1 00:00:00,240 --> 00:00:02,520 Operations at Onslow basically stopped. 2 00:00:03,320 --> 00:00:05,800 It looked to me like haulage wasn't going to work and as a 3 00:00:05,800 --> 00:00:08,280 consequence, there would be no trans shipping. 4 00:00:08,480 --> 00:00:11,520 As a consequence, there'd be no money and as a consequence that 5 00:00:11,520 --> 00:00:13,720 bondholders were going to end up owning the company. 6 00:00:18,000 --> 00:00:19,760 Trav Trav kicked off my Twitter career. 7 00:00:21,080 --> 00:00:23,200 I got like, I got like. And and gave you the most. 8 00:00:23,200 --> 00:00:26,160 Name I got yeah, yeah, yeah, yeah, yeah, yeah. 9 00:00:26,240 --> 00:00:28,280 I got 300 followers overnight and then it was off to the 10 00:00:28,280 --> 00:00:31,120 horses. You've made it. 11 00:00:32,520 --> 00:00:35,000 Trev's made it. Trev's now Forget it. 12 00:00:35,040 --> 00:00:36,240 That's now properly recorded. Oh. 13 00:00:37,320 --> 00:00:40,840 Mate, how funny is that clip so. You know, no matter who shares 14 00:00:40,840 --> 00:00:42,880 that video, no matter where they are, no matter where there's 15 00:00:42,880 --> 00:00:46,840 Elon Musk, there's a great big Trevor Ricardo bubble that links 16 00:00:46,840 --> 00:00:47,960 to your profile. Yeah. 17 00:00:48,080 --> 00:00:50,920 So Elon Musk is sending a tweet that has Travis Ricardo and I 18 00:00:50,920 --> 00:00:51,880 haven't linked your profile on it. 19 00:00:52,440 --> 00:00:54,200 That's pretty funny. It's incredible. 20 00:00:54,200 --> 00:00:55,520 It's kind of crazy. Yeah. 21 00:00:55,520 --> 00:00:56,000 I'm. I'm. 22 00:00:56,080 --> 00:00:57,640 Daily Mail writing in for a comment. 23 00:00:57,640 --> 00:01:00,320 Yeah, that's pretty funny. Pretty funny mate, I'm just. 24 00:01:00,320 --> 00:01:03,360 Happy that's just the that's the lowest form of journalism. 25 00:01:03,680 --> 00:01:06,560 Just like a Twitter events unfolding quick, stick it on the 26 00:01:06,560 --> 00:01:08,400 front back. So, so you know what's kind of 27 00:01:08,400 --> 00:01:10,520 funny? Both both Daily Mail and 28 00:01:10,520 --> 00:01:11,680 news.com, though you picked it up. 29 00:01:11,680 --> 00:01:16,960 Daily Mail actually asked to which I said thenews.com dot AU 30 00:01:16,960 --> 00:01:18,280 article was pretty good. Just use that. 31 00:01:20,680 --> 00:01:22,960 You don't know that guy though. You just haven't. 32 00:01:22,960 --> 00:01:24,240 Someone just sent you this or yes? 33 00:01:24,440 --> 00:01:28,520 Yeah, I like mate, Jerry is clearly like that. 34 00:01:28,520 --> 00:01:32,880 That snippet was was a was it worthy of being a viral clip? 35 00:01:32,880 --> 00:01:35,920 Yeah, I'm happy to just milk it for the virality that it is, but 36 00:01:36,720 --> 00:01:39,000 I am. I can take no credit for that at 37 00:01:39,040 --> 00:01:40,440 all other than just yeah, repost. 38 00:01:40,440 --> 00:01:42,520 It but did you post it intending it to go viral? 39 00:01:42,920 --> 00:01:44,200 I I had no. Idea. 40 00:01:44,200 --> 00:01:45,600 Well, you're just like, this is gold. 41 00:01:46,000 --> 00:01:47,840 I just thought it was. It was sent to me on WhatsApp 42 00:01:49,120 --> 00:01:51,760 and I looked at it and I showed it to JD and you both. 43 00:01:51,760 --> 00:01:54,360 He's all needed to see this. He started when he started just 44 00:01:54,360 --> 00:01:55,680 cracking up in the. So you're like, it's just 45 00:01:55,680 --> 00:01:57,680 cracking up. I was like, is this on Twitter 46 00:01:57,680 --> 00:01:58,960 yet? I checked Twitter, wasn't there. 47 00:01:58,960 --> 00:02:00,200 I'm like, I'm putting this up like. 48 00:02:01,480 --> 00:02:04,000 And and 24 hours later, you've doubled your follower count. 49 00:02:04,000 --> 00:02:08,199 You've got a million views or a billion views, or some insane 50 00:02:08,199 --> 00:02:10,199 number of views. My my new followers are going to 51 00:02:10,199 --> 00:02:12,680 be very disappointed. When it's when it's hyper 52 00:02:12,680 --> 00:02:15,480 technical. Half, yeah, my new followers 53 00:02:15,480 --> 00:02:17,680 that they've all got like Australian flags. 54 00:02:17,760 --> 00:02:20,400 I noticed, I noticed very patriarchal Put it this way, if 55 00:02:20,400 --> 00:02:22,320 I interviewed Pete Buttigieg, they are not the intended 56 00:02:22,320 --> 00:02:26,400 listeners for that conversation. You just let me know if you want 57 00:02:26,400 --> 00:02:28,520 to reach them. I'll put out some tweets for 58 00:02:28,520 --> 00:02:32,160 you. Yeah, Moz, thank you for for 59 00:02:32,160 --> 00:02:33,400 coming in. Thanks for having me. 60 00:02:33,800 --> 00:02:35,800 Who are you? Who am I? 61 00:02:36,360 --> 00:02:44,080 I am a A a an erstwhile lawyer turned Twitter commentator. 62 00:02:45,320 --> 00:02:48,600 And the reason that we're we're bringing you in for studio mate 63 00:02:48,600 --> 00:02:53,400 is yeah, it's kind of an interesting, a different kind of 64 00:02:53,400 --> 00:02:57,320 chat we're going to have JD, but Moz has become obsessed with a 65 00:02:57,320 --> 00:02:59,960 single stock. That single stock just happens 66 00:02:59,960 --> 00:03:03,880 to be my my favorite stock. Mineral resources and your 67 00:03:03,880 --> 00:03:07,280 obsession I find interesting. I find interesting when anyone 68 00:03:07,280 --> 00:03:09,320 gets like solely obsessed people. 69 00:03:09,320 --> 00:03:13,640 If you get so obsessed with like a single stock, I don't see the 70 00:03:13,640 --> 00:03:16,080 only stock in your portfolio. So it's like you're solely 71 00:03:16,080 --> 00:03:19,840 obsessed with this one stock. Then I think you have a tendency 72 00:03:19,840 --> 00:03:23,600 to do do hardcore analysis. You try and check all of your 73 00:03:23,600 --> 00:03:25,640 assumptions. You see where you're right or 74 00:03:25,640 --> 00:03:27,720 where you're wrong. Doesn't mean you won't have 75 00:03:28,160 --> 00:03:31,880 like, you know, biases along along the way, but but you've 76 00:03:31,880 --> 00:03:33,800 been putting your analysis out there into the abyss. 77 00:03:33,800 --> 00:03:35,240 It's it's gathered some attention. 78 00:03:36,360 --> 00:03:39,040 You know, I've, I've, I've found it useful and checking my own 79 00:03:39,040 --> 00:03:41,440 prize. And I just think it's it's an 80 00:03:41,440 --> 00:03:45,040 interesting point in time for us to really peel apart where 81 00:03:45,080 --> 00:03:49,600 Minrez is at right now, like bullish thesis, bearish thesis 82 00:03:51,000 --> 00:03:53,480 and the whole swarm of of other affairs going on. 83 00:03:53,680 --> 00:03:57,640 We're recording this Monday afternoon, 28th of July. 84 00:03:57,800 --> 00:04:01,760 They're reporting this coming Wednesday for, for the, for the, 85 00:04:01,920 --> 00:04:06,080 for the June quarter. Stock is run from 1440 up to 86 00:04:06,440 --> 00:04:09,560 what went up to like 34 and now it's back down to 30 bucks 87 00:04:09,640 --> 00:04:14,200 today. I know your average entry was in 88 00:04:14,200 --> 00:04:19,079 the 20s Twenty 2:00-ish. How did how the hell did you get 89 00:04:19,079 --> 00:04:23,840 obsessed with Minarez? Well, it's an interesting story 90 00:04:23,840 --> 00:04:27,040 because this conversation could be unfolding in a very different 91 00:04:27,040 --> 00:04:29,320 manner. When I first started following 92 00:04:29,920 --> 00:04:33,280 the company carefully, it was because I thought it was going 93 00:04:33,280 --> 00:04:42,560 to 0 and I thought that this was a dead to rights story of 94 00:04:43,440 --> 00:04:47,040 corporate failure. This was in April this year. 95 00:04:47,040 --> 00:04:48,360 I followed the company for quite a while. 96 00:04:48,360 --> 00:04:54,560 I've always been interested in its CEO and his business. 97 00:04:55,560 --> 00:04:58,120 It's hard not to be interested in someone like Chris Ellison, I 98 00:04:58,120 --> 00:05:02,640 think, especially when you're when you live in WA and grow up 99 00:05:02,640 --> 00:05:06,000 in a mining or mining adjacent sort of world. 100 00:05:07,480 --> 00:05:10,800 But in April, I thought, as I say, this company was going to 101 00:05:10,800 --> 00:05:13,720 0. So I started doing my work and 102 00:05:15,000 --> 00:05:16,920 it coincided. That period of time coincided 103 00:05:16,920 --> 00:05:24,000 with Trump's doomsday tariffs and whilst all of that was going 104 00:05:24,000 --> 00:05:29,520 on in the background, the Onzo iron Ore project for Minrez 105 00:05:30,000 --> 00:05:34,760 wasn't having a great time. Perhaps it's useful actually for 106 00:05:34,760 --> 00:05:36,400 your audience. If we go back in time a little 107 00:05:36,400 --> 00:05:38,840 bit and just set up what's happened with Minrez over the 108 00:05:38,840 --> 00:05:41,840 last 18 months, you've covered it pretty well. 109 00:05:43,280 --> 00:05:48,880 But 18 months ago, this company was moving from strength to 110 00:05:48,880 --> 00:05:51,840 strength. It had a supportive lithium 111 00:05:51,840 --> 00:05:54,080 price. Maybe 20-4 months ago, it had a 112 00:05:54,080 --> 00:05:56,840 supportive lithium price. It had an iron ore price that 113 00:05:56,840 --> 00:06:02,200 was that was maybe not irrationally high, but strong. 114 00:06:03,320 --> 00:06:06,520 And then over the next six months, just about everything 115 00:06:06,520 --> 00:06:09,960 went wrong in fairly catastrophic fashion. 116 00:06:10,640 --> 00:06:15,520 The lithium price collapsed, SPOD fell down to at one point 117 00:06:16,600 --> 00:06:25,320 500 on a 500US on an SC6 basis. That was a month or two ago and 118 00:06:26,240 --> 00:06:29,600 that alone I think would have been enough to to cause some 119 00:06:29,600 --> 00:06:33,440 panic amongst the market for Minarez or in respect of Minarez 120 00:06:35,240 --> 00:06:38,240 particularly given it's highly indebted balance sheet. 121 00:06:39,120 --> 00:06:41,400 Then things that are going wrong on the iron ore side of the 122 00:06:41,400 --> 00:06:46,520 business and the iron ore price weakened a little bit. 123 00:06:48,480 --> 00:06:56,480 The trucks started rolling over and earlier this year the whole 124 00:06:56,480 --> 00:07:00,520 Rd. started to fall apart as a consequence of some wild weather 125 00:07:00,520 --> 00:07:05,640 up north. I think these three factors each 126 00:07:05,640 --> 00:07:08,880 individually would have caused jitters in the market. 127 00:07:10,080 --> 00:07:14,160 Together they conspired to bring the company to its knees. 128 00:07:14,640 --> 00:07:19,960 And at the same time there was a high speed collision between 129 00:07:21,320 --> 00:07:24,200 Chris Ellison's personal life and the affairs of the company. 130 00:07:25,920 --> 00:07:30,320 And that that I think was the straw that broke the camel's 131 00:07:30,320 --> 00:07:36,360 back in respect of the market's view as to the value of the 132 00:07:36,360 --> 00:07:39,360 company. Now, none of that phased me a 133 00:07:39,360 --> 00:07:43,280 great deal. But then in April, operations at 134 00:07:43,280 --> 00:07:48,280 Onslow basically stopped. So I was interested in following 135 00:07:48,440 --> 00:07:51,040 what was happening on the shipping side of things and I 136 00:07:51,040 --> 00:07:55,280 noticed that there was no shipping for the first half of 137 00:07:55,680 --> 00:07:57,600 April this year. It looked to me like this 138 00:07:57,600 --> 00:08:00,280 company was was going down and looked to me like haulage wasn't 139 00:08:00,280 --> 00:08:03,400 going to work and as a consequence there would be no 140 00:08:03,840 --> 00:08:05,800 trans shipping. As a consequence, there'd be no 141 00:08:05,800 --> 00:08:09,760 money and as a consequence, the bondholders were going to end up 142 00:08:09,760 --> 00:08:13,960 owning the company. And that's where I fired up the, 143 00:08:14,960 --> 00:08:17,840 the account maybe a little bit after that and started giving my 144 00:08:17,840 --> 00:08:21,480 thoughts. Now this long monologue has 145 00:08:21,480 --> 00:08:25,200 meant that I somewhat lost your question, but you asked me what 146 00:08:25,200 --> 00:08:28,720 my interest in the company is. And and my interest now is in 147 00:08:29,000 --> 00:08:35,240 looking at the fairly spectacular comeback that that I 148 00:08:35,240 --> 00:08:38,840 think the Onzo Iron ore project has made over the last six 149 00:08:38,840 --> 00:08:42,919 months and particularly the last three months following a period 150 00:08:42,919 --> 00:08:45,480 in April where as I say, almost nothing was happening. 151 00:08:45,880 --> 00:08:48,640 You, you were, you were looking to see if you should put on a 152 00:08:48,640 --> 00:08:52,120 short, Yeah. And in your DD, you went to the, 153 00:08:52,520 --> 00:08:55,080 you went to the transshipping volumes effectively. 154 00:08:56,400 --> 00:08:57,920 At what point were you tracking the volumes? 155 00:08:57,920 --> 00:09:02,760 And you thought, hang on, maybe, maybe consensus doesn't quite 156 00:09:02,760 --> 00:09:06,040 match my my view. The first three weeks of April, 157 00:09:06,440 --> 00:09:11,280 they shipped almost no iron ore and they didn't say anything. 158 00:09:11,400 --> 00:09:14,520 They didn't update the market as it was occurring, but it looked 159 00:09:14,520 --> 00:09:19,440 to me like they were on a pathway to be delivering 5 160 00:09:19,440 --> 00:09:22,760 million, maybe 10 million tons on a per annum basis unless 161 00:09:22,760 --> 00:09:26,600 things dramatically changed. So at that point I thought, I 162 00:09:26,600 --> 00:09:28,160 mean, at that point it's a matter of simple maths. 163 00:09:28,160 --> 00:09:32,560 There's there's no universe in which this company comes out of 164 00:09:32,560 --> 00:09:38,000 this without a massive cap raise or some sort of other fairly 165 00:09:38,000 --> 00:09:44,200 drastic liquidity change, change in the, in the company's 166 00:09:44,200 --> 00:09:48,640 liquidity. And that's where that's where a 167 00:09:48,640 --> 00:09:51,800 decision had to be made. And that that, that was where I 168 00:09:51,800 --> 00:09:57,240 think the, the short, the, the people who are short this 169 00:09:57,240 --> 00:09:59,840 company seemed like they've been vindicated. 170 00:10:00,560 --> 00:10:03,160 That that roughly corresponded with some of your work. 171 00:10:03,160 --> 00:10:05,680 Trevin, you were quite bearish on the company and I think 172 00:10:06,320 --> 00:10:10,680 perhaps that bearishness stem from your view about the 173 00:10:10,680 --> 00:10:13,520 feasibility and the the success of Onslow. 174 00:10:13,520 --> 00:10:16,840 Is that a? Is that a fair comment? 175 00:10:17,240 --> 00:10:19,680 I don't think I'll reveal if I've ever been bullish or 176 00:10:19,680 --> 00:10:23,080 bearish. I feel like my sentiment, yeah, 177 00:10:23,080 --> 00:10:25,360 might, might come out. I feel like I'll be scathing of, 178 00:10:25,480 --> 00:10:28,720 of capital allocation decisions. I'll be scathing of, of the 179 00:10:28,720 --> 00:10:31,560 level of reporting to the market under certain circumstances. 180 00:10:31,560 --> 00:10:33,840 That's that that actually has improved by the way. 181 00:10:34,960 --> 00:10:38,000 But and yeah, obviously scathing of like corporate, corporate 182 00:10:38,000 --> 00:10:40,320 covenants issues as they've transpired and evolved. 183 00:10:40,360 --> 00:10:43,280 I think there's like a lot that I have been, you know, have been 184 00:10:43,360 --> 00:10:45,440 and willing to be complimentary to the business for as well. 185 00:10:45,440 --> 00:10:48,000 Like the, you know, the, the degree to which been raised has 186 00:10:48,000 --> 00:10:51,880 a culture of like making things happen in a, in a very, very 187 00:10:51,880 --> 00:10:53,840 short time frame. Is, is, is generally 188 00:10:53,840 --> 00:10:56,200 unparalleled, you know, amongst amongst the sector. 189 00:10:56,200 --> 00:11:01,960 And I'm, I'm happy to say that the balance sheet is, is 190 00:11:01,960 --> 00:11:05,560 everything and then the cash flow from Onslow is everything 191 00:11:05,560 --> 00:11:08,080 to address that balance sheet. So I think you have to, the 192 00:11:08,080 --> 00:11:11,960 eyeballs have to be on the delivery of Onslow because that, 193 00:11:11,960 --> 00:11:13,840 that's the only solution for the balance sheet. 194 00:11:13,880 --> 00:11:17,040 And in April, you're 100% right. Like there was no indication 195 00:11:17,040 --> 00:11:20,400 that this project was going to be what had been put out there. 196 00:11:20,920 --> 00:11:22,720 Roof's still going to be in the pudding. 197 00:11:23,240 --> 00:11:27,200 But but the volumes coming out of Onslow you've been tracking 198 00:11:27,200 --> 00:11:29,520 the last couple months are certainly stronger than I was 199 00:11:29,520 --> 00:11:30,720 expecting. Yeah, they have. 200 00:11:30,720 --> 00:11:32,640 They've been they've been a lot stronger than I was expecting. 201 00:11:34,400 --> 00:11:35,840 On that point. I should probably just clarify 202 00:11:35,840 --> 00:11:39,960 before we get into some more of the detail, what the purpose of 203 00:11:39,960 --> 00:11:44,360 the shipment tracking Twitter County is that I'm running and 204 00:11:44,840 --> 00:11:48,560 and also more importantly, where my data is coming from based 205 00:11:48,560 --> 00:11:51,960 upon the number of journalists in my DMSI think there's a 206 00:11:51,960 --> 00:11:54,640 suspicion amongst some members of the market that I'm providing 207 00:11:54,960 --> 00:11:58,320 non public information or information that the average 208 00:11:58,320 --> 00:12:02,480 person doesn't have access to. That's not, that's not right. 209 00:12:04,480 --> 00:12:06,960 Generally speaking, there's three sort of buckets of 210 00:12:06,960 --> 00:12:10,600 information that I that I draw from in respect of that account. 211 00:12:11,200 --> 00:12:13,200 And the first bucket is the majority of it. 212 00:12:13,200 --> 00:12:15,560 And that's information that is publicly available. 213 00:12:15,840 --> 00:12:19,080 So shipping information is publicly available. 214 00:12:19,080 --> 00:12:23,400 There's AIS tracking that you can that anyone could, could get 215 00:12:23,400 --> 00:12:26,640 access to tomorrow. I also share information that 216 00:12:26,640 --> 00:12:33,080 comes from a more, I suppose terrestrial source, but also but 217 00:12:33,080 --> 00:12:38,600 remains public information. So if somebody observes a 218 00:12:38,600 --> 00:12:41,680 particular event that's happening up north, that's not 219 00:12:41,840 --> 00:12:43,960 insider information, that's not non public information. 220 00:12:43,960 --> 00:12:47,080 It's maybe a little bit harder to to find. 221 00:12:47,480 --> 00:12:52,440 But I just want to make it very clear that I don't have any 222 00:12:53,360 --> 00:12:55,520 special access to any company information. 223 00:12:55,520 --> 00:12:59,080 I'm not an insider. I've never worked with Minrez in 224 00:12:59,080 --> 00:13:01,200 any capacity. I don't know anybody who works 225 00:13:01,200 --> 00:13:05,760 at Minrez and none of my information is is information 226 00:13:05,760 --> 00:13:12,640 that the average intelligent and well meaning individual would 227 00:13:12,640 --> 00:13:16,000 struggle to find. That said, there are two other 228 00:13:16,000 --> 00:13:19,240 buckets which I think is is useful to be able to draw from. 229 00:13:19,240 --> 00:13:20,720 The second one is just speculation. 230 00:13:20,720 --> 00:13:24,280 So I try to make this clear when I do this on the Twitter 231 00:13:24,280 --> 00:13:26,360 account. But some of what I say is 232 00:13:26,360 --> 00:13:29,400 speculation is just a guess based upon the information that 233 00:13:29,400 --> 00:13:32,160 we have. And the third bucket of 234 00:13:32,160 --> 00:13:35,640 information is, is hearsay. So much the same way that you 235 00:13:35,640 --> 00:13:38,920 guys every now and then will report on something you've heard 236 00:13:38,920 --> 00:13:40,760 about. I do that occasionally on the 237 00:13:40,760 --> 00:13:47,440 Twitter account. It's, it's not, it's not 238 00:13:47,480 --> 00:13:50,680 reliable in the sense that I have no way to know whether or 239 00:13:50,680 --> 00:13:53,000 not something I say is necessarily accurate. 240 00:13:53,000 --> 00:13:56,040 But I try to, I try to take whatever steps necessary to 241 00:13:56,040 --> 00:13:58,800 ensure that I'm not spreading nonsense. 242 00:14:01,040 --> 00:14:02,760 As I say, I think it's important to get that out there. 243 00:14:02,760 --> 00:14:05,000 I wouldn't want anybody making investment decisions based upon 244 00:14:05,000 --> 00:14:09,360 something I've said, assuming that I, I'm more informed than I 245 00:14:09,360 --> 00:14:13,600 actually AM. The point of the account that 246 00:14:13,600 --> 00:14:18,520 I'm that I'm running is just to give your average investor more, 247 00:14:19,320 --> 00:14:21,760 I suppose, finely grained information about what's going 248 00:14:21,760 --> 00:14:25,360 on at the port. Because I think at the end of 249 00:14:25,360 --> 00:14:28,120 the day, despite the fact that this company trades like a 250 00:14:28,680 --> 00:14:34,480 lithium miner today, down 7% or whatever, it closed out along 251 00:14:34,480 --> 00:14:38,280 with PLS and IGO and the rest of the lithium miners. 252 00:14:39,120 --> 00:14:42,520 I think Onslow is really the key to this company's success. 253 00:14:42,520 --> 00:14:46,520 And I think that if Onzo were to go wrong, nothing else matters. 254 00:14:46,960 --> 00:14:50,920 I don't think the balance sheet can support, can support. 255 00:14:51,360 --> 00:14:53,480 I don't think the balance sheet can be supported by its mining 256 00:14:53,480 --> 00:14:57,240 services business, no matter how outstanding that business may 257 00:14:57,240 --> 00:14:58,800 be. And it certainly can't be 258 00:14:58,800 --> 00:15:02,240 supported by the lithium business, not in, not at 259 00:15:02,240 --> 00:15:04,840 prevailing prices for lithium in any event. 260 00:15:06,440 --> 00:15:10,360 So I think our best guess as to where this company's going is 261 00:15:10,360 --> 00:15:14,680 what's happening at Onslow. Do you agree with that? 262 00:15:15,000 --> 00:15:16,360 Yeah. And that well, that balance 263 00:15:16,360 --> 00:15:21,400 sheet at last quarter, this $5.4 billion net debt, if you had, 264 00:15:22,040 --> 00:15:26,040 you know, you kind of trying to you've got $500 million of of 265 00:15:26,040 --> 00:15:29,080 interest payments that, that need to be serviced on the, you 266 00:15:29,080 --> 00:15:30,120 know, on, on the debt. Yeah. 267 00:15:30,120 --> 00:15:33,360 And to you effectively need operations that, that can 268 00:15:33,360 --> 00:15:36,840 produce enough free cash flow to a minimum service the the 269 00:15:36,840 --> 00:15:39,920 interest payments on that debt. And the only way you can get 270 00:15:39,920 --> 00:15:44,000 there in my view is through the delivery of Onslatt with margin. 271 00:15:44,400 --> 00:15:45,800 Yeah, yeah. I agree. 272 00:15:48,320 --> 00:15:52,160 Before we before we get into what I think is happening with 273 00:15:52,160 --> 00:15:57,120 Onso itself, perhaps we could just talk about a few themes 274 00:15:57,680 --> 00:16:02,560 that that I've observed in respect of this company because 275 00:16:02,760 --> 00:16:08,400 they make for fairly, fairly torturous. 276 00:16:09,120 --> 00:16:11,160 They make the lives of anybody interested in following this 277 00:16:11,160 --> 00:16:13,600 company as a hobby fairly torturous, to say nothing of 278 00:16:13,600 --> 00:16:16,720 those who have invested their own money in the company. 279 00:16:17,400 --> 00:16:20,360 As you mentioned, a category into which I've recently fallen 280 00:16:21,880 --> 00:16:24,160 and something I thought we should spend some time talking 281 00:16:24,160 --> 00:16:28,520 about is the way this company talks to the market. 282 00:16:29,440 --> 00:16:36,680 Because it has been a, in my view, a consistent failing of 283 00:16:36,680 --> 00:16:39,640 this company. And I should say that any 284 00:16:39,640 --> 00:16:42,560 criticism I have of the company is not criticism of individuals 285 00:16:42,560 --> 00:16:45,960 at the company, it's criticism of the company itself. 286 00:16:46,360 --> 00:16:49,680 I say that because it's true, and also because I know enough 287 00:16:49,680 --> 00:16:53,360 about Australian defamation laws to know that you can't defame a 288 00:16:53,360 --> 00:16:55,000 company. So you as. 289 00:16:55,120 --> 00:16:56,880 Long as there's more than 1010 employees. 290 00:16:57,040 --> 00:16:59,880 Yeah, yeah. They haven't laid off enough to 291 00:16:59,920 --> 00:17:02,160 to bring them under that number. What was? 292 00:17:02,240 --> 00:17:06,240 That so you, you start following the company in April and then 293 00:17:06,240 --> 00:17:10,480 obviously your, your work kind of goes back and you start to 294 00:17:10,480 --> 00:17:12,480 get a flavour of how they they report. 295 00:17:12,480 --> 00:17:16,800 And yeah, well, actually April's a great starting in April 296 00:17:16,800 --> 00:17:19,920 provides a perfect example of the the phenomenon that I'm 297 00:17:20,160 --> 00:17:24,280 about to describe. In April, as I say, not much was 298 00:17:24,280 --> 00:17:25,920 going on in terms of Onslow shipping. 299 00:17:27,240 --> 00:17:31,560 There was silence from the company at the end of April 300 00:17:31,560 --> 00:17:35,120 right before I was thinking, all right, time to time to go short. 301 00:17:35,720 --> 00:17:39,160 The company publishes its quarterly and they have an 302 00:17:39,160 --> 00:17:42,240 interesting part in it where they talk about what's happening 303 00:17:42,240 --> 00:17:46,640 at Onslow in terms of haulage and therefore shipping, and they 304 00:17:46,640 --> 00:17:51,120 basically say, yeah, April was a terrible month, but don't worry, 305 00:17:51,120 --> 00:17:54,400 May and June are going to be much better. 306 00:17:54,520 --> 00:17:56,400 We're going to double. Yeah, we're going to double. 307 00:17:56,440 --> 00:18:01,680 In fact, they, they imply that in May, which was three days 308 00:18:01,680 --> 00:18:04,680 after this this quarterly report came out, they were going to be 309 00:18:04,680 --> 00:18:08,440 hauling and shipping at a rate pretty much on nameplate 310 00:18:08,440 --> 00:18:10,240 capacity at 35,000,000 tons per annum. 311 00:18:12,000 --> 00:18:15,880 And there's an interesting part of that quarterly report where 312 00:18:15,880 --> 00:18:20,400 they say that the reason April was so poor is because our 313 00:18:20,400 --> 00:18:23,280 contractor trucks that we're running while the whole Rd. has 314 00:18:23,280 --> 00:18:26,640 been repaired are operating at a reduced cycle time. 315 00:18:27,400 --> 00:18:29,880 And the cycle time is about 2.9, they said. 316 00:18:30,000 --> 00:18:34,520 And we think it can be 4. We can, we think we can get it 317 00:18:34,520 --> 00:18:38,000 up to four. And they say in May, in May and 318 00:18:38,000 --> 00:18:40,040 in June, it'll be back up. It'll be up at 4:00. 319 00:18:40,120 --> 00:18:42,560 And that'll give us the haulage we need to operate at 35,000,000 320 00:18:42,560 --> 00:18:46,880 tons per annum. And they say in that quarterly, 321 00:18:47,280 --> 00:18:50,280 these projected cycle times are now being achieved. 322 00:18:50,560 --> 00:18:55,720 So we are presently at the end of April achieving a cycle time 323 00:18:55,720 --> 00:18:57,720 of four for these contractor trucks. 324 00:18:59,080 --> 00:19:02,840 Now we get into May and for the first half of May, they're not 325 00:19:03,080 --> 00:19:05,120 shipping in anything like 35,000,000 tons per annum. 326 00:19:05,120 --> 00:19:08,480 And I'm, I'm sounding the alarm on Twitter saying this is not, 327 00:19:08,600 --> 00:19:10,120 they are not going to make this guidance. 328 00:19:10,760 --> 00:19:13,280 They're clearly down. They're not down by 5% or 10%, 329 00:19:13,280 --> 00:19:20,000 they're down by 50%. And then on the last day of May 330 00:19:20,000 --> 00:19:23,720 or one of the last days of May, the company jumps in with A1 331 00:19:23,720 --> 00:19:26,800 line announcement, price sensitive announcement titled 332 00:19:26,800 --> 00:19:29,680 Onslow Iron Update. The day before the site visit. 333 00:19:29,680 --> 00:19:32,320 The day before the site visit, Yep, it's accompanied by the 334 00:19:32,320 --> 00:19:34,920 site visit presentation, which is a long, long document, not 335 00:19:34,920 --> 00:19:36,640 marked, not marked, price sensitive. 336 00:19:37,160 --> 00:19:39,160 But in addition, they jump in with a single page document in 337 00:19:39,160 --> 00:19:43,880 which they say, yeah, yeah, yeah, we're way down on exports 338 00:19:43,880 --> 00:19:45,080 for May. We're not going to meet our 339 00:19:45,080 --> 00:19:48,960 guidance. This is because our cycle times 340 00:19:49,440 --> 00:19:53,320 are at 2.7 or 2.9 or some number in the in the twos. 341 00:19:55,040 --> 00:19:58,280 So just just stop and observe what's just occurred. 342 00:19:58,600 --> 00:20:01,760 They've said in April we're operating, we have our 343 00:20:01,760 --> 00:20:08,120 contractor trucks operating at a cycle time of 2.9, but they're 344 00:20:08,120 --> 00:20:10,680 now at the end of April operating at a cycle time of 345 00:20:10,680 --> 00:20:13,400 four. Which means in May, we're going 346 00:20:13,400 --> 00:20:15,640 to be operating, we're going to be exporting at 35,000,000 tons 347 00:20:15,640 --> 00:20:17,600 per annum. Then at the end of May, they 348 00:20:17,600 --> 00:20:20,160 jump in and they say no, no, no, we're way down on guidance. 349 00:20:20,600 --> 00:20:24,160 Our trucks are operating at a cycle time of 2.7. 350 00:20:24,160 --> 00:20:25,440 Cool. I think it was 2.7. 351 00:20:28,080 --> 00:20:33,600 That sort of carelessness in the way you report to the market is, 352 00:20:34,480 --> 00:20:39,920 is destructive of the ability of your investors and your 353 00:20:39,920 --> 00:20:42,440 prospective investors to take you seriously. 354 00:20:43,360 --> 00:20:50,400 And it makes trying to build out a, an accurate valuation model 355 00:20:50,400 --> 00:20:52,360 for this company very, very difficult. 356 00:20:53,240 --> 00:20:58,920 I, I continue to be concerned that it's not possible to put 357 00:20:58,920 --> 00:21:02,080 faith in some of the things that this company says, be it through 358 00:21:02,080 --> 00:21:10,600 carelessness or be it through sheer happenstance. 359 00:21:14,160 --> 00:21:17,680 And, and this is a problem that I think has plagued min res for 360 00:21:17,680 --> 00:21:20,560 quite a while. I think this company suffers 361 00:21:20,560 --> 00:21:22,720 from a discounted valuation in the market. 362 00:21:22,720 --> 00:21:26,240 I think, I think the market builds in a discount as a result 363 00:21:26,240 --> 00:21:31,720 of the complex vertically integrated structure with a fair 364 00:21:31,720 --> 00:21:37,680 bit of, if not obfuscation, at least a lack of clarity 365 00:21:37,720 --> 00:21:39,880 surrounding the company's operations. 366 00:21:41,520 --> 00:21:45,800 And it's frustrating because this can be fixed very, very 367 00:21:45,800 --> 00:21:47,920 easily. What do you think about that, 368 00:21:47,920 --> 00:21:49,320 Trev? Are we on the same? 369 00:21:49,320 --> 00:21:53,680 Page yeah, the company's got a history of minimal disclosure, I 370 00:21:53,680 --> 00:21:54,960 think. Like it'd be the only company 371 00:21:54,960 --> 00:21:59,040 where I still to this day don't quite know what material, like 372 00:21:59,400 --> 00:22:02,160 any materiality threshold is. Like that just seems like a 373 00:22:02,160 --> 00:22:05,320 subjective kind of term that could, could, could change. 374 00:22:05,320 --> 00:22:08,760 But, you know, there's a very, a very kind of confidential 375 00:22:08,760 --> 00:22:10,480 materiality threshold for a lot of disclosure. 376 00:22:11,600 --> 00:22:13,280 I think there's been signs of improvement. 377 00:22:13,280 --> 00:22:16,600 Like for example, the yeah, the latest quarterly did have 378 00:22:16,720 --> 00:22:20,120 information relating to Onslow that was like more like 379 00:22:20,120 --> 00:22:21,840 thoroughly than they had ever been in the past. 380 00:22:21,880 --> 00:22:25,120 The Onslow site visit presentation included a level of 381 00:22:25,120 --> 00:22:27,800 disclosure that had previously not been revealed on a lot of 382 00:22:27,800 --> 00:22:30,600 different parts of the road. It also included a, a, you know, 383 00:22:30,800 --> 00:22:33,400 a minimum guarantee in relation to the whole Rd. which was a 384 00:22:33,400 --> 00:22:37,120 specific, you know, a specifically asked question in 385 00:22:37,120 --> 00:22:39,800 the past, which was kind of sidestepped and had now been 386 00:22:39,800 --> 00:22:42,160 revealed. Those were positive steps in 387 00:22:42,160 --> 00:22:45,720 regards to the level of disclosure the market expects. 388 00:22:45,720 --> 00:22:48,400 And I think why why is it important? 389 00:22:48,400 --> 00:22:52,600 Because if, if, if management at Minarez has actually has a 390 00:22:52,600 --> 00:22:55,040 positive differentiated view on the stock versus what the market 391 00:22:55,040 --> 00:22:58,040 was pricing in, then then why not give the market information 392 00:22:58,080 --> 00:23:00,200 exactly? I'd, I'd push back on the, the 393 00:23:00,200 --> 00:23:01,920 notion that this is unique though. 394 00:23:02,120 --> 00:23:05,720 I think this is super, super commonplace across the, the 395 00:23:05,720 --> 00:23:09,400 resource landscape. And you're, yeah, there's plenty 396 00:23:09,400 --> 00:23:11,080 of companies. Fortescue is one that comes to 397 00:23:11,080 --> 00:23:13,760 mind and they're always stretched targets that they're 398 00:23:13,760 --> 00:23:16,360 putting out there and they're, you know, look at like Iron 399 00:23:16,360 --> 00:23:18,400 Bridge, for example, where you could go back 20 years and say 400 00:23:18,400 --> 00:23:21,080 the same thing about Fortescue. But that's part of the the 401 00:23:21,080 --> 00:23:22,560 culture of the business. Sure. 402 00:23:22,600 --> 00:23:26,240 I there's documents that are said to be binding agreements 403 00:23:26,240 --> 00:23:29,560 and they're just not at all the the the degree of materiality 404 00:23:29,560 --> 00:23:32,400 that Onslow in particular has to this company. 405 00:23:32,400 --> 00:23:35,040 And the market's never seen a feasibility study from Minarez. 406 00:23:35,040 --> 00:23:38,480 It's never yeah, like those those examples would be 407 00:23:38,480 --> 00:23:40,080 Fortescue 20 years ago. Yeah. 408 00:23:40,160 --> 00:23:43,320 And if you if you also just think like. 409 00:23:43,840 --> 00:23:51,240 One of many kind of reporting gripes that I have, one of them 410 00:23:51,240 --> 00:23:53,680 largely relates to, I don't think there's a single analyst 411 00:23:53,680 --> 00:23:57,520 in Australia that can really tell you the value of CSI and 412 00:23:57,600 --> 00:24:00,960 undoubtedly CSIS. The mining services businesses, 413 00:24:00,960 --> 00:24:03,240 contracts that they have with the majors are incredibly 414 00:24:03,240 --> 00:24:06,400 valuable and they have tremendous like earnings 415 00:24:06,480 --> 00:24:08,640 resilience. They have tremendous ability to 416 00:24:08,640 --> 00:24:11,640 roll over contracts repeatedly. There really isn't any other 417 00:24:11,920 --> 00:24:14,040 competition in that space the contracts they have with the 418 00:24:14,040 --> 00:24:16,520 majors. However, my gripe is that the 419 00:24:16,520 --> 00:24:19,560 volumes attributed to those contracts with the majors are 420 00:24:19,560 --> 00:24:22,480 grouped in with volumes. Servicing their own mines, the. 421 00:24:22,480 --> 00:24:27,000 Servicing miners, you know, own JV mines and which, which are in 422 00:24:27,000 --> 00:24:30,880 my view like they're cyclical operations that that that are 423 00:24:30,880 --> 00:24:34,200 vulnerable to, to being turned off in a, in a, in a, in a down 424 00:24:34,200 --> 00:24:36,560 market. Whereas the way that the mining 425 00:24:36,560 --> 00:24:39,120 services contracts are portrayed to the market in general are 426 00:24:39,120 --> 00:24:42,200 like these infrastructure assets that, you know, the cash flows 427 00:24:42,200 --> 00:24:46,280 go on forever and ever. And to, to, to kind of hone in 428 00:24:46,280 --> 00:24:49,320 on why I underlined that. It's like the last quarterly you 429 00:24:49,320 --> 00:24:53,760 actually, you actually saw the, the way that earnings to the CSI 430 00:24:53,760 --> 00:24:57,520 business can be hit when you know, when, when there's this 431 00:24:57,560 --> 00:25:02,520 over reliance on 3rd party trucking and haulage at at 432 00:25:02,520 --> 00:25:05,400 Onslow, like that's, that's at the detriment to the to the 433 00:25:05,440 --> 00:25:09,960 earnings of CSI business. So all of that to say, no one 434 00:25:09,960 --> 00:25:12,480 can tell can actually disaggregate the value of CSI 435 00:25:12,480 --> 00:25:17,360 business if they don't know the disaggregation of of contracts 436 00:25:17,360 --> 00:25:21,120 to min res's own minds and what they look like versus versus 437 00:25:21,120 --> 00:25:22,280 third parties. Yeah. 438 00:25:22,280 --> 00:25:25,000 And this ties back to my comment about the discount the market 439 00:25:25,000 --> 00:25:28,560 applies as a consequence of the complex and vertically 440 00:25:28,560 --> 00:25:31,360 integrated structure that that min Res operates under. 441 00:25:32,520 --> 00:25:36,840 Another point, a similar point is it's $2.00 a tonne margin 442 00:25:37,400 --> 00:25:40,760 claim that seems to come up in respect of every single service 443 00:25:40,760 --> 00:25:44,160 provided by CSI to every aspect of every business that IT 444 00:25:44,160 --> 00:25:45,920 services. I mean that that doesn't make 445 00:25:45,920 --> 00:25:46,880 any sense. No. 446 00:25:46,920 --> 00:25:51,040 And and to the fact that you can simplify CSI, what are they like 447 00:25:51,040 --> 00:25:53,840 to everything simplifies to these units of these volumes, 448 00:25:53,840 --> 00:25:56,600 these tonnage volumes. And so we just apply a dollar 449 00:25:56,600 --> 00:26:00,080 per tonne to a volume of like to your point, there's no way that, 450 00:26:00,360 --> 00:26:03,160 you know, crushing volume is the same as a haulage volume, like 451 00:26:03,160 --> 00:26:06,200 the fundamentally very, very different margin types of 452 00:26:06,200 --> 00:26:08,280 businesses. They get asked this question 453 00:26:08,880 --> 00:26:12,040 every quarterly just about and they they always dodge it. 454 00:26:12,440 --> 00:26:15,000 Yeah, well, that's what I'm here for, to to push for more 455 00:26:15,000 --> 00:26:18,800 transparency and respective min res disclosures. 456 00:26:18,920 --> 00:26:20,120 Yeah. And there there have been like 457 00:26:20,200 --> 00:26:23,160 for example, the latest reserves update on Onslow as well. 458 00:26:23,160 --> 00:26:26,040 That was a big improvement. There was, you know, disclosure 459 00:26:26,040 --> 00:26:28,880 about what future CapEx looks like, wash plans can be 460 00:26:28,880 --> 00:26:30,600 required. Things like that, which which 461 00:26:30,600 --> 00:26:33,120 you know, probably been part of the thinking for a long time 462 00:26:33,120 --> 00:26:36,280 have have have finally started to come to the market in a more 463 00:26:36,280 --> 00:26:38,720 more forthcoming Nana. I'd welcome, I welcome more of 464 00:26:38,960 --> 00:26:42,440 more of that, like more, yeah, more of that transparency. 465 00:26:42,440 --> 00:26:45,160 I think he's a positive. You know what mate, Minres have 466 00:26:45,160 --> 00:26:48,680 pretty swish digs up at Onslow. I know you've seen the pictures, 467 00:26:48,680 --> 00:26:50,360 right? I've seen them, mate, yes, they, 468 00:26:50,400 --> 00:26:53,080 they talk about the great Kens board retreat, but they're not 469 00:26:53,080 --> 00:26:55,800 the only ones building these flashy like, like, you know, 470 00:26:55,800 --> 00:26:59,720 very, very accommodative camps for FIFO workers, mate, Grounded 471 00:26:59,720 --> 00:27:01,520 construction group. They've been doing this for 472 00:27:01,520 --> 00:27:03,360 years. They've, they've really brought 473 00:27:03,360 --> 00:27:06,120 out some, some absolutely stunning camps for, for, for 474 00:27:06,240 --> 00:27:09,000 FIFO workers across the state. You're on the money mate, and 475 00:27:09,080 --> 00:27:11,280 there was a big announcement earlier this week or maybe late 476 00:27:11,280 --> 00:27:14,240 last week, they're building a new accommodation set up in the 477 00:27:14,240 --> 00:27:16,720 mighty S headland the. South Headland premium 478 00:27:16,720 --> 00:27:18,960 accommodation is is coming, mate. 479 00:27:19,200 --> 00:27:21,920 It's a $60 million camp, 297 rooms. 480 00:27:21,920 --> 00:27:23,920 We're talking rec room, all of the perks. 481 00:27:24,080 --> 00:27:26,480 This thing's going to be swish and special, and it's being 482 00:27:26,480 --> 00:27:28,880 delivered, brought to everyone by Grounded. 483 00:27:29,160 --> 00:27:32,080 It's true mate, and I think we need, really need to hammer this 484 00:27:32,080 --> 00:27:32,760 point home. Why? 485 00:27:32,760 --> 00:27:35,200 Why it's so important? Because you need to keep the 486 00:27:35,200 --> 00:27:38,520 workers happy, right? High turnover, high costs and 487 00:27:38,520 --> 00:27:41,120 that hits your productivity and that goes on and hits your 488 00:27:41,120 --> 00:27:42,800 profitability. So if you wanna have. 489 00:27:42,800 --> 00:27:44,600 This sounds like what Jack Tooley wrote in the AFI. 490 00:27:44,600 --> 00:27:46,320 Just the. Other way tooley and it gets 491 00:27:46,600 --> 00:27:48,600 research right? What do the workers want mate? 492 00:27:49,080 --> 00:27:52,520 Comfortable rooms, good and quiet rooms, sounds spacious, 493 00:27:52,520 --> 00:27:55,800 acoustics not asking for a lot. No, it's it's simple. 494 00:27:55,920 --> 00:27:58,880 And you know what mate? Grounded gets workers and if 495 00:27:58,880 --> 00:28:00,920 workers are happy, that helps the bottom line. 496 00:28:00,960 --> 00:28:03,160 That's the message. Get in touch with Paul Natoli 497 00:28:03,160 --> 00:28:05,880 and the team at Grounded. Get yourself a new accommodation 498 00:28:05,880 --> 00:28:08,520 set up wherever you are in WA. Go grounded construction. 499 00:28:08,520 --> 00:28:10,320 Go grounded. Yeah. 500 00:28:10,600 --> 00:28:14,320 Well, actually on the theme of transparency, I don't think we 501 00:28:14,320 --> 00:28:16,240 should move on to the actual operations until we spend a 502 00:28:16,240 --> 00:28:20,800 little bit of time discussing our beloved CEO. 503 00:28:24,360 --> 00:28:27,880 It might be easier if you give me your view on, on Chris 504 00:28:27,880 --> 00:28:32,240 Ellison first, if you're willing to, and then perhaps I can, I 505 00:28:32,240 --> 00:28:36,320 can comment on a phenomenon that that I'm wrestling with at the 506 00:28:36,320 --> 00:28:40,360 moment in respect of, in respect of his effect upon this company. 507 00:28:40,800 --> 00:28:41,520 Nah, you first. Well. 508 00:28:42,800 --> 00:28:49,040 I, I have, I have nothing but positive words in respect of 509 00:28:49,440 --> 00:28:52,560 Chris Ellison's talent as a mining executive. 510 00:28:52,880 --> 00:28:54,760 And, and perhaps you and I disagree a little bit on this, 511 00:28:54,760 --> 00:28:59,120 but I think he's a, he's a genuinely skilled operator. 512 00:28:59,400 --> 00:29:05,520 And I think that he, he does get projects done that wouldn't 513 00:29:05,520 --> 00:29:08,640 otherwise get done and he gets projects done faster than other 514 00:29:08,640 --> 00:29:14,440 people would be able to do them. He, he, he, he hustles harder 515 00:29:14,440 --> 00:29:16,840 than any other mining executive I'm familiar with. 516 00:29:16,840 --> 00:29:20,440 And I think for me, a lot of people like to spend a lot of 517 00:29:20,440 --> 00:29:24,680 time trying to find the best asset on a piece of paper they 518 00:29:24,680 --> 00:29:28,840 want the, the, the Holy Grail of mining investing is, is, you 519 00:29:28,880 --> 00:29:32,360 know, the highest grade or the largest ore body. 520 00:29:32,840 --> 00:29:36,360 You've got institutional support from the from JP Morgan. 521 00:29:37,000 --> 00:29:41,200 You've got, you know, you've got the, you're going to end up 522 00:29:41,200 --> 00:29:45,480 with, you've got the projected lowest costs on a unit basis and 523 00:29:45,480 --> 00:29:50,880 then the project sits there for five years and four cap raisers 524 00:29:50,880 --> 00:29:52,480 go through. And at the end of the day that 525 00:29:52,480 --> 00:29:55,360 the prospect of outside shareholder returns despite the 526 00:29:55,840 --> 00:29:58,720 strength of the asset minimum. On the other hand, you have a 527 00:29:58,720 --> 00:30:02,480 company like or a person like Chris Ellison who he'll take A 528 00:30:02,480 --> 00:30:07,160 and he'll take an asset that perhaps isn't on paper at the 529 00:30:07,160 --> 00:30:09,320 highest quality quality asset in the world. 530 00:30:10,320 --> 00:30:12,920 And I'm thinking of something like in the lithium space, 531 00:30:12,920 --> 00:30:15,160 something like Mount Marion or even Wodgina. 532 00:30:15,800 --> 00:30:20,320 But he'll, he'll just start mining the bloody stuff and 533 00:30:20,480 --> 00:30:23,400 he'll do it quickly and he'll cut costs where he can. 534 00:30:23,560 --> 00:30:29,960 And for me, it is very easy to prioritize asset quality to the 535 00:30:29,960 --> 00:30:33,520 detriment of to the detriment of returns investing in this space. 536 00:30:33,840 --> 00:30:40,080 I will take a a second class asset with a first class 537 00:30:40,080 --> 00:30:44,040 operator any day of the week over a first class asset with a 538 00:30:44,040 --> 00:30:49,560 second class operator. That that's, that's the 539 00:30:49,560 --> 00:30:53,960 foundation of my views about Chris Ellison's role as a 540 00:30:53,960 --> 00:30:58,080 talented mining executive. But what I what I will say is 541 00:30:58,080 --> 00:31:06,080 that he's put us all and by us all, I mean people who invest 542 00:31:06,080 --> 00:31:09,240 their money in this company in a, in a fairly unfortunate 543 00:31:09,240 --> 00:31:11,080 position. Because I mean, I've asked you 544 00:31:11,080 --> 00:31:13,080 this Trev before, but I'll ask you again for the sake of your 545 00:31:13,080 --> 00:31:16,000 listeners. If you were plopped into the CEO 546 00:31:16,000 --> 00:31:18,440 seat tomorrow of Minres, what will be the first thing you do? 547 00:31:20,240 --> 00:31:22,400 Well, first thing I'd do would be get the real numbers, yeah. 548 00:31:23,120 --> 00:31:24,440 And then what were the second thing you do? 549 00:31:25,040 --> 00:31:26,880 Second thing I do depends on what the real numbers are. 550 00:31:28,400 --> 00:31:31,320 And if you had to have a guess of what you think the second 551 00:31:31,320 --> 00:31:33,440 thing you do would be. Even what we know, well, it 552 00:31:33,440 --> 00:31:34,920 depends. It totally depends like. 553 00:31:34,920 --> 00:31:36,080 The answer I'm fishing for is a cap. 554 00:31:36,080 --> 00:31:38,160 Raise. It would be a cap raise if if 555 00:31:38,160 --> 00:31:43,040 you, if peak net debt on your numbers still has a like isn't 556 00:31:43,040 --> 00:31:47,080 actually coming to call it, you know, the end of the end of this 557 00:31:47,240 --> 00:31:50,400 calendar year or, or a bit later, yeah, then it would be a 558 00:31:50,400 --> 00:31:51,040 cap raise. Yeah. 559 00:31:51,240 --> 00:31:53,160 And that's what I think. That's what I think is happening 560 00:31:53,160 --> 00:31:56,240 with peak net debt, although we can come back to that later. 561 00:31:57,120 --> 00:32:00,480 I think any, any professional CEO in this company would do a 562 00:32:00,480 --> 00:32:02,320 cap raise before the seat was worn. 563 00:32:03,440 --> 00:32:08,120 And yet Chris has resisted pressure to do that for the last 564 00:32:08,120 --> 00:32:14,760 18 months. His, his interests are aligned 565 00:32:14,760 --> 00:32:18,720 with shareholders in a way that I think is unusual in this 566 00:32:18,720 --> 00:32:23,880 space. But as a consequence of that, I 567 00:32:23,880 --> 00:32:27,160 feel like I, and I've observed this phenomenon in my own mind. 568 00:32:27,160 --> 00:32:31,400 I feel like we're all subject to a form of Stockholm syndrome. 569 00:32:31,960 --> 00:32:37,760 It's, it's not normal that when I'm reading the AFR 7th 570 00:32:38,440 --> 00:32:41,560 disclosure or seventh piece about some misconduct that 571 00:32:41,560 --> 00:32:44,240 they're alleging Chris Ellison to have committed, it's not 572 00:32:44,240 --> 00:32:47,880 normal that I'm, I'm reading that with one eye closed and, 573 00:32:47,880 --> 00:32:51,120 and, and fighting the, the dissonance in my mind with every 574 00:32:51,120 --> 00:32:53,720 second sentence trying to justify why, oh, this actually 575 00:32:53,720 --> 00:32:56,240 isn't that big a deal. And come on, you know, this was 576 00:32:56,240 --> 00:32:58,920 15 years ago. That's that's not a normal 577 00:32:58,920 --> 00:33:02,960 pattern of thinking, and yet it's one that so many of us have 578 00:33:02,960 --> 00:33:07,400 been forced into as a consequence of our desire to 579 00:33:07,400 --> 00:33:11,600 avoid plainly destructive actions that would be taken by 580 00:33:11,600 --> 00:33:14,120 anybody other than Chris. And this is the phenomenon that 581 00:33:14,120 --> 00:33:19,240 gave us gave us the the truly paranormal, which was a standing 582 00:33:19,240 --> 00:33:26,040 ovation at the AGM at which he was apologizing for historical 583 00:33:26,040 --> 00:33:31,040 misconduct for what was played in the media as a tax evasion 584 00:33:31,040 --> 00:33:32,640 scandal. But if you if you take the 585 00:33:32,640 --> 00:33:35,400 allegations made in the AFR at face value and you assume they 586 00:33:35,440 --> 00:33:37,680 are true and I have no other information, I have no 587 00:33:37,680 --> 00:33:39,280 independent reason to think they are true. 588 00:33:39,280 --> 00:33:42,200 But assuming they are true, this was not just a tax evasion 589 00:33:42,200 --> 00:33:45,160 scandal. This was the knowing misuse of 590 00:33:45,160 --> 00:33:47,160 corporate funds for personal enrichment. 591 00:33:49,200 --> 00:33:57,720 And so I, I think that I think that genuinely talented 592 00:33:59,160 --> 00:34:04,200 individuals are often flawed. I think Chris Ellison is 593 00:34:04,240 --> 00:34:07,680 evidence enough of that fact. But I do think something needs 594 00:34:07,680 --> 00:34:14,400 to be done to, to try bring shareholders around to a more 595 00:34:14,400 --> 00:34:16,639 comfortable position. I don't think it's sustainable 596 00:34:16,639 --> 00:34:21,400 that big super funds view this company as uninvestable. 597 00:34:22,480 --> 00:34:26,679 I don't think it's sustainable that there's lurking in the 598 00:34:26,679 --> 00:34:32,719 background the constant danger of some new article in the AFR 599 00:34:33,440 --> 00:34:38,280 alleging some manner of historical misconduct or some 600 00:34:38,280 --> 00:34:46,480 manner of failure of disclosure. What I'm saying is if there's a 601 00:34:46,480 --> 00:34:50,400 way to have the good without the bad, I think I think all of us 602 00:34:50,400 --> 00:34:52,719 would be would be grateful for that opportunity. 603 00:34:55,320 --> 00:34:57,280 I I've realized I'm I'm sort of monologuing now. 604 00:34:57,280 --> 00:34:59,880 This is a no, no, no. It's a bugbear of mine, but. 605 00:34:59,920 --> 00:35:01,400 It's a really interesting train of thought. 606 00:35:01,400 --> 00:35:04,200 What, what, what is the, the sort of solution there or what, 607 00:35:04,200 --> 00:35:07,480 what is the, the, the idea? Is it sustainable with Allison? 608 00:35:07,600 --> 00:35:10,960 Well, I, I think what they should do is be is show that 609 00:35:10,960 --> 00:35:14,320 they are committed to transparency by being far more 610 00:35:14,320 --> 00:35:16,320 open about the operations of the company. 611 00:35:16,360 --> 00:35:17,520 And you think they've had the first steps? 612 00:35:17,520 --> 00:35:19,200 There, Yeah, I do. Yeah, I do. 613 00:35:19,720 --> 00:35:21,120 I do. And I think the company should 614 00:35:21,120 --> 00:35:25,880 be applauded for that. And and I don't, I don't think I 615 00:35:25,880 --> 00:35:34,320 have as negative a view about the the intentionality of some 616 00:35:34,320 --> 00:35:36,840 of this past conduct that that maybe you do, Trev. 617 00:35:37,200 --> 00:35:40,800 I think that there's a decent chance a lot of this got caught 618 00:35:40,800 --> 00:35:44,880 up. A lot of these disclosure or 619 00:35:44,880 --> 00:35:48,520 mistakes of disclosure or absences of transparency in 620 00:35:48,520 --> 00:35:50,960 their disclosures have been the consequence of past decisions, 621 00:35:50,960 --> 00:35:54,160 not not recent deliberate decisions to mislead the market. 622 00:35:54,160 --> 00:35:56,480 I don't think they've set out to mislead the market in any way, 623 00:35:56,920 --> 00:36:01,520 but I do think that has been the effect, if not the intention. 624 00:36:02,680 --> 00:36:06,360 I I often think back like, you know, talking about Alison and 625 00:36:06,360 --> 00:36:10,400 his role sort of running this company, you know, stewarding it 626 00:36:10,440 --> 00:36:13,880 to the tremendous shareholder returns that we had from IPO to, 627 00:36:14,480 --> 00:36:19,400 to recently and and subsequently the the erosion of shareholder 628 00:36:19,400 --> 00:36:21,080 return in, in, in the recent years. 629 00:36:21,840 --> 00:36:25,640 The I often think back to the question that was asked, not at 630 00:36:26,280 --> 00:36:28,400 the last AGM, but the AGM before that. 631 00:36:29,600 --> 00:36:31,640 A shareholder gets up and. I think I know where you're. 632 00:36:31,640 --> 00:36:34,520 Going yeah, and and and asks, you know, how do you think about 633 00:36:35,120 --> 00:36:37,520 hubris? It strikes me that a weakness of 634 00:36:37,520 --> 00:36:39,280 yours or the companies might be. Do you remember his? 635 00:36:39,280 --> 00:36:40,960 Response to that question because I remember the question 636 00:36:40,960 --> 00:36:42,640 but I don't. Remember his yeah, he he hit 637 00:36:42,640 --> 00:36:44,640 Chris handballed it to James requirements. 638 00:36:44,760 --> 00:36:47,800 But I it was it was a funny kind of way. 639 00:36:47,800 --> 00:36:49,560 It all evolved. I'm not entirely sure that Chris 640 00:36:49,560 --> 00:36:51,880 knew what the definition of hubris was and that's why he 641 00:36:51,880 --> 00:36:54,160 handballed it. But it was like regardless, it 642 00:36:54,160 --> 00:36:57,040 seemed a a funny a funny interaction. 643 00:36:57,040 --> 00:37:01,640 Like the body language was really intriguing and why, why I 644 00:37:01,640 --> 00:37:05,200 still think about that is like IA 100% think hubris is, is the 645 00:37:05,200 --> 00:37:07,160 biggest weakness of Chris is a capital allocator. 646 00:37:07,200 --> 00:37:10,000 I think like that, that level of, of hubris. 647 00:37:10,200 --> 00:37:12,000 It's like you, you roll in the dice, you roll in the dice, you 648 00:37:12,000 --> 00:37:14,400 roll in the dice and there's a probability you'll be right. 649 00:37:15,120 --> 00:37:17,920 And he's and he's, he's had a he's had a freaking hot streak. 650 00:37:17,920 --> 00:37:21,000 He had a really hot streak. But if you keep kind of, you 651 00:37:21,000 --> 00:37:24,160 know, rolling the lot on the next roll and at some point, 652 00:37:24,560 --> 00:37:27,720 like, you know, you're not in charge of the macro, you can 653 00:37:27,720 --> 00:37:29,600 look pretty silly on the capital allocation front. 654 00:37:29,760 --> 00:37:34,120 I do think a lot of the, the lithium investment like, yeah, 655 00:37:34,360 --> 00:37:36,920 the, you know, the billion odd dollars that that went into 656 00:37:37,320 --> 00:37:40,680 copper, lithium stocks and, and the like, I don't know how you 657 00:37:40,680 --> 00:37:43,000 justify that from a capital allocation perspective. 658 00:37:43,120 --> 00:37:47,920 And and yeah, how you kind of back solve the, the, the lithium 659 00:37:47,920 --> 00:37:52,040 price assumptions that were so, so distinctly different from, 660 00:37:52,040 --> 00:37:55,920 from the market. Like why, why did you deter from 661 00:37:56,120 --> 00:37:59,680 consensus by, by such a, you know, like 2 standard deviations 662 00:37:59,680 --> 00:38:01,560 in your, in your assumptions, when you're, when you're, when 663 00:38:01,560 --> 00:38:04,880 you're bidding on these things, is is still a big question mark 664 00:38:04,880 --> 00:38:08,440 to be had. Yeah, I, I, I tend to agree. 665 00:38:08,600 --> 00:38:15,240 I think that I think that that success and this is not not the 666 00:38:15,240 --> 00:38:20,720 sort of comment that I would usually think goes that is that 667 00:38:20,720 --> 00:38:23,120 is apartment in respect of a company like Min Res. 668 00:38:23,120 --> 00:38:25,760 But I do think that success can breed complacency. 669 00:38:26,240 --> 00:38:28,480 And although Chris Ellison doesn't strike me as somebody 670 00:38:28,480 --> 00:38:34,880 who's complacent, he does strike me as somebody who who trusts 671 00:38:34,880 --> 00:38:40,920 his gut more than perhaps it is prudent to do. 672 00:38:42,040 --> 00:38:44,400 And I think he's been right in a number of respects. 673 00:38:44,400 --> 00:38:49,720 And and as I'm sure we'll get to, I think Onslow may well 674 00:38:50,200 --> 00:38:56,760 prove him right on an enduring, on an enduring basis, but 675 00:38:59,160 --> 00:39:05,000 there's too many unforced errors that are that I think by their 676 00:39:05,000 --> 00:39:08,720 nature can be, can be solved. And I think it would, it would 677 00:39:08,720 --> 00:39:10,520 redound to the company's benefit to do so. 678 00:39:11,080 --> 00:39:13,200 And and I don't see any downside. 679 00:39:13,320 --> 00:39:16,760 I don't believe that this company is hiding, hiding 680 00:39:16,760 --> 00:39:20,040 information that would make the company re evaluate the entire 681 00:39:20,040 --> 00:39:22,880 mining services business and come to the conclusion that this 682 00:39:22,880 --> 00:39:28,040 is actually AC grade services business rather than the A+ 683 00:39:28,280 --> 00:39:30,600 grade that everybody has given it in the past. 684 00:39:30,600 --> 00:39:33,240 I I don't think that's likely and and I don't agree with you, 685 00:39:33,240 --> 00:39:38,520 Trev that their operations that they are servicing are marginal. 686 00:39:38,520 --> 00:39:40,800 At least I don't agree that Onslow is a marginal operation. 687 00:39:41,160 --> 00:39:46,200 So I think that the mining services business will go from 688 00:39:46,200 --> 00:39:48,520 strength to strength over the next five years. 689 00:39:48,880 --> 00:39:52,160 Let's take Marion and Wajna. Do you think that either of 690 00:39:52,160 --> 00:39:55,480 those joint venture partners other than Minrez would like to 691 00:39:55,480 --> 00:40:00,440 close those operations down? Well, I think you've reported 692 00:40:00,440 --> 00:40:04,440 that they that Albemarle is desperate to to close down 693 00:40:05,120 --> 00:40:08,800 Wajna. So I'll I'll take that at face 694 00:40:08,800 --> 00:40:12,320 value. I don't think and Feng is is 695 00:40:12,320 --> 00:40:15,880 keen to close down Marion. No, I think they're happy for 696 00:40:15,880 --> 00:40:21,120 that to stay. Open, yeah, but I mean Minres 697 00:40:21,120 --> 00:40:25,200 Minres would would keep Mount Marion running even with the 698 00:40:25,200 --> 00:40:31,360 even with spot spot at at you know the US price for SE-6 of 699 00:40:31,360 --> 00:40:33,880 women at 300 I would have thought I think that they're 700 00:40:33,880 --> 00:40:37,560 banking on those mining services that mining services revenue 701 00:40:37,560 --> 00:40:40,560 stream. I do think they're, they're 702 00:40:40,560 --> 00:40:43,480 probably telling the truth when they say that those operations 703 00:40:43,480 --> 00:40:45,880 are cash flow positive from a min res point of view. 704 00:40:47,320 --> 00:40:50,400 It's obviously not the JV is obviously not cash flow positive 705 00:40:50,400 --> 00:40:52,680 at either of those lithium mines. 706 00:40:53,160 --> 00:40:57,760 But I think, I think it's likely that min res is happy to leave 707 00:40:57,760 --> 00:41:02,640 them running at the at the current spot price because I 708 00:41:02,640 --> 00:41:06,280 think they're either generating cash or sort of break even. 709 00:41:08,280 --> 00:41:11,120 You, you're a bit more bearish on that side of things than I 710 00:41:11,120 --> 00:41:13,680 am, I think or bearish is maybe not the right word. 711 00:41:13,680 --> 00:41:15,800 You're a bit more negative on the the viability of those 712 00:41:15,800 --> 00:41:19,440 operations at this price. Viability is an interesting one. 713 00:41:19,480 --> 00:41:27,280 I, I think, I think I don't, yeah, I, I, I think like, OK, if 714 00:41:27,280 --> 00:41:29,720 you look at the, the JVS, to the best of my knowledge, both of 715 00:41:29,720 --> 00:41:33,200 those JVS actually require, you know, mutual agreement or mutual 716 00:41:33,200 --> 00:41:37,080 consent to actually like sees sees mining or sees operations. 717 00:41:37,160 --> 00:41:42,080 I think, I think Min Res might be able to, to shut them down of 718 00:41:42,080 --> 00:41:45,960 their own accord as the operators, as the operator of 719 00:41:45,960 --> 00:41:48,160 each. I'm not sure about that, but I, 720 00:41:48,160 --> 00:41:52,160 I certainly suspect, well, I think it's clear that the other 721 00:41:52,160 --> 00:41:56,000 JV partner cannot unilaterally insist on care and maintenance. 722 00:41:56,040 --> 00:41:59,440 Get ugly, you know, if, if, if it was like a more public kind 723 00:41:59,440 --> 00:42:04,040 of display of wanting that operation to be shot, things get 724 00:42:04,040 --> 00:42:06,560 ugly that could kind of like, you know, force that to happen. 725 00:42:06,600 --> 00:42:09,840 I do think I don't, I like, you know, I see your analysis and 726 00:42:09,920 --> 00:42:12,680 it's not like you're actually forecasting a positive free cash 727 00:42:12,680 --> 00:42:16,320 flow from the lithium business. So I think when you when you 728 00:42:16,320 --> 00:42:17,520 say, we probably set this up for the views. 729 00:42:17,520 --> 00:42:20,440 When you say you see my analysis, you're talking about 730 00:42:21,000 --> 00:42:23,160 the financials that I've shared with you privately. 731 00:42:23,400 --> 00:42:25,440 That's not not the financials. That's that's gonna give the 732 00:42:25,440 --> 00:42:26,840 wrong impression to in cash flow forecast. 733 00:42:26,960 --> 00:42:27,440 Yeah. Yeah, yeah. 734 00:42:27,440 --> 00:42:29,760 My cash flow forecast I I. Think that's a fair? 735 00:42:30,200 --> 00:42:33,320 Base case assumption like I don't I do think like those the 736 00:42:33,320 --> 00:42:37,200 business current prices like all in mining services, everything. 737 00:42:37,800 --> 00:42:40,240 I wouldn't be surprised if there were you know operations from 738 00:42:40,240 --> 00:42:42,960 time to time that actually like like bleeding cash. 739 00:42:43,360 --> 00:42:48,520 But yeah, like TVA, there's also, you know what a well 740 00:42:48,520 --> 00:42:53,200 reported agreement that Minres is looking to sell up to 49% of, 741 00:42:53,520 --> 00:42:57,040 you know, Marion and, and and watching on whilst effectively 742 00:42:57,040 --> 00:43:00,320 retaining kind of control via whatever that JV is in, in the 743 00:43:00,360 --> 00:43:03,400 decision, decisions to be made in the respective minds. 744 00:43:03,400 --> 00:43:07,600 But yeah, I think that would be a, a, a. 745 00:43:08,640 --> 00:43:11,560 Tragic mistake. Everything's got a price. 746 00:43:12,520 --> 00:43:15,200 Wow. I I think assuming. 747 00:43:15,200 --> 00:43:17,320 Any realistic price, I think that would be a tragic mistake. 748 00:43:18,600 --> 00:43:21,960 I I think what you've said is. Is is sort of bang on for for 749 00:43:21,960 --> 00:43:27,480 the lithium business as we stand and for the say one to two year 750 00:43:27,480 --> 00:43:31,680 period, but like they're clearly not running gangbusters. 751 00:43:32,000 --> 00:43:34,120 What you know, we'll get to a point where more CapEx needs to 752 00:43:34,120 --> 00:43:36,320 be kind of spent. So Marion too, like, you know, 753 00:43:36,320 --> 00:43:38,400 like the. Float plant is a priority. 754 00:43:38,400 --> 00:43:41,560 You've gone gone from like that, so that's an acceptable. 755 00:43:41,560 --> 00:43:45,720 Sort of situation for the short to medium term, I think before a 756 00:43:45,720 --> 00:43:47,760 real decision has to be made. Yeah, yeah. 757 00:43:47,760 --> 00:43:51,440 I mean and again. This is a product of or. 758 00:43:51,800 --> 00:43:54,360 This is somewhat a product of our uncertainty surrounding. 759 00:43:54,360 --> 00:43:57,080 This is somewhat a product of the. 760 00:43:57,400 --> 00:43:59,880 Absence of detail in. Some of the disclosures around 761 00:43:59,880 --> 00:44:04,640 these operations, who knows what CapEx has been deferred at what 762 00:44:04,640 --> 00:44:08,080 you know, who knows whether they're high? 763 00:44:08,080 --> 00:44:17,480 Grading it or not? Well, we can guess, but you 764 00:44:17,480 --> 00:44:19,240 would think in in the current price environment they would 765 00:44:19,240 --> 00:44:22,200 have to be, they would have to be high grading migrating it. 766 00:44:23,240 --> 00:44:24,920 In fact, I think that that would be almost prudent. 767 00:44:28,160 --> 00:44:30,880 But the good news is. None of this matters. 768 00:44:31,160 --> 00:44:37,600 If Onslow performs, then the lithium revenue is merely a drop 769 00:44:37,600 --> 00:44:40,840 in the ocean compared to how much money they'll. 770 00:44:40,840 --> 00:44:42,360 Make up. North. 771 00:44:42,680 --> 00:44:46,120 So this is this is the point. I think of of contention and 772 00:44:46,120 --> 00:44:51,560 importance to to peel out is how suppose a, how you've come to 773 00:44:51,560 --> 00:44:56,520 have a a very positive view and even medium term outlook on 774 00:44:56,520 --> 00:45:02,360 Onslow's ability to generate real free cash flow and and B 775 00:45:02,360 --> 00:45:06,480 how you consider like the the risks to that that view. 776 00:45:06,720 --> 00:45:08,120 Yeah. And then we might differ yeah. 777 00:45:08,440 --> 00:45:11,680 So I. Think, I'm not sure how well 778 00:45:11,680 --> 00:45:14,200 your audience is likely to understand this operation, but 779 00:45:15,560 --> 00:45:18,920 this project has been quite a long time in the making and I 780 00:45:18,920 --> 00:45:21,280 think it's been a something of a passion project for Chris 781 00:45:21,280 --> 00:45:23,000 Ellison. I think he a long time ago 782 00:45:23,000 --> 00:45:28,920 identified these identified bid for Aquila back in 20. 783 00:45:30,640 --> 00:45:34,520 I would say 1414 I think. So he identified these tenements 784 00:45:34,520 --> 00:45:42,080 as capable of producing iron ore at A at a competitive price that 785 00:45:42,080 --> 00:45:43,240 was. A view contrary. 786 00:45:43,240 --> 00:45:47,720 To the views of most other market participants and I think 787 00:45:47,720 --> 00:45:51,520 that was because of the distance the tenements are from the 788 00:45:51,520 --> 00:45:55,480 nearest deepwater port and the associated costs of running rail 789 00:45:55,480 --> 00:46:00,280 from where these where these mines are, they're about 150 790 00:46:00,280 --> 00:46:05,920 kilometers southeast of the port of Ashburton keep in. 791 00:46:05,920 --> 00:46:07,320 Mind when? When Aquila. 792 00:46:07,320 --> 00:46:11,120 Was ultimately taken over the successful bidders where you 793 00:46:11,360 --> 00:46:14,880 know it was Bastille in consortium with Horizon rail 794 00:46:15,120 --> 00:46:20,040 provider Horizon ultimately, you know did after numerous studies 795 00:46:20,280 --> 00:46:24,080 thought there was no potential for rail at this operation hence 796 00:46:24,080 --> 00:46:26,560 why they were willing to kind of float their their stake in 797 00:46:26,560 --> 00:46:31,600 Aquila to Minrez for I think it was like $10 million wasn't very 798 00:46:31,600 --> 00:46:35,400 much their stake in a color. Yeah, yeah, and and and Minrez. 799 00:46:35,400 --> 00:46:39,200 Agreed in respect of the the feasibility of rail and so 800 00:46:39,200 --> 00:46:44,080 instead the project is the the tenements are connected to the 801 00:46:44,160 --> 00:46:47,200 port of Ashburton which is a which is not a a proper deep 802 00:46:47,200 --> 00:46:52,760 water port via a Hall Rd. the highway. 803 00:46:52,760 --> 00:46:56,520 To Hell has. Been the cause of so much of the 804 00:46:57,400 --> 00:47:01,640 dramas running this company over the last 12 months but then of 805 00:47:01,640 --> 00:47:05,720 course even once you get there or to the port, it's. 806 00:47:05,720 --> 00:47:08,360 It's it's. Loaded in an unconventional 807 00:47:08,360 --> 00:47:10,560 manner because the port is not a deep water port, meaning that 808 00:47:10,920 --> 00:47:13,920 proper Cape sized bolt carriers can't get all the way in. 809 00:47:14,600 --> 00:47:18,840 Meaning that Minarez is instead loading shallow draft 810 00:47:18,840 --> 00:47:24,560 transshippers, which are, in my view, a a, an incredible piece 811 00:47:24,560 --> 00:47:28,040 of technology that I mean, transshippers are not new, but 812 00:47:28,200 --> 00:47:30,520 Mina is. These transshippers are, from 813 00:47:30,520 --> 00:47:37,760 everything I've heard and can see, remarkably, remarkably 814 00:47:39,080 --> 00:47:43,760 efficient isn't the right word. Remarkably entrepreneurial, I 815 00:47:43,760 --> 00:47:47,080 suppose. And then and then these 816 00:47:47,080 --> 00:47:49,640 transshippers. Take the ore out to the waiting 817 00:47:50,120 --> 00:47:58,000 bulk carriers offshore. Where are we going with this 818 00:47:58,000 --> 00:48:01,160 discussion about Onslow? Sort of the background history. 819 00:48:01,160 --> 00:48:03,520 Right from 10 years ago. Yeah, yeah, yeah, yeah, yeah. 820 00:48:03,520 --> 00:48:05,480 So. And so the reason all of this is 821 00:48:05,480 --> 00:48:09,480 interesting is, is interesting is because these these these 822 00:48:09,880 --> 00:48:12,760 tenements were considered to contain stranded or in the sense 823 00:48:12,760 --> 00:48:15,120 that it wouldn't have been economical to to transport them 824 00:48:15,520 --> 00:48:19,600 by rail to a deep water port. Minres. 825 00:48:20,080 --> 00:48:25,280 Has developed this project on the basis the most the most 826 00:48:25,280 --> 00:48:30,160 recent updated disclosure assumes that. 827 00:48:30,240 --> 00:48:32,880 They'll be. Mining and shipping the ore on a 828 00:48:33,520 --> 00:48:37,720 free on board basis at 49 Aussie per ton. 829 00:48:38,400 --> 00:48:42,120 So that number itself is lower than than you might have thought 830 00:48:42,120 --> 00:48:45,240 it would be. Given given the situation that 831 00:48:45,280 --> 00:48:48,200 this is, this is a fully. Ramped 35,000,000 ton per yeah, 832 00:48:48,200 --> 00:48:51,240 yeah, yeah. Not including third party like 833 00:48:51,240 --> 00:48:53,520 college, which they're heavily utilizing right now. 834 00:48:53,520 --> 00:48:54,960 Yeah. And and the cost that they've 835 00:48:54,960 --> 00:48:57,880 reported. So far they're not including 836 00:48:57,920 --> 00:48:59,480 capitalized development costs, obviously. 837 00:48:59,480 --> 00:49:03,320 So, so you know, you know, query where exactly this is going to 838 00:49:03,320 --> 00:49:05,880 end up. But but that number's a little 839 00:49:05,880 --> 00:49:09,840 bit deceptive, I think because that $4949 a tonne number is a 840 00:49:09,840 --> 00:49:12,720 little bit deceptive because built into that is all of Min 841 00:49:12,720 --> 00:49:15,640 Rez's margins on the mining services side of things. 842 00:49:16,160 --> 00:49:23,280 And so that's $8 a tonne in margin for min res mining 843 00:49:23,280 --> 00:49:27,840 services, but then there's also an $8 toll fee that's being paid 844 00:49:27,840 --> 00:49:31,200 for every ton and half of that comes back to min res. 845 00:49:31,560 --> 00:49:37,280 So there's $12.00 of margin in that $49.00 number for min res, 846 00:49:38,320 --> 00:49:39,320 which means? If you. 847 00:49:39,400 --> 00:49:40,840 If you. Strip that out and and. 848 00:49:40,840 --> 00:49:44,400 This is, I suppose, a fairly crude way to look at it, But if 849 00:49:44,400 --> 00:49:49,000 you strip 12 out of 49 and you end at a $37 a ton basis and you 850 00:49:49,000 --> 00:49:51,760 can sort of you can imagine from Minrez's point of view that 851 00:49:51,760 --> 00:49:53,360 that's one way they see this project. 852 00:49:53,800 --> 00:50:00,160 Suddenly this is a highly competitive bottom. 25%. 853 00:50:01,280 --> 00:50:04,880 Quartile, you know, lower quartile iron ore project. 854 00:50:07,040 --> 00:50:11,760 When have you ever seen? Companies like projected costs 855 00:50:11,920 --> 00:50:16,440 from a feasibility stage or pre pre pre development stage match 856 00:50:16,440 --> 00:50:21,960 your actuals in Australia mining history the last five years yeah 857 00:50:23,040 --> 00:50:24,680 and they've been. Revised, these costs have been 858 00:50:24,680 --> 00:50:29,640 revised upwards twice now, but I do think that we'll we will have 859 00:50:30,760 --> 00:50:33,680 a better understanding of what's happening in terms of the cost 860 00:50:33,720 --> 00:50:37,600 per tonne not in this coming quarterly, but probably in in 861 00:50:37,880 --> 00:50:41,560 the next quarterly. I still don't think anyone. 862 00:50:42,560 --> 00:50:44,040 Properly Understands. The cost? 863 00:50:44,040 --> 00:50:47,440 Base at Onslow like there's not a good appreciation of what you 864 00:50:47,560 --> 00:50:51,400 you know, costs are at Onslow and realistically what they 865 00:50:51,400 --> 00:50:53,880 could get to well in terms of the. 866 00:50:53,880 --> 00:50:57,840 Haulage so so this discussion generally relates to the haulage 867 00:50:57,840 --> 00:51:00,720 the the discussion of relating to. 868 00:51:00,720 --> 00:51:03,520 Cost at Onslow. Relates to the cost getting the 869 00:51:03,520 --> 00:51:05,680 iron ore from the mine to the port. 870 00:51:06,000 --> 00:51:10,520 I think I I don't think there's a whole lot of consternation 871 00:51:10,520 --> 00:51:12,760 surrounding the actual mine operations themselves. 872 00:51:12,760 --> 00:51:15,560 It seems pretty, pretty basic. It's low strip. 873 00:51:17,000 --> 00:51:19,480 Do you have any views about the actual costs on the mining site? 874 00:51:19,560 --> 00:51:21,320 I think naturally your your strip changes. 875 00:51:21,320 --> 00:51:26,440 Over time, but yeah. And I, I, I obviously think that 876 00:51:28,240 --> 00:51:30,400 yeah, your, your, your costs are also going to change the 877 00:51:30,400 --> 00:51:32,840 function of like where you've been like you mined the highest 878 00:51:32,840 --> 00:51:35,240 grade of a deposit earlier. And, and by all accounts, you 879 00:51:35,240 --> 00:51:37,920 can kind of see the deposits they bring into the mix are, 880 00:51:38,520 --> 00:51:41,960 are, are kind of optimizing for high grade, low impurities, but 881 00:51:41,960 --> 00:51:43,920 that does deplete relatively kind of quickly. 882 00:51:43,920 --> 00:51:46,280 And then you then sure, but but the other side of. 883 00:51:46,280 --> 00:51:52,360 Things scale allows you to to shrink your overall cost basis 884 00:51:52,360 --> 00:51:58,080 because because of the nature of scale, you have fixed costs in. 885 00:51:58,280 --> 00:52:00,280 In some respects, but. You also have costs and not 886 00:52:00,280 --> 00:52:04,880 fixed, so if they ramp this beyond 35,000,000 tons per 887 00:52:04,880 --> 00:52:07,800 annum. I think it's, I think it's, I 888 00:52:07,800 --> 00:52:09,640 don't think it's. Unreasonable to assume that that 889 00:52:09,800 --> 00:52:14,840 cost basis will come down you. You you think the cost basis? 890 00:52:14,840 --> 00:52:17,520 Long term will actually be below 49. 891 00:52:17,520 --> 00:52:19,560 Aussie. I'm not sure but. 892 00:52:20,040 --> 00:52:22,960 There's a big question mark surrounding the haulage side of 893 00:52:22,960 --> 00:52:26,360 things for me. But I, I don't think it's fair 894 00:52:26,360 --> 00:52:29,960 to to describe this as a marginal operation. 895 00:52:29,960 --> 00:52:33,240 I think that this is, I think this is competitively 896 00:52:33,280 --> 00:52:37,680 positioned, yeah. I think that it's competitively 897 00:52:37,680 --> 00:52:39,560 positioned. Subject to what happens with 898 00:52:39,560 --> 00:52:44,720 haulage. And that's a big question mark 899 00:52:44,720 --> 00:52:46,440 for me. Yeah. 900 00:52:47,120 --> 00:52:49,520 Yeah. And the way to think about, so 901 00:52:49,520 --> 00:52:53,240 you look at $49.00 a tonne, the the, the Onslow site visit 902 00:52:53,240 --> 00:52:57,040 presentation, they broke it up into like 3 components, $14.00 903 00:52:57,040 --> 00:53:00,400 per tonne for what they call other mining costs. 904 00:53:00,400 --> 00:53:03,240 Then there's the $27.00 per tonne, which is the services 905 00:53:03,240 --> 00:53:07,680 you're talking about that's crushing haulage, port handling 906 00:53:07,680 --> 00:53:10,240 and trans and trans shipping. So there's four things people 907 00:53:10,240 --> 00:53:12,680 are assuming there's $2.00 to each of those category per 908 00:53:12,680 --> 00:53:13,560 tonne. Well, the company has said 909 00:53:13,560 --> 00:53:15,600 there's $2.00 to. Each of those categories per 910 00:53:15,600 --> 00:53:17,880 tonne and then and then there's the $8. 911 00:53:19,160 --> 00:53:23,640 Our Rd. trust, yeah, the the whole Rd. like fee so, but look 912 00:53:23,640 --> 00:53:27,400 at the the $27.00 per ton bit on the services front. 913 00:53:27,480 --> 00:53:31,400 Now that's kind of like a, a contractual price to deliver to 914 00:53:31,400 --> 00:53:35,960 the to Mineco at in Rez's services effectively. 915 00:53:35,960 --> 00:53:39,160 So people think that there's $8 a ton of margin there. 916 00:53:39,400 --> 00:53:42,760 But what, what came out of the last quarterly was, was a, a, 917 00:53:43,720 --> 00:53:47,400 there's a clear example of, well, this mining CSI has to 918 00:53:47,400 --> 00:53:50,480 wear margin erosion because, because they've, they've 919 00:53:50,480 --> 00:53:53,360 guaranteed the price of these services to Mineco. 920 00:53:53,440 --> 00:53:56,320 And at the moment they're relying on 3rd party contractors 921 00:53:56,320 --> 00:54:01,080 for haulage, which is basically, you know, clearly, clearly 922 00:54:01,080 --> 00:54:03,560 meaning there's not $8 a tonne of, of margin there. 923 00:54:03,560 --> 00:54:05,400 Yeah, I I tried to do some digging. 924 00:54:05,400 --> 00:54:07,560 On on this side of things in particular, because I was 925 00:54:07,560 --> 00:54:12,160 concerned that the whole the situation might make this 926 00:54:12,520 --> 00:54:15,520 uneconomical or significantly reduce the economics of it on an 927 00:54:15,520 --> 00:54:21,200 on an ongoing basis. If the the road was to to not be 928 00:54:21,200 --> 00:54:23,040 up, not to be built to spec basically. 929 00:54:23,760 --> 00:54:27,560 And I think that to the best of so far as I could see. 930 00:54:30,240 --> 00:54:35,240 If the, if the. Min Res triples are not 931 00:54:35,240 --> 00:54:38,440 autonomous. They, the Min Res thinks that 932 00:54:38,440 --> 00:54:41,400 they will cost them about $0.06 per tonne per kilometer. 933 00:54:42,760 --> 00:54:45,920 I I assumed 7 cents. I had previously assumed $0.07 934 00:54:45,920 --> 00:54:50,320 per ton per ton per kilometer. The contractor trucks are double 935 00:54:50,320 --> 00:54:53,960 that, so double that. That's $0.06 per ton per 936 00:54:53,960 --> 00:54:55,760 kilometer. They, they cost them about $0.12 937 00:54:55,760 --> 00:54:59,840 per ton per kilometer. But the company thinks that if 938 00:54:59,840 --> 00:55:04,120 they go autonomous, that $0.06 per ton per kilometer can be 939 00:55:04,120 --> 00:55:07,920 brought down to three to around $0.03 per ton per kilometer. 940 00:55:08,400 --> 00:55:10,720 And that's competitive with with rail. 941 00:55:14,560 --> 00:55:19,360 I think that may. Be a little bit ambitious, but 942 00:55:19,360 --> 00:55:20,440 even if. Even if it's in the. 943 00:55:20,440 --> 00:55:25,200 Ballpark, then, then that. Do you think that's 6? 944 00:55:25,200 --> 00:55:29,640 Cents per. TKM is is assuming like the full 945 00:55:29,640 --> 00:55:34,040 330 payload and cycle times that are, you know, average cycles 946 00:55:34,040 --> 00:55:36,920 per day, which are still kind of in the ambitious range of 947 00:55:36,920 --> 00:55:38,400 things. I'm not sure whether the. 948 00:55:38,840 --> 00:55:42,560 The average cycles per day are in the ambitious range of things 949 00:55:42,840 --> 00:55:45,160 to that's something else I've been trying to look into. 950 00:55:45,160 --> 00:55:49,040 And I think that they're they're probably more likely to achieve 951 00:55:49,040 --> 00:55:53,000 their cycle times than they are to achieve their full full load 952 00:55:54,800 --> 00:55:57,040 projections. I think that what's likely to 953 00:55:57,040 --> 00:56:00,960 occur is that they're going to run their triples at reduced 954 00:56:00,960 --> 00:56:02,680 capacity. I think that's, I think that's 955 00:56:02,680 --> 00:56:06,120 basically inevitable actually at least for the foresee or not 956 00:56:06,120 --> 00:56:08,120 foreseeable future, at least for the medium term. 957 00:56:10,560 --> 00:56:16,080 Now that may flow through and push that that cost up a little 958 00:56:16,080 --> 00:56:21,760 bit. But I mean, again, part of this 959 00:56:21,760 --> 00:56:26,800 is a function of, of a lack of disclosure around exactly how 960 00:56:26,800 --> 00:56:28,480 they're what, what they're going to do with these trucks going 961 00:56:28,480 --> 00:56:30,440 forward. But if we assume that they're 962 00:56:30,440 --> 00:56:36,080 loaded to 300 tons, which is down from 330, then I think that 963 00:56:36,080 --> 00:56:39,840 that's that $0.06 per ton per kilometer is probably not 964 00:56:39,840 --> 00:56:43,640 unrealistic from everything I'll be able to find online. 965 00:56:46,200 --> 00:56:49,400 Right here's. Yeah. 966 00:56:49,600 --> 00:56:54,600 Here's probably where I have a a different risk outlook on on the 967 00:56:54,600 --> 00:56:59,040 project's kind of capability to sustainably deliver, kind of 968 00:56:59,480 --> 00:57:03,400 name plate and sustainably deliver is the the the keyword 969 00:57:03,400 --> 00:57:08,080 there? The the moment you. 970 00:57:08,800 --> 00:57:13,120 The moment you you get rid of your your contractor road 971 00:57:13,120 --> 00:57:16,240 trains, well, the contractor Rd. trains are actually not 972 00:57:16,320 --> 00:57:18,520 operating on the whole Rd. They're taking a different path. 973 00:57:18,520 --> 00:57:20,840 They're using for for some of it, at least the access. 974 00:57:20,840 --> 00:57:23,680 Road for a bit and then they're. And then they're using public, 975 00:57:23,760 --> 00:57:26,120 the public highway. So it's a longer route, it's a 976 00:57:26,120 --> 00:57:29,200 smaller, smaller train. So if you remove the contractor 977 00:57:29,200 --> 00:57:34,880 trucks and you suddenly have a an enhanced reliance on the a 978 00:57:34,880 --> 00:57:38,160 combination of min raises, jumbos, plus there might be 979 00:57:38,160 --> 00:57:40,000 other size trucks that are also operating on the whole Rd. 980 00:57:42,240 --> 00:57:44,720 I I think you're, you know, depending on what you're 981 00:57:44,720 --> 00:57:48,200 actually loading these trucks at you're you're you're coming 982 00:57:48,680 --> 00:57:52,960 probably coming into a, a, a pretty dicey position in with 983 00:57:52,960 --> 00:57:56,360 the extent to which your whole Rd. is kind of capable of of 984 00:57:56,360 --> 00:58:01,840 that load in an unproven way. Yeah, you're talking about the 985 00:58:01,840 --> 00:58:04,120 actual. Underlying structure of the 986 00:58:04,120 --> 00:58:06,680 whole Rd. I, I I am. 987 00:58:07,400 --> 00:58:09,320 Yeah, yeah. But this is an unknown. 988 00:58:09,360 --> 00:58:15,840 This is there is. I have found absolutely. 989 00:58:15,840 --> 00:58:21,120 No, no reliable way to work out what's going to happen with this 990 00:58:21,120 --> 00:58:23,640 road. There are people who say that 991 00:58:24,440 --> 00:58:28,360 the the the actual composition of the base course is is 992 00:58:28,360 --> 00:58:32,360 necessarily stuffed as a consequence of a lack of 993 00:58:32,360 --> 00:58:36,440 available material when the road was built. 994 00:58:37,480 --> 00:58:41,120 On the other hand, the company seems to be the view that the 995 00:58:41,120 --> 00:58:44,920 main problem was. Was water ingress. 996 00:58:44,920 --> 00:58:48,520 It wasn't the actual underlying composition of the road and 997 00:58:48,520 --> 00:58:52,360 therefore as folding it and playing with the with the 998 00:58:52,360 --> 00:58:55,120 shoulders a little bit, extending it, being more careful 999 00:58:55,120 --> 00:58:59,920 around water will deal with all these problems, both of those 1000 00:58:59,960 --> 00:59:03,560 things that can be related. Because yeah, of course water is 1001 00:59:03,560 --> 00:59:05,800 the enemy of roads. Like when it gets into the like 1002 00:59:05,800 --> 00:59:08,360 the sub base, then yeah, your chemical bonding and everything 1003 00:59:08,360 --> 00:59:12,440 can be pretty compromised. And yeah, when you buy. 1004 00:59:12,440 --> 00:59:15,200 The stock, how do you get comfortable with that then? 1005 00:59:15,400 --> 00:59:17,760 Or do you think that's something that might play out in 18 plus 1006 00:59:17,760 --> 00:59:19,520 months and that's not in my time horizon or what? 1007 00:59:19,520 --> 00:59:21,760 Well, yeah, it's very difficult to know. 1008 00:59:23,560 --> 00:59:27,440 I think that over the next six months, the company. 1009 00:59:27,440 --> 00:59:29,120 Will get a better idea. Of what's going to happen with 1010 00:59:29,120 --> 00:59:33,760 the road it's been it's been reported that they're they're 1011 00:59:34,040 --> 00:59:38,160 monitoring it quite carefully they're using GPR ground 1012 00:59:38,160 --> 00:59:42,040 penetrating radar to try and to try and keep an eye on any 1013 00:59:42,040 --> 00:59:48,360 movement subsurface but. It's. 1014 00:59:49,840 --> 00:59:53,560 What they're doing now shows that the road can take. 1015 00:59:55,240 --> 01:00:00,640 Say 260 tons. In on these trailers, yes, which 1016 01:00:00,640 --> 01:00:03,240 is a prudent. Thing and just because it can 1017 01:00:03,240 --> 01:00:07,480 take that much right now it doesn't mean that come January, 1018 01:00:07,480 --> 01:00:09,840 January, February, it'll it'll still be rosy. 1019 01:00:10,000 --> 01:00:14,280 Yeah, yeah, yeah, and and and. The unsatisfactory answer to all 1020 01:00:14,280 --> 01:00:18,920 of this may be that we just need to wait and see, but I think 1021 01:00:18,920 --> 01:00:23,160 that the the risks are weighted to the upside in respect of the 1022 01:00:23,160 --> 01:00:28,920 company's operations at Onslow. Generally, I think that I don't, 1023 01:00:28,920 --> 01:00:33,160 I think that the the dispute between the initial Rd. 1024 01:00:33,160 --> 01:00:36,240 contractor and minerals has been, has been overplayed a 1025 01:00:36,240 --> 01:00:38,800 little bit in the media. I think that there were some 1026 01:00:39,560 --> 01:00:41,760 sort of that I think, I'm not sure if it was the fin review of 1027 01:00:41,760 --> 01:00:43,480 the Australian who reported on this, but there was some 1028 01:00:43,480 --> 01:00:49,320 innuendo around the quality of the actual Rd. composition. 1029 01:00:49,720 --> 01:00:52,160 But I think where you to ask the people who built the road, I 1030 01:00:52,160 --> 01:00:57,880 think they would say, actually we built a, we built a road, we 1031 01:00:57,880 --> 01:01:02,200 built a really good Rd. The this this thing. 1032 01:01:02,640 --> 01:01:04,240 I don't think we've ever probably hashed out on the 1033 01:01:04,240 --> 01:01:07,000 podcast. Yeah. 1034 01:01:07,200 --> 01:01:10,800 Why the maybe? Some of the intuitive science. 1035 01:01:10,800 --> 01:01:13,760 Behind why the road is such an important kind of piece of 1036 01:01:13,760 --> 01:01:18,200 things. And in in civil construction, in 1037 01:01:18,200 --> 01:01:21,960 Rd. design, there's this thing called the 4th power law, 4th 1038 01:01:21,960 --> 01:01:23,960 power law of Rd. design. What is the 4th power law? 1039 01:01:23,960 --> 01:01:25,920 Well, the 4th power law. I know what it looks like. 1040 01:01:26,040 --> 01:01:26,800 Yeah. Yeah. 1041 01:01:27,080 --> 01:01:29,640 It looks like. This you can picture an 1042 01:01:29,640 --> 01:01:31,360 exponential curve to the power of four. 1043 01:01:31,360 --> 01:01:34,640 Well, that's that's the relationship between the maximum 1044 01:01:34,880 --> 01:01:38,640 axle weight of vehicles on a on a road. 1045 01:01:39,640 --> 01:01:43,240 Well, the the change in that is, is directly proportional to the 1046 01:01:43,440 --> 01:01:44,840 well. The road damage is directly 1047 01:01:44,840 --> 01:01:47,760 proportional to the 4th power of the maximum maximum load. 1048 01:01:47,880 --> 01:01:49,120 And So what what you're saying is? 1049 01:01:49,240 --> 01:01:52,640 Small changes in load can have outsized effects. 1050 01:01:52,640 --> 01:01:56,400 Tremendously outsized if. You just take a look at a 1051 01:01:56,400 --> 01:02:02,680 typical standard Rd. train maximum Max load is is is is 8. 1052 01:02:03,360 --> 01:02:07,000 Now min res ones are 20. These are public public numbers. 1053 01:02:07,000 --> 01:02:10,320 That's that's 2 1/2 times the Max the the axle load. 1054 01:02:10,520 --> 01:02:15,880 But your your your effect on on road damage is proportional to 1055 01:02:15,880 --> 01:02:20,320 the to the 4th power of of 2.5. So it suddenly doesn't look 1056 01:02:20,320 --> 01:02:22,440 like. A difference between 8 and 20? 1057 01:02:22,800 --> 01:02:25,800 It looks like a difference between like 40 ish. 1058 01:02:26,080 --> 01:02:29,600 Times the the road damage you'd expect of a of a, of a road that 1059 01:02:29,600 --> 01:02:35,040 is, is yeah, that's, that's the intuition behind like why this 1060 01:02:35,040 --> 01:02:37,960 road is matters a lot. And this the people that built 1061 01:02:37,960 --> 01:02:39,960 the road, I'm sure like they, they did the numbers. 1062 01:02:39,960 --> 01:02:42,120 They they know this stuff. They built they built roads 1063 01:02:42,120 --> 01:02:45,960 before and they would have built it to the to spec, but the to to 1064 01:02:46,040 --> 01:02:48,400 to hope be able to manage this in the way they could. 1065 01:02:49,160 --> 01:02:53,320 Now it doesn't. What what I do mean though, is 1066 01:02:53,320 --> 01:02:56,360 like if, if the road would were designed to handle a maximum 1067 01:02:56,360 --> 01:03:00,680 load of of of 20, of 20, maximum maximum load of 20, but they 1068 01:03:00,680 --> 01:03:04,240 were overloading in the early days, for example, to 24 or 25. 1069 01:03:04,240 --> 01:03:07,200 Or maybe maybe the distribution of the actuals across the 1070 01:03:07,200 --> 01:03:10,240 vehicles wasn't probably like understood. 1071 01:03:11,520 --> 01:03:14,480 There was some variability that has a massive impact on kind of 1072 01:03:14,680 --> 01:03:16,080 what you can expect to happen on the road. 1073 01:03:16,400 --> 01:03:19,600 And the other, the other working assumption I have when thinking 1074 01:03:19,600 --> 01:03:24,040 about the risks of the road is the way I think about a road is 1075 01:03:25,520 --> 01:03:27,080 you. Will you will see Rd. 1076 01:03:27,080 --> 01:03:31,520 Failure in the first, you know, couple of months, if it, if, if 1077 01:03:31,520 --> 01:03:35,160 there were, you know, things that were where, if there were 1078 01:03:35,160 --> 01:03:36,720 design components were not up to scratch. 1079 01:03:36,800 --> 01:03:39,080 And you will know in the first couple of months, a properly 1080 01:03:39,080 --> 01:03:43,000 built Rd. will be durable for 50 years and you'll never have to 1081 01:03:43,000 --> 01:03:46,720 do any maintenance on that. So my, my working assumption it 1082 01:03:46,760 --> 01:03:50,320 like you think, you think of a, like freeways in, in the United 1083 01:03:50,320 --> 01:03:51,880 States, they're loud as all hell or whatever. 1084 01:03:51,880 --> 01:03:54,640 But those things they're, they're basically like built 1085 01:03:54,640 --> 01:03:56,760 with sufficient characteristics to, to have, you know, your 1086 01:03:56,760 --> 01:03:58,640 certain thickness of Rd. base and all that kind of stuff, all 1087 01:03:58,640 --> 01:04:02,880 those materials, yada, yada, so that they can endure without 1088 01:04:03,240 --> 01:04:05,920 maintenance for, for the longest period of time to think of, you 1089 01:04:05,920 --> 01:04:07,800 know, your airport tarmacs, those sorts of things are the 1090 01:04:07,800 --> 01:04:12,920 same. But if it's not built to the 1091 01:04:12,920 --> 01:04:16,520 right kind of specs for what the low ultimate load's going to be, 1092 01:04:16,520 --> 01:04:18,640 you'll see that very quickly. And I think we did see that very 1093 01:04:18,640 --> 01:04:20,560 quickly with minres. And my working assumption is 1094 01:04:20,560 --> 01:04:23,360 that it's not a, it's not necessarily going to be a case 1095 01:04:23,360 --> 01:04:27,360 that you can remediate it with some cement filling asphalt and 1096 01:04:27,480 --> 01:04:30,200 it's going to be durable again for, for 10 years. 1097 01:04:30,200 --> 01:04:36,280 In fact, like I'm, I'm very concerned about when you have 1098 01:04:36,320 --> 01:04:40,080 your summer months, January, February, it's going to be very 1099 01:04:40,080 --> 01:04:41,760 hot. That's when the road's going to 1100 01:04:41,760 --> 01:04:44,000 be under a lot of stress. It's also going to be very wet. 1101 01:04:45,440 --> 01:04:48,800 And you know, depending how much cement has kind of been put in 1102 01:04:48,800 --> 01:04:52,880 to stabilize the road, your risk of different types of risks like 1103 01:04:52,880 --> 01:04:57,480 block failure. Now all of that to say, like. 1104 01:04:57,840 --> 01:05:00,560 The road remains a key risk. What it can really credibly do 1105 01:05:00,560 --> 01:05:02,560 remains a key risk. All that to say, but I'm I'm 1106 01:05:02,560 --> 01:05:06,240 amazed that they're achieving an annualized rate of 35,000,000 1107 01:05:06,240 --> 01:05:08,560 tons per annum right now with the reliance on contractor 1108 01:05:08,560 --> 01:05:12,000 tracks and using kind of 1/2 effectively half a whole Rd. 1109 01:05:12,000 --> 01:05:14,680 because they're they're doing repairs along it at the moment. 1110 01:05:14,680 --> 01:05:17,240 It's it's incredible. It's it's. 1111 01:05:17,720 --> 01:05:19,080 It's part of the Chris Ellison magic. 1112 01:05:19,400 --> 01:05:23,600 Well, the question to figure. Out is like and we know that the 1113 01:05:23,600 --> 01:05:26,800 repairs of the whole Rd. all of that costs is going to be worn 1114 01:05:26,800 --> 01:05:31,480 by Minrez. So that's 100% Minrez's, you 1115 01:05:31,480 --> 01:05:33,920 know, what is a realistic number for the annualized? 1116 01:05:34,120 --> 01:05:36,840 Like if you look at if you look at what they're getting for 1117 01:05:36,840 --> 01:05:39,760 their share of the, the whole Rd., the 50%, it's like 150 1118 01:05:39,760 --> 01:05:41,600 million bucks a year, right? They're spending twice that 1119 01:05:41,600 --> 01:05:44,640 right now just in, in repair of the whole Rd. this year. 1120 01:05:45,040 --> 01:05:48,360 So what's your, what's your, what should be your annualized 1121 01:05:48,720 --> 01:05:52,240 number of like your annualized cap expectation for Rd. 1122 01:05:52,240 --> 01:05:53,960 maintenance? I'm sure it's not $300 million. 1123 01:05:53,960 --> 01:05:55,680 I'm sure it's less than that because they're, they're doing 1124 01:05:56,360 --> 01:05:59,360 yeah, faulty and everything. But but that's a that that kind 1125 01:05:59,360 --> 01:06:01,680 of cuts into your margins pretty, pretty clearly in my 1126 01:06:01,680 --> 01:06:04,880 opinion. And if it also inhibits your 1127 01:06:04,880 --> 01:06:07,760 maximum allowable volumes, which it obviously, you know, 1128 01:06:08,360 --> 01:06:11,240 obviously, what if you're having more, more trucks, you can't 1129 01:06:11,240 --> 01:06:13,240 just keep adding trucks and trucks to expand. 1130 01:06:13,560 --> 01:06:16,280 There's some maximum trucks and some maximum loading that this 1131 01:06:16,280 --> 01:06:19,000 road is going to be able to handle on a durable basis. 1132 01:06:19,000 --> 01:06:21,560 And that was clearly exceeded beforehand. 1133 01:06:21,560 --> 01:06:23,280 Yeah, it's interesting that there's been no. 1134 01:06:23,280 --> 01:06:27,920 Talk of long term reliance upon contractor trucks, yeah, 1135 01:06:28,400 --> 01:06:31,520 because. You know will. 1136 01:06:31,520 --> 01:06:34,520 We will. We see a point where they say 1137 01:06:34,520 --> 01:06:38,680 for the next 6 months we're only willing to run X amount of tons 1138 01:06:38,760 --> 01:06:41,360 along the whole Rd. We need it, we need it, we need 1139 01:06:41,360 --> 01:06:45,440 a year observation. So we will make up the shortfall 1140 01:06:45,800 --> 01:06:47,760 using the contractor accident and they've shown that they can 1141 01:06:47,760 --> 01:06:50,640 do that. I think that that would place 1142 01:06:51,120 --> 01:06:56,000 upwards pressure on, on well downwards pressure on min res's 1143 01:06:56,280 --> 01:06:58,640 revenue, upwards pressure on the costs involved in getting this 1144 01:06:58,640 --> 01:07:04,200 stuff to port, getting this order port in the in the 1145 01:07:04,200 --> 01:07:07,640 presentation that accompanied the mine visit. 1146 01:07:08,280 --> 01:07:10,480 I think there's a line in there where they say that once the 1147 01:07:10,480 --> 01:07:14,680 road is repaired, there'll be essentially 0 sustaining CapEx. 1148 01:07:15,080 --> 01:07:16,640 That's a that's a phenomenal line. 1149 01:07:17,080 --> 01:07:23,680 Yeah. Yeah, that it's not. 1150 01:07:23,680 --> 01:07:24,840 So much that that I mean that strikes. 1151 01:07:24,840 --> 01:07:29,320 Me as perfectly realistic if everything goes to plan that 1152 01:07:29,320 --> 01:07:30,880 strikes me as. Incredibly unrealistic. 1153 01:07:30,880 --> 01:07:33,240 Given the the the road needed repairs. 1154 01:07:33,240 --> 01:07:34,600 Yeah, well, that's what I mean. That's what I mean. 1155 01:07:34,600 --> 01:07:36,760 So. So what what I'm saying is 1156 01:07:37,760 --> 01:07:40,480 what's the basis for staying for saying there will be 0 1157 01:07:40,480 --> 01:07:44,560 sustaining CapEx in respect to the road unless they are very 1158 01:07:44,560 --> 01:07:46,960 confident that these Rd. repairs have solved this problem. 1159 01:07:47,200 --> 01:07:50,400 I I think like. The company does have a, a 1160 01:07:50,680 --> 01:07:53,400 history of disappointing on CapEx expectations from a 1161 01:07:53,400 --> 01:07:56,560 sustaining perspective. Like I don't, you know, and 1162 01:07:56,760 --> 01:07:59,760 you've spoken about, about that too, like I don't, I don't look 1163 01:07:59,760 --> 01:08:01,800 at that number. I think that number, the 1164 01:08:01,800 --> 01:08:04,840 expectation maybe is guidance to hopefully alleviate, you know, 1165 01:08:04,880 --> 01:08:07,760 the market that, you know, things are going to be OK for a 1166 01:08:07,760 --> 01:08:10,600 balance sheet perspective. But like, my thinking is that 1167 01:08:10,600 --> 01:08:13,480 the, the whole, the whole Rd. assuming there's going to be 0 1168 01:08:13,480 --> 01:08:15,520 maintenance CapEx on that whole Rd. after these repairs. 1169 01:08:15,520 --> 01:08:18,600 Like I think it's kind of a wacky assumption to to 1170 01:08:18,600 --> 01:08:22,600 realistically have given, you know, the, the, the reality of 1171 01:08:22,600 --> 01:08:24,960 how a bit of rain transpired. Yeah. 1172 01:08:25,120 --> 01:08:28,600 And if the sub base is compromised or all of that kind 1173 01:08:28,600 --> 01:08:29,880 of stuff, throw it out and start again. 1174 01:08:31,960 --> 01:08:34,439 I'm not a civil engineer, I'm not an expert on this stuff. 1175 01:08:34,439 --> 01:08:37,800 But the, you know, like you, I don't think you have to be too 1176 01:08:37,800 --> 01:08:41,680 intuitively kind of recognize the risks with assuming A0 1177 01:08:41,800 --> 01:08:44,840 maintenance CapEx. We should probably. 1178 01:08:44,840 --> 01:08:49,520 Then mention the. The upside risks which is that 1179 01:08:50,439 --> 01:08:54,000 some of these problems can be alleviated or at least fudged if 1180 01:08:54,000 --> 01:08:56,640 you if you push the project beyond 35,000,000 tons per 1181 01:08:56,640 --> 01:09:00,120 annum. If you're able to suppose that 1182 01:09:00,720 --> 01:09:06,399 they they covered the increased cost associated with the road 1183 01:09:06,720 --> 01:09:12,080 with increased shipments of I know I'm I'm pretty bullish on 1184 01:09:12,080 --> 01:09:15,600 the capacity of this project going forward. 1185 01:09:17,000 --> 01:09:23,640 I think that putting the road to one side, they've demonstrated 1186 01:09:24,040 --> 01:09:26,760 or they are in the process of demonstrating that they can push 1187 01:09:26,800 --> 01:09:28,960 everything else beyond 35,000,000 tons per annum. 1188 01:09:29,800 --> 01:09:32,760 And my read on what's happening on the port side of things is 1189 01:09:32,760 --> 01:09:40,520 that the project is performing phenomenally in. 1190 01:09:40,520 --> 01:09:43,040 Terms of what CapEx would be? Required to push the project 1191 01:09:43,040 --> 01:09:44,600 beyond 35,000,000 tons per annum. 1192 01:09:45,120 --> 01:09:48,880 We know that they've already ordered two more transshippers 1193 01:09:48,880 --> 01:09:51,840 and they're arriving next year taking it up to seven. 1194 01:09:52,279 --> 01:09:56,960 There, there. Everything I have seen and have 1195 01:09:56,960 --> 01:10:01,080 heard suggests that five transshippers operating at 1196 01:10:01,080 --> 01:10:05,840 capacity is alone enough to get this project to name play it or 1197 01:10:05,840 --> 01:10:08,520 beyond. The question then comes, can 1198 01:10:08,520 --> 01:10:10,880 they? Can they build? 1199 01:10:10,880 --> 01:10:13,360 Out to 4040. 550,000,000 tons per annum. 1200 01:10:15,360 --> 01:10:19,840 And go from there. My view is that the. 1201 01:10:19,840 --> 01:10:25,000 Market is is is overestimating how much it. 1202 01:10:25,000 --> 01:10:27,560 Will cost to push. Beyond 35,000,000 tons per annum 1203 01:10:28,200 --> 01:10:31,240 or is perhaps underestimating the likelihood of that occurring 1204 01:10:31,240 --> 01:10:36,760 at all. And I think that I think that 1205 01:10:36,760 --> 01:10:40,280 they've shown were it not. For problems with the. 1206 01:10:40,280 --> 01:10:43,040 Road, you know, assume the road works perfectly. 1207 01:10:43,760 --> 01:10:49,680 I think they've shown that with 7 transshippers in operation and 1208 01:10:49,720 --> 01:10:55,320 some work actually at the port concerning the, the, the channel 1209 01:10:55,320 --> 01:10:58,960 that the transshippers used to come in to shore to be loaded. 1210 01:10:59,920 --> 01:11:02,960 I think they'll be able to push this well beyond 35,000,000 tons 1211 01:11:02,960 --> 01:11:08,320 per just on that, on that Channel point. 1212 01:11:09,440 --> 01:11:14,080 I think that what's, what's the only real bottleneck at the port 1213 01:11:14,120 --> 01:11:19,360 at the moment is that they're sharing one single quite narrow 1214 01:11:19,360 --> 01:11:23,440 channel with, with Shep. So Shep, Chevron has the 1215 01:11:23,840 --> 01:11:28,200 Wheatstone LNG project basically on top of where minerals is 1216 01:11:28,200 --> 01:11:29,240 operating at the port of Ashburn. 1217 01:11:29,240 --> 01:11:30,400 And they're right next to each other. 1218 01:11:30,920 --> 01:11:35,880 And that means that almost once a day Chevron brings in an LNG 1219 01:11:35,880 --> 01:11:40,240 tanker or takes an LNG taker out and, and Chevron has priority 1220 01:11:40,240 --> 01:11:43,560 over the shipping of the maritime operations when that's 1221 01:11:43,560 --> 01:11:47,040 occurring. And so it seems that miners 1222 01:11:47,040 --> 01:11:51,360 can't actually use can't, can't use their transshippers while 1223 01:11:51,360 --> 01:11:52,640 that's occurring. They can't, they can't bring 1224 01:11:52,640 --> 01:11:56,680 them into load or take them out from shore to the carriers. 1225 01:11:57,280 --> 01:12:01,120 So my understanding is it may be possible to come up with a 1226 01:12:01,120 --> 01:12:03,800 workaround for this problem with a bit of bit of dredging. 1227 01:12:06,040 --> 01:12:10,320 I was, I was actually told that this this was not from somebody 1228 01:12:10,320 --> 01:12:13,280 who works at miners, but from somebody who's to understand 1229 01:12:13,280 --> 01:12:15,760 what's going on there. I was told that it may not be 1230 01:12:15,760 --> 01:12:20,120 expensive at all to dredge or to widen that Channel such that 1231 01:12:20,120 --> 01:12:24,000 this is no longer an issue. If that's the case, then I think 1232 01:12:24,000 --> 01:12:28,440 that the one impediment to shipping occurring beyond 1233 01:12:28,440 --> 01:12:31,320 35,000,000 tons per annum could be removed. 1234 01:12:35,240 --> 01:12:37,960 Does transpire then? Then we're back at the road. 1235 01:12:38,040 --> 01:12:40,680 We're back at the road being the the bottleneck. 1236 01:12:41,080 --> 01:12:44,160 Do you have a view as to to where this project can go beyond 1237 01:12:44,160 --> 01:12:50,080 35,000,000 tons per minute? Let's get to let's get to 35 for 1238 01:12:50,080 --> 01:12:56,360 a year first. Yeah, I like, I, I, I'm 1239 01:12:56,400 --> 01:12:58,480 intrigued by the opportunity for expansion. 1240 01:12:58,480 --> 01:13:00,840 I think like the upside's an interesting case to explore. 1241 01:13:01,240 --> 01:13:04,360 I think there was actually a brief window, I want to say it 1242 01:13:04,360 --> 01:13:07,840 was in 2024 where Chris was telling the market this is going 1243 01:13:07,840 --> 01:13:11,200 to be 50 million tons per annum. And then he also guided CapEx 1244 01:13:11,200 --> 01:13:13,360 that was kind of sharply higher than expectations and there was 1245 01:13:13,360 --> 01:13:17,840 a port kind of allowance that that was the the main factor for 1246 01:13:17,840 --> 01:13:20,320 the huge increase in expected kind of CapEx. 1247 01:13:20,320 --> 01:13:23,960 So I challenge the proposition that the dredging is a cheap 1248 01:13:23,960 --> 01:13:26,040 thing to do. I think it's quite an expensive 1249 01:13:26,040 --> 01:13:28,800 endeavour. I think like the discussion of 1250 01:13:29,040 --> 01:13:36,600 the expansion comes with it like a very uncertain like like how 1251 01:13:36,600 --> 01:13:37,760 they're going to fund this, right? 1252 01:13:37,920 --> 01:13:40,040 Like you know so well, I'm going to talk about expansion, but the 1253 01:13:40,040 --> 01:13:42,600 first thing you think of is, well, that's a lot of CapEx and 1254 01:13:42,720 --> 01:13:44,720 like the, the balance sheet's already stressed. 1255 01:13:44,720 --> 01:13:48,680 So where's the free cash flow to, to, to fund this expansion? 1256 01:13:48,680 --> 01:13:51,600 That's got to it's got to be proven to be free cash 1257 01:13:51,600 --> 01:13:54,760 generative substantially before you before the market is even 1258 01:13:54,760 --> 01:13:58,440 told about expansion in my opinion, like because. 1259 01:13:58,480 --> 01:14:00,800 Expansion comes with. CapEx, well, Speaking of, 1260 01:14:01,280 --> 01:14:03,840 Speaking of. The need for money to fund CapEx 1261 01:14:03,840 --> 01:14:07,400 and the balance sheet, yeah. Do you think they should do 1262 01:14:07,400 --> 01:14:11,320 nothing right now, focus on operations and then earn their 1263 01:14:11,320 --> 01:14:16,040 way out? I don't like I, I. 1264 01:14:16,600 --> 01:14:20,280 If you looked at the last quarter, the that, that you 1265 01:14:20,280 --> 01:14:22,320 know, cash at bank was like 4400 million bucks. 1266 01:14:22,320 --> 01:14:25,880 They had had an $800 million revolver which was undrawn, 1267 01:14:25,880 --> 01:14:27,280 which they, they, they could draw. 1268 01:14:29,520 --> 01:14:31,400 I don't have any reason to believe that they can't draw the 1269 01:14:31,400 --> 01:14:33,560 revolver, although I do think there's some uncertainty in the 1270 01:14:33,560 --> 01:14:36,080 market about that. Like I I'll believe them at face 1271 01:14:36,080 --> 01:14:39,160 value that they can't draw the revolver for like the purpose of 1272 01:14:39,360 --> 01:14:41,240 a hypothetical. Let's assume that they can't 1273 01:14:41,240 --> 01:14:43,880 draw the revolver. If $400 million is a completely 1274 01:14:43,880 --> 01:14:46,200 insufficient like level of liquidity for the nature of this 1275 01:14:46,200 --> 01:14:48,040 business, I think they would have, they would have had to. 1276 01:14:48,080 --> 01:14:51,400 Act before now if they weren't able to draw on the well, they. 1277 01:14:52,160 --> 01:14:54,680 They're they're absolutely running a sale process for up to 1278 01:14:54,680 --> 01:14:59,040 49% of the lithium business. So they are acting like and I 1279 01:14:59,040 --> 01:15:01,880 think like they're whether they pull the trigger on that or not 1280 01:15:01,960 --> 01:15:05,520 is TBA, but they are doing all things to act on adding more 1281 01:15:05,520 --> 01:15:07,960 liquidity to the business. I find that to be a very 1282 01:15:07,960 --> 01:15:11,320 curious. Very curious decision if that's 1283 01:15:11,320 --> 01:15:16,480 what they think is their most favoured response, their most 1284 01:15:16,480 --> 01:15:20,240 favoured method of of raising money. 1285 01:15:20,880 --> 01:15:22,720 It doesn't make sense to me. Actually, it doesn't make any 1286 01:15:22,720 --> 01:15:25,400 sense at all. I think that first thing first, 1287 01:15:25,800 --> 01:15:30,240 are they surrendering the mining services contracts over these 1288 01:15:30,360 --> 01:15:33,040 49% would mean that they. Still control the JV? 1289 01:15:33,160 --> 01:15:34,520 Well then, who's going to pay them? 1290 01:15:35,200 --> 01:15:40,240 The money that these assets are worth, you run a process to find 1291 01:15:40,240 --> 01:15:41,600 out. I don't know. 1292 01:15:41,600 --> 01:15:42,720 It's insanity. I don't know. 1293 01:15:42,840 --> 01:15:44,640 You would have to think. They would sound. 1294 01:15:44,640 --> 01:15:50,160 Out the bondholders and see what needs to be done to you know. 1295 01:15:50,680 --> 01:15:53,200 Reissue. Bonds and and roll the roll the 1296 01:15:53,200 --> 01:15:56,480 debt right and that would dictate how a lot of cut 1297 01:15:57,040 --> 01:16:02,040 conversations and levers which levers are pulled yeah, it 1298 01:16:02,040 --> 01:16:03,000 depends in some. Respect. 1299 01:16:03,280 --> 01:16:05,800 What what happens with interest rates in the United States will 1300 01:16:05,800 --> 01:16:14,240 be important, but but why why turn to your lithium assets that 1301 01:16:14,240 --> 01:16:18,400 are currently being valued in a. Market or on? 1302 01:16:18,400 --> 01:16:20,000 On. A basis, you know, if you value 1303 01:16:20,000 --> 01:16:22,840 them on a on a NPV basis, they're worth nothing. 1304 01:16:26,040 --> 01:16:27,040 But I think quite clearly they're not. 1305 01:16:27,080 --> 01:16:28,040 They're not going. To sell them? 1306 01:16:28,040 --> 01:16:29,480 No, if they're not, it's only if. 1307 01:16:29,480 --> 01:16:32,000 They get a a price. Commensurate they're they're an 1308 01:16:32,000 --> 01:16:34,320 expensive. Option like I feel like it's my 1309 01:16:34,320 --> 01:16:36,640 expensive, I mean, it's like it's a valuable option on on 1310 01:16:36,640 --> 01:16:38,640 lithium prices. How I view their like their 1311 01:16:38,640 --> 01:16:40,160 their lithium business. I think they could, I think they 1312 01:16:40,160 --> 01:16:42,600 could get, you know, a reasonable amount of upfront 1313 01:16:42,720 --> 01:16:45,360 kind of cash depending like curious you see how they might 1314 01:16:45,360 --> 01:16:47,440 structure something curious you see what type of buyers there 1315 01:16:47,440 --> 01:16:49,880 could be. You know, I'd also be surprised 1316 01:16:49,880 --> 01:16:53,840 if the buyers didn't leaders didn't have a view on like 1317 01:16:53,880 --> 01:16:56,400 they'd absolutely want the marketing rights with volumes. 1318 01:16:56,440 --> 01:16:59,160 I'm sure the mining services contracts is a pretty 1319 01:16:59,160 --> 01:17:01,680 interesting part of the puzzle because I'm, I'm, I'm sure 1320 01:17:01,680 --> 01:17:05,720 Monrez would be unwilling to to compromise on them, but that 1321 01:17:05,840 --> 01:17:08,120 that that could be a pretty sticky point of contention. 1322 01:17:08,200 --> 01:17:09,960 But that's what I mean. And suddenly this looks. 1323 01:17:09,960 --> 01:17:12,200 Like a for sale, if they're compromising, of course it's a 1324 01:17:12,240 --> 01:17:13,480 force. Like of course. 1325 01:17:13,480 --> 01:17:15,960 It's why start with the lithium. What? 1326 01:17:15,960 --> 01:17:17,600 What else is what? Else, I mean you've got 3 1327 01:17:17,600 --> 01:17:21,000 interesting levers. As well in an ideal world, they 1328 01:17:21,000 --> 01:17:23,680 get half a billion dollars from hitting the target on the road, 1329 01:17:23,680 --> 01:17:27,680 200 million and another 300 from the energy assets over the next 1330 01:17:27,680 --> 01:17:33,760 year and then monetizing the the loan yeah, would be the carry 1331 01:17:33,760 --> 01:17:35,920 loan, yeah. The carry loan which is sort of. 1332 01:17:36,080 --> 01:17:41,240 790 As of last reporting, the. The carry loan's an interesting 1333 01:17:41,240 --> 01:17:46,480 one and the carry loan's not going to lie about the the cash 1334 01:17:46,480 --> 01:17:50,320 dynamics at at at Onslow, but but. 1335 01:17:51,560 --> 01:17:52,160 Yeah. So that's a. 1336 01:17:52,160 --> 01:17:56,840 Separate point. But the the antecedent point is 1337 01:17:57,040 --> 01:17:58,320 why don't they just sell the carry line? 1338 01:17:58,920 --> 01:18:02,040 They can, I think that. They've sounded that option out 1339 01:18:02,120 --> 01:18:05,720 historically like, and it's an expensive endeavour like, you 1340 01:18:05,720 --> 01:18:10,000 know you're you're forgoing a pretty substantial, you know, 1341 01:18:10,240 --> 01:18:13,600 risk free rate for for for enacting on that transaction. 1342 01:18:14,080 --> 01:18:15,360 Well, but is it a risk free right? 1343 01:18:18,480 --> 01:18:22,440 Well, yeah, precisely in there min res's view it is right. 1344 01:18:22,640 --> 01:18:27,600 So if if you had to transact on that and so yeah, bewilders mean 1345 01:18:27,600 --> 01:18:28,640 that they. Haven't already done this. 1346 01:18:28,920 --> 01:18:31,960 I would have thought that would be that would be the the obvious 1347 01:18:31,960 --> 01:18:36,240 option and I can't imagine that I mean and this is here. 1348 01:18:36,240 --> 01:18:38,200 This is where I'm I'm desperately struggling to avoid 1349 01:18:38,200 --> 01:18:42,200 falsifying my thesis as to the viability of oh as to the not 1350 01:18:42,200 --> 01:18:45,800 viability as to the as to the nature of the ONS operations. 1351 01:18:45,800 --> 01:18:48,920 Because the fact that they haven't sold this already is 1352 01:18:48,920 --> 01:18:53,040 perhaps a hint that that Onzo may not be viewed as favourably 1353 01:18:53,040 --> 01:18:57,320 by. Other market participants as. 1354 01:18:57,880 --> 01:19:01,240 As the company user and I'd flip it I'd flip it I'd. 1355 01:19:01,240 --> 01:19:04,680 Say, I'd try and argue that maybe the market has a more 1356 01:19:04,720 --> 01:19:07,720 maybe min res now has a more somber view on lithium outlook 1357 01:19:07,720 --> 01:19:09,960 than they historically did right now. 1358 01:19:10,000 --> 01:19:15,080 If, if, if minres has internally come to the view that look, we 1359 01:19:15,080 --> 01:19:19,160 don't actually see it like too much upside on the lithium price 1360 01:19:19,160 --> 01:19:22,520 for a long period of Fair number of years ahead here. 1361 01:19:22,520 --> 01:19:24,400 And that's kind of consensus outlook. 1362 01:19:24,880 --> 01:19:29,680 Well, if you can like you say if the MPV is 0, maybe you can 1363 01:19:29,680 --> 01:19:33,600 actually sell it for 49% for you know up to a billion dollars. 1364 01:19:33,600 --> 01:19:36,000 And that's, that's a lot of money for something with MPV is 1365 01:19:36,000 --> 01:19:37,000 0. But you've kept the mining 1366 01:19:37,000 --> 01:19:39,080 services contract and maybe you've even kept some some 1367 01:19:39,080 --> 01:19:41,320 marketing volumes like and you've kept some equity upside 1368 01:19:41,320 --> 01:19:44,400 because you still earn a fair bit like I think I think that's 1369 01:19:44,400 --> 01:19:46,640 a pretty prudent like transaction to have. 1370 01:19:46,640 --> 01:19:48,880 I think the stock would RIP if they did it because they 1371 01:19:48,880 --> 01:19:52,720 alleviate a lot of liquidity concerns in the process you are 1372 01:19:53,400 --> 01:19:56,400 building. Into that a very bearish outlook 1373 01:19:56,400 --> 01:19:58,560 on lithium over the next five years. 1374 01:19:59,720 --> 01:20:00,800 Not even. Like not even. 1375 01:20:00,800 --> 01:20:03,240 Bearish. I think it's just I got it. 1376 01:20:03,960 --> 01:20:05,360 Who knows? Like I'm not kind of in the 1377 01:20:05,360 --> 01:20:09,760 business of predicting commodity prices and I'm certainly always 1378 01:20:09,760 --> 01:20:12,400 cautious of when a mining company predicts commodity 1379 01:20:12,400 --> 01:20:17,920 prices. I I yeah, I think, I think. 1380 01:20:17,920 --> 01:20:21,280 The value that min red. Sees in those assets is is 1381 01:20:21,280 --> 01:20:24,200 increasingly more towards the mining services contracts 1382 01:20:24,200 --> 01:20:28,720 attached to those assets rather than the equity and in the in in 1383 01:20:28,720 --> 01:20:32,160 the actual, you know line. The other option is to. 1384 01:20:32,720 --> 01:20:36,600 Sell the other half of the road. That that bit doesn't. 1385 01:20:37,800 --> 01:20:40,480 Makes sense to me. I certainly don't think you'd 1386 01:20:40,480 --> 01:20:41,600 get. Anything more than what you got 1387 01:20:41,600 --> 01:20:44,160 for the first half? I saw that there was some 1388 01:20:44,240 --> 01:20:46,480 amusing speculation in The Australian that they would get a 1389 01:20:46,520 --> 01:20:50,040 hefty control, that the that if they sold the other half to for 1390 01:20:50,040 --> 01:20:52,120 Morgan Stanley, Morgan Stanley would pay a hefty control 1391 01:20:52,120 --> 01:20:54,240 premium. Yeah, which makes absolutely no 1392 01:20:54,240 --> 01:20:55,560 sense. To me wonder where the. 1393 01:20:55,560 --> 01:21:01,080 Leak came from that is. Just. 1394 01:21:01,440 --> 01:21:03,880 A puzzling thought after what has happened since Morgan 1395 01:21:03,880 --> 01:21:06,200 Stanley bought the 49%. Yeah, yeah. 1396 01:21:06,640 --> 01:21:09,040 But. You have to remember that, that 1397 01:21:09,040 --> 01:21:11,520 that what they've sold is not, you know, Morgan Stanley isn't 1398 01:21:11,520 --> 01:21:15,680 on the hook for half of the repairs to the road, correct, 1399 01:21:15,680 --> 01:21:18,200 But Morgan. Stanley don't get paid if Minrez 1400 01:21:18,200 --> 01:21:20,240 fails. The mind doesn't work. 1401 01:21:20,240 --> 01:21:23,880 I mean if the entire company. Fails if if if. 1402 01:21:23,880 --> 01:21:26,320 Onslow doesn't work right. I mean, it still gets but 1403 01:21:26,520 --> 01:21:27,600 Morgan. Stanley still gets but from 1404 01:21:27,600 --> 01:21:29,560 what? Well, yeah, So you're saying so. 1405 01:21:29,760 --> 01:21:31,200 Yeah, sure. So you're saying the downside 1406 01:21:31,200 --> 01:21:33,120 case is not like an? Infrastructure asset, right, 1407 01:21:33,120 --> 01:21:37,720 like that thing's yeah, I, I, I just think that flexing the 1408 01:21:37,720 --> 01:21:40,520 downside case from an infrastructure perspective has 1409 01:21:40,520 --> 01:21:43,720 become increasingly a known thing in the market. 1410 01:21:43,720 --> 01:21:47,320 Yeah, I'd be amazed if it, you know, if investment committee 1411 01:21:47,400 --> 01:21:53,440 kind of approved a sale there at a price comparable to what it 1412 01:21:53,440 --> 01:21:55,560 was in the past. Yeah, I tend to agree, but. 1413 01:21:55,560 --> 01:21:57,520 I still would have thought that it would be possible to just 1414 01:21:58,080 --> 01:22:00,440 sell. I still would have preferred if 1415 01:22:00,440 --> 01:22:02,520 I if I'm in the position of minerals, I still would prefer 1416 01:22:02,520 --> 01:22:07,400 to sell the other half of that future revenue stream for the 1417 01:22:07,400 --> 01:22:10,080 same reason that I prefer to sell the carry loan. 1418 01:22:10,960 --> 01:22:14,120 However, the. The. 1419 01:22:16,800 --> 01:22:18,560 The. Negative view about. 1420 01:22:18,560 --> 01:22:21,040 Either of those two assets, if we call them assets may be the 1421 01:22:21,040 --> 01:22:24,360 same thing is what I'm saying, which may be why they're turning 1422 01:22:24,360 --> 01:22:29,920 to lithium, but. What I suspect the company would 1423 01:22:29,920 --> 01:22:31,920 prefer to do. Is sell nothing. 1424 01:22:34,760 --> 01:22:36,120 I think. I think. 1425 01:22:36,240 --> 01:22:39,200 The company's strong preference is to sell nothing. 1426 01:22:41,840 --> 01:22:44,960 Do you think that they're. You know, the businesses 1427 01:22:45,280 --> 01:22:49,880 liquidity needs are sufficient to warrant selling nothing like 1428 01:22:49,880 --> 01:22:52,360 you alluded to the fact that you think Max net debt actually 1429 01:22:52,360 --> 01:22:55,040 doesn't come until yeah, end of this calendar year. 1430 01:22:55,040 --> 01:22:57,160 Yeah, Yeah. So it's actually. 1431 01:22:57,160 --> 01:22:58,640 Justified just. On that point, I think that. 1432 01:22:59,280 --> 01:23:04,920 Net debt when it's just got, when it's revealed Wednesday in 1433 01:23:04,920 --> 01:23:08,440 the quarterly, I think that there's a very real chance it 1434 01:23:08,440 --> 01:23:10,120 stays about where it was last quarterly. 1435 01:23:10,120 --> 01:23:13,160 I think there are some the dissidents in the market who 1436 01:23:13,160 --> 01:23:14,680 think that it's going to start coming down. 1437 01:23:14,680 --> 01:23:17,080 I think that there's a very real chance that stays about the 1438 01:23:17,080 --> 01:23:20,120 same. Although what happens with the 1439 01:23:20,120 --> 01:23:24,000 currency may may mean that there is a revision downward sort of 1440 01:23:24,000 --> 01:23:26,120 on paper. That's not, it's not. 1441 01:23:26,200 --> 01:23:28,160 That doesn't tell you anything about what's happening in terms 1442 01:23:28,160 --> 01:23:31,600 of the cash coming in and out of the business, but. 1443 01:23:33,440 --> 01:23:36,320 Basically the reason I think. That it's unlikely to have 1444 01:23:36,320 --> 01:23:40,920 changed is because I think that we've had an extra 3 months of 1445 01:23:41,000 --> 01:23:43,640 of spending, of elevated spending required at Onslow. 1446 01:23:44,600 --> 01:23:47,560 I think that three months from now that number, that number 1447 01:23:47,560 --> 01:23:50,720 will start coming down 3 months from from Wednesday. 1448 01:23:51,160 --> 01:23:54,120 I think we'll be, I think it will be revealed to the market 1449 01:23:54,120 --> 01:23:56,480 that that number has started to come down and the. 1450 01:23:57,680 --> 01:24:02,080 The road is supposedly like supposed to be repaired by end 1451 01:24:02,080 --> 01:24:04,640 of September. I I think it the roads. 1452 01:24:04,640 --> 01:24:08,800 Likely to be repaired by by earlier than that, yeah, and. 1453 01:24:10,680 --> 01:24:17,240 Yeah, you. Think that the Max debt 1454 01:24:17,240 --> 01:24:23,000 therefore will coincide with the the the CapEx kind of you know 1455 01:24:23,200 --> 01:24:27,000 seizing well reparation CapEx seizing well, yes, but more. 1456 01:24:27,000 --> 01:24:31,760 Importantly, proper earnings from Onslow, repayment of the 1457 01:24:31,760 --> 01:24:37,440 carry loan and and and proper free cash flow the the carry 1458 01:24:37,440 --> 01:24:39,760 loan makes a difference. The $200 million contingent 1459 01:24:39,760 --> 01:24:42,360 contingent payment is expected, of course, of course, but you 1460 01:24:42,360 --> 01:24:44,800 have to remember, and this is a. Mistake that a lot of people 1461 01:24:44,800 --> 01:24:46,560 have made with this company over the last six months. 1462 01:24:47,080 --> 01:24:49,560 Despite the failures of disclosure and despite all the 1463 01:24:49,560 --> 01:24:53,640 drama that's been going on, we can actually get our hands 1464 01:24:53,640 --> 01:24:59,880 around basic. What's the word? 1465 01:24:59,880 --> 01:25:04,240 I'm searching for critical claims about the nature of these 1466 01:25:04,240 --> 01:25:07,800 operations. We can see how much iron ore is 1467 01:25:07,800 --> 01:25:11,560 being exported by this company. The numbers don't lie in that 1468 01:25:11,560 --> 01:25:14,440 respect. And there's been a dramatic step 1469 01:25:14,440 --> 01:25:20,240 up in exports over the last 12 weeks so that you know that that 1470 01:25:20,360 --> 01:25:25,640 ore has been paid for some of it in advance, but but some of it's 1471 01:25:25,640 --> 01:25:30,320 been paid for now, I think. I do think the market is 1472 01:25:30,320 --> 01:25:34,360 overlooking how much cash Onzo will be generating for this 1473 01:25:34,360 --> 01:25:39,320 business over the next 12 months What's the assuming that the 1474 01:25:39,320 --> 01:25:43,760 road holds up you know what's the what's the hole in that 1475 01:25:43,760 --> 01:25:45,800 thesis key risk is iron or practice yeah of. 1476 01:25:45,800 --> 01:25:46,960 Course, of course. But yeah, I. 1477 01:25:47,320 --> 01:25:50,680 I don't like. I I'd be willing to wager the 1478 01:25:50,680 --> 01:25:54,160 costs are substantially higher than 49 bucks when everything's 1479 01:25:54,160 --> 01:25:57,200 said and done. I just, yeah, like, like, kudos 1480 01:25:57,200 --> 01:25:58,400 to them if they can execute that. 1481 01:25:58,400 --> 01:26:03,720 But I just think the reality of delivering any project is is one 1482 01:26:03,720 --> 01:26:07,760 of us. Surprised the upside in. 1483 01:26:08,000 --> 01:26:10,840 A very inordinate number of ways that are originally maybe not 1484 01:26:11,640 --> 01:26:15,200 expected and kind of been. Raised they have the track. 1485 01:26:15,200 --> 01:26:18,560 Record of delivering projects. This is completely different to 1486 01:26:18,560 --> 01:26:20,120 any project they've ever delivered before. 1487 01:26:20,440 --> 01:26:21,920 Like this is enormous. This is not. 1488 01:26:22,280 --> 01:26:26,640 This is not, you know. Cool, you know where they had. 1489 01:26:26,640 --> 01:26:29,800 To build the Carina Rd. This is a, a transformative 1490 01:26:29,800 --> 01:26:31,760 project. It's, it's, it's, it's, it's, 1491 01:26:31,840 --> 01:26:34,320 it's crazy that they built what they did in the time frame that 1492 01:26:34,320 --> 01:26:35,760 they did. It's incredible. 1493 01:26:35,760 --> 01:26:37,400 It is like, you know. Like I'm not sure. 1494 01:26:37,400 --> 01:26:39,400 Another team could have done that, but I think that that 1495 01:26:39,400 --> 01:26:44,440 comes with a lot of risks on on on costs, a lot of pressure to 1496 01:26:44,440 --> 01:26:47,920 meet certain cost targets and and that can come out in a 1497 01:26:47,920 --> 01:26:50,520 variety of ways. All of that to say, I don't 1498 01:26:50,520 --> 01:26:52,040 think the costs are properly understood. 1499 01:26:52,280 --> 01:26:54,360 I certainly don't have a firm grip of what the unit costs are 1500 01:26:54,360 --> 01:26:56,920 going to be. You think that 49's reasonable? 1501 01:26:56,920 --> 01:27:02,240 I think 49's unreasonable. Now, all I have to say is, do I 1502 01:27:02,240 --> 01:27:04,720 think it's an asset that is vulnerable to a downturn in the 1503 01:27:04,720 --> 01:27:06,960 iron ore market? I do like, is iron ore being 1504 01:27:06,960 --> 01:27:08,200 very resilient right now? Absolutely. 1505 01:27:08,200 --> 01:27:10,360 Could they absolutely just milk the cow for a year? 1506 01:27:10,360 --> 01:27:12,520 And this, like, the debt's not a concern at all because iron ore 1507 01:27:12,520 --> 01:27:15,600 prices are elevated 100 percent, 100%. 1508 01:27:16,440 --> 01:27:20,200 Yeah, I'll make a number of. Comments about that, I think 1509 01:27:20,200 --> 01:27:24,760 that mean that the indebted position of Min Res is is 1510 01:27:25,080 --> 01:27:28,480 confusing our understanding of the cost profile of this 1511 01:27:28,480 --> 01:27:32,720 project. A if. 1512 01:27:32,720 --> 01:27:36,880 Those costs are roughly right. Then it's a, this is a, this is 1513 01:27:36,880 --> 01:27:41,680 a low cost iron ore project that's you know, strip out some 1514 01:27:41,680 --> 01:27:45,280 of the min res margin and convert it to US on AUS dollar 1515 01:27:45,280 --> 01:27:47,560 cost basis and compare that to FMGS costs. 1516 01:27:47,560 --> 01:27:50,640 I disagree. Yeah, I mean, like for one, they 1517 01:27:50,640 --> 01:27:54,320 don't actually convert the carnage reduced when they show 1518 01:27:54,320 --> 01:27:56,880 the cost curve. It's like presented on A on a D. 1519 01:27:59,200 --> 01:28:01,640 Mt basis instead of a WM. T basis, it's like, you know, 1520 01:28:01,640 --> 01:28:04,880 there's a there's a number of you know, every cost curves 1521 01:28:04,880 --> 01:28:09,000 forward for a variety of reasons, but this is this is but 1522 01:28:09,080 --> 01:28:10,840 it's it's not a marginal. Operation. 1523 01:28:11,680 --> 01:28:13,760 How do you know that? Like the carry loan's still 1524 01:28:13,760 --> 01:28:15,360 going up. It's certainly been marginal 1525 01:28:15,360 --> 01:28:19,920 today. On a fully red basis like I. 1526 01:28:20,080 --> 01:28:22,960 Like your points received, there should be a line of sight to 1527 01:28:23,280 --> 01:28:25,040 especially like on on on prices today. 1528 01:28:25,040 --> 01:28:27,560 Like, you know, it'd be, I'd be amazed if they didn't didn't 1529 01:28:27,680 --> 01:28:30,880 make free cash, you know, but but I don't think the market 1530 01:28:30,880 --> 01:28:32,560 really knows what unit costs are going to be. 1531 01:28:32,760 --> 01:28:36,280 I think the impact of third party like trucks is is poorly 1532 01:28:36,280 --> 01:28:38,120 understood. I disagree with your numbers on 1533 01:28:38,520 --> 01:28:41,720 TKMS, both six cents and 12 cents for, for both cases. 1534 01:28:42,760 --> 01:28:47,440 And I, I, I think they have to, I think This is why the stock is 1535 01:28:47,440 --> 01:28:49,880 priced where it is, where you think there's an opportunity 1536 01:28:50,200 --> 01:28:52,920 because, you know, like people like me are skeptical and I 1537 01:28:52,920 --> 01:28:55,160 think they have to prove the market wrong, right? 1538 01:28:55,160 --> 01:28:58,200 They have to prove not just for next three months or next six 1539 01:28:58,200 --> 01:28:59,560 months. I think they have to, they have 1540 01:28:59,560 --> 01:29:01,360 to prove themselves at this time next year. 1541 01:29:01,360 --> 01:29:05,560 There's been a continuity of, of delivery and an absence of, of, 1542 01:29:05,760 --> 01:29:09,880 of, of anomalies before like it's, you know, that the market 1543 01:29:09,880 --> 01:29:11,840 can believe this, this project in its entirety. 1544 01:29:11,840 --> 01:29:13,640 Yeah, I do think that there's a risk. 1545 01:29:13,640 --> 01:29:19,800 That the reported costs in each quarterly over the last, well, 1546 01:29:19,800 --> 01:29:21,440 let's just say the last quarterly, this quarterly and 1547 01:29:21,440 --> 01:29:29,160 the coming quarterly misunderstood due to the the the 1548 01:29:29,680 --> 01:29:32,120 loss of margin for the the mining services business. 1549 01:29:32,120 --> 01:29:37,160 I think that Minres is wearing costs that would otherwise make 1550 01:29:37,160 --> 01:29:41,480 that number that was last reported at, say, 58, higher. 1551 01:29:41,480 --> 01:29:45,960 Than higher than 50. Eight, yeah, and and in your. 1552 01:29:46,160 --> 01:29:49,120 Like in your experience, following the company when they 1553 01:29:49,120 --> 01:29:51,920 have typically suggested capital costs, for example, might be a 1554 01:29:51,960 --> 01:29:55,120 certain amount, have they had a tendency to be larger or smaller 1555 01:29:55,120 --> 01:29:58,680 or on, on, you know, on par with your expectations? 1556 01:29:58,720 --> 01:30:04,520 It's it's it's obvious that the I just I would struggle to to 1557 01:30:04,520 --> 01:30:06,320 believe the 49. I also struggle to believe 1558 01:30:06,320 --> 01:30:07,680 there's very maintenance cutbacks on the road. 1559 01:30:07,680 --> 01:30:10,760 And it doesn't mean that the cost can't go up, but it's still 1560 01:30:10,840 --> 01:30:13,520 have a project with sufficient margin to repack their debt, 1561 01:30:13,520 --> 01:30:17,120 especially when I was 105 US right now, like that's a, it's a 1562 01:30:17,120 --> 01:30:18,840 very healthy iron ore environment for them to be 1563 01:30:18,840 --> 01:30:21,880 delivering this project in. But but I don't think it's a 1564 01:30:21,880 --> 01:30:25,720 project that is, is is definitionally resilient to your 1565 01:30:26,000 --> 01:30:28,920 worst case iron ore market. No, perhaps not your worst case. 1566 01:30:28,920 --> 01:30:33,400 Iron ore market. But it's easy to lose sight of 1567 01:30:33,400 --> 01:30:39,320 just what has been accomplished here, given the the this the few 1568 01:30:39,320 --> 01:30:44,160 but fairly calamitous problems that that have been run into. 1569 01:30:44,280 --> 01:30:45,880 You'd lose trust as an investor. Yeah, yeah. 1570 01:30:45,880 --> 01:30:49,040 Of course, of course, but but. I mean, and this is what is 1571 01:30:49,040 --> 01:30:52,040 truly crazy making about all this, because if they had just 1572 01:30:52,040 --> 01:30:56,600 been completely honest upfront about everything that was that 1573 01:30:56,720 --> 01:30:57,960 that had worked and hadn't worked. 1574 01:30:58,160 --> 01:31:00,880 If they had said in January when this weather happened, look, we 1575 01:31:00,880 --> 01:31:03,920 think we're going to have to redo the entire Rd. from from 1576 01:31:03,920 --> 01:31:07,240 start to finish and it's going to cost an extra 250 mil, 300 1577 01:31:07,240 --> 01:31:11,120 mil. If that hadn't happened and 1578 01:31:11,120 --> 01:31:13,200 instead. What had happened was initially 1579 01:31:13,320 --> 01:31:15,920 they had just said the road is going to cost 300 million more 1580 01:31:15,920 --> 01:31:17,920 than they did say it was going to cost. 1581 01:31:18,240 --> 01:31:20,640 Everyone would say, well, whatever, this is still an 1582 01:31:20,640 --> 01:31:25,120 incredible project of incredible scale coming in at at remarkable 1583 01:31:25,120 --> 01:31:30,280 on a remarkable cost level. So it's very easy to get caught 1584 01:31:30,280 --> 01:31:35,560 up in the, in the, in the day-to-day errors of disclosures 1585 01:31:35,560 --> 01:31:38,760 and the day-to-day operational mishaps. 1586 01:31:38,760 --> 01:31:41,440 But, but just take a step back and look at what, what this 1587 01:31:41,440 --> 01:31:44,120 project looks like. That point matters. 1588 01:31:44,120 --> 01:31:48,640 A. Lot I've got no doubt that like 1589 01:31:48,880 --> 01:31:51,800 part of the culture of minres that has created the, you know, 1590 01:31:51,800 --> 01:31:54,840 the very value generative business that it has been for a 1591 01:31:54,840 --> 01:31:56,720 long period of time comes from this. 1592 01:31:56,720 --> 01:32:01,840 This kind of just like attitude of making shit happen on a low 1593 01:32:01,840 --> 01:32:04,960 budget, you know, in a in a crazy period of time with 1594 01:32:04,960 --> 01:32:07,720 people, you know, breaking all sorts of records, doing things. 1595 01:32:07,720 --> 01:32:09,840 But I thought you were going to say breaking all sorts of rules. 1596 01:32:09,840 --> 01:32:15,000 For it, but it's that mentality. That like may also compromise 1597 01:32:15,000 --> 01:32:17,920 something that is a key critical piece of infrastructure 1598 01:32:17,920 --> 01:32:21,680 underpinning it like they did they deliver the, the the road 1599 01:32:21,680 --> 01:32:25,440 with the same appreciation for, you know, critical delivery that 1600 01:32:25,440 --> 01:32:28,320 this is or, or was that same mentality of kind of, you know, 1601 01:32:28,880 --> 01:32:31,480 build it on a much tighter budget than maybe was was 1602 01:32:31,600 --> 01:32:34,600 desired by some, some people. Maybe, you know, with, with 1603 01:32:35,000 --> 01:32:37,880 certain parameters or standards kind of tightened here and there 1604 01:32:38,360 --> 01:32:40,680 with with assumptions that may may be optimistic. 1605 01:32:40,680 --> 01:32:43,160 If you do that, if that's the mentality and it's the the 1606 01:32:43,160 --> 01:32:47,000 typical mentality that also creates value, well, then maybe 1607 01:32:47,000 --> 01:32:48,480 you've also made yourself vulnerable. 1608 01:32:49,480 --> 01:32:52,680 That's the that's that's how I see the risks associated 1609 01:32:52,760 --> 01:32:54,000 associated with this infrastructure. 1610 01:32:54,160 --> 01:32:58,200 There's no doubt that there. That the the tsunami gathering, 1611 01:32:58,880 --> 01:33:00,440 gathering force in the background is the debt. 1612 01:33:01,040 --> 01:33:04,960 And that were you to take away this debt, there would be, there 1613 01:33:04,960 --> 01:33:11,120 would be no doubt that that this company had had a lot going for 1614 01:33:11,120 --> 01:33:15,680 it. Has the timing being. 1615 01:33:15,680 --> 01:33:21,160 Unfortunate in terms of what's happened with the debt, the. 1616 01:33:21,160 --> 01:33:23,960 Lithium Market. The iron ore market to some 1617 01:33:23,960 --> 01:33:31,240 extent, yes, but but I don't think that this project has been 1618 01:33:31,240 --> 01:33:35,000 appreciated for what it is. And the meme, the meme out there 1619 01:33:35,000 --> 01:33:38,280 that Onslow is a company maker, it's going to transform this 1620 01:33:38,280 --> 01:33:39,520 company. Well, so far as I can tell, 1621 01:33:39,520 --> 01:33:43,360 that's not just a meme. It is a genuine. 1622 01:33:43,840 --> 01:33:48,520 A genuinely transformational project and I don't think we 1623 01:33:48,520 --> 01:33:54,400 should look through that on the basis that on the basis that it 1624 01:33:54,400 --> 01:33:56,920 has some problems, it's unconventional and involves told 1625 01:33:57,040 --> 01:34:01,480 iron ore tons, which, you know, hardly, hardly screams low cost 1626 01:34:02,520 --> 01:34:04,400 and things have gone wrong with the whole Rd. 1627 01:34:04,600 --> 01:34:09,840 I think that I think that the problems are not insurmountable. 1628 01:34:09,840 --> 01:34:12,360 There's there's no evidence that the problems with the road at 1629 01:34:12,360 --> 01:34:15,720 this stage are insurmountable. And if they're not, I think that 1630 01:34:16,200 --> 01:34:18,920 the the valuation that has been given to this company by the 1631 01:34:18,920 --> 01:34:21,560 market at the moment makes makes very little sense. 1632 01:34:23,280 --> 01:34:26,120 At the end of the day, that's. That's the investment thesis for 1633 01:34:26,120 --> 01:34:27,760 me. It's not, it's not this is the 1634 01:34:27,760 --> 01:34:30,280 greatest company in the world. It's going to be the next, next 1635 01:34:30,640 --> 01:34:37,520 BHP or, or or Rio Tinto. It's that the risks against the 1636 01:34:37,520 --> 01:34:44,120 reward is not being not being calculated in a, in a reasonable 1637 01:34:44,120 --> 01:34:47,800 manner at the moment. I mean, go back a week before 1638 01:34:47,800 --> 01:34:51,600 the, the share price went from from 24 to 32 or whatever 1639 01:34:51,600 --> 01:34:55,120 happened back. But go back a week and, and the, 1640 01:34:55,440 --> 01:34:59,400 the valuation of this company is getting pretty close to full 1641 01:34:59,400 --> 01:35:02,280 blown distress. And I don't, I don't think the 1642 01:35:02,280 --> 01:35:08,040 company's in distress. What was the either? 1643 01:35:08,040 --> 01:35:11,320 Time horizon or target price when you bought in that you had 1644 01:35:11,320 --> 01:35:13,160 in March? I'm pretty reluctant to give a. 1645 01:35:13,160 --> 01:35:14,600 Target price because that's going to. 1646 01:35:15,600 --> 01:35:16,840 Is that how you thought about going to imbue? 1647 01:35:16,840 --> 01:35:19,000 My words with. More with more expertise and 1648 01:35:19,000 --> 01:35:24,560 confidence than they're worth. But yeah, I mean, look, my basic 1649 01:35:24,760 --> 01:35:27,280 and this is going to really trigger Trev, my basic, some of 1650 01:35:27,280 --> 01:35:30,880 the parts valuation basically basically involved just looking 1651 01:35:30,880 --> 01:35:33,720 at the the revenue profile that the company's likely to earn on 1652 01:35:33,720 --> 01:35:39,080 a on a EBITDA basis and checking a multiple of 5 or 6 on that. 1653 01:35:41,040 --> 01:35:42,640 You know a multiple of 5 to account for the fact. 1654 01:35:42,640 --> 01:35:46,240 That they got a lot of debt and you know, you look at Onslow, 1655 01:35:46,880 --> 01:35:51,200 the mining services outside of Onslow and then let's just say 1656 01:35:51,200 --> 01:35:56,040 A0 and lithium for now. Take that, that revenue, sum it 1657 01:35:56,040 --> 01:36:00,000 up 2 billion. Stick A5 or A6 on it, call it 1658 01:36:00,000 --> 01:36:01,280 A5. Given they've got a lot of debt. 1659 01:36:01,920 --> 01:36:04,960 That's ten billion. What's the company trading at 1660 01:36:04,960 --> 01:36:07,480 today? 5 billion equity, six. 1661 01:36:08,200 --> 01:36:11,920 Yeah, yeah, equity, but but I'm using a multiple that's that's 1662 01:36:11,920 --> 01:36:13,880 compressed having regard to the amount of debt they've got. 1663 01:36:14,600 --> 01:36:18,760 FMG doesn't trade on a multiple of five, I think. 1664 01:36:19,120 --> 01:36:21,240 I don't think. Yeah, yeah, there's definitely 1665 01:36:21,240 --> 01:36:22,840 different risk characteristics for sure. 1666 01:36:23,320 --> 01:36:33,160 The yeah, the the EBITDA, like the bullshit earnings. 1667 01:36:33,240 --> 01:36:36,360 It's it's. This Am I allowed to swear on 1668 01:36:36,360 --> 01:36:37,680 this? This is, yeah, this is another 1669 01:36:37,680 --> 01:36:40,880 gripe. With the business as well, there 1670 01:36:40,880 --> 01:36:44,880 is a huge focus on EBITDA. This can't be a mini specific, 1671 01:36:44,880 --> 01:36:47,080 right? This is mini specific this. 1672 01:36:47,080 --> 01:36:54,000 Is not a widely adopted financial metric of any other 1673 01:36:54,000 --> 01:36:55,760 mining company. I granted there's a services 1674 01:36:56,320 --> 01:37:01,000 company here, which of course, but but why, why use EBITDA, 1675 01:37:01,000 --> 01:37:02,880 right? And well, I think the answer is 1676 01:37:02,880 --> 01:37:03,840 they can't. They can't. 1677 01:37:03,840 --> 01:37:04,920 They don't know what to do with the debt. 1678 01:37:05,120 --> 01:37:06,800 It's very difficult to give free cash flow. 1679 01:37:06,800 --> 01:37:09,680 It's it's it's not just. That I think it's like. 1680 01:37:11,960 --> 01:37:14,600 Also like depreciation. Matters a lot to this business. 1681 01:37:14,600 --> 01:37:15,880 This is a capital intensive business. 1682 01:37:15,880 --> 01:37:18,240 So what you know, why, why are we giving, why are we talking 1683 01:37:18,240 --> 01:37:22,640 about EBITDA numbers and the interchange ability of EBITDA 1684 01:37:22,640 --> 01:37:26,200 with profitable when you know, when management talks is a is a 1685 01:37:26,200 --> 01:37:29,240 very like, you know, confusing component of the company. 1686 01:37:29,240 --> 01:37:36,080 But I do think, I do think like there's a have. 1687 01:37:36,080 --> 01:37:37,280 Have you? Maybe bankers have. 1688 01:37:37,280 --> 01:37:39,360 Convinced the company of that like, you know, if you point to 1689 01:37:39,520 --> 01:37:43,400 EBITDA growth, you point to strong EBITDA growth, albeit I 1690 01:37:43,400 --> 01:37:46,480 can't remember the last quarter that they had cash like like 1691 01:37:46,560 --> 01:37:49,160 honestly, I genuinely can't remember the last quarter that 1692 01:37:49,160 --> 01:37:51,480 in the cash. So but but EBITDA has continued 1693 01:37:51,480 --> 01:37:54,280 to grow in a variety of different parts of the business 1694 01:37:54,360 --> 01:37:56,320 or at least quarter and quarter from time to time. 1695 01:37:56,320 --> 01:38:00,520 Now why has that been a a, a focal point? 1696 01:38:00,520 --> 01:38:03,440 Well, it's obviously like debt covenants are tied to this there 1697 01:38:03,560 --> 01:38:06,600 like it matters to debt markets and and the, you know, the 1698 01:38:06,720 --> 01:38:10,240 utilization of debt markets in recent history, US bond market, 1699 01:38:11,000 --> 01:38:13,240 etcetera. Like that's a way their bonds 1700 01:38:13,240 --> 01:38:15,680 aren't tied to it. And the government, the 1701 01:38:15,680 --> 01:38:20,480 revolver, I believe it is, but, but I just think you have to 1702 01:38:20,480 --> 01:38:23,280 look at my cash flow, you have to look at free cash in this 1703 01:38:23,280 --> 01:38:26,280 business. And yeah, the recent history 1704 01:38:26,280 --> 01:38:30,800 trend has been selling assets to, to mitigate what's actually 1705 01:38:30,800 --> 01:38:34,760 happening to, you know, their, the, the, the ultimate liquidity 1706 01:38:34,760 --> 01:38:37,160 and cash balance available. I hope that trend turns now that 1707 01:38:37,160 --> 01:38:38,560 Onslow is kind of finding his feet. 1708 01:38:38,800 --> 01:38:41,160 I've been surprised at the volumes that they're doing. 1709 01:38:41,520 --> 01:38:44,520 I'm impressed at what they're capable and able to do with the 1710 01:38:44,520 --> 01:38:45,880 Reliance and 3rd party contractors. 1711 01:38:45,880 --> 01:38:49,040 I don't properly understand the cost basis, especially given 1712 01:38:49,040 --> 01:38:50,600 the, the Reliance and 3rd party contractors. 1713 01:38:50,600 --> 01:38:54,000 I'm nervous about, you know, the, their ability to preserve 1714 01:38:54,400 --> 01:38:58,080 margin in delivering the cost that the market expects there. 1715 01:38:58,080 --> 01:39:02,080 And I hope they can, they can alleviate my, my nerves to that 1716 01:39:02,080 --> 01:39:04,120 respect in in the future reporting periods. 1717 01:39:04,200 --> 01:39:07,800 I've despite whatever sentiment that I've had from time to time, 1718 01:39:07,800 --> 01:39:11,240 like I've, I've never had a position in stock like the, you 1719 01:39:11,240 --> 01:39:14,280 know, the entire duration we've been doing the podcast and I'll 1720 01:39:14,440 --> 01:39:16,520 continue not until it's too spicy for me, right. 1721 01:39:16,520 --> 01:39:18,840 But that doesn't match my risk. It's a matter of principle more 1722 01:39:18,840 --> 01:39:20,360 than it is a. Matter of the risk reward, 1723 01:39:20,360 --> 01:39:22,720 certainly both, yeah. The risk reward, I think it is 1724 01:39:22,720 --> 01:39:28,160 still too spicy for me to like I think you can have a a non 1725 01:39:28,160 --> 01:39:31,680 consensus view of operational deliverability and still get 1726 01:39:31,760 --> 01:39:35,040 pants by commodity price on the stock yeah, there's no. 1727 01:39:35,040 --> 01:39:37,600 Doubt that the price of iron ore, not the price of lithium, 1728 01:39:37,600 --> 01:39:42,240 but the price of iron ore matters a great deal. 1729 01:39:43,160 --> 01:39:44,840 Things over the next year and a half. 1730 01:39:45,720 --> 01:39:49,440 But the the sentiment around iron ore has been doom and gloom 1731 01:39:49,440 --> 01:39:51,840 for 20 years. For the last 20 years, yeah, 1732 01:39:52,520 --> 01:39:54,280 it's been a long time. Yeah, yeah. 1733 01:39:54,520 --> 01:39:57,440 What do you think end game looks like end game? 1734 01:39:57,440 --> 01:40:02,840 For in. 12 months from now. I'm hoping what? 1735 01:40:02,840 --> 01:40:08,000 This, what this experience has convinced the management of this 1736 01:40:08,000 --> 01:40:12,360 company is that they need to just have a core focus and they 1737 01:40:12,360 --> 01:40:16,560 need to do it well. I don't think that I certainly 1738 01:40:16,560 --> 01:40:20,040 hope we're not going to have another crenzy, frenzied, 1739 01:40:20,680 --> 01:40:27,720 frenzied spree of, of genius capital allegation into 1740 01:40:27,920 --> 01:40:31,040 whatever's sexy three months from now. 1741 01:40:31,760 --> 01:40:33,840 I think I mean, in that way, the debt may be a good thing. 1742 01:40:33,840 --> 01:40:38,320 It may, it may constrain the the worst impulses of of the company 1743 01:40:38,320 --> 01:40:42,560 and, and force them to to focus only on what matters. 1744 01:40:43,080 --> 01:40:47,640 But, but I think my, we're right to guess what this company looks 1745 01:40:47,640 --> 01:40:49,600 like in 12 months from now. Not the share price. 1746 01:40:49,600 --> 01:40:51,800 I have no idea what the share price look like, but we're right 1747 01:40:51,800 --> 01:40:53,600 to guess what Onza looks like in 12 months from now. 1748 01:40:53,960 --> 01:40:59,440 I would guess that it's operating at or above 35,000,000 1749 01:40:59,440 --> 01:41:04,680 tons per annum in terms of exports, in terms of cost, I 1750 01:41:04,680 --> 01:41:09,840 don't know. But I, I think there's a, 1751 01:41:09,840 --> 01:41:15,040 there's a more than 50% chance that certainly more than 50% 1752 01:41:15,040 --> 01:41:22,400 chance that haulage goes to plan the road holds up and and this 1753 01:41:22,400 --> 01:41:26,760 project begins to be appreciated for its, for its scale. 1754 01:41:28,760 --> 01:41:31,760 More than it is. Being appreciated by the market 1755 01:41:31,760 --> 01:41:38,440 at the moment. What do you think, God? 1756 01:41:39,520 --> 01:41:42,520 Yeah, there's like a a variety of different outcomes things can 1757 01:41:42,520 --> 01:41:45,000 take on the balance of probabilities. 1758 01:41:45,600 --> 01:41:47,280 Can I share? Can I share with your audience? 1759 01:41:47,720 --> 01:41:49,880 What what you said to me when I said to you, do you think the 1760 01:41:49,880 --> 01:41:54,160 share price of this company is more likely to be 55 or 0 within 1761 01:41:54,160 --> 01:41:57,280 the next 12 months? You asked 12 months is. 1762 01:41:57,280 --> 01:41:58,960 That what I might not have said 12 months I. 1763 01:41:59,440 --> 01:42:01,080 Think yeah, because if I recall. Quickly. 1764 01:42:01,080 --> 01:42:03,000 Your answer was I think it could be going to both. 1765 01:42:03,960 --> 01:42:06,400 Yep. But. 1766 01:42:06,400 --> 01:42:09,080 I do struggle to see like. Negative catalysts over the 1767 01:42:09,080 --> 01:42:12,920 next, I call it, call it five months like I like I don't till 1768 01:42:12,920 --> 01:42:14,560 summer. Yeah, yeah, I think. 1769 01:42:14,560 --> 01:42:16,480 I think I. Think, I think there's a lot 1770 01:42:16,560 --> 01:42:18,680 weighing on, on summer and there's a lot weighing on iron 1771 01:42:18,680 --> 01:42:24,680 oil price and you know like like there's yeah, iron market 1772 01:42:24,680 --> 01:42:28,480 suddenly looks healthy again after yeah and the lithium. 1773 01:42:28,480 --> 01:42:31,840 Market as well, perhaps, yeah. Yeah. 1774 01:42:31,920 --> 01:42:33,600 I actually, I actually will struggle to give you a 1775 01:42:33,600 --> 01:42:35,560 prediction because I think it's so commodity focused when you've 1776 01:42:35,560 --> 01:42:38,840 got so much like debt in the equity so levered to commodity 1777 01:42:38,840 --> 01:42:40,000 prices. Yeah, yeah, yeah. 1778 01:42:40,120 --> 01:42:42,000 But but that's a very. Different proposition. 1779 01:42:42,000 --> 01:42:43,760 And that's sort of, I'm fine with that. 1780 01:42:43,880 --> 01:42:46,840 I'm fine with this being a play on the iron ore price because 1781 01:42:47,080 --> 01:42:49,600 the iron ore price is not, it's not high at the moment. 1782 01:42:49,840 --> 01:42:52,800 It's not, it's not, it's not really low. 1783 01:42:52,800 --> 01:42:54,280 I don't know how you describe the iron ore price at the 1784 01:42:54,360 --> 01:42:55,320 moment. You can describe it. 1785 01:42:57,760 --> 01:43:01,200 As sort of floundering. At a sort of at a price that 1786 01:43:01,200 --> 01:43:05,080 incentivizes production, but but cuts out some of the very 1787 01:43:05,080 --> 01:43:08,000 marginal producers. But yeah, if if this is just a 1788 01:43:08,000 --> 01:43:11,200 plan, the iron ore price, then then the risk reward is is 1789 01:43:11,200 --> 01:43:14,120 fantastic. What? 1790 01:43:14,120 --> 01:43:18,160 What key risks? Have you identified and like you 1791 01:43:18,160 --> 01:43:20,600 know you kind of watching out for other than commodity price? 1792 01:43:20,600 --> 01:43:22,640 Yeah, yeah. So the quantity price is the. 1793 01:43:22,640 --> 01:43:26,840 Is the the price of iron ore? I think is more important and 1794 01:43:26,960 --> 01:43:34,520 represents a A more. A more. 1795 01:43:34,800 --> 01:43:38,080 Influential factor in respect of the success of this company than 1796 01:43:38,080 --> 01:43:42,800 than the other than the other factors combined, but I will be. 1797 01:43:42,800 --> 01:43:45,600 Disappointed if. If they sell the lithium 1798 01:43:45,840 --> 01:43:48,320 business, if they sell half of their of the lithium business 1799 01:43:49,160 --> 01:43:53,000 for for anything. For any amount that they're 1800 01:43:53,000 --> 01:43:54,800 going to get offered. I would be disappointed if they 1801 01:43:54,880 --> 01:43:57,480 if they sold it for so any amount ever. 1802 01:43:57,800 --> 01:43:58,880 Well. They're going to be offered 1803 01:43:58,880 --> 01:43:59,800 realistically. Yeah, Yeah. 1804 01:43:59,800 --> 01:44:00,800 I mean, they're not going to be offered. 1805 01:44:00,840 --> 01:44:02,360 They're not going to be offered. If they were offered three 1806 01:44:02,360 --> 01:44:04,880 billion tomorrow for half a living business, sign me up. 1807 01:44:05,400 --> 01:44:07,840 But I, I think that's struggled to even get a billion in the 1808 01:44:07,840 --> 01:44:11,360 current market, particularly given the the mining services 1809 01:44:12,040 --> 01:44:16,560 situation. I think that if Chris Ellison 1810 01:44:16,560 --> 01:44:21,520 were to to to be fired or to leave the company, that would be 1811 01:44:21,520 --> 01:44:23,840 a major downside risk from my perspective. 1812 01:44:25,360 --> 01:44:28,960 I think that people who think he is going to voluntarily retire 1813 01:44:28,960 --> 01:44:33,000 at the end of this transition period are very confused indeed. 1814 01:44:35,000 --> 01:44:36,760 If there was any doubt that that's not happening. 1815 01:44:36,760 --> 01:44:41,080 I think that was put to bed when the chairman posted his when the 1816 01:44:41,080 --> 01:44:43,800 company posted the chairman's governance slideshow the other 1817 01:44:43,800 --> 01:44:47,120 day that that basically said Chris Ellis was not going 1818 01:44:47,120 --> 01:44:49,600 anywhere. And that to me is a very 1819 01:44:49,600 --> 01:44:56,920 positive sign, not because I think he's the the not because 1820 01:44:56,920 --> 01:44:59,360 he's my idol, but because I think he's the the only thing 1821 01:44:59,360 --> 01:45:02,800 standing in the way of this, between standing in the way of a 1822 01:45:02,840 --> 01:45:08,040 massive cat raise. Other than those, I think the 1823 01:45:08,040 --> 01:45:14,560 only real risk that that. Is worth worrying about is. 1824 01:45:14,560 --> 01:45:21,440 Is the road. This this uncertainty. 1825 01:45:22,080 --> 01:45:24,440 Place havoc with with valuations because how do you how do you 1826 01:45:24,440 --> 01:45:28,080 build in you know, what percentage are you assigning to 1827 01:45:28,440 --> 01:45:30,560 the chance of the operation falling over because the road 1828 01:45:30,560 --> 01:45:34,320 doesn't work. I've had to assign in my sort of 1829 01:45:34,320 --> 01:45:38,400 model A0 percent chance of that but but query whether that's 1830 01:45:38,400 --> 01:45:41,800 realistic but. Otherwise, I think all the 1831 01:45:41,800 --> 01:45:44,400 other. Components of the Onslow export 1832 01:45:44,400 --> 01:45:46,480 chain are working really well. And I don't think there's any 1833 01:45:46,480 --> 01:45:50,440 risk associated with anything from port to carriers. 1834 01:45:50,440 --> 01:45:53,160 And I don't think there's any risk associated with or any real 1835 01:45:53,160 --> 01:45:57,800 risk associated with anything from with anything from the ore 1836 01:45:57,920 --> 01:46:00,840 to the road. What do you think? 1837 01:46:02,400 --> 01:46:03,680 I think. It's a yeah. 1838 01:46:03,800 --> 01:46:06,320 Like, I don't disagree. Like your point on Chris 1839 01:46:06,320 --> 01:46:10,680 Allison, Like, yeah. That's that's. 1840 01:46:10,840 --> 01:46:14,160 I agree with like, you know, the market's not pricing in or that 1841 01:46:14,360 --> 01:46:15,960 the market doesn't think that he's going to be leaving. 1842 01:46:15,960 --> 01:46:18,440 I don't think there's any kind of query about that. 1843 01:46:21,000 --> 01:46:24,680 To your point on. If he were to if the board. 1844 01:46:24,680 --> 01:46:26,320 Were to announce tomorrow that he'd been fired. 1845 01:46:26,840 --> 01:46:27,880 So you think the share price would go? 1846 01:46:27,960 --> 01:46:29,520 I do think there's a chance of that. 1847 01:46:29,520 --> 01:46:33,920 Like like, and I don't think it's a zero chance only because 1848 01:46:33,920 --> 01:46:37,960 if there's like heightened ASIC enforcement kind of warranting 1849 01:46:37,960 --> 01:46:41,080 it, which like who freaking knows like where, where that's 1850 01:46:41,080 --> 01:46:43,920 at or anything. But I'm just kind of like, yeah, 1851 01:46:43,920 --> 01:46:46,080 I don't think you can assign a 0% probability to that. 1852 01:46:46,080 --> 01:46:47,400 I think there's there is a chance. 1853 01:46:47,600 --> 01:46:49,120 And do you think what, what do you think would happen? 1854 01:46:49,200 --> 01:46:51,480 If that would happen it it, it wouldn't be good like. 1855 01:46:51,560 --> 01:46:56,200 I do think like that, you know, shareholders think that A, he is 1856 01:46:56,280 --> 01:46:59,320 like you say, most aligned to get the company to a better 1857 01:46:59,320 --> 01:47:03,040 financial and operating position and, and and B, can probably run 1858 01:47:03,040 --> 01:47:06,480 the company in a way that no other yeah, management person 1859 01:47:06,480 --> 01:47:09,440 could from getting stuff done perspective. 1860 01:47:10,680 --> 01:47:13,320 So yeah, I do think that's a, that'd be a pretty significant 1861 01:47:13,320 --> 01:47:19,440 negative catalyst for the stock. I I, I, I on my like my 1862 01:47:19,440 --> 01:47:21,800 intuition is that cost is substantially higher than what 1863 01:47:21,800 --> 01:47:23,240 you think they are. And what does that actually 1864 01:47:23,240 --> 01:47:25,200 mean? It means that that, you know, 1865 01:47:25,200 --> 01:47:28,160 depending where iron ore prices are, you're it's going to take a 1866 01:47:28,200 --> 01:47:33,120 fair bit longer to pay down the debt than than maybe you might 1867 01:47:33,120 --> 01:47:34,840 think it to take down. And what does that actually 1868 01:47:34,840 --> 01:47:36,520 mean? It means that you're vulnerable 1869 01:47:36,520 --> 01:47:39,600 to a commodity down cycle for for a longer period of time. 1870 01:47:39,600 --> 01:47:42,240 So that that if you're just prolonging the period, you're 1871 01:47:42,240 --> 01:47:45,480 kind of flirting with, with a high debt balance, you're kind 1872 01:47:45,480 --> 01:47:48,440 of at any point in time one negative economic shock away 1873 01:47:48,440 --> 01:47:51,840 from being in a a very ugly position, which would justify 1874 01:47:51,840 --> 01:47:54,240 doing something like selling. Half of the within business per 1875 01:47:54,560 --> 01:47:56,160 per a billion, yeah. Yeah. 1876 01:47:58,000 --> 01:48:01,480 But, yeah, it's been a pleasure to, to, to talk through the 1877 01:48:01,480 --> 01:48:03,560 stock. I'm, I'm glad you became 1878 01:48:03,560 --> 01:48:05,160 obsessed with it. I'm glad you've, you know, 1879 01:48:05,280 --> 01:48:10,280 you've been willing to figure out your thoughts, like, you 1880 01:48:10,280 --> 01:48:12,840 know, bet on them, articulate them and share them with the, 1881 01:48:12,920 --> 01:48:16,120 the world. You know, it's a it's a yeah, 1882 01:48:16,320 --> 01:48:18,560 it's an admirable thing to do. There's plenty of minarest bulls 1883 01:48:18,560 --> 01:48:20,160 out there, but not many of them are willing to put their face to 1884 01:48:20,160 --> 01:48:21,840 it. So like I do, I do commend you, 1885 01:48:21,840 --> 01:48:23,560 for they're not, they're not that foolish. 1886 01:48:26,960 --> 01:48:28,440 Yeah, well. One stock portfolio. 1887 01:48:28,440 --> 01:48:30,680 I don't know if I can endorse the merit of that though. 1888 01:48:32,640 --> 01:48:34,440 That's that's big, big kahunas, mate. 1889 01:48:35,400 --> 01:48:39,880 And yeah, I'd like I thank you a lot for even if to bring me 1890 01:48:39,880 --> 01:48:41,720 back. On if it all goes to hell and 1891 01:48:42,680 --> 01:48:44,200 come back in one year, yeah. There we go. 1892 01:48:44,480 --> 01:48:46,760 Yeah, Thanks Moz. It's been a pleasure. 1893 01:48:47,120 --> 01:48:49,560 There we go, money minus. Let us know. 1894 01:48:49,560 --> 01:48:52,880 Where you sit on the line, are you long or are you short? 1895 01:48:52,960 --> 01:48:56,320 And a massive thank you to our fantastic partners Grounded 1896 01:48:56,320 --> 01:48:59,080 Sanded Ground Support and Cross Boundary. 1897 01:48:59,080 --> 01:49:04,440 Energy. Now remember, I'm an idiot. 1898 01:49:04,720 --> 01:49:07,160 JD is an idiot. If you thought any of this was 1899 01:49:07,160 --> 01:49:09,680 anything other than entertainment, you're an idiot 1900 01:49:10,040 --> 01:49:11,200 and you need to read out a disclaimer.