1
00:00:00,040 --> 00:00:02,520
And that's why the mining sector
in the West is capped. 

2
00:00:02,640 --> 00:00:06,480
And that's the underlying 
problem for Western markets is 

3
00:00:06,520 --> 00:00:10,960
the incentivisation is not the 
same as an emerging market which

4
00:00:10,960 --> 00:00:13,400
has a much more diverse pool of 
capital. 

5
00:00:17,880 --> 00:00:20,120
Fascinating. 
I mean, we, we, we did a deep 

6
00:00:20,120 --> 00:00:23,240
dive in the Fortescue and as 
well been been reading about 

7
00:00:23,240 --> 00:00:27,160
like sort of Sino gold and that 
sort of at the same sort of time

8
00:00:27,280 --> 00:00:30,240
when that kind of got started. 
And yeah, it's crazy. 

9
00:00:30,240 --> 00:00:33,760
It's crazy to to read about, you
know, Jay Klein at the time 

10
00:00:33,760 --> 00:00:37,920
speaking about journeys that 
would take 15 hours. 

11
00:00:37,920 --> 00:00:40,240
And by the time he sort of left 
the country in that venture, 

12
00:00:40,840 --> 00:00:44,000
it's taking five hours because 
there's highways crossing 

13
00:00:44,000 --> 00:00:46,520
valleys, there's, you know, 
plane trips going, there's 

14
00:00:46,560 --> 00:00:49,840
airports being built in places 
where barely a city before. 

15
00:00:50,200 --> 00:00:53,680
Well, sometimes there's no cars.
So I remember we'd catch a train

16
00:00:53,680 --> 00:00:58,160
out from Beijing West train 
station, like most Thursdays 

17
00:00:58,160 --> 00:00:59,720
nights and we wouldn't even know
where we're going. 

18
00:00:59,720 --> 00:01:02,320
We'd get into third class. 
We'd just play poker, eat nuts 

19
00:01:02,320 --> 00:01:06,280
and drink beer in, in the train.
And like all the, all the 

20
00:01:06,280 --> 00:01:08,400
passengers would come and play 
with us and talk to us. 

21
00:01:08,400 --> 00:01:12,120
And, and then you'd get just get
off somewhere and, you know, try

22
00:01:12,120 --> 00:01:13,800
and find a restaurant and 
somewhere to stay. 

23
00:01:13,800 --> 00:01:17,880
And, you know, the next day 
you'd have 500 people outside of

24
00:01:17,880 --> 00:01:19,840
wherever you were staying trying
to sell you something. 

25
00:01:19,840 --> 00:01:22,960
You might get a couple of horses
and away you go into that. 

26
00:01:23,440 --> 00:01:25,520
Yeah, it's amazing. 
Like you'd knock on the door and

27
00:01:25,520 --> 00:01:27,400
say, oh, you know, if you've got
dinner and they go, what do you 

28
00:01:27,400 --> 00:01:32,280
want? 
Chicken, cow, pig, you know, OK,

29
00:01:32,320 --> 00:01:34,720
we'll have lamb. 
They'd build a fire on the road 

30
00:01:34,720 --> 00:01:39,040
outside of the house and they'll
they'll put the lamb on it, give

31
00:01:39,040 --> 00:01:40,520
you some beer. 
You just sit. 

32
00:01:40,520 --> 00:01:43,600
There's no cars going past. 
It's it's crazy. 

33
00:01:45,000 --> 00:01:49,520
What an experience, all right. 
JD we're, we're joined by Willow

34
00:01:49,520 --> 00:01:53,000
today and Willow, you're unlike 
any other guest, I think we've 

35
00:01:53,000 --> 00:01:55,960
ever had on our show, not just 
because you're an investment 

36
00:01:55,960 --> 00:01:58,160
banker and we, you know, we 
usually don't let investment 

37
00:01:58,160 --> 00:02:02,360
bankers on the show, but but 
because, I mean, you're one of 

38
00:02:02,360 --> 00:02:03,360
them. 
You've got one of the most 

39
00:02:03,360 --> 00:02:07,200
unusual, I guess, stories or 
like your, your own journey. 

40
00:02:07,200 --> 00:02:10,240
You grew up in SA, you went to 
high school in Japan, Uni in 

41
00:02:10,240 --> 00:02:16,000
China, 27 odd years with JP 
Morgan, SCB and HSBC doing 

42
00:02:16,560 --> 00:02:19,280
enormous kind of, you know, 
metals and mining M and a 

43
00:02:19,280 --> 00:02:21,360
transactions. 
A lot of our listeners would be 

44
00:02:21,360 --> 00:02:23,520
familiar with the likes of, you 
know, Dundee for Norman star or 

45
00:02:23,520 --> 00:02:27,360
red Crest for new Crest or 
Galaxy aura Cobra, IGO, Tianchi,

46
00:02:28,000 --> 00:02:30,000
Yanko Rio. 
I mean, these were, these were 

47
00:02:30,000 --> 00:02:31,480
big, big deals. 
You were a part of them. 

48
00:02:31,720 --> 00:02:35,880
These days you've, you've kicked
off Pacific one, which is, you 

49
00:02:35,880 --> 00:02:38,840
know, a, a business you own and,
and continuing your career. 

50
00:02:40,000 --> 00:02:42,800
I think you've got a pretty 
unique lens of the world, not 

51
00:02:42,800 --> 00:02:45,160
only your, your history, your 
trajectory, but your insights 

52
00:02:45,160 --> 00:02:49,320
into that, the kind of Asian 
capital world, having lived 

53
00:02:49,320 --> 00:02:52,040
there, you know, speaking the, 
the language as yourself. 

54
00:02:52,040 --> 00:02:53,480
We're we're delighted that 
you're joining us. 

55
00:02:53,480 --> 00:02:56,040
And as we're going to kind of 
reflect on the week that's gone 

56
00:02:56,040 --> 00:02:59,800
and and some of the big themes 
that as we look ahead, I want to

57
00:02:59,800 --> 00:03:00,760
money mine. 
Great. 

58
00:03:01,240 --> 00:03:02,960
Thank you. 
Thank you, guys. 

59
00:03:02,960 --> 00:03:05,520
It's a great service. 
I'll listen to you every week 

60
00:03:05,760 --> 00:03:07,240
and I know a lot of other people
do as well. 

61
00:03:07,240 --> 00:03:09,280
It's fantastic. 
As flattering Willow, we're 

62
00:03:09,320 --> 00:03:13,120
we're very excited and I think 
for the the reasons that Trav 

63
00:03:13,120 --> 00:03:17,360
just outlined, your background 
makes you pretty uniquely suited

64
00:03:17,360 --> 00:03:19,520
for the conversation we're going
to have. 

65
00:03:19,520 --> 00:03:21,840
Although he's going to be cagey 
when we ask him about companies,

66
00:03:21,840 --> 00:03:25,160
mate, because every investment 
banker will actually not really 

67
00:03:25,160 --> 00:03:26,840
tell you what they really think 
when you ask him about 

68
00:03:26,840 --> 00:03:28,880
companies. 
It's just it's good business, 

69
00:03:28,880 --> 00:03:30,840
good business. 
Not publicly, yeah. 

70
00:03:32,440 --> 00:03:37,560
On the theme of geopolitics and 
cost of capital, where funding 

71
00:03:37,680 --> 00:03:40,440
is coming from in the resources 
world, where it might come from 

72
00:03:40,440 --> 00:03:43,160
in five years and 10 years time 
though, yeah, you're pretty 

73
00:03:43,160 --> 00:03:44,880
primed. 
So I think we should start the 

74
00:03:44,880 --> 00:03:47,600
conversation in that kind of 
spot because we caught up a 

75
00:03:47,600 --> 00:03:50,800
little while ago and we spoke 
about the big shifts underway as

76
00:03:50,800 --> 00:03:54,160
well as your positioning in in 
Asia and how you sort of see the

77
00:03:54,160 --> 00:03:58,160
flows as well as your experience
in working in junk bond markets 

78
00:03:58,160 --> 00:04:01,680
in in debt markets. 
So I want to, I want to sort of 

79
00:04:01,680 --> 00:04:04,600
start this conversation at a 
kind of broad level and 

80
00:04:04,600 --> 00:04:08,000
understand what you think of the
big trends in the cost of 

81
00:04:08,000 --> 00:04:10,680
capital and how miners are 
getting financed as we sort of 

82
00:04:10,680 --> 00:04:12,720
see it today. 
Yeah. 

83
00:04:12,720 --> 00:04:17,160
So if if you're a Western listed
miner, you've you've always kind

84
00:04:17,160 --> 00:04:20,000
of done it one way. 
You, you get project funding, 

85
00:04:20,000 --> 00:04:22,600
you you go to the equity market 
and you raise equity. 

86
00:04:23,240 --> 00:04:26,920
And when emerging markets were 
pretty small, you know, that 

87
00:04:26,920 --> 00:04:30,080
was, that was the only way did 
it. 

88
00:04:30,720 --> 00:04:33,520
Some of the bigger projects the 
Japanese financed, you know, 

89
00:04:33,520 --> 00:04:37,680
along with the majors, iron ore 
and coal and and copper and 

90
00:04:37,680 --> 00:04:38,960
other things. 
And, and that was very 

91
00:04:38,960 --> 00:04:44,080
effective. 
And, you know, over the last 10 

92
00:04:44,080 --> 00:04:47,520
years especially, we've noticed 
that a lot of the Western 

93
00:04:47,520 --> 00:04:49,680
countries have really been 
hollowed out in terms of their 

94
00:04:49,680 --> 00:04:53,800
industrial capacity. 
And that includes mining and 

95
00:04:53,800 --> 00:04:59,080
certainly processing. 
And one of the surprising things

96
00:04:59,080 --> 00:05:01,640
to me is a lot of the Western 
politicians don't actually try 

97
00:05:01,640 --> 00:05:04,760
and solve the problem. 
They just Band-Aid over it with,

98
00:05:05,240 --> 00:05:08,280
you know, handouts. 
I mean, what it, what is the 

99
00:05:08,280 --> 00:05:12,080
problem? 
The problem is that the two 

100
00:05:12,080 --> 00:05:15,680
things Western equity capital 
is, is now a lot more expensive 

101
00:05:15,800 --> 00:05:18,760
than emerging market capital. 
And I don't really like to call 

102
00:05:18,760 --> 00:05:22,720
it emerging markets because 
China, Japan, Korea, they've 

103
00:05:22,720 --> 00:05:24,600
emerged, you know, they're, 
they're the industrial 

104
00:05:24,600 --> 00:05:26,640
economies, not, not the West 
anymore. 

105
00:05:27,320 --> 00:05:31,040
So it's an average of 66% more 
expensive is Western equity 

106
00:05:31,040 --> 00:05:34,320
capital. 
When you look at, you know, very

107
00:05:34,320 --> 00:05:37,280
similar companies and a number 
of them over the last 10 years. 

108
00:05:37,360 --> 00:05:38,920
So that's, that's a huge 
difference. 

109
00:05:39,800 --> 00:05:42,720
And then debt capital, I mean, 
that's very easy to, to 

110
00:05:42,720 --> 00:05:45,480
reference. 
You've got Japanese and Chinese 

111
00:05:45,480 --> 00:05:48,000
five year bond rates, which are 
below 2%. 

112
00:05:49,000 --> 00:05:52,960
You've got US and most Western 
countries about 4 1/2 percent. 

113
00:05:52,960 --> 00:05:55,680
I mean that, that that makes a 
huge difference to your IRR on 

114
00:05:55,680 --> 00:05:58,960
a, on a project. 
And so if you're just doing it 

115
00:05:58,960 --> 00:06:03,760
with Western capital, you're 
competing against companies, 

116
00:06:03,760 --> 00:06:07,720
whether government sponsored or 
not, that, that are competing 

117
00:06:07,720 --> 00:06:11,480
with far lower cost of capital 
and therefore much higher IRRS. 

118
00:06:11,480 --> 00:06:15,080
And so how do you acquire a, a, 
you know, a cop of mine, for 

119
00:06:15,080 --> 00:06:18,560
example, with a much higher cost
of capital relative to your 

120
00:06:18,800 --> 00:06:19,760
competitors? 
You can't. 

121
00:06:20,280 --> 00:06:22,520
To to tap into that point 
because I think we start talking

122
00:06:22,520 --> 00:06:24,760
about cost of capital and we're 
at real risk of losing the 

123
00:06:24,760 --> 00:06:27,400
people that are not from a, a 
finance kind of background. 

124
00:06:27,760 --> 00:06:28,960
So. 
It's everything. 

125
00:06:29,000 --> 00:06:30,840
It's everything in a capital 
intensive industry. 

126
00:06:30,880 --> 00:06:33,080
Yeah, exactly. 
And so if we can really break it

127
00:06:33,080 --> 00:06:37,080
down to, to the nuts and bolts 
and what the ramifications of a 

128
00:06:37,120 --> 00:06:41,280
high cost of capital are or you 
know, from say an Australian 

129
00:06:41,280 --> 00:06:42,920
perspective or from a miner's 
perspective. 

130
00:06:42,920 --> 00:06:44,960
Yeah. 
So if if you're a Zigen, for 

131
00:06:44,960 --> 00:06:48,960
example, and you trade on 12 
times EBITDA and you're you're 

132
00:06:48,960 --> 00:06:52,000
buying something at four times 
EBITDA, fantastic, because that 

133
00:06:52,000 --> 00:06:54,560
for that EBITDA just goes 
straight to your 12 times and 

134
00:06:54,560 --> 00:06:58,240
there's value created. 
If you're trading on four times 

135
00:06:58,280 --> 00:07:00,360
EBITDA and you're buying 
something for four times EBITDA,

136
00:07:00,360 --> 00:07:03,840
well, it's pretty hard to create
value off the bat from that. 

137
00:07:03,840 --> 00:07:06,400
And you certainly can't pay what
Zijin can. 

138
00:07:06,400 --> 00:07:08,680
So that that, that's just a 
simple example. 

139
00:07:08,680 --> 00:07:11,280
And the same applies to let's 
say you're investing a billion 

140
00:07:11,280 --> 00:07:15,120
dollars of capital in into a 
project and you need a required 

141
00:07:15,280 --> 00:07:17,600
greater return. 
That's very hard when your cost 

142
00:07:17,600 --> 00:07:21,160
of equity is is so low, so, so 
high. 

143
00:07:21,160 --> 00:07:25,400
Sorry. 
And we've skipped over a little 

144
00:07:25,400 --> 00:07:28,160
bit because the key point is 
why, why is that? 

145
00:07:28,280 --> 00:07:30,840
I mean, cost of debt, you can 
probably understand, you know, 

146
00:07:30,840 --> 00:07:35,960
the Western countries are in a 
higher lever, but why is cost of

147
00:07:35,960 --> 00:07:40,800
equity so high for Western 
companies given that all we hear

148
00:07:40,800 --> 00:07:43,960
is that I've, you know, the US 
market has higher multiples and,

149
00:07:44,360 --> 00:07:47,560
and it does, it does for other 
industries, it does certainly 

150
00:07:47,560 --> 00:07:49,440
for tech and it does for 
infrastructure. 

151
00:07:49,840 --> 00:07:53,000
Well, why mining? 
Well, if the problem with the 

152
00:07:53,000 --> 00:07:57,040
Western equity markets is that 
they're now 85% institutionally 

153
00:07:57,320 --> 00:07:58,720
owned, right? 
And what does that mean? 

154
00:07:58,720 --> 00:08:02,680
That means you just crowd 
capital into where the LP's or 

155
00:08:02,680 --> 00:08:05,160
the, you know, the ultimate 
asset allocators want. 

156
00:08:05,160 --> 00:08:07,680
And what do they want? 
Well, they want, they're happy 

157
00:08:07,680 --> 00:08:10,200
to have volatility in 
operational cash flows like 

158
00:08:10,200 --> 00:08:12,880
tech, but it has to be capital 
light. 

159
00:08:13,000 --> 00:08:16,040
So I have to be able to invest 
in like 10 of them to, to have 

160
00:08:16,040 --> 00:08:17,840
two or three of them come off 
fantastic. 

161
00:08:18,760 --> 00:08:22,200
And if it's capital heavy, well,
it better not be volatile. 

162
00:08:22,520 --> 00:08:25,360
So infrastructure love that. 
In fact, I don't really care 

163
00:08:25,360 --> 00:08:28,960
what I pay for infrastructure is
because I know the return that 

164
00:08:28,960 --> 00:08:31,200
I'm getting. 
But mining's in between, isn't 

165
00:08:31,200 --> 00:08:32,760
it? 
It's, it's high capital 

166
00:08:32,760 --> 00:08:35,000
intensity and it's very high 
volatility. 

167
00:08:35,600 --> 00:08:40,280
And as a generalist, which I 
used to be, you know that that's

168
00:08:40,280 --> 00:08:43,159
the worst of both worlds. 
Why, why am I going to bid more 

169
00:08:43,159 --> 00:08:45,680
than four times EBITDA for a 
company like that? 

170
00:08:45,680 --> 00:08:48,160
And that's why the mining sector
in the West is capped. 

171
00:08:48,760 --> 00:08:53,120
And that's the underlying 
problem for Western markets is 

172
00:08:53,120 --> 00:08:57,480
the incentivization is not the 
same as an emerging market, 

173
00:08:58,360 --> 00:09:00,960
which has a much more diverse 
pool of capital. 

174
00:09:01,400 --> 00:09:04,840
So retail in China, for example,
is 80% of the stock market 

175
00:09:05,160 --> 00:09:07,160
completely different. 
I mean, that's, that's how 

176
00:09:07,160 --> 00:09:08,840
Western markets were 50 years 
ago. 

177
00:09:09,640 --> 00:09:13,400
And that therein lies the 
difference in capital formation 

178
00:09:13,400 --> 00:09:15,120
and the difference in capital 
cost. 

179
00:09:15,160 --> 00:09:20,680
And then that gives an advantage
to those, those companies. 

180
00:09:20,680 --> 00:09:23,320
And it's, it's not just China. 
It's it's, it's Korea, 

181
00:09:23,800 --> 00:09:30,600
Indonesia, India, Saudi, Yeah. 
So when you think about the, the

182
00:09:30,640 --> 00:09:33,720
equity markets though the, you 
know quite famously the the 

183
00:09:33,720 --> 00:09:39,000
Chinese broader indices, they 
haven't performed phenomenally 

184
00:09:39,360 --> 00:09:42,800
well in in recent decades say 
that the last 15 years since 

185
00:09:42,800 --> 00:09:46,560
the, the, the GFC Despite that 
they have gotten bigger, there 

186
00:09:46,560 --> 00:09:49,040
is more and more companies being
being listed there. 

187
00:09:49,040 --> 00:09:51,880
So the the kind of gross market 
cap is growing of the 

188
00:09:51,880 --> 00:09:55,200
performance kind of hasn't. 
Is that something you think is 

189
00:09:55,200 --> 00:09:57,840
part of the the natural 
evolution and in time we'll do 

190
00:09:57,840 --> 00:10:00,160
well or because of the system 
there that that's not going to 

191
00:10:00,600 --> 00:10:03,400
perform in time well? 
When it's a retail centric 

192
00:10:03,800 --> 00:10:07,360
market, you know, sometimes you 
don't get the valuations that 

193
00:10:07,360 --> 00:10:09,560
you would in the US. 
So, you know, if you go back 

194
00:10:10,880 --> 00:10:14,480
seven or eight years, a lot of 
the Chinese tech companies 

195
00:10:14,480 --> 00:10:17,520
listed in the US for the higher 
valuations that that makes 

196
00:10:17,520 --> 00:10:22,120
sense. 
But most of the manufacturing, 

197
00:10:22,120 --> 00:10:25,480
either directly or indirectly 
and heavy industrials have all 

198
00:10:25,480 --> 00:10:28,240
gravitated towards those 
markets. 

199
00:10:29,040 --> 00:10:32,480
And, and either it's in a 
chemicals, I think China is 

200
00:10:32,800 --> 00:10:37,440
twice the size of the US and EU 
combined in chemicals output. 

201
00:10:37,720 --> 00:10:40,160
So you look at a hydroxide 
plant, you go, well, why can't 

202
00:10:40,160 --> 00:10:42,640
it work in the West? 
We you don't have the supply 

203
00:10:42,640 --> 00:10:44,440
chain backing it up. 
You don't have the cost of the 

204
00:10:44,440 --> 00:10:49,640
inputs that can compete. 
And and if we think about these,

205
00:10:49,640 --> 00:10:53,560
these sort of holes of money at 
kind of traversing those 2 E 

206
00:10:53,560 --> 00:10:57,720
East and West with a specific 
example in mind, FMGA little 

207
00:10:57,720 --> 00:11:02,960
while ago announced this, 
remember the US $2 billion bond 

208
00:11:03,000 --> 00:11:04,440
bond deal. 
How do you think about those 

209
00:11:04,440 --> 00:11:08,000
bits of financing because 
they're, they're a relatively, 

210
00:11:08,040 --> 00:11:11,640
you know, unique piece or maybe 
the first of that kind of type 

211
00:11:11,640 --> 00:11:13,000
of financing? 
Do you think that's something we

212
00:11:13,000 --> 00:11:15,680
continue to see more of? 
So you should be able to get a, 

213
00:11:16,360 --> 00:11:19,400
a lower interest rate because 
the underlying government bond 

214
00:11:19,400 --> 00:11:20,800
is a lower interest rate in 
China. 

215
00:11:20,800 --> 00:11:22,680
So that's great. 
But then because you're 

216
00:11:22,680 --> 00:11:25,080
reporting in Australian dollars 
or U.S. dollars and that's your 

217
00:11:25,080 --> 00:11:28,080
functional currency, you you're 
going to have to swap it back 

218
00:11:28,880 --> 00:11:30,680
into that Western currency. 
And that's expensive. 

219
00:11:30,680 --> 00:11:32,640
And that's the reason why a lot 
of people don't do it. 

220
00:11:32,640 --> 00:11:37,600
But in the case of Fortescue, 
they sell to China and they can 

221
00:11:37,600 --> 00:11:41,880
sell an RnB and that would 
naturally hedge their R&B 

222
00:11:41,880 --> 00:11:46,080
exposure and thereby reduce 
their net cost of interest. 

223
00:11:46,280 --> 00:11:49,920
So it can work. 
It's not for everyone, but in 

224
00:11:50,400 --> 00:11:52,760
five years time it'll be a lot 
more popular to do that. 

225
00:11:53,360 --> 00:11:55,720
Isn't that interesting, right? 
So they get, they get a, a 2%. 

226
00:11:55,760 --> 00:11:57,920
I mean, it's like, you know, you
look at it and you're like, this

227
00:11:57,920 --> 00:12:00,000
is the lowest cost of capital 
you can have as a western minor 

228
00:12:00,600 --> 00:12:05,120
to well, lowest cost of debt 
oriented a 2% coupon on a, on a 

229
00:12:05,120 --> 00:12:07,760
$2 billion loan. 
But you know, are they, are 

230
00:12:07,760 --> 00:12:11,080
they, are they able to do that? 
And because because like China 

231
00:12:11,080 --> 00:12:15,760
has a political or will to, you 
know, want to, to de de 

232
00:12:15,760 --> 00:12:18,800
dollarize as well. 
Like if they're selling in R&B, 

233
00:12:18,800 --> 00:12:21,600
is that is that is there some 
advantage and incentive for for 

234
00:12:21,600 --> 00:12:26,560
that? 
I think we all overestimate the 

235
00:12:26,560 --> 00:12:28,160
government's hand in a lot of 
this. 

236
00:12:28,760 --> 00:12:31,960
I mean, that is the Chinese 
banks wanting to expand outside 

237
00:12:31,960 --> 00:12:33,560
of China. 
I mean, look at what they've 

238
00:12:33,560 --> 00:12:35,880
done in Indonesia. 
The Chinese government, the 

239
00:12:35,880 --> 00:12:37,680
Indonesian government didn't 
have much to do with that 

240
00:12:37,680 --> 00:12:39,160
really. 
It was zinc Shan and a whole 

241
00:12:39,160 --> 00:12:43,920
bunch of very private, very 
proud Chinese companies that put

242
00:12:44,640 --> 00:12:48,240
maybe 50 billion in capital now 
in Indonesia and nickel to build

243
00:12:48,240 --> 00:12:53,320
up all of that industrial size. 
And, and it's only now that the 

244
00:12:53,320 --> 00:12:54,880
governments are kind of getting 
involved. 

245
00:12:55,120 --> 00:12:56,840
The capital came in because of 
the the. 

246
00:12:56,960 --> 00:12:58,840
Government goal setting. 
Yeah, the, I mean the, the 

247
00:12:59,400 --> 00:13:02,960
industrial park like tax in tax 
breaks for, you know, big, big 

248
00:13:02,960 --> 00:13:05,320
windows of time and everything 
that was the, the landscape that

249
00:13:05,320 --> 00:13:08,040
allowed capital to to accumulate
though, was it not? 

250
00:13:08,120 --> 00:13:10,360
That was that was part of it. 
Yeah, part of it. 

251
00:13:10,440 --> 00:13:13,680
But you know, the the capital 
from Tinxion wasn't government 

252
00:13:13,680 --> 00:13:14,720
capital. 
Sure. 

253
00:13:15,400 --> 00:13:17,920
Like every government, you have 
an industrial policy that 

254
00:13:18,360 --> 00:13:22,240
encourages lending to certain 
sectors, but it doesn't dictate,

255
00:13:22,240 --> 00:13:26,080
oh, we're going to go and spend 
forty, $50 billion in Indonesia 

256
00:13:26,080 --> 00:13:29,600
and and ruin the nickel market. 
Mate, we've just got to jump in 

257
00:13:29,600 --> 00:13:31,280
with a quick public service 
announcement. 

258
00:13:31,280 --> 00:13:34,880
We are one short week away from 
Africa Down Under Adu. 

259
00:13:35,000 --> 00:13:37,360
Less than less than a week mate.
The conference starts on 

260
00:13:37,360 --> 00:13:40,120
Wednesday next week. 
Only a few sleeps to go. 3rd to 

261
00:13:40,120 --> 00:13:42,800
the 5th so it's a Wednesday to 
the Friday we're gonna we're 

262
00:13:42,800 --> 00:13:45,240
gonna be there come come come 
check like we'll be there 

263
00:13:45,240 --> 00:13:46,680
Wednesday morning. 
So if you're gonna buy your 

264
00:13:46,680 --> 00:13:49,400
tickets to come to Africa Down 
Under, now is the time to pull 

265
00:13:49,400 --> 00:13:51,480
the trigger. 
If you're gonna go, I don't. 

266
00:13:51,480 --> 00:13:53,360
I don't even think there's many 
tickets left, mate. 

267
00:13:53,360 --> 00:13:54,600
The selling like hot cakes. 
So you bought? 

268
00:13:54,600 --> 00:13:56,360
Cakes. 
There's a number of reasons why 

269
00:13:56,360 --> 00:13:57,560
you want to get yourself down 
there. 

270
00:13:57,600 --> 00:13:59,720
You've got the biggest African 
miners, you've got the up and 

271
00:13:59,720 --> 00:14:02,000
coming ones, you've got the the 
juniors that are doing big 

272
00:14:02,000 --> 00:14:03,000
things. 
We've seen deals. 

273
00:14:03,000 --> 00:14:05,080
Don't forget the delegates of 
from all of different countries.

274
00:14:05,080 --> 00:14:06,880
Delegates, a lot going on that 
front. 

275
00:14:06,880 --> 00:14:09,320
When you invest in Africa, you 
need to understand the playing 

276
00:14:09,320 --> 00:14:10,760
field. 
You want to get in front of the 

277
00:14:10,760 --> 00:14:12,400
face of these delegates. 
You want to speak with them. 

278
00:14:12,560 --> 00:14:16,600
The biggest and the biggest 
African mining convention 

279
00:14:16,600 --> 00:14:18,000
outside of Indaba? 
Phenomenal. 

280
00:14:18,000 --> 00:14:19,800
That's crazy right here in 
Perth. 

281
00:14:20,160 --> 00:14:21,680
Get your tickets in the show 
notes. 

282
00:14:21,920 --> 00:14:23,880
Africa down under September 3rd 
to 5th. 

283
00:14:24,440 --> 00:14:29,000
Yeah, it, it is a, a fascinating
example in, in terms of more 

284
00:14:29,000 --> 00:14:33,160
money that's coming into the 
metals and market space traders 

285
00:14:33,240 --> 00:14:36,320
and the the commodity traders 
with a lot of these guys being, 

286
00:14:36,480 --> 00:14:39,920
you know, energy first traders, 
they've entered the the space. 

287
00:14:39,920 --> 00:14:44,560
We saw another example just 
recently with Capuchi, the 

288
00:14:44,560 --> 00:14:49,320
Ivanhoe mine and a deal with 
Mercuria, who have always been 

289
00:14:49,320 --> 00:14:52,280
an energy trader. 
Is that another sort of source 

290
00:14:52,280 --> 00:14:53,560
of capital? 
I mean, they're really muscling 

291
00:14:53,560 --> 00:14:56,040
in on one another now. 
Do you do you see that trend 

292
00:14:56,040 --> 00:14:58,000
continuing? 
That's fantastic, isn't it, 

293
00:14:58,000 --> 00:15:00,920
Because they go back maybe 7 or 
8 years. 

294
00:15:00,920 --> 00:15:03,640
There's a few big bankruptcies 
in, in trading companies, 

295
00:15:03,640 --> 00:15:07,400
particularly in Asia, only on I 
think was one of them and there 

296
00:15:07,400 --> 00:15:11,800
was a few more. 
And so a lot of the banks pulled

297
00:15:11,800 --> 00:15:15,960
back from financing the traders 
into particularly metals deals. 

298
00:15:17,560 --> 00:15:20,760
And you know, you remember maybe
15 years ago, there was all of 

299
00:15:20,760 --> 00:15:25,960
that LME, all of those LME 
problems with security over and 

300
00:15:25,960 --> 00:15:27,280
then a lot of the banks got out 
of it. 

301
00:15:27,280 --> 00:15:30,560
So it was very hard for the 
traders to get any size and the 

302
00:15:30,560 --> 00:15:34,120
metals market is what, 8 to 10 
times smaller than oil. 

303
00:15:34,120 --> 00:15:37,480
So well, let's just stay in oil 
and make money there, which a 

304
00:15:37,480 --> 00:15:40,320
lot of them have made huge 
amounts of money and now they 

305
00:15:40,320 --> 00:15:43,720
need to expand outside of oil. 
And so metals is obvious, but 

306
00:15:43,720 --> 00:15:47,840
Glencor and TRAF have had the 
lion's share of the the best 

307
00:15:47,840 --> 00:15:52,000
markets. 
So now you've got 8 to 10 others

308
00:15:52,000 --> 00:15:56,000
that are heritage oil, but 
coming very, very aggressively 

309
00:15:56,520 --> 00:16:00,800
into providing fundings either 
off takes or prepaid or hybrid 

310
00:16:00,800 --> 00:16:03,080
type structures. 
That's different from equity, 

311
00:16:04,840 --> 00:16:07,760
can have equity warrants or or 
debt and it depends how it's 

312
00:16:07,760 --> 00:16:11,320
structured. 
But the banks tend to sit behind

313
00:16:11,320 --> 00:16:16,160
those prepaid facilities and 
lever it to between 50 and 80%. 

314
00:16:16,440 --> 00:16:20,240
So the trading company ends up 
not having to put so much equity

315
00:16:20,240 --> 00:16:25,240
into those facilities. 
And, and from another sort of 

316
00:16:25,240 --> 00:16:27,440
source of capital, you've got 
the, the streamers and the 

317
00:16:27,440 --> 00:16:30,000
royalty players getting bigger 
and bigger. 

318
00:16:30,000 --> 00:16:32,320
If if we kind of piece it all 
together, what what do you make 

319
00:16:32,320 --> 00:16:35,840
of the, the, the statement that 
there's a, a shortage of money 

320
00:16:35,840 --> 00:16:39,160
for mining companies? 
There's definitely a shortage of

321
00:16:39,400 --> 00:16:42,520
capital for mining companies at 
certain stages of their 

322
00:16:42,520 --> 00:16:46,000
development. 
So right now, I mean, and it's 

323
00:16:46,000 --> 00:16:49,200
fantastic that the, the Perth 
retail brokers and brokers are 

324
00:16:49,200 --> 00:16:52,320
raising all this money for, for,
for mining development companies

325
00:16:52,320 --> 00:16:55,560
because that's really hard 
capital to, to get. 

326
00:16:56,880 --> 00:17:00,400
So the exploration capital is a 
bit easier now to get. 

327
00:17:00,400 --> 00:17:03,600
But the problem is when you come
to actually funding the, the, 

328
00:17:03,720 --> 00:17:06,400
the construction or, or the 
bigger capital and you're a $50 

329
00:17:06,400 --> 00:17:11,480
million market cap company and 
you've got 400 million of CapEx 

330
00:17:11,480 --> 00:17:14,359
to spend. 
You know, how do I do that? 

331
00:17:15,960 --> 00:17:19,680
And there's not necessarily 
capital available for that from 

332
00:17:19,680 --> 00:17:22,800
traditional sources. 
And that's why, you know, we sit

333
00:17:22,800 --> 00:17:25,560
there going, you've got to, 
you've got to look at layering 

334
00:17:25,560 --> 00:17:27,560
your capital structure. 
So how do I get a Japanese 

335
00:17:27,560 --> 00:17:30,800
trading house in here? 
How do I get a royalty structure

336
00:17:30,800 --> 00:17:33,200
in here? 
How do I do off take, how do I 

337
00:17:33,400 --> 00:17:38,880
then bring Japanese or Korean or
Exim bank debt in the project 

338
00:17:38,880 --> 00:17:42,480
financing level at a lower cost?
And how do I layer all of those 

339
00:17:43,560 --> 00:17:46,320
capital structures so that the 
equity market understands what 

340
00:17:46,320 --> 00:17:48,320
I'm doing? 
It's not too complex, which is 

341
00:17:48,320 --> 00:17:50,160
very important in an Australian 
context. 

342
00:17:50,160 --> 00:17:54,320
And and so my cost of capital is
low enough that it justifies me 

343
00:17:54,640 --> 00:17:57,400
doing the project. 
That HUD Bay example that we 

344
00:17:57,400 --> 00:17:59,600
spoke about a couple weeks ago, 
that feels like a a prime 

345
00:17:59,600 --> 00:18:03,080
example to to, to put forward 
in, in unlocking like the first 

346
00:18:03,080 --> 00:18:05,560
kind of steps of that with the 
Japanese trading houses coming 

347
00:18:05,560 --> 00:18:07,600
in. 
Right, fantastic. 

348
00:18:07,640 --> 00:18:10,280
I mean, what? 
What a great result the HUD Bay,

349
00:18:10,440 --> 00:18:13,520
you know, both of them, but, but
HUD Bay into in particular. 

350
00:18:13,520 --> 00:18:16,800
So they've basically just taken 
all of the capital CapEx needs 

351
00:18:16,800 --> 00:18:20,240
away from themselves. 
Mitsubishi comes in and and 

352
00:18:20,240 --> 00:18:22,120
funds it all. 
HUD Bay was trading at, you 

353
00:18:22,120 --> 00:18:25,080
know, round numbers, let's say 
.7 times they've brought in 

354
00:18:25,080 --> 00:18:29,520
capital at 1.1 times MPV, great 
value arbitrage. 

355
00:18:29,840 --> 00:18:32,240
I mean everyone that can do that
should do that. 

356
00:18:32,480 --> 00:18:34,800
Even if you don't even need the 
capital, you should be buying 

357
00:18:34,800 --> 00:18:37,920
back shares to reduce your your 
equity count because you're 

358
00:18:37,920 --> 00:18:41,960
replacing expensive equity with 
with cheap equity. 

359
00:18:42,240 --> 00:18:46,720
The inevitability of of the 
world need for these metals. 

360
00:18:46,720 --> 00:18:48,880
It's just like it's so 
compelling, it's so obvious. 

361
00:18:49,600 --> 00:18:52,920
But where is the capital going 
to come from to bring, you know,

362
00:18:52,920 --> 00:18:56,800
these new developments online if
it, if it is, you know, scarce? 

363
00:18:57,800 --> 00:19:00,560
So it's not going to come from 
Western equity markets. 

364
00:19:00,640 --> 00:19:01,920
That's where it's not going to 
come from. 

365
00:19:01,920 --> 00:19:07,200
And where it is coming from is 
industrial, IE Korea, Japan, 

366
00:19:07,640 --> 00:19:09,960
China, Indonesia and emerging 
markets. 

367
00:19:09,960 --> 00:19:12,920
I mean the, the capital coming 
out of Indonesia now is enormous

368
00:19:13,560 --> 00:19:15,960
and a lot of it we don't see 
because they might not be public

369
00:19:15,960 --> 00:19:21,640
companies or they're not listed 
on ASX or NYSE, but but that is 

370
00:19:21,640 --> 00:19:24,320
huge capital. 
Is that because they understand 

371
00:19:24,440 --> 00:19:28,160
like the, the need for these 
materials because they have the,

372
00:19:28,320 --> 00:19:31,200
the industrial downstream 
component in some respects or 

373
00:19:31,200 --> 00:19:32,200
they're tied to it in some 
respects? 

374
00:19:32,200 --> 00:19:34,720
So they're like, they've got the
foresight to think, you know, 

375
00:19:34,720 --> 00:19:38,880
20-30 years in the future. 
Well, yes, partly because if 

376
00:19:38,880 --> 00:19:42,640
you, you know, live in Jakarta 
or you live in Shanghai or, or 

377
00:19:43,080 --> 00:19:46,760
you live in Riyadh, you see 
masses of construction every day

378
00:19:46,760 --> 00:19:51,360
and OK, things are growing. 
Let's let's get on board that 

379
00:19:51,360 --> 00:19:53,280
train. 
But I, I think the, the bigger 

380
00:19:53,600 --> 00:19:56,560
issue is, is when you're growing
an economy, those materials are 

381
00:19:56,560 --> 00:19:59,280
really important and the 
security of those are really 

382
00:19:59,400 --> 00:20:01,600
important. 
But more than anything, they're 

383
00:20:01,600 --> 00:20:05,400
just arbitraging the the. 
The higher cost of capital in 

384
00:20:05,400 --> 00:20:10,560
the West, so they're saying, 
well, this is a gap in Western 

385
00:20:10,560 --> 00:20:14,200
markets where where it's too 
expensive for them to play with,

386
00:20:14,280 --> 00:20:17,800
you know, and, and maybe the the
processing's too environmentally

387
00:20:17,800 --> 00:20:20,360
unfriendly and, and there's a 
whole lot of other issues, but 

388
00:20:20,360 --> 00:20:23,560
that's a gap that our capital 
can play in that we're not 

389
00:20:23,560 --> 00:20:27,760
competing with the West tell. 
Me, tell me more about like, you

390
00:20:27,760 --> 00:20:31,120
know what the ways in which 
you're seeing this capital, you 

391
00:20:31,120 --> 00:20:33,400
know, find it's way into into 
Western projects. 

392
00:20:35,920 --> 00:20:39,680
Yeah, So it, and this is the 
thing, it's not, it's, you can't

393
00:20:39,680 --> 00:20:42,960
just go out to auction and say, 
you know, highest bidder wins to

394
00:20:42,960 --> 00:20:44,840
be my partner. 
That's not how it works. 

395
00:20:44,840 --> 00:20:48,480
I mean, these are big 
sophisticated companies usually 

396
00:20:48,480 --> 00:20:51,880
that, that have their own checks
and balances and their own 

397
00:20:51,880 --> 00:20:55,600
systems and their, you know, 
every timetable is different and

398
00:20:55,600 --> 00:20:56,880
they're all looking for a 
different thing. 

399
00:20:56,880 --> 00:20:59,480
So it's a bit of a challenge, 
particularly to a midcap or a 

400
00:20:59,480 --> 00:21:04,440
small cap to yeah, you can, you 
can go to Japan and have a whole

401
00:21:04,440 --> 00:21:05,920
heap of meetings. 
But what does that mean? 

402
00:21:06,560 --> 00:21:09,760
And then how do I compare that 
to Korea or Indonesia or China 

403
00:21:09,760 --> 00:21:15,560
or Saudi or UAE or India? 
There's no one you can go to 

404
00:21:15,560 --> 00:21:18,280
that's that's going to compare 
all of those together and say 

405
00:21:18,280 --> 00:21:21,560
that that's what makes sense for
you because most of the service 

406
00:21:21,560 --> 00:21:24,880
providers have they either want 
you to raise equity or they want

407
00:21:24,880 --> 00:21:26,960
you to do a high yield bond or 
they're, you know, they've done 

408
00:21:26,960 --> 00:21:28,840
a few deals in Japan. 
So that's great. 

409
00:21:28,840 --> 00:21:30,760
We want to go there, but they 
don't know about the other side 

410
00:21:30,760 --> 00:21:31,960
of it. 
So it's very, you know, they 

411
00:21:31,960 --> 00:21:34,040
don't know about off take 
agreements. 

412
00:21:34,040 --> 00:21:38,280
So it's very hard to layer that 
capital structure efficiently. 

413
00:21:40,600 --> 00:21:42,280
That's the opportunity for P1, 
isn't it? 

414
00:21:43,760 --> 00:21:45,840
I was going to say that's where 
that's where a great advisor 

415
00:21:45,880 --> 00:21:49,720
sort of how do you how do you 
pace in US junk bonds in that in

416
00:21:49,720 --> 00:21:52,520
that kind of market because 
they've at an interesting 

417
00:21:52,520 --> 00:21:55,400
history financing Aussie 
resource projects. 

418
00:21:56,440 --> 00:21:59,080
Yeah. 
So I, I was at JP Morgan for a 

419
00:21:59,080 --> 00:22:04,920
long time and you know, they 
have a very powerful US centric 

420
00:22:05,520 --> 00:22:08,080
higher bond desk, which is. 
I've heard Chris Allison talk 

421
00:22:08,080 --> 00:22:13,160
about it, yeah. 
Right, So it's a it's a it's a 

422
00:22:13,160 --> 00:22:14,920
great market. 
You know, it's not not something

423
00:22:14,920 --> 00:22:19,560
to be scared of it because 
before you know, you obviously 

424
00:22:19,560 --> 00:22:21,560
had Fortescue, right. 
And that was that was a 

425
00:22:22,320 --> 00:22:26,800
fantastic way of financing what 
what they achieved and, and. 

426
00:22:27,080 --> 00:22:29,720
What no one else kind of would 
have financed. 

427
00:22:30,120 --> 00:22:36,120
Right, because because you can 
get capital, it's just a it's 

428
00:22:36,120 --> 00:22:38,880
just price, right. 
And I think, I think actually 

429
00:22:38,880 --> 00:22:42,960
Minrose said that on, on the 
call it you know, execution risk

430
00:22:42,960 --> 00:22:46,880
is not big, it's just a question
of price and that, and that's 

431
00:22:46,880 --> 00:22:48,200
great. 
It's bullet finance. 

432
00:22:48,200 --> 00:22:50,960
So you, you know, for five years
plus you can sit there and 

433
00:22:50,960 --> 00:22:54,480
you've got the finance and the 
next five year cycle doesn't 

434
00:22:54,960 --> 00:22:59,160
really matter so much. 
But then you then you just 

435
00:22:59,160 --> 00:23:02,640
simply roll it over and whatever
price you know it is at the 

436
00:23:02,640 --> 00:23:04,480
time, that's how you've got to 
time it and. 

437
00:23:05,760 --> 00:23:09,400
And the, the, you know, with 
regards to that priciness, you 

438
00:23:09,400 --> 00:23:11,960
know, the, the cost of that, how
do you paste that in with what 

439
00:23:11,960 --> 00:23:14,120
it might cost from these Asian 
kind of players that you think 

440
00:23:14,120 --> 00:23:15,920
about? 
Yeah. 

441
00:23:15,920 --> 00:23:21,320
So I mean that's purely debt and
usually it, it's a little bit 

442
00:23:21,520 --> 00:23:26,080
more costly than a loan, only a 
little bit and that changes over

443
00:23:26,080 --> 00:23:30,400
time. 
So that's debt from Asian 

444
00:23:30,800 --> 00:23:34,160
players and, and you know, 
believing RMB loans and debt 

445
00:23:34,160 --> 00:23:38,840
aside, you know, a lot of the 
capital is equity like. 

446
00:23:39,600 --> 00:23:42,520
So you know, I guess the next 
step down is, is kind of off 

447
00:23:42,520 --> 00:23:44,440
taking prepays with, with 
warrants. 

448
00:23:44,440 --> 00:23:48,240
So equity warrants to give a bit
more of a return. 

449
00:23:48,240 --> 00:23:51,760
And then you go all the way down
to a Lisco equity investment 

450
00:23:51,760 --> 00:23:56,000
minority or or an asset level 
investment minority, which the 

451
00:23:56,240 --> 00:23:59,400
completely different style of of
capital. 

452
00:24:00,160 --> 00:24:05,440
Yeah. 
And the, the, I suppose like the

453
00:24:05,440 --> 00:24:09,080
growth of the Nordic bonds to, 
to finance more spicy types of 

454
00:24:09,280 --> 00:24:12,760
projects is, is a, is another 
trend that we're kind of pretty 

455
00:24:12,760 --> 00:24:15,800
astute to at the moment as well.
Well, I think, I think given 

456
00:24:15,800 --> 00:24:20,280
private capital is growing so 
fast that that sort of structure

457
00:24:20,400 --> 00:24:24,280
is, is going to make a lot more 
sense and open other doors for, 

458
00:24:24,280 --> 00:24:26,440
for mining companies. 
So the Nordic bond is, you know,

459
00:24:26,440 --> 00:24:30,400
yes, I think it originally it, 
you know, it was for Nordic mums

460
00:24:30,400 --> 00:24:33,280
and dads at home, but it's just 
a structure that then you can 

461
00:24:33,280 --> 00:24:37,920
sell to lots of different credit
funds and, and I think we'll see

462
00:24:37,920 --> 00:24:40,400
more structures like that over 
time. 

463
00:24:41,000 --> 00:24:43,520
So it like where does the cap 
like let's say you know, min 

464
00:24:43,520 --> 00:24:47,160
raise raises money in the US 
junk bond market. 

465
00:24:47,200 --> 00:24:49,440
Are they US investors or are 
they, are they, are they 

466
00:24:49,480 --> 00:24:52,360
investors that are actually like
Asian centric? 

467
00:24:52,880 --> 00:24:56,200
I I didn't set up that question,
but that is a good question. 

468
00:24:57,160 --> 00:25:02,560
So that used to be principally 
US investors so that a book 

469
00:25:02,560 --> 00:25:06,680
would print usually be like 
8090% US, very US heavy. 

470
00:25:07,440 --> 00:25:10,080
But over time all of those US 
funds have established their 

471
00:25:10,080 --> 00:25:13,160
offices in Hong Kong and 
Singapore and other other parts 

472
00:25:13,160 --> 00:25:15,320
of the world. 
And so now the book is at least 

473
00:25:15,320 --> 00:25:22,360
5050, you know, US, Asia and 
sometimes a lot more Asia heavy.

474
00:25:22,360 --> 00:25:25,800
And the reason, the reason for 
metals and mining in particular 

475
00:25:25,800 --> 00:25:30,720
is that Asian issuance is much 
larger in metals and mining than

476
00:25:30,720 --> 00:25:34,800
it is in the US because there's 
a lot of companies, there's a 

477
00:25:34,800 --> 00:25:37,280
lot of need. 
A lot of the Chinese companies 

478
00:25:37,280 --> 00:25:41,880
raise short term debt and bonds 
from markets and that's the way 

479
00:25:41,880 --> 00:25:45,560
they finance themselves. 
And so if you're a portfolio 

480
00:25:45,560 --> 00:25:47,720
manager sitting in Hong Kong, 
you're going, yeah, I've, I've 

481
00:25:47,720 --> 00:25:50,600
seen this, this sort of gold 
company, you know, 100 times 

482
00:25:50,600 --> 00:25:52,280
before. 
I've seen this sort of aluminium

483
00:25:52,280 --> 00:25:53,800
company. 
I know how the supply chain 

484
00:25:53,800 --> 00:25:57,320
works because I already have 
investments in bonds in a, in a 

485
00:25:57,320 --> 00:26:01,200
bunch of the, the peers. 
And that's why for metals and 

486
00:26:01,200 --> 00:26:04,400
mining company companies, Asia 
is a really important part. 

487
00:26:04,400 --> 00:26:08,160
So is the US It's, but it's 
important to understand that 

488
00:26:08,160 --> 00:26:10,000
they're two different buckets of
capital. 

489
00:26:10,880 --> 00:26:15,040
So the way, the way in which 
the, the, the, I suppose the 

490
00:26:15,040 --> 00:26:18,280
government forces in very recent
history are trying to level the 

491
00:26:18,280 --> 00:26:19,800
playing field from a cost of 
capital. 

492
00:26:19,800 --> 00:26:25,000
It's I, I, I'll get angry kind 
of talking about it, but but 

493
00:26:25,000 --> 00:26:26,920
it's, it's frustrating in a lot 
of ways. 

494
00:26:26,920 --> 00:26:30,160
Do you have the same frustration
in, in, in, I suppose the, you 

495
00:26:30,240 --> 00:26:32,480
know, the approaches we've seen 
today of government to lower the

496
00:26:32,480 --> 00:26:35,280
cost of capital of, of, of 
Western mining, you know, 

497
00:26:35,480 --> 00:26:37,560
projects and companies. 
Yeah. 

498
00:26:37,560 --> 00:26:40,960
I mean, look, I mean, and we 
could talk about geopolitics for

499
00:26:40,960 --> 00:26:43,800
a long time, but clearly, you 
know, the US is not as strong as

500
00:26:43,800 --> 00:26:49,840
it was 10 years ago and China on
every objective measure is a 

501
00:26:49,840 --> 00:26:52,720
superpower. 
Like it or not it it just is. 

502
00:26:54,080 --> 00:26:57,640
I'd say the West band aids some 
of these problems, you know, 

503
00:26:57,640 --> 00:27:03,120
they're short term sugar hit get
a good headline. 

504
00:27:03,680 --> 00:27:06,800
Voters are happy because 
something's being done, but no 

505
00:27:06,800 --> 00:27:09,280
one really understand. 
You know, it doesn't appear that

506
00:27:09,280 --> 00:27:12,440
the government's really are even
bothering to understand what the

507
00:27:12,760 --> 00:27:15,800
underlying problems are, what, 
what are the causes for a lot of

508
00:27:15,800 --> 00:27:19,600
these things. 
And then I'm I'm sure some in 

509
00:27:19,600 --> 00:27:23,680
the government are, but but if 
they did, then you would form 

510
00:27:23,680 --> 00:27:28,200
policies, underlying policies to
address some of those issues, 

511
00:27:28,200 --> 00:27:31,160
not not handouts and band aids 
and sugar hits. 

512
00:27:32,640 --> 00:27:37,520
And the problem is the more we 
sugar hit and the less economic 

513
00:27:38,000 --> 00:27:40,240
it becomes. 
I mean, in Brea, So I get it, 

514
00:27:40,240 --> 00:27:42,960
you, you need security of supply
and, and it's not that bigger 

515
00:27:42,960 --> 00:27:44,280
industry. 
So it's, you know, it's 

516
00:27:44,640 --> 00:27:47,760
relatively easy to solve, but 
you've, what have you really 

517
00:27:47,760 --> 00:27:50,800
done? 
You've now got a structurally 

518
00:27:50,800 --> 00:27:57,960
higher cost supply of of inputs 
into the industrial complex, you

519
00:27:57,960 --> 00:28:00,240
know, and in the military, I 
mean, as we've seen in Ukraine, 

520
00:28:00,240 --> 00:28:05,560
you need very cheap production 
to to multiply your, your forces

521
00:28:05,560 --> 00:28:07,800
and having Caicos inputs is not 
the answer. 

522
00:28:08,560 --> 00:28:11,080
You, you said we could kind of 
speak for hours about this, this

523
00:28:11,080 --> 00:28:12,960
geopolitical theme and I think 
we easily could. 

524
00:28:12,960 --> 00:28:17,080
So let's tap into it for for a 
bit because it's kind of 

525
00:28:17,080 --> 00:28:19,240
implicit in what we were talking
about with with the funding 

526
00:28:19,240 --> 00:28:20,720
there. 
You know, it's it's, it's the 

527
00:28:20,720 --> 00:28:23,200
kind of read through line. 
And is it going to be that easy 

528
00:28:23,200 --> 00:28:26,600
to have capital flow from from 
east to West and all these sorts

529
00:28:26,600 --> 00:28:29,320
of things? 
So do you, do you see there 

530
00:28:29,320 --> 00:28:32,320
being difficulty in, you know, 
countries like Indonesia, for 

531
00:28:32,320 --> 00:28:35,280
instance, if we're trying to 
have that money come in to 

532
00:28:35,320 --> 00:28:38,760
Australia, like they're in a a 
kind of funny middle ground 

533
00:28:38,760 --> 00:28:43,400
between Asia, China and 
Australia and and the US, Do you

534
00:28:43,400 --> 00:28:45,600
see there being blockages on a 
geopolitical front to that 

535
00:28:45,600 --> 00:28:55,480
capital flowing? 
I hope not because what what is 

536
00:28:55,480 --> 00:29:00,360
happening now is becoming a 
multipolar world and lots of 

537
00:29:00,560 --> 00:29:04,120
bilateral negotiations between 
countries, which are, you know, 

538
00:29:04,160 --> 00:29:07,440
is different to what we've seen 
in the last, you know, since 

539
00:29:07,440 --> 00:29:11,920
World War 2. 
And if you're saying that I 

540
00:29:11,920 --> 00:29:16,920
think you've as a company, you 
need to start to be multipolar 

541
00:29:16,920 --> 00:29:19,200
as well. 
So if I'm thinking about my SO 

542
00:29:19,200 --> 00:29:22,360
what's the easiest way to 
equalize the cost of capital? 

543
00:29:22,360 --> 00:29:25,600
Well, it's get a partner in with
a lower cost of capital than I 

544
00:29:25,600 --> 00:29:29,200
do and supplement my capital 
with that partner. 

545
00:29:30,040 --> 00:29:32,680
Now do I just pick one country 
and that's the country I want to

546
00:29:32,680 --> 00:29:34,160
go to? 
I don't think so. 

547
00:29:34,360 --> 00:29:37,960
I think from now on you need to 
be multi polar. 

548
00:29:37,960 --> 00:29:41,760
You need to have a Japanese 
partner, a Korean partner, a 

549
00:29:41,760 --> 00:29:45,920
Chinese partner, a Indonesian 
partner, a Arab partner, an 

550
00:29:45,920 --> 00:29:47,960
Indian partner. 
I mean, that would be fantastic.

551
00:29:48,280 --> 00:29:51,480
And then none of them have power
over you, but you have access to

552
00:29:51,480 --> 00:29:54,720
each bucket of capital depending
on what you want to build, 

553
00:29:54,720 --> 00:29:57,680
expand, buy. 
Because it's all different. 

554
00:29:57,680 --> 00:29:59,920
It's all different costs and 
it's all different terms and 

555
00:29:59,920 --> 00:30:02,840
they're all different cultures. 
When you think about the the 

556
00:30:02,840 --> 00:30:04,800
mining companies that could 
potentially do something like 

557
00:30:04,800 --> 00:30:07,680
this, you'd have to be of some 
sort of scale. 

558
00:30:07,680 --> 00:30:10,560
And at least in the West, 
there's really not that many 

559
00:30:10,920 --> 00:30:14,800
mining companies that are of 
sufficient scale that could have

560
00:30:14,800 --> 00:30:17,480
the bandwidth to set up 
relationships in all the 

561
00:30:17,480 --> 00:30:20,720
countries you've just mentioned.
Do you think I'm right in saying

562
00:30:20,720 --> 00:30:22,040
that? 
Yeah. 

563
00:30:22,040 --> 00:30:26,320
So I think Semitomo Metals just 
put 5.5 million into Mirador, 

564
00:30:26,320 --> 00:30:30,960
for example, in, you know, how, 
how does that, how does that 

565
00:30:30,960 --> 00:30:32,680
form? 
How, how, how was that 

566
00:30:32,680 --> 00:30:34,800
originated? 
How many counterparties would 

567
00:30:34,800 --> 00:30:38,280
have Mirador talked to before 
they decided on, on that? 

568
00:30:39,600 --> 00:30:41,240
I, I think it's really hard to 
navigate. 

569
00:30:41,240 --> 00:30:44,480
And then, you know, you go to 
the Middle East and you can fly 

570
00:30:44,480 --> 00:30:48,040
around for weeks. 
And I mean, it's a big place. 

571
00:30:48,200 --> 00:30:50,000
There's lots of cities and 
they're all different countries.

572
00:30:50,000 --> 00:30:54,760
You know, it's not A and, and, 
and you know, Asia's obviously 

573
00:30:55,880 --> 00:30:58,000
very different depending on the 
countries as well. 

574
00:30:58,000 --> 00:31:01,960
And, and it's for a lot of the 
companies, they, they, they, 

575
00:31:01,960 --> 00:31:05,000
some, some of them will see a 
lot of the, the counterparties, 

576
00:31:05,000 --> 00:31:07,560
but they'll often be the traders
as opposed to the investment 

577
00:31:07,560 --> 00:31:08,360
guys. 
And so do you. 

578
00:31:08,440 --> 00:31:10,800
Are you really talking to the 
people that you need to talk to 

579
00:31:10,800 --> 00:31:12,400
to influence an investment 
decision? 

580
00:31:13,440 --> 00:31:15,720
And and do you think one of the 
other sort of ramifications of 

581
00:31:15,720 --> 00:31:18,240
this multi polar world is 
inflation? 

582
00:31:22,080 --> 00:31:24,240
Yeah. 
And undoubtedly, you know, 

583
00:31:24,600 --> 00:31:28,320
because if we're reducing the 
efficiency of the supply chain, 

584
00:31:28,320 --> 00:31:31,080
then you're getting cost imposts
at every point. 

585
00:31:31,080 --> 00:31:33,560
And the more closed you get, the
higher inflation you're going to

586
00:31:33,560 --> 00:31:37,400
get, particularly if you reduce 
interest rates. 

587
00:31:39,840 --> 00:31:42,280
You've got, you've got some, 
some interesting views to share 

588
00:31:42,280 --> 00:31:45,600
with us for me when we got up a 
couple weeks ago, mate, just in 

589
00:31:45,600 --> 00:31:51,080
relation to to how how people 
might choose to combat inflation

590
00:31:51,080 --> 00:31:52,800
and look for store stores of 
value. 

591
00:31:52,800 --> 00:31:54,200
Do you mind sharing that? 
Yeah, right. 

592
00:31:54,240 --> 00:31:57,600
I, I'm, I mean, this is 
obviously all very personal 

593
00:31:59,400 --> 00:32:03,720
opinions, but you know, if I'm a
government anywhere else than 

594
00:32:03,720 --> 00:32:06,680
the USII historically have just 
looked to U.S. 

595
00:32:06,680 --> 00:32:10,840
Treasuries as my store of value.
That's where most of the world 

596
00:32:12,200 --> 00:32:15,080
look to store their value. 
And, and now that's looking less

597
00:32:15,120 --> 00:32:20,000
certain and, and certainly you 
don't want to have most of your 

598
00:32:20,000 --> 00:32:22,160
wealth parked in that store of 
value. 

599
00:32:22,160 --> 00:32:26,440
And so gold and Bitcoin and 
maybe silver are the first, 

600
00:32:27,360 --> 00:32:30,600
first places to turn to because 
there's no real alternative. 

601
00:32:30,760 --> 00:32:35,640
Like a digital RnB currency is 
not not ready and, and people 

602
00:32:35,640 --> 00:32:39,280
aren't ready to accept that 
wholesale yet. 

603
00:32:39,280 --> 00:32:43,000
So, so where to next? 
Because gold's only a certain 

604
00:32:43,000 --> 00:32:47,640
size and it's already gone up 
Bitcoin, not sure whether that's

605
00:32:47,680 --> 00:32:51,960
a store of value or of a, or a 
good way to transfer value. 

606
00:32:53,040 --> 00:32:55,880
But if I was a Middle Eastern 
government, I would start buying

607
00:32:56,040 --> 00:32:58,280
and storing metals with positive
contango. 

608
00:32:58,280 --> 00:33:03,800
So they're, you know, aluminium,
copper, zinc, nickel, and and 

609
00:33:03,800 --> 00:33:07,560
that is a store of real wealth. 
It can't be taken away from me 

610
00:33:07,960 --> 00:33:09,920
because the property laws change
in a country. 

611
00:33:09,920 --> 00:33:13,320
It, it, it can't, it's not going
to change because someone 

612
00:33:13,320 --> 00:33:16,000
changes interest rates or I 
can't move my money from here to

613
00:33:16,000 --> 00:33:17,520
there. 
It is a real store of wealth. 

614
00:33:17,520 --> 00:33:22,360
And I, I think that's probably 
the next leg in in metals as 

615
00:33:22,360 --> 00:33:27,520
everyone searches for somewhere 
to put to park their reserves. 

616
00:33:28,080 --> 00:33:31,840
That that has pretty real 
borders to it as well because of

617
00:33:31,840 --> 00:33:35,000
the the physical kind of 
constraints of of a lot of these

618
00:33:35,000 --> 00:33:37,280
things. 
And you speak about doing it 

619
00:33:37,280 --> 00:33:41,240
with gold, but gold being a, a 
finite kind of market, it's the 

620
00:33:41,240 --> 00:33:42,560
same issue with, with a lot of 
these. 

621
00:33:42,560 --> 00:33:45,840
So we're not there yet, but 
they'll, they'll touch a 

622
00:33:45,840 --> 00:33:49,200
boundary. 
And if you know a a number of 

623
00:33:49,200 --> 00:33:52,360
countries of significant wealth 
tried to do this, you touch that

624
00:33:52,360 --> 00:33:54,360
boundary pretty pretty soon as 
well, don't you think? 

625
00:33:55,680 --> 00:33:57,800
Yeah, I think we're, we're 
starting to see it. 

626
00:33:57,800 --> 00:34:00,840
I mean, the, the, there's a lot 
of economies that are slowing. 

627
00:34:01,360 --> 00:34:03,480
You know, the industrial output 
of China, for example, has 

628
00:34:03,480 --> 00:34:08,120
slowed steels slowing, you know,
and that that naturally feeds 

629
00:34:08,120 --> 00:34:11,560
into copper and other metals. 
But but we're not necessarily 

630
00:34:11,560 --> 00:34:16,000
seeing those metal prices weak, 
I think because we are seeing a 

631
00:34:16,000 --> 00:34:21,800
bit more storage that's off LME 
and off, yeah, not public. 

632
00:34:22,440 --> 00:34:26,239
When you say like like storing 
the ones with positive contango,

633
00:34:26,239 --> 00:34:29,400
are you, are you talking about 
any, any financial trades to, to

634
00:34:29,400 --> 00:34:31,480
go along with just buying the 
physical and storing it or 

635
00:34:31,480 --> 00:34:33,360
you're just you're just saying 
that the ones with positive 

636
00:34:33,360 --> 00:34:35,280
contango would be more 
attractive in general? 

637
00:34:36,159 --> 00:34:38,639
You could do. 
I don't think you'd make it that

638
00:34:38,800 --> 00:34:42,080
complex necessarily. 
You you just want to store your 

639
00:34:42,080 --> 00:34:46,280
wealth in a diverse set of 
assets, particularly ones that 

640
00:34:46,280 --> 00:34:48,440
can't be taken away or don't 
inflate away. 

641
00:34:49,080 --> 00:34:51,440
That doesn't really matter what 
inflation is when you've got 

642
00:34:51,440 --> 00:34:54,800
metals, because that's going to 
match or better inflation. 

643
00:34:55,679 --> 00:34:58,440
This could have pretty, pretty 
severe implications on metal 

644
00:34:58,440 --> 00:35:01,160
prices in a in a pretty short 
period of time if if you know, 

645
00:35:01,160 --> 00:35:05,000
multiple, yeah, like Arab 
countries come to a similar 

646
00:35:05,000 --> 00:35:08,400
conclusion and a similar point 
in time and start doing that. 

647
00:35:09,680 --> 00:35:13,120
Yeah. 
Even worse than that, if you 

648
00:35:13,120 --> 00:35:16,080
think multi polarity could be 
bad for inflation, what this 

649
00:35:16,080 --> 00:35:20,400
could do to the the price of a a
computer, you know anything, a 

650
00:35:20,400 --> 00:35:23,760
fan, an air conditioner be 
pretty pretty huge. 

651
00:35:24,280 --> 00:35:25,920
Right. 
You know, I think we're living 

652
00:35:25,920 --> 00:35:30,040
through the start of a of a 
massive change in geopolitics, 

653
00:35:30,040 --> 00:35:33,760
which is is exciting and 
terrifying at the same time. 

654
00:35:34,040 --> 00:35:37,440
And I, I tend to think with 
these things that people don't 

655
00:35:37,440 --> 00:35:40,360
really act until the the problem
is really in their face. 

656
00:35:40,360 --> 00:35:41,920
So the problem has started to 
happen. 

657
00:35:41,920 --> 00:35:45,360
So the we've got. 
To lower, we've got to lower 

658
00:35:45,360 --> 00:35:47,240
interest rates, right, because 
people don't think inflation is 

659
00:35:47,240 --> 00:35:49,800
going to be an issue like. 
Well, the the value of 

660
00:35:50,040 --> 00:35:54,360
treasuries really has to start 
deteriorating to a serious 

661
00:35:54,360 --> 00:35:56,880
degree before people will act on
on these things. 

662
00:35:56,880 --> 00:36:01,520
And maybe they diversify their 
measure to euros, yen, Bitcoin, 

663
00:36:01,520 --> 00:36:04,400
gold, and then you start to see 
the metals kind of move. 

664
00:36:04,520 --> 00:36:07,840
Yeah, I, I think it's, I mean, 
look, there's a natural status 

665
00:36:07,840 --> 00:36:11,440
quo bias that you want things to
remain the same because that's 

666
00:36:11,440 --> 00:36:13,280
the easiest way to think about 
the future. 

667
00:36:13,840 --> 00:36:15,720
But ultimately they, they never 
do. 

668
00:36:15,720 --> 00:36:21,280
And it's usually long cycles, 
but that means when they they 

669
00:36:21,280 --> 00:36:26,120
shift, they shift big. 
And and for the mining companies

670
00:36:26,120 --> 00:36:29,280
out there, this would in effect 
pull up the bridge behind them. 

671
00:36:29,280 --> 00:36:33,080
The ones that have built the 
project would kind of get to the

672
00:36:33,080 --> 00:36:36,640
promised landish because they 
are now receiving higher prices.

673
00:36:37,200 --> 00:36:40,280
But the builds to build a new 
mine would go up significantly 

674
00:36:40,520 --> 00:36:43,240
because or the input costs go 
up. 

675
00:36:43,240 --> 00:36:46,880
So it's it's got a kind of 
compounding effect. 

676
00:36:46,880 --> 00:36:49,840
So how do you think about the 
the mining companies in this 

677
00:36:49,840 --> 00:36:53,320
world? 
So that's right. 

678
00:36:53,320 --> 00:36:58,560
So you'd have inflation of 
costs, but you'd also have a lot

679
00:36:58,560 --> 00:37:02,560
more M&A where it's not just 
countries, it's going to be 

680
00:37:02,560 --> 00:37:05,720
families and, and, and big 
companies with big reserves, 

681
00:37:05,720 --> 00:37:09,240
they want to store that wealth 
and the gold in particular, but 

682
00:37:09,400 --> 00:37:12,080
also other metals. 
Buying metal in the ground is 

683
00:37:12,760 --> 00:37:16,600
still metal, just not mine yet. 
So that, that's still a hedge 

684
00:37:16,600 --> 00:37:19,600
against inflation and 
geopolitics. 

685
00:37:19,600 --> 00:37:21,200
It's just that you're owning 
land. 

686
00:37:23,280 --> 00:37:27,040
So I, I think it's got big, big 
positive implications. 

687
00:37:27,040 --> 00:37:31,320
So, you know, and bringing this 
back to maybe a mining company 

688
00:37:32,760 --> 00:37:34,040
running a mining company is 
hard. 

689
00:37:34,560 --> 00:37:37,440
You know, it's, it's not just 
the financials and it's, you 

690
00:37:37,440 --> 00:37:41,160
know, it is native title, it is 
regulatory. 

691
00:37:41,160 --> 00:37:47,640
It is, you've got, you've got so
many moving pieces and it, you 

692
00:37:47,640 --> 00:37:50,720
know, it's very, very difficult 
to go from a explorer and a 

693
00:37:50,720 --> 00:37:53,040
developer to actually 
constructing a mine. 

694
00:37:53,040 --> 00:37:55,680
But but please keep going 
because, you know, I think the 

695
00:37:55,680 --> 00:38:00,200
rewards will come. 
And I, I feel like with all the 

696
00:38:00,200 --> 00:38:02,960
topics we've spoken about, 
Willow, there's one we need to 

697
00:38:02,960 --> 00:38:06,840
piece in here and that's energy.
Because energy, when you think 

698
00:38:06,840 --> 00:38:10,920
about like the cost of energy in
China versus the US and where 

699
00:38:10,920 --> 00:38:13,200
that's kind of heading in a, in 
a world trying to combat 

700
00:38:13,520 --> 00:38:16,800
climate. 
And it, it is a significantly 

701
00:38:16,800 --> 00:38:19,440
moving part, especially if we 
pull in the, the Arab states as 

702
00:38:19,440 --> 00:38:22,600
well, which have a, a very cheap
cost of, of energy. 

703
00:38:22,600 --> 00:38:27,000
So what ramifications do does 
the price of energy have on all 

704
00:38:27,040 --> 00:38:28,240
these things that you've been 
thinking about? 

705
00:38:28,320 --> 00:38:31,760
Well, I think it, it, it's so 
yes, it's energy, but it's more 

706
00:38:32,480 --> 00:38:36,880
using that as a concept. 
So, So what the US was really 

707
00:38:36,880 --> 00:38:41,000
good at in the 40s, fifties and 
60s was underlying productive 

708
00:38:41,000 --> 00:38:43,920
infrastructure, right? 
And that includes energy. 

709
00:38:44,680 --> 00:38:47,920
And so, you know, let's just 
take a few of the, the, the 

710
00:38:47,920 --> 00:38:51,120
building blocks, so the inputs 
into some of these processing 

711
00:38:51,680 --> 00:38:54,320
units. 
So, you know, China has twice 

712
00:38:54,320 --> 00:38:57,760
the electricity capacity of, of 
the US that that is amazing. 

713
00:38:57,760 --> 00:39:03,080
And building absolutely massive 
infrastructure to, to underline 

714
00:39:03,080 --> 00:39:08,160
that advantage. 
It produces twice the chemical 

715
00:39:08,160 --> 00:39:12,920
content that the US and EU does 
combined, right? 

716
00:39:12,920 --> 00:39:18,320
That that is just such a big 
advantage in in unit cost in in 

717
00:39:18,320 --> 00:39:23,600
rail freight, it's about twice 
as big as the USI mean in mining

718
00:39:23,600 --> 00:39:26,840
engineers, there's 20,000 mining
engineers every year graduating 

719
00:39:26,840 --> 00:39:33,640
in China, there's maybe 1000 in 
in, you know, in Australia way 

720
00:39:33,640 --> 00:39:35,520
less. 
Yeah, exactly right. 

721
00:39:36,400 --> 00:39:40,880
The scale is just a completely 
different size. 

722
00:39:40,880 --> 00:39:43,760
And all of that is in productive
capacity. 

723
00:39:44,240 --> 00:39:49,000
It's not in super yachts and 
it's not in watches and it's not

724
00:39:49,000 --> 00:39:51,680
in handbags anymore. 
It is in productive capacity 

725
00:39:51,800 --> 00:39:55,200
that is very, very powerful and 
it and then it multiplies over 

726
00:39:55,200 --> 00:39:59,680
the rest of the economy. 
But China you'd imagine would 

727
00:39:59,680 --> 00:40:03,480
want to get to that, that high 
level where where brand attaches

728
00:40:03,480 --> 00:40:08,160
value and and you can become a a
service type economy like this 

729
00:40:08,160 --> 00:40:11,160
is what all these other 
countries did a while ago. 

730
00:40:12,040 --> 00:40:16,880
So yes, and I guess we all sit 
here going, oh, well, labour 

731
00:40:16,880 --> 00:40:19,280
cost is cheaper in China. 
It's not that much cheaper. 

732
00:40:19,280 --> 00:40:23,080
In some ways it's it's more 
expensive, but labour's not a 

733
00:40:23,080 --> 00:40:26,680
key input into a lot of this 
anymore because robotics is kind

734
00:40:26,680 --> 00:40:29,200
of taking out. 
So where do we do we care 

735
00:40:29,200 --> 00:40:33,800
whether robotics are in China or
the US or any other country? 

736
00:40:33,800 --> 00:40:35,680
We don't. 
All we really care about is the 

737
00:40:35,680 --> 00:40:37,440
input. 
The other input costs like 

738
00:40:38,040 --> 00:40:42,440
electricity, chemicals, copper. 
You know what? 

739
00:40:42,480 --> 00:40:44,680
What makes robotics rarest? 
Copper. 

740
00:40:45,240 --> 00:40:48,520
Aluminium. 
You know, where does 60% of the 

741
00:40:48,520 --> 00:40:51,280
world's copper go to China. 6% 
goes to the US. 

742
00:40:54,640 --> 00:40:56,840
Jeez, has a a lot to think about
there. 

743
00:40:58,000 --> 00:41:00,800
It man, there's a lot to reflect
on in the whole. 

744
00:41:00,920 --> 00:41:04,640
Yeah, that entire bit, you know,
super fascinating. 

745
00:41:04,640 --> 00:41:06,600
I feel like those are the themes
that are going to kind of define

746
00:41:06,600 --> 00:41:11,120
the next, next decade in, in our
industry geopolitics for sure. 

747
00:41:12,520 --> 00:41:13,640
And yeah, I appreciate you 
sharing them. 

748
00:41:13,840 --> 00:41:17,960
We're going to pivot to talk 
about some some news of the 

749
00:41:17,960 --> 00:41:20,080
week. 
And this this is like a 

750
00:41:20,080 --> 00:41:22,040
relatively new, new thing we've 
been doing, Willow. 

751
00:41:22,040 --> 00:41:25,840
But grade control is one of the 
segments where, you know, give a

752
00:41:25,840 --> 00:41:29,800
letter A to F on a on, on, on a 
certain kind of corporate action

753
00:41:29,880 --> 00:41:31,200
of the week. 
Are you up for that? 

754
00:41:31,200 --> 00:41:33,000
Are you are you actually going 
to give grades to companies? 

755
00:41:33,000 --> 00:41:35,200
Yeah, because I'll give them all
A's because they're other 

756
00:41:35,200 --> 00:41:40,240
clients. 
Prospective clients, first up, 

757
00:41:40,320 --> 00:41:46,280
BHB have signalled that Nickel W
is up for sale again now to give

758
00:41:46,280 --> 00:41:49,240
you a slight out. 
You can yeah, you can get 

759
00:41:49,240 --> 00:41:51,720
creative on, on the grading. 
I'll, I'll, I'll say I'll leave 

760
00:41:51,720 --> 00:41:55,680
it at that. 
Well, I think all of the majors 

761
00:41:55,680 --> 00:42:00,000
need to simplify like like Rio 
just announced as well. 

762
00:42:00,000 --> 00:42:05,640
And if they're not going to 
productively develop and harness

763
00:42:05,640 --> 00:42:10,120
these assets, then let's try and
maximize value by by working out

764
00:42:10,120 --> 00:42:12,720
who's the best operator and 
owner of those assets. 

765
00:42:12,720 --> 00:42:16,640
So I think it's a great idea 
that you concentrate on your 

766
00:42:16,640 --> 00:42:19,320
most productive assets and give 
someone else a chance on the 

767
00:42:19,320 --> 00:42:23,920
others. 
Yeah, I, I, I I'll give them, 

768
00:42:23,960 --> 00:42:27,480
I'll give them an, an A when 
they actually like transact you.

769
00:42:27,480 --> 00:42:30,480
I think they're going to have to
pay someone to take Nicola W off

770
00:42:30,480 --> 00:42:33,160
of them because of the, the 
pretty inordinate rehab 

771
00:42:33,160 --> 00:42:36,560
liability associated with, with 
what's happened to Cam Ballot 

772
00:42:36,560 --> 00:42:39,320
there. 
But but I mean, this, you know, 

773
00:42:39,600 --> 00:42:42,080
the return on capital they were 
getting at in the nickel 

774
00:42:42,080 --> 00:42:44,160
business, even in the years 
before the nickel market went 

775
00:42:44,160 --> 00:42:46,800
to, to ship with, with, with 
like atrocious compared to the 

776
00:42:47,160 --> 00:42:51,120
other parts of their business. 
This, this wasn't like a a game 

777
00:42:51,120 --> 00:42:55,040
changer for, for BHP. 
It's like a social project to, 

778
00:42:55,240 --> 00:42:58,440
to keep big employment in WA And
I think they were kind of stuck 

779
00:42:58,440 --> 00:42:59,840
with it. 
You know, they're finally going 

780
00:42:59,840 --> 00:43:02,400
to part ways with it. 
It'll be a a change for West 

781
00:43:02,400 --> 00:43:03,920
Australians, but it's kind of 
inevitable. 

782
00:43:04,720 --> 00:43:08,840
So yeah, So what if no one buys 
it and and then the government's

783
00:43:08,840 --> 00:43:11,320
forced to keep it I because why 
doesn't BHP just go to the 

784
00:43:11,320 --> 00:43:13,680
government, say, well, you gave 
a handout to all of these guys 

785
00:43:13,840 --> 00:43:15,320
did. 
Yeah, they already did, right. 

786
00:43:15,320 --> 00:43:18,360
That was like, you know, they, 
they put the foot on the on the 

787
00:43:18,360 --> 00:43:21,040
government's neck in the lead up
to them actually announcing that

788
00:43:21,040 --> 00:43:22,200
this would go into care 
maintenance. 

789
00:43:22,200 --> 00:43:24,840
I mean, I think the cost 
involved to restart a smelter. 

790
00:43:25,120 --> 00:43:28,360
But since, but since then, since
then to your point like near 

791
00:43:28,360 --> 00:43:31,360
star and all these guys have 
have got handouts and likely 

792
00:43:31,360 --> 00:43:34,480
more handouts to kind of come. 
So it's a a really sort of 

793
00:43:34,480 --> 00:43:37,600
poignant question to to frame 
and let's hope we don't get to 

794
00:43:37,600 --> 00:43:39,600
that. 
So what if the government comes 

795
00:43:39,600 --> 00:43:42,280
back and says sorry, what if 
there's the only buyer is 

796
00:43:42,280 --> 00:43:46,520
Chinese of the smelter, not the 
mines, and they've got the tech 

797
00:43:46,520 --> 00:43:50,320
and the and the capital to fix 
it and and create jobs. 

798
00:43:50,320 --> 00:43:52,000
You know what? 
You know what very interesting 

799
00:43:52,000 --> 00:43:54,200
question is? 
This the first big test of Ferb.

800
00:43:55,200 --> 00:43:56,360
That would that. 
That'd be a. 

801
00:43:56,520 --> 00:43:59,480
That would be a big test. 
Yeah, that would be a big test. 

802
00:43:59,480 --> 00:44:05,120
What the Chinese did with with 
us for 30-40, fifty years was 

803
00:44:05,120 --> 00:44:07,840
have joint ventures. 
We would go there, there would 

804
00:44:07,840 --> 00:44:11,320
be JVS and we would learn and 
it's, you know, eating a bit of 

805
00:44:11,320 --> 00:44:14,160
your own humble pie. 
But bring them in and have it as

806
00:44:14,160 --> 00:44:16,240
a joint venture where we 
actually learn why they can do 

807
00:44:16,240 --> 00:44:19,680
stuff so much cheaper. 
And, you know, maybe some of 

808
00:44:19,680 --> 00:44:22,960
those things actually aren't 
attainable for us, but there 

809
00:44:22,960 --> 00:44:25,680
sure as hell will be a few 
things that we can learn from, 

810
00:44:25,720 --> 00:44:28,320
and that could potentially be 
one way to put forward a 

811
00:44:28,320 --> 00:44:30,160
solution. 
Can you imagine the car industry

812
00:44:30,160 --> 00:44:34,000
in Australia without Toyota, 
Mitsubishi, Nissan, GM and Ford?

813
00:44:35,760 --> 00:44:37,120
They don't have an industry. 
Yeah. 

814
00:44:37,720 --> 00:44:39,800
So maybe, maybe there's a bit of
that. 

815
00:44:41,120 --> 00:44:44,160
Yeah, yeah, we might need to get
creative on a a solution and I'm

816
00:44:44,160 --> 00:44:47,040
sure BHP is already having to. 
I'd, I'd actually, I'd actually 

817
00:44:47,040 --> 00:44:49,640
prefer, you know, if you ever 
prove that then and and see some

818
00:44:49,720 --> 00:44:52,560
other form of like government 
handout or bail out here. 

819
00:44:52,960 --> 00:44:54,440
That happens. 
I'm changing my citizenship, 

820
00:44:54,440 --> 00:44:55,920
mate. 
I'm I'm done. 

821
00:44:56,120 --> 00:45:00,840
Welcome to Singapore. 
Does China need any citizen all?

822
00:45:03,360 --> 00:45:05,920
Right. 
Next one that I want to talk 

823
00:45:05,920 --> 00:45:09,440
about is, Wolf, just very 
recently come out with the 

824
00:45:10,040 --> 00:45:14,720
trading halt that Burkina wants 
to up their stake in Kiaka 

825
00:45:14,760 --> 00:45:17,640
subsidiary. 
Yeah. 

826
00:45:17,680 --> 00:45:21,280
What do you grade this one? 
So it just underlines, well, 

827
00:45:21,280 --> 00:45:23,560
that's greater than a because, 
you know, they might be a client

828
00:45:23,560 --> 00:45:28,360
like, but it just underlines how
dangerous emerging markets are. 

829
00:45:28,360 --> 00:45:33,480
I mean, Even so, it's very hard 
for a junior to have any kind of

830
00:45:33,480 --> 00:45:36,360
political force in a country 
like that. 

831
00:45:36,800 --> 00:45:43,120
But even if you look at EGA and 
their dispute with Guinea, I 

832
00:45:43,120 --> 00:45:46,280
mean, Egas just pulled out and 
they've had their license taken 

833
00:45:46,280 --> 00:45:48,240
away. 
That's 1.4 billion in capital 

834
00:45:48,240 --> 00:45:51,760
that the UAE put into Guinea. 
But I think someone in the UAE 

835
00:45:51,760 --> 00:45:55,640
is going to notice. 
And why did Guinea do that? 

836
00:45:55,640 --> 00:45:59,040
Well, Gee, there's a few other 
countries that have some 

837
00:45:59,040 --> 00:46:00,640
influence over the Guinea 
government, don't they? 

838
00:46:00,640 --> 00:46:02,760
So. 
Well, as I, as I understand it, 

839
00:46:02,760 --> 00:46:05,360
they, they did fail to, to make 
a few promises. 

840
00:46:05,360 --> 00:46:09,560
So it's not completely black and
white in, in the Guinea Ghanaian

841
00:46:09,680 --> 00:46:12,040
scenario. 
Yeah. 

842
00:46:12,080 --> 00:46:15,640
I mean, I, I think you're, 
you're bang on, right with, with

843
00:46:15,640 --> 00:46:19,160
regards to, to Wolf, like the, 
the AM risk is something we've 

844
00:46:19,160 --> 00:46:22,080
all kind of been aware of and 
that's why they've traded at, at

845
00:46:22,080 --> 00:46:24,400
such a, a low multiple. 
Like, yeah, they've had a great 

846
00:46:24,400 --> 00:46:26,800
run the last sort of three 
years, but we're they've 

847
00:46:26,800 --> 00:46:29,640
executed phenomenally and they 
are on the cusp of doubling 

848
00:46:30,040 --> 00:46:33,480
their kind of production. 
So very, very curious to see 

849
00:46:33,480 --> 00:46:37,160
what the outcome is. 
You love you love Wolf because 

850
00:46:37,160 --> 00:46:40,880
you see the cash flow they make,
but you always like the the true

851
00:46:40,880 --> 00:46:42,760
test. 
You talk about the true test 

852
00:46:42,760 --> 00:46:44,680
affair, but the true test for 
Wolf is like, can they ever get 

853
00:46:44,680 --> 00:46:47,560
that money out? 
They've had five of these types 

854
00:46:47,560 --> 00:46:50,040
of things in the last few years,
and every time they just bounce 

855
00:46:50,040 --> 00:46:52,040
back within a within a couple of
days they're. 

856
00:46:52,200 --> 00:46:54,560
Like that's the, you know, like 
there'll be a government coup, 

857
00:46:54,560 --> 00:46:55,200
whatever. 
And they do. 

858
00:46:55,200 --> 00:46:57,200
You always buy the dip on the 
coup coup order. 

859
00:46:57,360 --> 00:46:58,480
Yeah, yeah, yeah. 
But whatever. 

860
00:46:58,480 --> 00:47:01,160
But there were was a change in 
mining code, yeah as well. 

861
00:47:01,160 --> 00:47:03,680
And this is like an, you know, 
hey, yeah, you're not being 

862
00:47:03,680 --> 00:47:05,960
grandfathered. 
You're jumping on the new code. 

863
00:47:05,960 --> 00:47:09,400
And let's see what sort of 
valuable consideration turns out

864
00:47:09,400 --> 00:47:10,920
to be. 
If they can't, if they can't 

865
00:47:10,920 --> 00:47:15,560
spend the money like X like that
they make it at a kiaka and 

866
00:47:15,560 --> 00:47:17,760
samrat. 
If they can't spend that X 

867
00:47:17,800 --> 00:47:22,760
Bikina farso then all they 
inevitably do all they can 

868
00:47:22,840 --> 00:47:25,600
inevitably do is just like 
reinvest in the country, become 

869
00:47:25,720 --> 00:47:28,840
a a larger portion of became a 
fire associ GDP and become more 

870
00:47:28,840 --> 00:47:30,560
beholden to the government in 
the process. 

871
00:47:30,560 --> 00:47:32,400
Like that's what. 
You're. 

872
00:47:32,400 --> 00:47:34,760
Yeah, yeah. 
Exactly the same, Yeah, until 

873
00:47:34,760 --> 00:47:36,800
recently. 
Next up, what have we got? 

874
00:47:36,880 --> 00:47:39,720
Mining services. 
A bit of a slightly change in 

875
00:47:39,720 --> 00:47:42,760
tech here, but the mining 
services multiples have expanded

876
00:47:42,760 --> 00:47:46,320
dramatically in the last month 
to to two months. 

877
00:47:46,320 --> 00:47:49,400
Curious to to hear how closely 
you pay attention to these ones,

878
00:47:49,400 --> 00:47:51,840
Willow. 
Sure. 

879
00:47:51,840 --> 00:47:56,680
So I, I think it's a, it's a 
wide variety of different 

880
00:47:56,880 --> 00:48:00,760
companies, right. 
And if you're just doing dry 

881
00:48:00,760 --> 00:48:05,280
hire, you know, big trucks that 
are capital intensive and you're

882
00:48:05,280 --> 00:48:07,320
a small cap, you're never going 
to win. 

883
00:48:07,440 --> 00:48:10,320
That is never a win because your
cost of capital is always going 

884
00:48:10,320 --> 00:48:13,680
to be too high to compete with 
particularly McMahon, which now 

885
00:48:13,680 --> 00:48:19,000
get the money from Indonesia, 
Burma, Indonesia. 

886
00:48:20,440 --> 00:48:25,680
How long will TS be around? 
You know, so that, that big dump

887
00:48:25,680 --> 00:48:29,360
truck open pit stuff is, is 
difficult and I suspect you'll 

888
00:48:29,360 --> 00:48:35,080
see some other capital coming in
to support the existing players 

889
00:48:35,080 --> 00:48:40,280
or, or, or form new players. 
The, the, the industry leader 

890
00:48:40,600 --> 00:48:45,160
is, is probably FLS myth in 
which is a Danish company and 

891
00:48:45,160 --> 00:48:47,880
that does a lot of the 
processing equipment and gavares

892
00:48:47,880 --> 00:48:50,280
and a whole bunch of different 
stuff. 

893
00:48:50,280 --> 00:48:55,960
They trade on 9 1/2 times EBITDA
and it's 80% services, mining 

894
00:48:55,960 --> 00:49:01,200
services mainly, but sorry the 
the, the the other bit of that 

895
00:49:01,200 --> 00:49:07,440
is that underground services are
completely different and it's 

896
00:49:07,440 --> 00:49:12,200
really difficult to find skilled
underground people. 

897
00:49:12,680 --> 00:49:16,320
The skill set of being an 
underground, you know, mining 

898
00:49:16,320 --> 00:49:18,440
service provider versus open pit
is very different. 

899
00:49:18,560 --> 00:49:20,960
It's more specialized, being 
underground and that 

900
00:49:20,960 --> 00:49:24,000
specialization is scarce. 
But the people who have that 

901
00:49:24,000 --> 00:49:27,160
specialization, JD of 
underground service providing or

902
00:49:27,160 --> 00:49:30,080
underground mining, they always 
repeat one thing to me whenever 

903
00:49:30,080 --> 00:49:33,320
I talk to them. 
We use Sandvik ground support. 

904
00:49:33,320 --> 00:49:35,960
It's the. 
Mandrick Ground Support, Just 

905
00:49:35,960 --> 00:49:38,600
like the best people want to 
work with the best people, the 

906
00:49:38,600 --> 00:49:41,360
best people also want to use the
best equipment in the industry 

907
00:49:41,360 --> 00:49:46,160
and that is provided by the team
with the R&D squad at the 

908
00:49:46,160 --> 00:49:48,280
cutting edge of technology 
Sandwich ground. 

909
00:49:48,280 --> 00:49:51,240
Support not just the best, the 
best ground support mate, but 

910
00:49:51,240 --> 00:49:54,800
the safest ground support, the 
most innovative like you talk 

911
00:49:54,800 --> 00:49:56,000
about. 
And it goes. 

912
00:49:56,120 --> 00:49:58,160
They too have the best team. 
It's true, and it goes one step 

913
00:49:58,160 --> 00:50:00,040
further. 
They've also got manufacturing 

914
00:50:00,040 --> 00:50:04,120
and distribution hubs in every 
corner of the world, so they can

915
00:50:04,240 --> 00:50:06,960
get on the phone with you 
quickly, or you can just put 

916
00:50:06,960 --> 00:50:09,160
your order in through the new 
app that they've got and they 

917
00:50:09,160 --> 00:50:12,560
can get that out to you quick, 
smart, so that you keep getting 

918
00:50:12,560 --> 00:50:15,240
the tons out of the ground and 
keep producing that metal that 

919
00:50:15,240 --> 00:50:17,360
makes the world go round. 
I don't think there's a ground 

920
00:50:17,360 --> 00:50:19,520
that can't be supported by Sandy
ground support. 

921
00:50:19,560 --> 00:50:25,120
Go Sandy ground support. 
And and management teams and 

922
00:50:25,800 --> 00:50:30,960
when we're talking to non 
Australian capital providers, we

923
00:50:31,200 --> 00:50:35,200
every conversation is stop 
looking at just the geology, 

924
00:50:35,560 --> 00:50:38,560
start looking at the management 
team that is going to produce 

925
00:50:38,560 --> 00:50:41,120
the value. 
Because a, a really good 

926
00:50:41,120 --> 00:50:46,360
management team can produce huge
value out of a average geology. 

927
00:50:47,000 --> 00:50:49,560
A bad management team can 
destroy any geology. 

928
00:50:49,840 --> 00:50:53,720
Is this, yeah, not, not all 
mining services companies are 

929
00:50:53,720 --> 00:50:55,680
the same. 
Not all of them are are capital 

930
00:50:55,680 --> 00:50:57,080
intensive. 
A lot of them are. 

931
00:50:57,080 --> 00:50:58,640
But like some of them, some of 
them are capital light. 

932
00:50:58,680 --> 00:51:00,160
Osinka, you had Zoomy on the 
other day. 

933
00:51:00,240 --> 00:51:02,640
Yeah, yeah. 
And like, that's a, that's a, 

934
00:51:02,840 --> 00:51:05,120
you know, great example of 
parallel that is still listed on

935
00:51:05,120 --> 00:51:10,640
the ACX like G&G, like bring up 
the chart, 4 bucks 40 trading on

936
00:51:10,640 --> 00:51:14,240
like I saw, I saw one broken 
note trading on 24 times FY20, 6

937
00:51:14,240 --> 00:51:16,760
earnings now like kind of 
remarkable multiples. 

938
00:51:17,000 --> 00:51:19,560
But if you go back in time and 
you know, back to us, when the 

939
00:51:19,560 --> 00:51:21,760
period that Jimmy was talking 
about with the Senko, the 

940
00:51:21,760 --> 00:51:24,400
multiples of that he was talking
about with, with the Senko at 

941
00:51:24,400 --> 00:51:26,320
one point in time were just 
astronomical as well. 

942
00:51:26,320 --> 00:51:28,760
Like we we have lived through an
era where mining services 

943
00:51:28,760 --> 00:51:31,160
multiples like where we're 
crazy. 

944
00:51:31,320 --> 00:51:32,640
Where are all the new mine 
builds? 

945
00:51:32,640 --> 00:51:34,880
Yeah. 
And, and, and now we're now 

946
00:51:34,880 --> 00:51:37,560
we're seeing like ASX listed 
mining services companies, both 

947
00:51:37,560 --> 00:51:41,160
Capital Heavy and Capital Light 
expanding pretty heavily on the 

948
00:51:41,320 --> 00:51:43,200
you can see that on the focus 
charts we'll bring up right now 

949
00:51:43,200 --> 00:51:45,160
by market tech. 
Yeah, I mean, it's great to see 

950
00:51:45,160 --> 00:51:47,960
them actually get a bit of love.
So I'll give it an A for, for 

951
00:51:47,960 --> 00:51:50,760
that because so many of these 
companies, their share prices in

952
00:51:50,760 --> 00:51:53,440
the in the doldrums for years 
and years and years. 

953
00:51:53,440 --> 00:51:57,560
So you can expand that to 
McMahon's like you mentioned MIH

954
00:51:57,560 --> 00:51:59,680
Parenti as well. 
They're well north of 2 bucks 

955
00:51:59,680 --> 00:52:01,360
now. 
So they're all having their kind

956
00:52:01,360 --> 00:52:04,400
of day in the sun and want to 
see how they how they capitalize

957
00:52:04,400 --> 00:52:06,280
on this opportunity if they if 
they kind of can. 

958
00:52:06,480 --> 00:52:11,160
Last, last one to give a grade 
to Willow. 2 days ago was the 

959
00:52:11,160 --> 00:52:14,640
20th anniversary of a very 
interesting kind of corporate, 

960
00:52:14,640 --> 00:52:16,520
corporate event in Australian 
mining history. 

961
00:52:17,120 --> 00:52:21,320
It was the 26th of August. 20 
years ago was the the, the day 

962
00:52:21,360 --> 00:52:25,400
in which Rio accidentally let 
their Shavalana iron ore project

963
00:52:25,400 --> 00:52:29,160
tenements lapse. 
This Junior Kazaley picked those

964
00:52:29,160 --> 00:52:30,840
up at the time. 
Now then, then there was this 

965
00:52:30,840 --> 00:52:32,240
big court battle that played 
out. 

966
00:52:32,720 --> 00:52:34,360
You know, you were, you're 
paying attention to Marcus. 

967
00:52:34,360 --> 00:52:36,480
I'm sure you remember this. 
We had to learn about it in 

968
00:52:36,480 --> 00:52:40,680
history books, but Rio ended up 
kind of, you know, arguing about

969
00:52:40,680 --> 00:52:43,680
how this all played out. 
Apparently something got like 

970
00:52:43,680 --> 00:52:46,720
they wanted to, you know, renew 
the tenements, but something got

971
00:52:46,720 --> 00:52:49,560
caught up at A at a post station
in like some remote part of 

972
00:52:49,560 --> 00:52:52,840
Australia anyway, but it lapsed.
They did, you know, things in 

973
00:52:53,040 --> 00:52:55,480
the and and because they only 
picked them up in in short 

974
00:52:55,480 --> 00:52:57,720
order. 
Now, in the court battle that 

975
00:52:57,720 --> 00:53:01,400
kind of played out, what what 
Rio did is they argued that it 

976
00:53:01,400 --> 00:53:04,680
was in the public interest for 
the tenements to be given back 

977
00:53:04,920 --> 00:53:07,640
to them, even though they they 
lapsed. 

978
00:53:08,040 --> 00:53:10,200
And they suggested that they 
would, they would develop these 

979
00:53:10,200 --> 00:53:13,000
tenements, not themselves, but 
they do an asset swap with BHP 

980
00:53:13,000 --> 00:53:16,080
because Shavalana is in BHP 
territory surrounded by BHP 

981
00:53:16,680 --> 00:53:18,400
infrastructure, not Rio's 
infrastructure, right? 

982
00:53:19,200 --> 00:53:21,000
So OK, we're, we're going to 
develop it. 

983
00:53:22,000 --> 00:53:26,480
And amazingly, right, the 
ministerial decision comes in 

984
00:53:26,480 --> 00:53:29,800
the minister, the minister kind 
of overrides everything and 

985
00:53:29,920 --> 00:53:34,160
gives the tenements back to Rio 
Tinto 20 years later. 

986
00:53:34,800 --> 00:53:36,600
Well, by the way, because they 
only had to pay the Rio, the, 

987
00:53:36,640 --> 00:53:39,800
the legal costs for, for Rio. 20
years later, Rio, Rio Tinto's 

988
00:53:39,800 --> 00:53:42,240
still not done an asset swap 
with BHP. 

989
00:53:43,320 --> 00:53:45,720
The, the project is undeveloped 
and it's, and it's worthy of 

990
00:53:45,720 --> 00:53:48,840
being developed like the grade 
this project is, you know, it's,

991
00:53:49,000 --> 00:53:51,320
it's, it's above the average 
grade that the majors are 

992
00:53:51,320 --> 00:53:53,960
producing today by, you know, 
substantial margin and great 

993
00:53:53,960 --> 00:53:58,320
impurities and the likes. 
So how do you, how do you, how 

994
00:53:58,320 --> 00:54:02,080
do you rate Rio Tinto and, and 
the government on, on this, on 

995
00:54:02,240 --> 00:54:05,280
the decision to actually give 
the tenements back to Rio Tinto 

996
00:54:05,280 --> 00:54:10,040
A plus? 
For Rio, obviously, and special 

997
00:54:10,040 --> 00:54:14,320
mention to the lobbyists. 
They earned their fees there, 

998
00:54:14,560 --> 00:54:16,640
yeah. 
And I and I don't think we need 

999
00:54:16,640 --> 00:54:19,760
to mark the government, do we? 
That's, you know, that's above 

1000
00:54:19,760 --> 00:54:22,160
all of that. 
We can mark the government here.

1001
00:54:22,160 --> 00:54:25,280
Yeah, that's an F for for the 
Australian government that was 

1002
00:54:25,800 --> 00:54:28,360
clearly not in the in the 
national interest and. 

1003
00:54:29,240 --> 00:54:31,520
Joint F. 
Because I like to have to pay 

1004
00:54:31,520 --> 00:54:34,200
the legal fees for, for just 
being smart and on the ball. 

1005
00:54:34,800 --> 00:54:35,680
Yeah. 
Yeah. 

1006
00:54:35,680 --> 00:54:38,720
A fascinating 1. 
All right, let's move into sweet

1007
00:54:38,720 --> 00:54:40,800
and sour deal. 
We've got a few to to run 

1008
00:54:40,800 --> 00:54:43,040
through here. 
I want to start with capital 

1009
00:54:43,040 --> 00:54:44,800
raises because we've had a few 
juicy ones. 

1010
00:54:45,160 --> 00:54:49,800
First and foremost, Linus, $750 
million. 

1011
00:54:50,320 --> 00:54:52,600
These guys are kept at nearly 
$14 billion today. 

1012
00:54:52,600 --> 00:54:55,160
The share prices run 
dramatically. 

1013
00:54:55,920 --> 00:54:58,800
I, I, I'm kind of gobsmacked by 
this one. 

1014
00:54:58,800 --> 00:55:01,920
How do you sort of think about 
this sweet or sour deal and and 

1015
00:55:01,920 --> 00:55:02,920
what are your thoughts on it, 
Willow? 

1016
00:55:04,600 --> 00:55:06,240
Great time to raise capital. 
So. 

1017
00:55:06,600 --> 00:55:08,920
So why not? 
Particularly when there's a 

1018
00:55:08,920 --> 00:55:11,960
whole bunch of public capital 
coming in to help a lot of the 

1019
00:55:11,960 --> 00:55:15,200
other potential competitors. 
And that's probably not going to

1020
00:55:15,200 --> 00:55:18,720
be positive for Linus's profits,
are they? 

1021
00:55:18,720 --> 00:55:22,560
So yeah, let's raise capital. 
I, I think you're right. 

1022
00:55:22,600 --> 00:55:25,240
I mean, this is just over 5% 
dilution that is. 

1023
00:55:25,280 --> 00:55:27,840
Right, It's a great deal for 
them raise the money while yeah,

1024
00:55:27,920 --> 00:55:29,520
like. 
Feed the ducks while they quack.

1025
00:55:29,520 --> 00:55:32,760
What'd you say they were? 
They were trading at 24 times 

1026
00:55:32,760 --> 00:55:35,040
last 12 months for revenue. 
Like. 

1027
00:55:35,760 --> 00:55:39,440
Just reported $8 million. 
Capital intensive business, it's

1028
00:55:39,440 --> 00:55:41,440
truly, truly remarkable 
valuation if you. 

1029
00:55:41,720 --> 00:55:43,960
They trade on a big premium to 
the Chinese rare earth 

1030
00:55:43,960 --> 00:55:45,840
companies, by the way. 
So that's fantastic. 

1031
00:55:45,840 --> 00:55:47,640
That's. 
Yeah, there you go. 

1032
00:55:47,840 --> 00:55:51,880
Are they worth it? 
I'm I'm not an equity adder. 

1033
00:55:53,440 --> 00:55:57,960
Of course, OK, Cyprium, this one
more in your in your wheelhouse 

1034
00:55:57,960 --> 00:56:02,560
in the sense that the Tenito 
group took a 9.9% shareholding. 

1035
00:56:02,560 --> 00:56:05,760
They upsized this from a $60 
million raise to an $80 million 

1036
00:56:05,760 --> 00:56:08,520
raise. 
They were a $60 million market 

1037
00:56:08,520 --> 00:56:10,560
cap coming into this raise. 
They. 

1038
00:56:10,600 --> 00:56:11,880
Did have a fair bit of debt 
though. 

1039
00:56:11,880 --> 00:56:13,640
There was a combination of the 
con notes. 

1040
00:56:13,640 --> 00:56:15,040
And they'll pay down some of 
that with this. 

1041
00:56:15,040 --> 00:56:16,920
Yeah, yeah, yeah. 
Sweet or sour deal? 

1042
00:56:18,040 --> 00:56:23,160
Sweet, wait for them, raise the 
capital, organise the capital 

1043
00:56:23,160 --> 00:56:25,640
structure so that they can fight
another day. 

1044
00:56:26,800 --> 00:56:32,320
If bringing in a family like 
that is is a better way to get a

1045
00:56:32,320 --> 00:56:34,880
better outcome for the equity 
raise and lower your cost of 

1046
00:56:34,880 --> 00:56:36,760
capital, then that's what you 
got to do. 

1047
00:56:37,360 --> 00:56:41,000
Do you think, do you think doing
the, the, that you know, the 

1048
00:56:41,000 --> 00:56:45,600
equity raise at the corporate 
level was you know, and, and the

1049
00:56:45,600 --> 00:56:47,280
dilution involved and everything
like that, Like could they have 

1050
00:56:47,280 --> 00:56:50,520
structured something differently
at the asset level or do you 

1051
00:56:50,520 --> 00:56:53,440
think you think it's the 
structuring is fine as is? 

1052
00:56:53,560 --> 00:56:57,760
Maybe, but there's a whole lot 
of issues with the capital 

1053
00:56:57,760 --> 00:57:01,560
structure already with the 
offtake and and other parts of 

1054
00:57:01,560 --> 00:57:05,560
how they acquired that asset. 
So I, I think they were probably

1055
00:57:06,480 --> 00:57:09,840
their hands were tied and and 
equity was the easiest way to 

1056
00:57:09,880 --> 00:57:12,160
address it. 
Gotcha. 

1057
00:57:12,320 --> 00:57:13,600
Fair enough. 
I'll give it a yeah, I'll give 

1058
00:57:13,600 --> 00:57:15,600
it a good deal as well. 
Yeah. 

1059
00:57:15,600 --> 00:57:17,840
I mean, it was, it was done at a
pretty tight discount and 

1060
00:57:17,960 --> 00:57:21,160
they've raised an enormous 
amount of equity relative what 

1061
00:57:21,160 --> 00:57:23,840
their market cap like was and 
you don't always get to do that 

1062
00:57:23,840 --> 00:57:25,640
at a pretty tight discount. 
Yeah, good deal. 

1063
00:57:25,640 --> 00:57:29,000
Markets are open and take take 
the capital and see if the the 

1064
00:57:29,000 --> 00:57:30,720
asset can move one step closer 
to production. 

1065
00:57:32,040 --> 00:57:35,680
I don't even want to mention the
other two really, but some more 

1066
00:57:35,680 --> 00:57:38,600
troubled kind of company supreme
historically troubled companies.

1067
00:57:38,600 --> 00:57:40,720
Well, don't worry. 
But like Peninsula raising 70 

1068
00:57:40,720 --> 00:57:43,200
million bucks, they've just had 
a whirlwind of issues in 

1069
00:57:43,200 --> 00:57:46,400
relation to production woes 
combined with, you know, 

1070
00:57:46,400 --> 00:57:51,400
contracted revenue and core if 
you they, they raised 50 million

1071
00:57:51,400 --> 00:57:54,880
bucks this week as well. 
Any thoughts on on either of 

1072
00:57:54,880 --> 00:58:02,320
those 2 Willow? 
No, but when the ducks are 

1073
00:58:02,320 --> 00:58:04,040
quacking you, you, you raise 
equity. 

1074
00:58:04,040 --> 00:58:08,800
That's and I, I just question, 
you know, so for all of these 

1075
00:58:08,800 --> 00:58:11,920
companies that are raising a bit
of equity, but maybe not enough 

1076
00:58:11,920 --> 00:58:15,240
to get them to the next step. 
I mean, what's, what's the next 

1077
00:58:15,240 --> 00:58:16,760
step? 
You know, you've raised enough 

1078
00:58:16,760 --> 00:58:20,160
to kind of just keep it going. 
How do you get to the next step?

1079
00:58:20,160 --> 00:58:25,280
You coming back to the market? 
Bit of a hope strategy, right? 

1080
00:58:25,280 --> 00:58:28,200
Like they are taking advantage 
in the core example that the 

1081
00:58:28,200 --> 00:58:31,640
lithium price has has kicked up,
kicked up, but do you just have 

1082
00:58:31,640 --> 00:58:34,920
to wait for the next kick up? 
Well, maybe you wait for the 

1083
00:58:34,920 --> 00:58:36,400
next kick up to raise the 
capital. 

1084
00:58:36,400 --> 00:58:42,400
You really need to to to to 
achieve all all your your plans.

1085
00:58:44,200 --> 00:58:46,800
Yeah, I think on that point 
you've kind of got to give them 

1086
00:58:46,800 --> 00:58:50,000
credit for taking the hit and 
getting the capital on board. 

1087
00:58:50,040 --> 00:58:52,400
Yeah, but it does leave you in a
bit of no man's land there. 

1088
00:58:52,400 --> 00:58:56,000
In a sense, the Peninsula 1 was 
like a, you know, a coalescence 

1089
00:58:56,000 --> 00:58:58,880
of various the buckles all come 
in head to head. 

1090
00:58:58,880 --> 00:59:01,600
So I want to see how they they 
move forward from here. 

1091
00:59:01,760 --> 00:59:05,600
They've had a few final raises, 
but they they they have the 

1092
00:59:05,600 --> 00:59:07,840
strategy of keep coming back, 
unfortunately. 

1093
00:59:08,440 --> 00:59:10,640
So yeah, hopefully this one is 
the last one for them. 

1094
00:59:11,800 --> 00:59:15,880
I'm going to give, I actually, 
I'm going to give these ones a a

1095
00:59:16,120 --> 00:59:21,640
day just because when the ducks 
are cracking like you, you raise

1096
00:59:21,640 --> 00:59:23,120
equity. 
I get that. 

1097
00:59:23,120 --> 00:59:25,600
But I do think when you have the
preponderance of equity raises, 

1098
00:59:25,600 --> 00:59:29,480
it actually, it actually dilutes
the total capital. 

1099
00:59:29,640 --> 00:59:31,600
Like like there's there's so 
much capital willing to 

1100
00:59:31,600 --> 00:59:34,000
participate in the space. 
What can that capital do? 

1101
00:59:34,000 --> 00:59:37,000
It can participate in, in equity
raises of like, I don't know, 

1102
00:59:37,000 --> 00:59:41,280
mediocre opportunities or it can
find a home in companies and 

1103
00:59:41,280 --> 00:59:43,720
development opportunities that 
that have legs. 

1104
00:59:43,760 --> 00:59:46,920
And I don't love seeing huge 
raises for mediocre projects 

1105
00:59:46,920 --> 00:59:52,600
because like it, yeah, it just 
kind of cannibalizes long run 

1106
00:59:52,600 --> 00:59:54,000
capital availability in my 
opinion. 

1107
00:59:54,720 --> 00:59:56,000
So I'll give them, I'll give 
them AD. 

1108
00:59:56,000 --> 00:59:57,240
Controversial. 
Yeah. 

1109
00:59:58,680 --> 01:00:02,360
All right, projects not yeah. 
All righty, let's talk about a 

1110
01:00:02,360 --> 01:00:04,240
couple of hidden gems. 
I know you've got a few thoughts

1111
01:00:04,240 --> 01:00:07,760
on this front. 
Willow books or podcasts or 

1112
01:00:08,320 --> 01:00:11,600
places of interest that have 
sprung up recently that you you 

1113
01:00:11,600 --> 01:00:15,080
want to share? 
Perth weather's colder than I 

1114
01:00:15,080 --> 01:00:18,320
thought. 
We're coming out the back end of

1115
01:00:18,320 --> 01:00:21,400
it, don't worry. 
I well, not, not really. 

1116
01:00:21,400 --> 01:00:27,160
I, you know, I'm, I'm a big 
reader and listen to podcasts a 

1117
01:00:27,160 --> 01:00:31,080
lot and, you know, a few books 
came to mind that would might be

1118
01:00:31,080 --> 01:00:33,040
helpful that I, I thought were 
really good. 

1119
01:00:34,160 --> 01:00:36,360
Goliath. 
What's that about? 

1120
01:00:36,640 --> 01:00:40,880
Goliath is about the history of 
antitrust in the US, which 

1121
01:00:40,920 --> 01:00:44,800
basically shows the long term 
cycles from the mid 1800s 

1122
01:00:44,800 --> 01:00:47,040
through to now and how the 
governments have kind of 

1123
01:00:47,040 --> 01:00:49,400
managed, you know, to break up 
Standard Oil and put it back 

1124
01:00:49,400 --> 01:00:53,280
together and Busters. 
So and, and it goes just beyond 

1125
01:00:53,280 --> 01:00:56,920
blue and red, but but to much 
longer term cycles. 

1126
01:00:56,920 --> 01:01:00,120
And we're in one at the moment. 
It's fascinating to them, you 

1127
01:01:00,120 --> 01:01:02,960
know, to look at the 30s and 
look at now and it's very, very 

1128
01:01:02,960 --> 01:01:07,160
similar. 
You know, in 1923, Andrew Mellon

1129
01:01:07,160 --> 01:01:09,640
had a monopoly of aluminium. 
Well, what's the first thing 

1130
01:01:09,640 --> 01:01:12,360
when he became, believe it or 
not, Finance Secretary? 

1131
01:01:12,360 --> 01:01:14,680
Well, put up tariffs for 
aluminium. 

1132
01:01:14,680 --> 01:01:16,720
That's easy. 
Yeah. 

1133
01:01:19,920 --> 01:01:21,520
That is great. 
That one's going on the list. 

1134
01:01:21,760 --> 01:01:24,840
Any other? 
Oh, sorry, history of uranium. 

1135
01:01:25,040 --> 01:01:27,360
I might just give me one minute 
on this. 

1136
01:01:27,360 --> 01:01:30,800
It's fascinating. 
So World War Two, biggest 

1137
01:01:30,800 --> 01:01:33,200
producer of uranium in the world
is DRC. 

1138
01:01:33,600 --> 01:01:35,280
Fine. 
It's owned by Belgium. 

1139
01:01:36,120 --> 01:01:39,360
Germany invade Belgium, first 
thing they do is bring down some

1140
01:01:39,360 --> 01:01:41,880
ships to DRC and go, where's the
uranium? 

1141
01:01:42,360 --> 01:01:44,000
And they've gone. 
Oh no, they've taken another 

1142
01:01:44,000 --> 01:01:45,920
flood on the mines. 
It's all all gone. 

1143
01:01:46,440 --> 01:01:50,520
And a couple of weeks later the 
the Belgian delegation turns up 

1144
01:01:50,520 --> 01:01:53,800
in in the US and goes, we've, 
we've got something you might 

1145
01:01:53,800 --> 01:01:55,440
want. 
It's a whole bunch of uranium. 

1146
01:01:55,440 --> 01:01:57,240
They go, no, no, we've got 
plenty which we don't need any 

1147
01:01:57,240 --> 01:01:58,960
of that. 
And they go, that's fine, here's

1148
01:01:58,960 --> 01:02:03,120
my card if you need some of it 
later, you've got my number. 

1149
01:02:03,880 --> 01:02:06,360
About six months later they go, 
yeah, OK, we get it. 

1150
01:02:06,880 --> 01:02:08,400
We'd like that. 
Please, please come in. 

1151
01:02:08,400 --> 01:02:11,560
Let's talk about it. 
And so he, he comes in and they 

1152
01:02:11,720 --> 01:02:14,280
negotiate price, which I, I 
figured that maybe it was $20 

1153
01:02:14,280 --> 01:02:18,080
billion, the biggest ever 
foreign deal that the US had 

1154
01:02:18,080 --> 01:02:21,160
done at the time, you know, 
confirm that the money has 

1155
01:02:21,160 --> 01:02:23,520
changed hands and, you know, the
US has gone right. 

1156
01:02:23,520 --> 01:02:24,600
Well, where is it? 
Where is it? 

1157
01:02:24,600 --> 01:02:27,200
And he's throwing the keys 
across the table and goes down 

1158
01:02:27,200 --> 01:02:31,160
in dock 46. 
That's such a great story. 

1159
01:02:31,160 --> 01:02:33,600
Yeah, that one's definitely 
going on the list. 

1160
01:02:33,640 --> 01:02:34,760
You've you've got a few others 
there. 

1161
01:02:34,760 --> 01:02:38,680
We that's to get chip wars. 
Yeah, well, most people have 

1162
01:02:38,680 --> 01:02:42,320
read Chip Wars, which kind of 
talks about the, the, the 

1163
01:02:42,360 --> 01:02:44,400
semiconductor supply chain, 
which is fascinating. 

1164
01:02:44,400 --> 01:02:49,960
It has a lot of similarities or 
rhymes a lot with a lot of the 

1165
01:02:49,960 --> 01:02:53,320
metals supply chains. 
Choke Points, which is written 

1166
01:02:53,320 --> 01:02:57,000
by the same guy, which talks 
about the, the financial or 

1167
01:02:57,000 --> 01:03:02,880
economic war that that countries
wage against each other. 

1168
01:03:02,880 --> 01:03:06,120
And you know, the US, China 
thing's pretty, pretty 

1169
01:03:06,120 --> 01:03:10,080
interesting for that at the 
moment. 2 that are kind of 

1170
01:03:10,080 --> 01:03:15,160
unrelated to mining, the 
brilliant abyss, which is all 

1171
01:03:15,160 --> 01:03:20,480
about under the sea, which when,
when we think about seabed 

1172
01:03:20,480 --> 01:03:23,680
mining, which I'm, I, I think is
a good idea in some 

1173
01:03:23,680 --> 01:03:27,640
circumstances. 
We've destroyed so much of the 

1174
01:03:27,640 --> 01:03:30,680
sea thus far. 
It's just important to kind of 

1175
01:03:30,680 --> 01:03:33,720
understand what we're destroying
before we just blindly go and do

1176
01:03:33,720 --> 01:03:36,240
it. 
I'm not saying seabed mining 

1177
01:03:36,240 --> 01:03:38,280
definitely does that because it 
doesn't in most cases. 

1178
01:03:38,280 --> 01:03:42,760
But the other one is the hidden 
life of trees. 

1179
01:03:42,760 --> 01:03:47,280
So I love this stuff. 
So it's about old growth forests

1180
01:03:47,280 --> 01:03:49,720
and how they communicate over, 
over thousands of years. 

1181
01:03:49,720 --> 01:03:52,680
You know, they support all just 
so that each tree has 

1182
01:03:52,680 --> 01:03:56,040
personalities and they support 
old stumps that died for, you 

1183
01:03:56,040 --> 01:03:59,560
know, sometimes 200 and 5300 
years and others that they don't

1184
01:03:59,560 --> 01:04:02,040
like they'll just let die. 
It's pretty cool. 

1185
01:04:02,800 --> 01:04:05,080
That's remarkable. 
I'll have to. 

1186
01:04:05,080 --> 01:04:06,600
I'll have to do a bit of reading
myself there. 

1187
01:04:06,640 --> 01:04:08,760
You're student of history. 
I also love it. 

1188
01:04:08,880 --> 01:04:13,480
How how is how's the history 
there going to, you know, inform

1189
01:04:13,480 --> 01:04:17,800
any any decisions or oppositions
you make right now? 

1190
01:04:19,160 --> 01:04:22,040
Well, the, sorry, the book I 
don't have in here is called 

1191
01:04:22,040 --> 01:04:26,720
Range, which compares, I'll get 
back to Question, which compares

1192
01:04:26,840 --> 01:04:29,280
Federer to Tiger Woods and how 
they were brought up. 

1193
01:04:29,280 --> 01:04:32,520
So Federer had played, I don't 
know, 20 different sports and 

1194
01:04:32,520 --> 01:04:35,040
then, you know, just decided, Oh
well, I might as well play 

1195
01:04:35,040 --> 01:04:36,720
tennis. 
And, and that's why he's so 

1196
01:04:36,720 --> 01:04:39,360
naturally skilled. 
But Tiger Woods only ever played

1197
01:04:40,480 --> 01:04:43,360
golf. 
But I think just all of these 

1198
01:04:43,360 --> 01:04:45,720
inputs, so, you know, 
understanding equity markets, 

1199
01:04:45,720 --> 01:04:48,640
understanding industrials, not 
just mining, because a lot of 

1200
01:04:48,640 --> 01:04:50,280
people in mining have only ever 
done mining. 

1201
01:04:50,280 --> 01:04:53,120
They haven't, you know, 
understand different languages, 

1202
01:04:53,120 --> 01:04:58,000
different countries, different 
systems and, and, and read 

1203
01:04:58,000 --> 01:05:00,520
broadly. 
That gives you a lot more pieces

1204
01:05:00,520 --> 01:05:03,400
of the puzzle that you can put 
together to form a solution 

1205
01:05:03,400 --> 01:05:05,520
that. 
Disciplinary Learning. 

1206
01:05:06,120 --> 01:05:09,440
Yeah. 
And a couple podcasts to to wrap

1207
01:05:09,440 --> 01:05:12,040
it up. 
Oh, the rest is history and an 

1208
01:05:12,040 --> 01:05:14,360
empire with great, great 
stories. 

1209
01:05:14,360 --> 01:05:17,600
But they're running out of 
history now. 600 episodes in. 

1210
01:05:17,960 --> 01:05:23,480
Yeah, and multipolarity is a 
pretty, pretty honest take on on

1211
01:05:23,480 --> 01:05:27,680
China, US relativity and and EU 
politics, and that's pretty 

1212
01:05:27,680 --> 01:05:29,360
cool. 
All right on on the theme of 

1213
01:05:29,360 --> 01:05:32,320
podcast, most people have sort 
of speaking spoken with. 

1214
01:05:32,320 --> 01:05:34,720
I would have rambled about this 
one, but founders is a a 

1215
01:05:34,720 --> 01:05:39,840
fantastic pod and on the book 
front in it recently read the 

1216
01:05:39,840 --> 01:05:43,320
big rich on the Texan oil 
families, the four families that

1217
01:05:43,320 --> 01:05:46,080
dominated that over the last 
hundred 150 years was 

1218
01:05:46,680 --> 01:05:49,120
fascinating. 
A lot of parallels with with 

1219
01:05:49,200 --> 01:05:54,760
resources and with Texas. 
There's seemingly a lot of 

1220
01:05:54,760 --> 01:05:58,040
relatability to to WA and our 
uniqueness, which is was 

1221
01:05:58,080 --> 01:06:02,720
fascinating and read over the 
weekend, The rise and fall of 

1222
01:06:02,720 --> 01:06:04,880
Alan Bond. 
An interesting kind of take, but

1223
01:06:05,080 --> 01:06:09,840
awesome to learn about WA in in 
the Sixties, 70s and 80s and and

1224
01:06:09,840 --> 01:06:11,880
that kind of era. 
So there's a couple in the mix. 

1225
01:06:12,360 --> 01:06:14,080
Thank you so much for joining 
us, Willow. 

1226
01:06:14,200 --> 01:06:17,040
The the way you think and the 
experiences you sort of bring to

1227
01:06:17,040 --> 01:06:19,640
the table are, are fascinating 
and make for, for such a rich 

1228
01:06:19,640 --> 01:06:20,960
conversation. 
So appreciate you making the 

1229
01:06:20,960 --> 01:06:22,880
time for us. 
Yeah, thanks for having me and 

1230
01:06:22,960 --> 01:06:24,960
congratulations on a great, 
great show. 

1231
01:06:24,960 --> 01:06:25,680
Do. 
You wanna do? 

1232
01:06:25,720 --> 01:06:26,920
You wanna help us? 
Thank our partners. 

1233
01:06:26,920 --> 01:06:28,000
Willow, you can hang out for 
this. 

1234
01:06:28,000 --> 01:06:29,520
Our show. 
Thank you so much to our 

1235
01:06:29,520 --> 01:06:31,400
partners, mate. 
We've got our Axis Mineral 

1236
01:06:31,400 --> 01:06:33,320
Services. 
They're crush rocks from big to 

1237
01:06:33,320 --> 01:06:35,360
small. 
They do sand bit ground support 

1238
01:06:35,360 --> 01:06:37,520
the the only name you need to 
know in the ground support 

1239
01:06:37,520 --> 01:06:40,440
industry. 
Africa down under tickets up for

1240
01:06:40,440 --> 01:06:42,560
sale right now. 
Conference is next week from 

1241
01:06:42,560 --> 01:06:44,880
September 3rd to 5th. 
And last but not least, mate. 

1242
01:06:45,080 --> 01:06:48,040
Focused by market deck Uduru 
Uduru Uduru. 

1243
01:06:48,240 --> 01:06:50,080
I'm an idiot. 
JD is an idiot. 

1244
01:06:50,440 --> 01:06:52,520
If you thought any of this was 
anything other than 

1245
01:06:52,520 --> 01:06:55,200
entertainment, you're an idiot 
and you need to read out a 

1246
01:06:55,200 --> 01:06:55,680
disclaimer.