JD, are we about to see a bidding war for this copper
junior? There could be some alpha in
this episode mate. Maybe, maybe not.
Because Xanadu has received a bid from Bastion and it seems
cleverly structured to elicit a counter bid from Zijin at a
higher price and fast. I'm keen to explore that with
you today mate. Plus why we think Regis won't
buy Ravenswood Asterisk mostly depends on price.
To kick things off mate. We've had a really interesting
few days reading all of the emails that have come our way.
I haven't replied to them all yet, but I know that you have
and. I can't say they have yet.
So thanks a bunch of the people that reached out.
We added phenomenal feedback and we thought we'd we thought we'd
run through a couple of the best replies, the things that made us
laugh a little bit. There was some some wicked
responses, some great ideas of what we can think about going
forward and a few great one liners in there.
So let's let's just bounce off each other this.
Is this is the one liners that you've you've cut out here,
you've ignored all of the feedback, but you've just
concluded the one liners, the zingers from the money miners.
Massive appreciation for sending through your thoughts and
comments. It means a lot to know that that
yeah, the the listeners you guys are still invested in in the
future of of of money of mine. And that certainly came across
in those emails. But I'm I'm intrigued in these,
these one liners, mate, what have we got?
All right. Here we go.
I'll start us off so talking about our Abbott dour Thursday
episode. Mate.
Saw your episode today. It was like watching 2 guys
whose 20 year old dog had just died.
Pretty grim stuff. Oh, I got one for you.
If Black Sabbath can break up and reunite, maybe you guys will
too. Someday, who knows?
Who knows? I saw the same actually about
wasn't wasn't about Black Sabbath.
Maybe. Maybe you've.
Got it. Might be coming.
It might be coming. Hold your breath.
All right, so to give you context on how big a fan I am, I
was listening to your episode on the worst mining deals so
intently in my car that I missed my turn off by 25 kilometers.
Didn't realize for 25 guys. You might need to use your phone
or your sat NAV for that, but we are thrilled that we could be so
engaging in a podcast. Unreal.
All right, go on for you mate. I was keen to hear more on the
battlefield, Lenora and the activist interview about
Abyssinian medals and they got completely pulled.
I listened to it twice before it vanished.
I still remember driving down the street in Vancouver nearly
having a car accident because I was so locked in.
Maybe one day we'll bring that one back.
I don't know, JD. Actually, no, it's deleted
forever unfortunately. It's out of our hands, but maybe
we can tell a story one day. Last but not least, money
miners. Imagine how much ACDC would have
wanted to quit when Bond Scott died and yet they came back even
better with the new guy. It's fantastic.
I never thought we would get mentioned or compared to a CDCI.
Didn't think those sort of words went in the same sentence mate.
But lo and behold, lo and behold, us and ACDC being
compared. Thanks a lot to all the money
miners for getting in touch with us, sharing your feedback.
We haven't got back to all of it because it's been a complete
mountain, but we will get there. Every day I say I'll be happy if
I end my day with like, no, no emails sending in my inbox.
And it just gets bigger. But we'll get there, mate.
We'll get there. Those messages from the money
miners, they've brought in the mood here and they've, they've
given me some energy, which I didn't, I didn't think it was
possible to get that energy in, in this period of time, JD.
But it's it's very relevant because I've actually prepared a
quiz for you today. Have you?
I have mate, no pressure, but your reputation's on the line.
Are you ready? Question one who's building
state-of-the-art hybrid power stations for enormous mine sites
all over the world? Cross boundary energy is the
only name that comes. Correct question two.
Who actually owns and operates them so the mining company
doesn't have to lift a finger. Steel cross boundary.
He's on fire. Final question, who's helping
mines cut diesel, cut costs and cut emissions, all without
CapEx? That's an easy one mate.
Cross boundary energy. Clean sweep mate, want to know
what you win? Hopefully their phone number
mate. If you're if you're running or
building a mine and want lower energy deals without building
your own bloody power plant, talk to Tim Taylor across
Boundary Energy. That's the answer every time.
Phone number and show notes. Go cross boundary energy.
All right, mate. Xanadu copped a beer.
I think up front. We've got to do a Ding, Ding,
Ding Jada, you and I have been shareholders for best past six
months, I want to say in this stock so.
Something about that since better.
To disclose that up front. Yeah, we, we spoke about this
one about 6 odd months ago and it intrigued us so much, so much
that a little while after that we decided to, to pick up some
shares. So yes, we're talking our own
book, but we think it's super relevant for the money miners
and it is a fascinating story. We're going to try answer the
question, will there be a bidding war at Xanadu?
It's currently trading above bid price, which we'll get into and
there are some some juicy details to this one mate.
What's, what's the one-on-one? You know, fast, fast background
on what's going on here, mate. All right.
In in a nutshell, Xanadu holds a stake in a huge undeveloped
copper gold project in Mongolia. The asset is called Karmagtai.
Now the CapEx is close to US 900 million.
That's the important detail to know because that has always
been the impediment for Xanadu to develop this asset.
Now they have had a bit of a relationship forming with Siege
in over time. Xanadu owns about 38% of this
big project with our great friends in China, Z Gin.
So everyone long suspected Z Gin of being the ultimate owners of
this one, and the company have made no secret that they've
tried to get a deal done to that end in recent times.
And effectively over the the course of history, there's a few
different deal structure options.
It's all coalesced in, in what was briefly an exclusivity
period for Z Gin last month. That exclusivity actually
lapsed. And then, you know, we, we, we
kind of woke up, was it yesterday And Xanadu copped an 8
cent bead not from ZZ in very interestingly.
Yeah, fascinating. So the the bead itself, we're
just churning away, sitting in the office here drumming up
content for the Director Special newsletter.
It's early. Sign up if you're not already,
by the way, get. On in the show notes and then we
see it recommended 8 cent cash offer.
Now, like you mentioned that we'd long been suspecting a bid,
but we were a bit surprised in the form that it took.
So like I said, Colin Moore head the CEO of the company and the
whole company have been working pretty hard.
They've had webinars, they've had calls they've mentioned in
countless presentations over recent months.
Now Z Gen. was the glaringly obvious partner to this.
So long behold, we crank open this announcement that we see
and Xanadu and Bastian have entered into a agreement.
My first thoughts mate, Who the hell are Bastian?
Second thoughts, which I thought right after that.
You bloody beauty. We could be on for some
competition here mate. I think we got lucky to be
honest with you, mate, because like, no, we've talked about
this before, but no one ever makes real money trying to
predict an M and a corporate transaction.
And we're like reading the tea leaves a bit.
Thinking was pretty, everything was transparent.
It was like, yeah, these are all the dates.
These are the options. We're like, it just makes sense
for the agent to buy this. So we that's.
The thing there was a timeline on, Yeah.
And that was the the only reason in what you, yeah, can otherwise
describe as a pretty fruitless strategy, at least for a punter.
Totally and there was it was a non controlling or became
effectively like non controlling interest.
So we sort of you often get screwed over in those
situations. And we, we also thought, I don't
know if there's actually any like credible other party
bidding here or, or, or putting forward a credible funding
option. So when we saw it was Bastion,
well, like, yes, there's there's someone else here.
This is, this is interesting. But yeah, I I was stoked to say
that. Yeah, absolutely, mate.
So clearly we've got to unpack a few more details in what came
out. So cash offer for $0.08.
Now there is quite a bit more meat on the bone here.
You've got Xanadu, the directors in the company recommending
shareholders accept this. Then you've got Bastian, which
is a consortium of a couple parties, excuse me, subscribing
for shares at six cents. Now 8 cents bid, six cents is
what they're subscribing for shares at.
And it's not just a completely paltry amount, $17 million
worth. Now, as I mentioned, a
consortium that is made-up of this group called Peru, which is
Singapore based, and Xanadu director by the name of Ganbaya.
Now, Ganbaya is a very important character in this whole
narrative because he also owns what is a 13.5% stake in the
project. Very, very important detail back
to the placement. So there's a catch to that.
And what you start to uncover as you read more about this deal,
right, is that they're doing everything they can to prompt
Zijin to get the work, to get to work.
And Zijin have been dragging their feet as we just described.
Siegen have for the longest period thought they're the only
natural buyers. They already own a big stake in
this. It's Mongolia has sort of
attributes that make it more appealing to a Chinese buyer,
all these sorts of things. Now, I think the market as well
as us thought best case Siegen come in and, you know, we'd
kicked about this idea about maybe a month ago.
Eight cents, maybe 88 and a half cents if we're lucky.
But we'll see what sort of happens.
We didn't really think there was a.
Logical Plan B what's your Plan B?
Yeah. We actually thought that Plan B
was the put option and thought, OK, if worst case scenarios, 25%
carried interest, whatever, like that's, that's, that's like can
live with that feels like a downside somewhat, you know,
protected, Yeah, but didn't, didn't think there was a
credible Plan B of another, another party.
But it is interesting, right? The way it's kind of zigging was
had exclusivity because they had tended an NBIO, which the board
of Xanadu deemed to be a, a a superior proposal to what the,
you know, the alternative was going to be the the 25% put
option would have been shareholders were asked to to go
to go and go and vote, vote on that.
But instead they deferred that let gave gave CGN exclusivity.
And clearly whatever number CGN put it put on the table in that
NBIO, they backed out of it. And I think they were just kind
of who knows, right? But it's, it's, it's, it's
potential that they just played hardball, realised they've got
all the power in the negotiating position.
They're exclusive to your lapses.
Then all of a sudden that was actually the, the, the Plan B we
didn't know about all along comes the party.
And there's real pressure on Zijin here because of that
placement. Like you talked about that
placement of 70 million bucks at six cents.
Now Ziji's got to make their mind up.
Do they, do they, do they want more ownership at, at, at a, at
a price that's, you know, reasonable or do they not?
And if they, they do, they're going to have to pay north of
north of the $0.08, which means that on that 70 million bucks of
cash that's going to be put into the pro forma, they might be
having to pay like 25,000,000 bucks for that in terms of, you
know, what they actually pay. So their incentive to put
forward a more compelling bid is only up in like is they let's
say you know, at least 7,000,000 bucks if they submit that offer
before the 26th of May, which is only 6 days away.
If they submit an offer before then, then and and it seemed to
be a superior proposal and the the board recommends it and
Bastian doesn't exercise their matching right, then all of a
sudden CGM will save 7,000,000 bucks.
That's a decent enough incentive for them to come to the party.
Hence why we're kind of yeah, really interested in in how the
next six days plays out. Now, I don't think we have like
stars in our eyes about what what value can be really
attained here because everything about this doesn't look like
Bastian wants to enter a bidding war.
It just looks to me like Bastian wants XI Jin to pay a fair bit
more than they, you know, currently being willing to.
And that's where the other part of the ownership that Ganbaya,
that director comes into play because there is potential if
Xanadu goes into another party's hands, IE Ganbaya, that when you
take into account his ownership interest in the project outside
of this sort of joint venture between XI Jin and Xanadu, that
he would have a bigger stake. He and his, you know, partners
in the in the consortium would have a bigger stake than Seijin
and that is a key, key detail here.
Totally, there's a lot more negotiating leverage that is is
concentrated with Gumbaya in that case.
And if Seijin really wanted to consolidate the, you know, full
ownership of the project laid down the track or or at least as
much as they can without government, then then Gumbaya
holds a lot more power and cards in all of that.
And, and right now what, what, what could they feasibly get get
away with paying well at 8.3 cents, That's where Bastion kind
of starts to, to, to actually make money otherwise.
So I think any, any offer from Zegen that like, that's the
absolute sort of starting point. But depending on the leverage
that can be, you know, held between Gabby are because what
Zegen wouldn't want to do is let, let let Bastion, you know,
acquire this stake in, in the, in the project by acquiring
Xanadu. And then all of a sudden you
have to pay like 15 cents instead of $0.10 equivalent for
the entire thing. So.
And what what you're sort of describing there is the, the
optionality at play here for shareholders who would go onto
the market and pick up these shares, right?
So after the deal got announced yesterday, we start seeing it
trade in the high sevens, you know, below the the bid.
But people aren't paying upfront over expecting anything to come
through. And then that changes today.
Clearly some people have cottoned on to say, hey, we have
sort of solid footing at 8 cents.
Yeah, but but we might get 8 and half, we might get 9.
Whatever we we can, you know, weigh those probabilities
against each other. Whatever you might think it is,
it's pretty hard to pick into the mind of what Z gin Yeah, but
you've got your downside in the sense protected and that's the,
that's the base you've got. That's the that's the downside.
You're not losing an awful lot of money if you can pick them up
like some shareholders were yesterday at 7.67.7.
Awesome. Your beauty, right?
Totally. Yeah, totally.
Yeah, it, it doesn't look like there's too much risk of of deal
failure in the sense of invest in not getting 50.1 acceptances,
I think becomes unconditional at that point.
So I do think deal risk is actually pretty low here on the
balance of probabilities. The the asymmetry is skewed dish
to the upside. However, I wouldn't get carried
away with like a bidding war. I think there's like, you know,
one more bid. Is it $0.09?
Is it $0.10? I don't know.
I don't know what gets the deal done, but I I'm, I'm hopeful as
a shareholder. I'm still still yes haven't
haven't sold my stake. Yeah, exactly.
I mean credit to the to the team at Xanadu, they they managed to
drum up interest where most people thought there there
wasn't an awful lot of interest. So I came to see how it kind of
plays out from here. But it's a it's an interesting
one. Your, your talking point on how
solid is the, the deal is an interesting one because shortly
after we realized it wasn't CGN and it was someone else who were
like, well, clearly they're trying to prompt CGN to come in.
So like, is this someone that's just come in randomly trying to
product? Like, are they solid?
You know, do they have a bit on them?
And yeah, long behold, they do. So that's the relief, Yeah, I
think we got lucky, JD, but. I think we got more than lucky
mate count now. Lucky stars.
Awesome, that was really interesting mate.
So now JD, the the Billion Dollar Man, Mr. Derek heard of
Sandvik ground support. He sat down with us last week
and he told us boatloads about ground support.
We're pumped to to share a bunch of these kind of one minute
snippets from the combo that we had with the Billion Dollar Man
over the coming weeks, starting with this, how has ground
support changed over like the the last 20 years for example?
Some people might say not much at the end of the day because it
looks like a a steel bolt or a splitty or a friction bolt.
Depends if you know what you call it sort of thing.
But they've been around forever and a day because they're a good
product at the end of the day and they they do their job.
But there's been a lot of evolution on sort of the dynamic
capability of products, you know, that can hold more
capacity, more energy. Again, as these conditions
become more challenging, you know, there's more requirements
for, you know, higher capacity products at the end of the day.
The other thing that that's probably changed over the years
is the, the frequency of use probably ground support probably
was a almost an afterthought, you know, 20-30 years ago.
Now it's a critical as part of the development cycle, you know,
to provide again, provide that safe working environment.
Thank you, Derek, Kurt and Sandvik Ground support.
Thanks Wiser, you know he was in, he started his career in
R&D. That's why he cares so much
about how things have changed over.
Time I did. It was a pleasure to learn a lot
from Derek. Thank you.
And to round out JD, we actually had a chinwag about Ravenswood.
We've recorded it the same days we did our Lion Town episode,
but because we chose to include that kind of post episode RIP,
we just wanted to make the podcast a realistic time to
consume. And we've reserved it to to
Chuck. And today it's still just as
relevant. Nothing has changed since, but
we're going to have a good yarn about why Regis isn't going to
buy Ravenswood. No less relevant.
Here we go. Who's going to buy Ravenswood?
Well, this is, this has been like one of the more advertised
sales processors out there, especially in the data room
column. There's not much going on on
sales price fronts. So you got to, you got to write
articles about something. And Ravenswood, Ravenswood's
gotten a fair bit of attention, but Ravenswood gold mine in
Queensland, it produces about 200,000 ounces of gold annually.
It's on the market and, and all of the, the articles, they kind
of advertise this gold mine as A2, a $2 billion price tag
grant. Now this, this mine is jointly
owned by EMR Capital and Golden Energy and Resources, which is
called Gear often when it's referred to EMR Capital, they're
obviously private equity firm. You've spoken with Owen on the
podcast in the past, JD and then you've got Gear now that is a
majority owned by Indonesia's Bujaya family.
They, they do a lot in coal and see them kind of with Latimore's
and and Stanmore and all those sorts of things.
So anyway, EMR and Gear acquired Ravenswood in 2020.
The up to 300 million bucks was the price tag, 100 million of
that was was upfront and 300 and the remaining 200 million was
kind of contingent. That's largely all all paid or
payable. Since then they've invested a
fair bit into Ravens. What a lot of capital is going
in here. They've reportedly extended the
mines life by 15 years to 2022. I say reportedly because there's
a few asterisks to that extension, which I will get to
this is a a sale process that has been publicly advertised
since November last year. That was six months ago.
That's that's like quite a long time to be banging on about our
sales process with lots of articles in data room.
And over that time, we've watched the bidding pool narrow
down in all of the columns to now it's just two bidders left
early days. There were tons of potential
bidders like named in these articles.
Everyone was saying Capricorn, Gold, Rd.
Remelius, Evolution, dot, like you name it.
Every every mid tier was always kind of like reference with a
bunch of Chinese, a bunch of Indonesian capital, all that
sort of stuff. And now we've got just two names
and final bids are due next week.
The only two contenders apparently left ASX listed Regis
Resources and Indonesia's United Tractors.
A good set name. It's funny.
United Tractors. Yeah.
I want to talk about some of the maybe not so obvious elements to
to this sale process if you're interested in reading kind of
past the press. Spell them out mate.
What are? What are the details you can to
discuss? Firstly, this is, this is a sale
process from private equity and you know my golden rule when it
comes to sales processes from private equity.
JD. Never forget mate, never buy the
bags of PE. Never buy private equity bags.
Like I, yeah, I just, we private equity is remarkably good at
dressing things up a lot better than they are.
And because they're auctions, like they're often, you know,
competitive. There's a lot of like those
dynamics where you dress something up to be really,
really good and then maybe in the long run, it might actually
turn out to not be as good. And because it was an auction or
a sales process, it's competitive.
Everyone really, really wants it.
And maybe a couple of people need it and they bid and they
aren't bid. And it's private equity guys.
They're pretty damn good at kind of harnessing the competitive
attention and, and often you don't quite realize, you know,
what you might have truly bought until a year or so later.
And then the reality is, you know, some of the policies have
washed off a little bit, But that's a generalization.
It's not to say you can't make money buying off private equity.
And plenty of people will point to plenty of examples where
people have made lots of money buying off private equity.
But in general, that's like a, a blanket kind of, you know,
heuristic. I I roll with.
To to to go specific now on on Ravenswood, spell out some of
the the key risks as you kind of see.
Them well, well, even even a step before that, the
generalization is it's going to be competitive.
This is different. This isn't competitive.
You've got 2 two parties left in a sales process submitting final
bids. Like that's kind of crazy to me.
So in in general, the competitive nature might lead
people to overpaying for something that is not going to
turn out to be as good as you think it is.
This one, it might not have the same competitive tension.
So I. And even even 2 might not be
what it might first appear to people on the outside.
One could just be hanging in to the end with a with a lowball as
well. So it's not as if you've got 2
eager buyers. But I think there could be none
like, but yeah, absolutely, that's a real potential.
So the other point too is there's some critical risks that
you you kind of need to accept as a bidder in this sale
process. What's being, you know, talked
about or what what's kind of come out in the price in the
duration of the sale process? Why there are only two it is
left. Well, there's a very substantial
out of the money hedge book in place here.
Bidders, whoever buys Ravenswood has to assume that hedge book or
maybe they could alternatively stump up their own funding to to
close it out, restructure it, whatever.
I, I haven't been able to get the exact number out of anyone
of what the true value of this out of the money hedge book is.
But I think it is enormous. Like my, my intuition, the kind
of range that I've I've been told or guided towards this is
very, very substantial. Like north of, you know, 5
hundred 607 hundred $800 million sort of substantial.
To the huge detriment of the the current owners, right?
Totally. That's a that's, that's a pretty
chunky. Yeah, it's pretty chunky, part
of the capital structure, right And.
You touched on earlier the the life extension component and
this sort of off reported 15 years that they have sort of
worked on. What are you thinking on that?
This, this, I don't think a 15 year mine life extension is as
certain as it might imagine. This kind of comes into the part
where private equity could have kind of, yeah, making things
look better than they, they actually might be.
So there's in that within that mine plan, there's new ore
bodies that kind of rely on untested or sorting.
All of all of that has risk, right?
If you, if you're taking on kind of new technological or applying
technology to untested already, all those sorts of things,
there's, there's risk there. And another, another kind of,
you know, part of this sale process too is do you remember
when, when Newmont was selling Telfer, that sale process was
sort of plagued by a, a leak in one of the, the TSFS they had
there. There's a bit of deja vu here.
One of one of the TSFS here is yeah, there's, there's, there's
a, you know, I don't think it's, you know, terminable kind of
leak, but there is, there is an issue here, yeah, the tailing
storage facilities here. But my, you know, my, my broader
point is this is a week before final bids and there's, there's
two parties supposedly submitting a binding offer in
the midst of a gold bull market. That's that kind of speaks
volumes to like issues that the bidding bidders have had A, with
the asset quality and B, reconciling asset quality with
the valuation expectations of the vendors, like $2 billion to
accept a lot of risk and edge book and all that sort of stuff
doesn't compute. Hence 2 bidders left.
So let's talk about how it, how it plays out, how it plays out
in reality then. I think so.
So you're not attractors and Regis left, right in this
apparently you're not attractors.
He's an Indonesian group. One of the vendors of this is is
Gear Indonesia links, you know, EMR notorious kind of like
Hegity has kind of connections to yeah, Indonesian capital, all
those sorts of things. So I don't, I kind of interpret
United Attractors interest as that questionable in and of
itself. I'm not, I'm not convinced that
United Attractors is a, is a genuine kind of credible bidder
purely because I'm like, is this like, is it a, is it a favour to
look like a A? Competitor.
It's a big question, but. But yeah, I'm I'm told that
maybe they are kind of serious and they're, but that they might
not be serious anywhere near the value expectations of the actual
vendor. So you're not attracted in and
of itself. I'm like unsure of even even
like assume you're not attracted is a serious bidder.
And they might actually like have, you know, a value, a value
that is unpalatable. I'm not even sure they'd get fib
approval. And I know that's kind of maybe
a bit questionable or absurd because because this isn't
Indonesian capital as opposed to Chinese capital, but there's
definitely overlap like the Chinese ethnic Indonesian
capital is. I don't know, I don't know how
like down the track you want to get, but but Ravenswood is a
stone's throw away from Townsville military base.
That's a pretty kind of critical area.
Ferb might be a lot more interested than they otherwise
would, given proximity to a pretty cool, pretty critical
military base. So.
Anyone who's had mates in the army, they've they've swung
through Townsville at some point.
Yeah, yeah. I don't think it's impossible.
I'm here obviously like was able to buy this times are different
in 2020 as well. But I just think like it's not,
it's not a home run furb outcome in my mind.
I think there's I think there's like there's risk there.
And as vendors you've got to kind of question, well, how much
conditionality am I willing to accept?
You accept more conditionality when it's not very competitive
And then Regis, right? Do we actually think Regis is
going to buy this? I don't, I'm not convinced, I'm
not convinced. And I like, I'm certainly not
convinced that they're there at any anywhere near the value
expectations that the vendors have.
That that's the, that's the point, right?
Because I think yeah, they would pick it up if they could do it
completely on the price that they want.
But is that anywhere near what EMR are expecting?
If you're, if you're already assuming a call it close to a
billion dollar like out of the money hedge book, it's, it's it
that, that's, it's, it's, it can be a stretch here when there's
technical risk as well. And even in Regis's case, who
are clearly keen to buy something, I mean, that's no, no
doubt. And they're making tremendous
cash at the moment, but they're obviously looking to add growth,
improve their portfolio. Whether Ravenswood actually does
that, I don't know. And and Regis doesn't have the
same license for M&A in the same way that a lot of other mid
tiers do because the last goal of it was buying its stake in
Tropicana, which was really poorly received by the market
for for a good period of time. Their big consensus was that
they overpaid. Now they've like built up a bit
more trust gold prices run that you know improved their hedge
book. Tropicana is clearly the best
part of their portfolio now, but they have the same license for
M&A. It's interesting what a few
years did into that deal and they solid run in the in the
gold price. But you know, license to do a
deal as as you sort of frame it is clearly more limited at
outrageous than it is at other companies all the while they're
growing their cash bar. They, they and they have to
benchmark this opportunity next to like the other opportunities
which are clearly in the market at the same time.
And on that point there, there are like 2 like very present
real ways that they could allocate their, their capital or
seek growth. And both of them are far more in
their like their home court. I'm talking about Bellevue who
was like publicly declared that they're running a strategic
review. Like we're pretty sure that
they're like showing signs of being serious about that.
There's the data room. To the best of our knowledge, a
bunch of, you know, companies mid tiers have been invited into
that data room. I don't know like details about
timing or everything like that, but there's a, there's a proper
process that underway there for, for Bellevue to maximize
shareholder value, which certainly involves exploring
kind of best, best value M&A on its cards, which it's very
possible Regis could be a serious contender in that.
And the other one is, we've talked about it a few times,
Focus Minerals is, is actively selling their Laverton, all of
their like, yeah, tenure in the Laverton, which there's a lot of
gold there that focus of kind of land grabbed for many years and
not done very much with. But there's, there's a there's
there's a lot of answers there, the quality and how long it will
take and all that sort of stuff. All of that's to be proven out,
but. Much more under the radar given,
you know, Chinese ownership and. Totally.
Or or the sort of questions around that, but.
In the right part of the world though, and there's a lot of,
yeah, a lot of players in that labour and region, even Regis
themselves have will have synergies.
But there's yeah, there's you know, possibly like 4 million
ounces of mineral resource that can be acquired there for like,
you know, in the hundreds of millions of dollars.
But a reasonable number that that like what would the market
prefer to see Regis do? I think it would have much less
appetite for it to to go go Interstate, take on like, again,
more hedging, take on technical risk, all those sorts of things.
But yeah, that's my gut feeling. And where does that leave the
sales process? Well, if you were Regis, what do
you do? Probably put in a pretty lowball
bid. And that lowball bid might be
just like, like the actual price you'd be willing to, you know,
stump up if it like a super lowball bid and private equity,
what are they going to do? They're probably not going to
accept it. I put good money that this
doesn't sell. Like that's my, like my, my
leading hypothesis is that it doesn't, it doesn't sell.
Or maybe maybe gear buys EMR, EMR stake that like in for like
negligible profit. And that lets kind of, you know,
EMR have the, the, the kind of closure outcome that's required
for their for the LP's and the funds and the asset and all that
sort of stuff. But I struggle to sort of see if
these are the only two parties there.
I'm I'm more skeptical of a of an outcome that kind of will
actually be acceptable and palatable unless they accept the
very low ball off of ranges. Yeah, absolutely.
That's that's the other aspect just to emphasize with PE, they
bought it in 2020, but who knows when the that particular fund, I
think that was already a couple years old.
They have definitive timelines. They have pressure on when they
need to have outcomes and get stuff done.
And if it doesn't sell now, you know, maybe they can extend a
few years with the fund and stuff.
Maybe they had a few more years up their sleeve.
But they have outcome pressures that unless they roll it into
the next fund and these sorts of things which PE does over time,
but they no doubt have pressures put on them as well to achieve
outcomes so. I I do think both like Focus and
Bellevue are going to be competitive and.
Undoubtedly. And LV back.
Down at that below the raise price.
Yeah. And Ravenswood is not like not
competitive, right. So there's like, yeah, like what
kind of bargain you're going to get on a relative basis, like, I
don't don't know. But but yeah, like they'd be the
equations for for a company like Regis.
Yeah. Given we've also said in the
past that winning a competitive auction process is is no great
achievement, but we'll see what happens on that front given that
the nature of it. Absolutely, mate.
I think we've got some Marks and partners to thank mate.
Absolutely a massive thank you to Mineral Mining services,
Grandeur, Sandvik Ground support, CRE Insurance, K drill,
KCA site services, Black diamond drilling services and Cross
Boundary Energy.