1 00:00:00,200 --> 00:00:03,600 All right, money miners, we have a, we could chat to share with 2 00:00:03,600 --> 00:00:05,960 you today with none other than Dave Franklin. 3 00:00:06,160 --> 00:00:08,760 So a lot of the money miners would know Dave, he runs the 4 00:00:08,760 --> 00:00:12,920 Argonaut Natural Resource fund. And why I think we both are very 5 00:00:12,920 --> 00:00:15,160 attracted to him mate, is that he has this investment 6 00:00:15,160 --> 00:00:19,520 philosophy that is very similar to to the two of us. 7 00:00:19,520 --> 00:00:22,560 There's there's parts of that that really resonate with the 8 00:00:22,680 --> 00:00:24,840 the two of us and. What is that? 9 00:00:25,080 --> 00:00:28,520 The the phrase to capture it best is not compromising on 10 00:00:28,520 --> 00:00:32,240 value as well as sort of getting in the weeds on companies 11 00:00:32,240 --> 00:00:35,920 running up through the the ramp up cycle, understanding the the 12 00:00:36,240 --> 00:00:40,600 cost curve really well and trying to be disciplined 13 00:00:40,600 --> 00:00:43,440 throughout, which is something I think we can we can all learn 14 00:00:43,440 --> 00:00:45,000 off. And here we go. 15 00:00:45,000 --> 00:00:51,040 Let's get to it, Dave Franklin. This is suddenly not a stock 16 00:00:51,200 --> 00:00:54,600 pickers market again. What are you making of it? 17 00:00:55,760 --> 00:00:58,920 Yeah, look, well, I think it, it is always a stock pickers 18 00:00:58,920 --> 00:01:00,840 market, right. So I think there's times where 19 00:01:01,920 --> 00:01:04,080 where there's, you know, commodities and resources is 20 00:01:04,080 --> 00:01:08,840 generally running, but there's times like now where it's pretty 21 00:01:08,840 --> 00:01:11,640 tough and and really you got to sort of eke out the the 22 00:01:11,640 --> 00:01:14,800 opportunities as you find them. So you know as, as, as you guys 23 00:01:14,800 --> 00:01:16,200 would know, we're high conviction. 24 00:01:16,280 --> 00:01:20,800 So typically we have a large portion of our portfolio in in 25 00:01:20,800 --> 00:01:24,800 the top five or ten stocks and that's that's where we're at now 26 00:01:24,800 --> 00:01:27,080 and we think we'll do well from that. 27 00:01:27,720 --> 00:01:30,840 What are you making of the the broader macro environment? 28 00:01:30,840 --> 00:01:32,880 Take it anywhere you want. The trade war. 29 00:01:32,880 --> 00:01:35,520 China energy commodities. Yeah. 30 00:01:35,600 --> 00:01:38,320 Well, I think the two the two places you got to look what's 31 00:01:38,320 --> 00:01:41,240 going on is, is the US and and China. 32 00:01:41,440 --> 00:01:45,120 And maybe starting with China, the way I look at it is they're 33 00:01:45,120 --> 00:01:47,680 going through a transition much like I think the US is going 34 00:01:47,680 --> 00:01:49,800 through a transition, but but it's a bit different. 35 00:01:49,800 --> 00:01:53,560 I mean, what's happened with China in the last five years is 36 00:01:53,960 --> 00:01:56,400 firstly, they locked down their population for three years 37 00:01:56,400 --> 00:01:59,160 roughly with COVID. And then when they let them out, 38 00:01:59,160 --> 00:02:01,960 they then slam their wealth by crushing the, the property 39 00:02:01,960 --> 00:02:04,160 market. So, so you had a, a population 40 00:02:04,160 --> 00:02:05,720 that really didn't want to spend money. 41 00:02:06,840 --> 00:02:09,039 And now I think the Chinese government is realizing that 42 00:02:09,039 --> 00:02:12,600 their next step of growth needs to come from domestic demand 43 00:02:12,640 --> 00:02:15,800 and, and getting their population to spend. 44 00:02:15,800 --> 00:02:18,080 And, and it's, it's easier said than done, right? 45 00:02:18,080 --> 00:02:23,400 So they've done a few baby steps on the stimulus side, but really 46 00:02:23,400 --> 00:02:25,680 I think what you need to see is some major stimulus. 47 00:02:25,680 --> 00:02:28,760 And I think that'll be one of the key drivers for the resource 48 00:02:28,760 --> 00:02:31,280 market. Now, having said that, I think 49 00:02:31,280 --> 00:02:33,400 they're also stepping back a bit and just saying, well, what's 50 00:02:33,400 --> 00:02:36,120 happening in the US and before we make a big commitment, you 51 00:02:36,120 --> 00:02:38,480 know, let's see how that that that goes forward. 52 00:02:38,760 --> 00:02:42,880 So I think China's a really interesting position and I think 53 00:02:42,880 --> 00:02:44,680 they're very committed to 5% growth. 54 00:02:44,800 --> 00:02:47,840 And particularly where they're under pressure from the US, I 55 00:02:47,840 --> 00:02:49,520 think they'll they'll really stick to that. 56 00:02:49,520 --> 00:02:50,920 So I think you will see stimulus. 57 00:02:51,120 --> 00:02:54,680 Do you think, do you think that stimulus is, it takes the shape 58 00:02:55,480 --> 00:02:58,400 of different types of stimulus that we've grown accustomed to 59 00:02:58,400 --> 00:03:02,840 in the past given yeah, a big kind of detour from the the risk 60 00:03:02,840 --> 00:03:04,080 associated with property stimuli. 61 00:03:04,440 --> 00:03:06,760 Well, I think you're right. I think what they need to do is 62 00:03:06,760 --> 00:03:09,600 they need to put more money in the hands of the people and get 63 00:03:09,600 --> 00:03:12,440 them spending. And you know, it's the other 64 00:03:12,440 --> 00:03:15,720 side of of what Trump is is talking about now, right, Where 65 00:03:15,800 --> 00:03:18,600 all the products that are being reduced in China, you know, the 66 00:03:18,600 --> 00:03:21,280 vast majority is being being exported and sold into other 67 00:03:21,280 --> 00:03:24,400 economies where I think the Chinese population needs to step 68 00:03:24,400 --> 00:03:28,600 up and the economy needs to be a bit more self self perpetuating. 69 00:03:28,640 --> 00:03:32,800 So, you know, I think that's I, you know, I think that's going 70 00:03:32,800 --> 00:03:35,040 through a transition and I think that's going to be positive for 71 00:03:35,040 --> 00:03:36,760 resources. It's it's like a it's a catch 72 00:03:36,760 --> 00:03:39,760 22. We try in some ways because in 73 00:03:39,760 --> 00:03:43,440 order to have have private investment or firms investing 74 00:03:43,800 --> 00:03:46,800 well, there has to be kind of sufficient profitability for 75 00:03:46,800 --> 00:03:49,680 them to make investment. Obviously big savings is a is a 76 00:03:49,680 --> 00:03:51,200 phenomenon in China. Yeah. 77 00:03:51,280 --> 00:03:53,280 So how do you, how do you incentivize all the investment? 78 00:03:53,280 --> 00:03:56,600 Well, one of the things that counteracts that is the massive 79 00:03:57,600 --> 00:04:00,000 ambitions to to have overcapacity that kind of 80 00:04:00,000 --> 00:04:01,640 reduces the firm's profitability. 81 00:04:01,960 --> 00:04:05,960 Do you envisage them actually rolling out some supply side 82 00:04:06,520 --> 00:04:09,200 policies to maybe reduce the, you know, the overcapacity 83 00:04:09,200 --> 00:04:12,720 things return firms to profitability and that then you 84 00:04:12,720 --> 00:04:14,880 get, you know, firm profitability, then you get 85 00:04:14,880 --> 00:04:16,480 confidence and that kind of thing? 86 00:04:16,480 --> 00:04:18,200 Or do you think that that will just continue in their 87 00:04:18,200 --> 00:04:19,320 endeavours to that? Yeah. 88 00:04:19,519 --> 00:04:21,399 I mean, I think it's a bit of a mix. 89 00:04:21,480 --> 00:04:23,600 Do you know what's, as we all know, what's different about 90 00:04:23,600 --> 00:04:27,800 China is they take a longer term view and the, the EV market and, 91 00:04:27,800 --> 00:04:32,680 and the general production of, of batteries is a really good 92 00:04:32,680 --> 00:04:34,560 example of that where they take a long term view. 93 00:04:34,560 --> 00:04:36,000 They devote a lot of capital to it. 94 00:04:36,960 --> 00:04:42,080 And, and over time they have have dominated that market. 95 00:04:42,080 --> 00:04:44,000 And you know, we're talking to someone yesterday and they're 96 00:04:44,000 --> 00:04:47,440 saying the cost of a, a battery now is essentially halved in the 97 00:04:47,440 --> 00:04:51,880 last 18 months. So they, they reduce their cost 98 00:04:51,880 --> 00:04:54,520 of production so much so then they can dominate the supply 99 00:04:54,520 --> 00:04:56,520 globally. And I think that's, that's, 100 00:04:56,680 --> 00:04:59,280 that's, I think that's part of their business strategy. 101 00:04:59,640 --> 00:05:01,680 You know, rarer, if you look at how that flows through to 102 00:05:01,680 --> 00:05:04,840 commodities, you got lithium prices down the dumps and rarest 103 00:05:04,840 --> 00:05:06,840 prices down the dumps. And that's really a function of 104 00:05:06,840 --> 00:05:09,840 that. They're just, they're driven 105 00:05:09,840 --> 00:05:13,800 prices down by dominating supply and then that flows through to 106 00:05:13,800 --> 00:05:20,480 the to the to the end products. Do you do you think Australia is 107 00:05:20,480 --> 00:05:24,200 in a is in an extremely difficult position and and how 108 00:05:24,200 --> 00:05:26,960 do you think it plays out like our security partner in the US? 109 00:05:27,040 --> 00:05:31,840 Yeah, now by far largest customer in China that that 110 00:05:31,840 --> 00:05:35,520 seems like a head on collision that's still on the horizon, 111 00:05:35,520 --> 00:05:37,600 but. Well, it's a precarious position 112 00:05:37,600 --> 00:05:39,680 for Australia where you're kind of walking that tightrope 113 00:05:39,680 --> 00:05:43,480 between your biggest customer and your and your, yeah, global 114 00:05:43,640 --> 00:05:46,560 economic partner, I guess, and security partner, yeah, so. 115 00:05:47,720 --> 00:05:51,480 We Start learning Mandarin. Yeah, you know, I'd like to 116 00:05:51,480 --> 00:05:52,560 think. They've been accused of being on 117 00:05:52,560 --> 00:05:54,760 the Chinese payroll, so. Driving you below there's. 118 00:05:55,040 --> 00:05:58,000 A middle ground there. You know, the good thing is 119 00:05:58,000 --> 00:06:01,000 we've got stuff that China wants and we've got stuff that the US 120 00:06:01,000 --> 00:06:04,280 wants. Probably what we need to see is, 121 00:06:05,040 --> 00:06:08,600 is is strong political leaders that take advantage of of that 122 00:06:08,600 --> 00:06:12,400 situation, right, I think. In a while since we've seen one 123 00:06:12,440 --> 00:06:14,160 of them. Well, exactly, exactly. 124 00:06:14,360 --> 00:06:16,480 But it's probably worth just touching on the US on the other 125 00:06:16,480 --> 00:06:19,120 side of China. And you know, like I'm not the 126 00:06:19,120 --> 00:06:23,560 greatest fan of of Donald Trump, right, But and he's a polarizing 127 00:06:23,560 --> 00:06:24,720 figure. And, you know, I think the 128 00:06:24,720 --> 00:06:27,360 frustration we're all seeing in investment markets is he has a 129 00:06:27,360 --> 00:06:31,080 very chaotic management style, which means that volatility is 130 00:06:31,080 --> 00:06:33,280 going to follow him, you know, while while he's in office. 131 00:06:33,680 --> 00:06:37,520 But if you look at the US and where the US was heading, it was 132 00:06:37,520 --> 00:06:39,040 stagnating. And there's some issues they 133 00:06:39,040 --> 00:06:41,680 need to address. And the, the big one is, is the 134 00:06:41,680 --> 00:06:43,760 debt position. You know, it kept getting 135 00:06:43,760 --> 00:06:45,200 bigger. Their, you know, their trade 136 00:06:45,200 --> 00:06:48,240 deficit was, was a worry. If you look at what they did on 137 00:06:48,240 --> 00:06:52,040 energy policy, the energy prices have been high because of the 138 00:06:52,040 --> 00:06:55,440 energy transition, which was perhaps managed poorly. 139 00:06:56,120 --> 00:06:58,760 You got a bureaucratic or, you know, cost of government 140 00:06:58,760 --> 00:07:02,760 expense, which was out of control, you know, planning and 141 00:07:02,760 --> 00:07:05,640 regulation very difficult, You know, whether you're building a 142 00:07:05,640 --> 00:07:07,240 house or whether you're building a mine, right? 143 00:07:07,240 --> 00:07:10,400 Just the time frames blew out. So what you needed is someone to 144 00:07:10,400 --> 00:07:12,800 come in and shake all that up and say, look, you know, we keep 145 00:07:12,800 --> 00:07:14,440 going down this path. We're going to be in some 146 00:07:14,440 --> 00:07:17,240 serious trouble. And, you know, I think the the 147 00:07:17,240 --> 00:07:21,720 positive is that, you know, when you strip away Trump and, and 148 00:07:21,720 --> 00:07:24,920 his style is they're addressing some of the issues. 149 00:07:24,920 --> 00:07:28,680 Now I'll come down to how will they execute? 150 00:07:28,720 --> 00:07:30,840 And you know, you have to say with Trump in control, there's 151 00:07:30,840 --> 00:07:33,160 always risk around that. But he does have some good 152 00:07:33,160 --> 00:07:34,800 people around him. And I think, you know, the 153 00:07:34,800 --> 00:07:39,600 market is gaining confidence as Scott Bessent has, has has taken 154 00:07:39,600 --> 00:07:41,440 the lead in a lot of those negotiations. 155 00:07:42,200 --> 00:07:45,680 And even if you look at things like defence, the fact that 156 00:07:45,680 --> 00:07:48,160 Germany is now stepping up and probably the rest of Europe will 157 00:07:48,160 --> 00:07:51,520 step up and and cover a lot of their costs, that's really given 158 00:07:51,520 --> 00:07:53,160 their economies a bit of a kick as well. 159 00:07:53,160 --> 00:07:56,440 So, you know, I think there is a silver lining there, if we can, 160 00:07:56,480 --> 00:07:58,880 if it can be managed, can be managed properly. 161 00:08:00,520 --> 00:08:02,920 Yeah, yeah, absolutely. They've, they've got their work 162 00:08:03,480 --> 00:08:06,200 cut out for them, right. And there's, I mean, there's, 163 00:08:06,280 --> 00:08:08,120 there's heaps of ways we can kind of take this. 164 00:08:08,960 --> 00:08:11,760 You have a a portion of the funding in gold as well. 165 00:08:11,760 --> 00:08:16,560 And that's been a a huge benefit of, yeah, what what has 166 00:08:16,560 --> 00:08:17,840 happened. How do you see that playing out? 167 00:08:18,680 --> 00:08:24,080 Yeah, well, I mean, you know, it's, it's gold's time in the 168 00:08:24,080 --> 00:08:25,840 sun, right. I remember when we, we started 169 00:08:25,840 --> 00:08:30,160 the fund five years ago and, and as we've talked about before, 170 00:08:30,480 --> 00:08:33,120 the way we start is what do we think of the key resilient 171 00:08:33,120 --> 00:08:35,039 themes and our impact on, on the resource sector. 172 00:08:35,039 --> 00:08:38,240 And the two were sort of energy transition and electrification 173 00:08:38,240 --> 00:08:40,559 as one and the other was geopolitical risk and a view 174 00:08:40,559 --> 00:08:43,520 that, you know, the world is going to go through a period of 175 00:08:43,520 --> 00:08:45,920 increased geopolitical risk. And, and I think that's really 176 00:08:45,920 --> 00:08:48,040 played out and they're probably still the two key themes you'd 177 00:08:48,040 --> 00:08:50,520 be looking at. You know, what's, what's the, 178 00:08:50,840 --> 00:08:53,280 you know, what's going on with gold is, is a whole lot of 179 00:08:53,280 --> 00:08:56,280 factors. One is 1 is globally, there's 180 00:08:56,280 --> 00:08:59,600 there's plenty of economies and plenty of countries that don't 181 00:08:59,600 --> 00:09:01,320 really want to hold U.S. dollar assets. 182 00:09:01,320 --> 00:09:03,680 And so they're looking for an alternative and that's been a 183 00:09:03,680 --> 00:09:06,640 driver of central bank buying over the last, you know, five 184 00:09:06,640 --> 00:09:11,920 years in particular, you've got, but then you've also got, you 185 00:09:11,920 --> 00:09:14,600 know, other factors like interest rates near their peak. 186 00:09:16,560 --> 00:09:20,920 And, and with the geopolitical situation that we've just been 187 00:09:20,920 --> 00:09:24,320 talking about, you know, people want to hold gold as a as a 188 00:09:24,320 --> 00:09:27,200 store of value. So there's still a lot of key 189 00:09:27,200 --> 00:09:28,960 drivers there for for the gold price. 190 00:09:28,960 --> 00:09:31,920 It's obviously had a big run over the last couple of years, 191 00:09:31,920 --> 00:09:34,120 but I think he's still going to have it in your portfolio. 192 00:09:34,600 --> 00:09:38,680 Yeah, yeah, absolutely. And, and to go back to the the 193 00:09:38,680 --> 00:09:43,720 geopolitical environment between China and the US and then, you 194 00:09:43,720 --> 00:09:47,400 know, US and the rest of the world, really we're at a pause 195 00:09:47,400 --> 00:09:49,920 technically with this tariff situation. 196 00:09:49,920 --> 00:09:53,360 But the market has really taken to heart that this pause will 197 00:09:53,520 --> 00:09:55,920 continue on indefinitely. The market is now above what it 198 00:09:55,920 --> 00:09:57,760 was before Liberation Day. Yeah. 199 00:09:57,840 --> 00:10:01,920 Do you think this comes back to to bite the market soon or do 200 00:10:02,360 --> 00:10:05,400 you think Trump trying to kind of forgets about this after 201 00:10:05,720 --> 00:10:07,400 having seen what happened to the market? 202 00:10:08,600 --> 00:10:12,480 Well, I think he was certainly scared, you know, mid-april when 203 00:10:12,480 --> 00:10:15,720 the market was really taking. And I think when when, you know, 204 00:10:15,720 --> 00:10:19,440 bond yields started to go up rather than go down and you saw 205 00:10:19,440 --> 00:10:22,680 an outflow of money from the US, it really questioned, you know, 206 00:10:22,680 --> 00:10:26,200 EU s s position as a, you know, as a reserve currency. 207 00:10:26,200 --> 00:10:30,280 And, and so I think I think he's going to be aware of that. 208 00:10:30,280 --> 00:10:34,720 But, you know, I think Trump's style is go hard and go 209 00:10:34,720 --> 00:10:37,760 excessive and then sort of backtrack and come up with a 210 00:10:37,760 --> 00:10:40,240 deal that that you kind of hope to get. 211 00:10:40,240 --> 00:10:43,080 And I think he'll probably end up giving away more than than he 212 00:10:43,080 --> 00:10:45,320 wanted to. So I think he is going to be 213 00:10:45,320 --> 00:10:46,800 cognizant of where the market's AT. 214 00:10:47,160 --> 00:10:50,800 And I think people like Scott Percent, who I who I mentioned 215 00:10:50,800 --> 00:10:53,960 before, you know, I think the best description I heard of him 216 00:10:53,960 --> 00:10:57,880 is he's kind of the adult in the room And, and I think you kind 217 00:10:57,880 --> 00:11:01,600 of need something like that. So I think you'd have to say 218 00:11:01,600 --> 00:11:03,240 there's more volatility to come, right? 219 00:11:03,240 --> 00:11:06,200 I think just to assume it's all good from here is, is a bit 220 00:11:06,200 --> 00:11:08,040 unrealistic. I hope it's, I hope that is the 221 00:11:08,040 --> 00:11:11,320 case, but but you've got to expect volatility. 222 00:11:11,320 --> 00:11:14,760 So the way you handle that as a as a fund manager, I think is 223 00:11:14,760 --> 00:11:18,400 you kind of prepare for the worst and and hope for the best 224 00:11:18,760 --> 00:11:21,520 and you can structure your portfolio to reflect that. 225 00:11:22,400 --> 00:11:23,760 Yeah, Yeah. You've also got a higher than 226 00:11:23,760 --> 00:11:27,720 normal cash position from from what I could last see. 227 00:11:27,720 --> 00:11:29,560 Is that, is that still the case and what's your thinking about 228 00:11:29,560 --> 00:11:31,280 that? Higher than normal cash 229 00:11:31,280 --> 00:11:33,440 position. That is what miners have after 230 00:11:33,440 --> 00:11:35,960 they just called KCA. In fact, mate, all this time 231 00:11:35,960 --> 00:11:37,240 we've been telling people to just call KCA. 232 00:11:37,440 --> 00:11:40,440 We've never actually just called KCA ourselves. 233 00:11:40,480 --> 00:11:46,520 That was until today. Watch this, we got ya. 234 00:11:46,560 --> 00:11:50,400 What is the differentiator of of KCA versus anyone else? 235 00:11:51,080 --> 00:11:55,160 For me, it's the flexibility and the ability to to want to make 236 00:11:55,520 --> 00:11:57,440 our client more successful as well. 237 00:11:57,440 --> 00:11:59,320 Why? It's just getting the shift up. 238 00:11:59,840 --> 00:12:04,000 Yeah, like, and it's making like if they've got a problem, like, 239 00:12:04,000 --> 00:12:06,960 what's the issue? Tell them with the problem and 240 00:12:07,120 --> 00:12:08,480 if you need it, we'll just do it. 241 00:12:08,800 --> 00:12:13,120 And we'll try and find a way to make it make it work. 242 00:12:13,280 --> 00:12:14,440 And I guess we'll look at everything. 243 00:12:14,880 --> 00:12:17,840 When like when you say a client's got a problem, what 244 00:12:17,840 --> 00:12:20,120 does a problem sometimes look look like for a client? 245 00:12:20,640 --> 00:12:23,080 A problem could be like a piece of equipment. 246 00:12:23,080 --> 00:12:26,960 So for example, like the client rang up the other day and said 247 00:12:26,960 --> 00:12:30,640 they need a 6020 truck. You know, we've got a standing 248 00:12:30,840 --> 00:12:33,080 truck like, well, it doesn't, you know, it's not going to suit 249 00:12:33,080 --> 00:12:34,920 the fleet. It's a hire truck. 250 00:12:35,400 --> 00:12:36,520 You know, we don't have any parts. 251 00:12:36,520 --> 00:12:39,800 We don't have people trying. I'm now trying to source a 6020 252 00:12:39,800 --> 00:12:42,960 truck because I want to deliver to the client. 253 00:12:43,040 --> 00:12:46,440 And obviously it's a, it's a period of time that we can, we 254 00:12:46,480 --> 00:12:48,800 can justify. It's just making that happen. 255 00:12:48,800 --> 00:12:52,640 It's not even in fleet. But how do we make this work for 256 00:12:52,640 --> 00:12:56,280 the client and work for us? I'm glad that I just called KCA 257 00:12:56,280 --> 00:13:00,040 today. And you know what, anyone that 258 00:13:00,040 --> 00:13:02,440 has your mobile number, it's in the show notes. 259 00:13:02,440 --> 00:13:06,000 They can also just call KCAJD. This is this is what you get 260 00:13:06,000 --> 00:13:07,000 when you just call KCA. Call KCA. 261 00:13:08,840 --> 00:13:14,040 Well, you know what we do in periods of uncertainty, we've 262 00:13:14,040 --> 00:13:15,280 got a couple of levers that we pull. 263 00:13:15,280 --> 00:13:18,040 The 1st is we say well yes, we're entering into what we 264 00:13:18,040 --> 00:13:21,640 think might be a more volatile time is we try and reduce our 265 00:13:21,640 --> 00:13:24,120 exposure to small cap stocks and we increase the bigger cap 266 00:13:24,120 --> 00:13:27,000 stocks and you know, and really a focus on quality and 267 00:13:27,000 --> 00:13:30,440 liquidity. The other side to that is, is, 268 00:13:30,480 --> 00:13:33,080 is cash. So unusually, we can go to 30% 269 00:13:33,080 --> 00:13:38,080 cash in the portfolio and, and, and we're at 20% now. 270 00:13:39,200 --> 00:13:42,440 And that's just a reflection of, you know, we want to be able to 271 00:13:42,440 --> 00:13:48,440 move quickly, either invest more or, or, or take more out, you 272 00:13:48,440 --> 00:13:51,200 know, because you know, the way I look at investing in the 273 00:13:51,200 --> 00:13:53,080 resource market is the cyclical market. 274 00:13:53,080 --> 00:13:56,080 And there's obviously also these geopolitical type factors that 275 00:13:56,240 --> 00:13:59,320 that impacted when the market's rallying, you want to be a 276 00:13:59,320 --> 00:14:01,520 relative investor and when the market's falling, you want to be 277 00:14:01,520 --> 00:14:03,640 an absolute investor because no one likes to lose money. 278 00:14:03,640 --> 00:14:07,560 So you know, you kind of need to plan your portfolio construction 279 00:14:07,560 --> 00:14:11,920 around that. What it's such an interesting 280 00:14:11,920 --> 00:14:14,880 point when you think of the, yeah, the portfolio pressures of 281 00:14:14,880 --> 00:14:17,960 a resources focused by management because resources by 282 00:14:17,960 --> 00:14:21,480 definition super cyclical, yeah, you need to have endurance 283 00:14:21,480 --> 00:14:23,920 through the cycle. And oftentimes our like 284 00:14:24,080 --> 00:14:26,920 resources, multiple resources are hyper correlated because 285 00:14:26,920 --> 00:14:29,520 they're different by things like club demand, China, yada, yada. 286 00:14:29,840 --> 00:14:33,720 Yeah, so how do you actually have absolute return in times 287 00:14:33,880 --> 00:14:36,120 when? There isn't, there is going 288 00:14:36,120 --> 00:14:38,880 down. Well, I mean, I think the 289 00:14:38,880 --> 00:14:42,040 ability to switch between commodities is is important. 290 00:14:42,040 --> 00:14:45,200 So as you're saying, a lot of commodities are are correlated, 291 00:14:45,200 --> 00:14:52,240 but but some aren't. So number one is, is to try and 292 00:14:52,240 --> 00:14:54,200 target those commodities that are looking pretty good. 293 00:14:54,200 --> 00:14:57,560 So for example, gold at the moment is, has been a good place 294 00:14:57,560 --> 00:15:01,040 to be and that's obviously contributed to, to there's a 295 00:15:01,040 --> 00:15:04,280 portfolio of results. The second is stock pickings. 296 00:15:04,280 --> 00:15:07,520 You know, as we started stock pickings always a part of what 297 00:15:07,520 --> 00:15:10,640 you gotta do, right? So in, in any sector, in any 298 00:15:10,640 --> 00:15:14,200 commodity, there'll be those stocks that are undervalued and 299 00:15:14,440 --> 00:15:16,720 maybe misunderstood by the market. 300 00:15:16,720 --> 00:15:19,560 And if you can, if you can get some gains out of those, then 301 00:15:19,560 --> 00:15:21,920 that's really good. And then probably the third area 302 00:15:21,920 --> 00:15:26,280 is really that quality liquidity position in that if you take a 303 00:15:26,280 --> 00:15:27,680 view, the market's going to fall. 304 00:15:28,120 --> 00:15:32,120 And while you can't totally avoid that, you can be in the 305 00:15:32,120 --> 00:15:34,720 kind of companies going to that are going to fall less than the 306 00:15:34,720 --> 00:15:37,440 rest of the market. So, you know, for example, you 307 00:15:37,440 --> 00:15:40,200 know, more recently we've increased our exposure to BHP 308 00:15:40,200 --> 00:15:44,360 and Rio, which really we don't normally own because we think 309 00:15:44,360 --> 00:15:47,640 there's better value out there. But what it does in this kind of 310 00:15:47,640 --> 00:15:50,520 market is it provides resource sector exposure in a pretty 311 00:15:50,520 --> 00:15:54,080 general way. But your pseudo cash, yeah, but 312 00:15:54,440 --> 00:15:56,880 exactly optionality. But if the market rallies, 313 00:15:56,880 --> 00:16:00,000 you're going to, because it is the index essentially you're 314 00:16:00,000 --> 00:16:01,760 going to keep, you know, you're going to get a benefit from 315 00:16:01,760 --> 00:16:02,960 that. But if it falls, it's going to 316 00:16:02,960 --> 00:16:05,800 fall by less. So it's really sort of managing 317 00:16:05,800 --> 00:16:07,720 all those, all those levers. Yeah. 318 00:16:07,960 --> 00:16:10,320 You made the comment when we last spoke about not 319 00:16:10,400 --> 00:16:12,960 compromising on quality. And I think that is what you 320 00:16:12,960 --> 00:16:15,400 just said in in different words. But I'd love to hear you just 321 00:16:15,960 --> 00:16:19,800 speak more about that because on the surface sounds easy, 322 00:16:19,800 --> 00:16:21,440 obvious, understandable. Yeah. 323 00:16:21,480 --> 00:16:25,080 But to actually stick to that through, through the mania times 324 00:16:25,080 --> 00:16:28,160 when everything's running and, you know, be rewarded, yeah. 325 00:16:28,160 --> 00:16:30,200 Or when it goes down Is is not that easy? 326 00:16:30,400 --> 00:16:34,160 Yeah, you know, we're always looking. 327 00:16:34,160 --> 00:16:38,040 So how do you, how do you define quality? 328 00:16:38,320 --> 00:16:40,280 You know, I think there's a number of different ways in 329 00:16:40,280 --> 00:16:44,120 resources you, you know, you, you got to have a really good 330 00:16:44,120 --> 00:16:47,120 understanding of costs, right? You know, what is the average 331 00:16:47,120 --> 00:16:51,560 cost across the sector and how does the company looking at rate 332 00:16:51,560 --> 00:16:55,040 on that sort of, you know, on that, on that, on that line. 333 00:16:55,640 --> 00:16:58,840 So I think that's number one. I think increasingly and as you 334 00:16:58,840 --> 00:17:02,200 guys know, you know, John McDonald is working with us, 335 00:17:03,160 --> 00:17:05,079 he's been with us probably getting on to a year now. 336 00:17:05,760 --> 00:17:09,440 And he's added a lot of value in, in how you should look at a 337 00:17:09,680 --> 00:17:11,720 resource company. And, and really what it comes 338 00:17:11,720 --> 00:17:16,079 down to is what's the free cash that it generates and what's the 339 00:17:16,079 --> 00:17:19,839 value of the reserve and, and, and, and the current reserve and 340 00:17:19,839 --> 00:17:21,560 what the reserve might be in the future. 341 00:17:22,520 --> 00:17:25,440 And I think they're really good disciplines because if there's a 342 00:17:25,480 --> 00:17:29,680 negative with the reporting of of resource companies, you know, 343 00:17:29,680 --> 00:17:32,440 the quarterlies, which I think really drive sort of the the 344 00:17:32,440 --> 00:17:38,000 short term market reactions, you know, they often they don't tell 345 00:17:38,000 --> 00:17:39,320 you what you want to know, right. 346 00:17:39,320 --> 00:17:42,920 So, you know, all in sustaining cost is a is a, you know, is a 347 00:17:43,160 --> 00:17:46,040 pretty tangible or intangible kind of thing in that I. 348 00:17:46,480 --> 00:17:49,280 Think I heard Johnny Mack ever use the word all in sustaining 349 00:17:49,280 --> 00:17:49,880 cost. Yeah. 350 00:17:50,680 --> 00:17:53,040 So it's all in cost. So, So what we increasingly do 351 00:17:53,040 --> 00:17:54,920 is you kind of say, well, what's the movement in cash? 352 00:17:55,360 --> 00:17:57,680 And I think I've heard you guys talk about that as well. 353 00:17:57,680 --> 00:17:59,920 What's the movement in cash and should there be any adjustments? 354 00:17:59,920 --> 00:18:03,280 And and then look at sort of free cash yield or or you know, 355 00:18:03,560 --> 00:18:06,840 a, a multiple and gold's a really good example of that 356 00:18:06,840 --> 00:18:11,600 because what you've got is, is you've had this sector just 357 00:18:11,600 --> 00:18:14,480 rally where the gold price is now sort of approaching. 358 00:18:15,040 --> 00:18:22,760 It's just over $5000 Australian and, and, and costs have sort of 359 00:18:22,760 --> 00:18:24,760 moved up a bit, but the margins are increasing. 360 00:18:24,760 --> 00:18:27,680 But the other side to that is, is equity prices have moved up 361 00:18:27,680 --> 00:18:29,280 as well. You know, so if you look at 362 00:18:29,280 --> 00:18:32,000 well, how are they all looking on a free cash flow yield? 363 00:18:33,400 --> 00:18:35,600 There's a, there's a big divergent and some are fully 364 00:18:35,600 --> 00:18:38,360 priced again because the share price is kind of matched to 365 00:18:38,360 --> 00:18:40,800 where their free cash is that. The the thing that'll will 366 00:18:40,840 --> 00:18:44,960 separate them is what return they can generate on that free 367 00:18:44,960 --> 00:18:46,320 cash as well. Like yeah. 368 00:18:46,920 --> 00:18:48,240 And that's what they do, part of it. 369 00:18:48,240 --> 00:18:50,480 Yeah, exactly. And that, that's the yeah, 370 00:18:50,920 --> 00:18:52,240 that's the uncertain thing. Yeah. 371 00:18:52,760 --> 00:18:55,880 And exactly. The other thing I think in these 372 00:18:55,880 --> 00:19:00,440 kind of markets and gold's a really good example is, is I 373 00:19:00,440 --> 00:19:03,640 think that the tendency is to move away from the really good 374 00:19:03,640 --> 00:19:06,560 quality companies because you think they're fully priced. 375 00:19:06,560 --> 00:19:09,080 And then you go, yeah, and you think the lesser quality 376 00:19:09,080 --> 00:19:11,440 companies a better value or cheaper. 377 00:19:11,440 --> 00:19:14,600 But you know, when you factor in the quality difference, perhaps 378 00:19:14,600 --> 00:19:18,960 they're not right. So, you know, so one company 379 00:19:18,960 --> 00:19:21,800 that I think is a real stand out is is Genesis, where I think 380 00:19:21,920 --> 00:19:25,480 you'd look at and go, shit, it's had a huge run and it probably 381 00:19:25,480 --> 00:19:28,160 does look a bit fully priced. But if you look at its free cash 382 00:19:28,160 --> 00:19:31,520 flow yield, it's, you know, it's at the top end, which for a 383 00:19:31,640 --> 00:19:34,440 company which came through what it's been through, yeah, is 384 00:19:34,440 --> 00:19:36,880 pretty impressive. And and its reserve life is also 385 00:19:36,880 --> 00:19:38,520 very strong. This is probably an appropriate 386 00:19:38,520 --> 00:19:40,840 time to do a Ding, Ding, Ding value GC, not just on Genesis, 387 00:19:40,840 --> 00:19:41,880 but she's got money in your fund. 388 00:19:41,880 --> 00:19:43,240 So yeah, get that out of the way. 389 00:19:43,520 --> 00:19:45,080 Every time I've looked at Genesis, it's always been too 390 00:19:45,080 --> 00:19:47,360 expensive to buy. Yeah, you know, but yeah, it's a 391 00:19:47,360 --> 00:19:49,320 company you think are on the management team. 392 00:19:49,320 --> 00:19:51,720 They'll generate value, they'll allocate capital effectively. 393 00:19:52,360 --> 00:19:54,920 And I feel like an idiot every time, you know, because it's. 394 00:19:54,920 --> 00:19:58,120 Well, and we're, we're the same you kind of think and, and I 395 00:19:58,120 --> 00:20:00,080 think the difference is really in the last quarter in 396 00:20:00,080 --> 00:20:03,200 particular, free cash was really strong, right. 397 00:20:03,200 --> 00:20:07,680 So, so, you know, the good thing with with the team there is they 398 00:20:07,680 --> 00:20:11,080 kind of say what they're going to do and, and, and and and they 399 00:20:11,080 --> 00:20:14,920 deliver which which is which is, you know, pretty rare really. 400 00:20:16,400 --> 00:20:18,440 Trav, are we talking about Genesis or? 401 00:20:18,440 --> 00:20:20,920 Grounded here. There are so many parallels. 402 00:20:20,920 --> 00:20:24,880 JD Grounded Group is the Genesis of mine site accommodation. 403 00:20:24,880 --> 00:20:27,000 This is how I think about it, just like Genesis. 404 00:20:27,040 --> 00:20:30,240 JD, on first impression, you think the tender is too 405 00:20:30,240 --> 00:20:33,360 expensive, right? They're on the pricey end, but. 406 00:20:33,760 --> 00:20:36,640 You think the lesser quality companies a better value or 407 00:20:36,640 --> 00:20:39,560 cheaper, but you know, when you factor in the quality 408 00:20:39,560 --> 00:20:42,040 difference, perhaps they're not. Perhaps they're not indeed, 409 00:20:42,040 --> 00:20:43,440 Dave. You have to factor in the 410 00:20:43,440 --> 00:20:46,680 quality difference, JD. It's the quality that matters 411 00:20:46,960 --> 00:20:48,760 with a mine site camp to make life better. 412 00:20:48,760 --> 00:20:51,440 And does the site have amenities that make it enjoyable? 413 00:20:51,680 --> 00:20:53,680 Do the rooms have a bit more space in the bathrooms? 414 00:20:54,040 --> 00:20:56,240 Feel like a bathroom? These are the simple things, but 415 00:20:56,240 --> 00:20:58,400 they go a long way because if you factor in the quality 416 00:20:58,400 --> 00:21:00,840 difference, like Dave says, quality accommodation equals 417 00:21:00,840 --> 00:21:03,000 happy working and more productivity. 418 00:21:03,200 --> 00:21:05,840 Importantly, better people want to come and work there too. 419 00:21:06,200 --> 00:21:08,400 You know my favorite thing about Paul, Natalia and the entire 420 00:21:08,400 --> 00:21:10,160 team are grounded though JD. Please tell me. 421 00:21:10,520 --> 00:21:13,960 They kind of say what they're going to do and and and and and 422 00:21:13,960 --> 00:21:15,160 they deliver. Back to Dave. 423 00:21:17,320 --> 00:21:20,920 How does jurisdictional risk factor into this and does that 424 00:21:21,080 --> 00:21:23,240 ebb and flow with with the market times or have you just 425 00:21:23,240 --> 00:21:25,080 got a completely different structure to? 426 00:21:25,680 --> 00:21:31,360 Well, so our portfolio now, so we, we, we monitor the 427 00:21:31,360 --> 00:21:34,920 proportion of the portfolio where the projects, the 428 00:21:34,920 --> 00:21:38,320 underlying projects, you know where they're located, right. 429 00:21:38,320 --> 00:21:42,720 And, and typically we have over 90% of the underlying projects 430 00:21:42,720 --> 00:21:45,120 in the companies we own in Australia or North America. 431 00:21:47,000 --> 00:21:49,920 And it, it, it doesn't vary a whole lot. 432 00:21:50,880 --> 00:21:53,760 We will go into high risk locations, but you know, we're 433 00:21:53,760 --> 00:21:57,320 very cognizant of of the risk. So we do own a little bit in 434 00:21:57,320 --> 00:22:00,440 Brazil, some of the rare earths own it, own it clays there. 435 00:22:00,920 --> 00:22:03,480 I think that's kind of the best, the best place to play it. 436 00:22:03,600 --> 00:22:08,120 But but if we don't need to take that risk, then we won't. 437 00:22:08,720 --> 00:22:13,360 So gold's a good example again, I would need to be convinced to 438 00:22:13,360 --> 00:22:19,560 buy, you know a W African gold producer just because there is a 439 00:22:19,560 --> 00:22:22,760 lot of choice in Australia. And so why take that where 440 00:22:22,760 --> 00:22:25,320 particularly in the portfolio, it's kind of in the portfolio 441 00:22:25,320 --> 00:22:29,760 where there is that store of value and and defensive element? 442 00:22:31,000 --> 00:22:35,960 To expand the conversation on portfolio makeup, if you like, 443 00:22:36,520 --> 00:22:39,040 sort of spoken about jurisdictional risk, touching 444 00:22:39,040 --> 00:22:42,240 on, on commodities, you mentioned holding certain 445 00:22:42,240 --> 00:22:45,480 commodities, AG gold as a kind of safe place when when things 446 00:22:45,480 --> 00:22:47,800 are volatile. Are there other sort of 447 00:22:47,800 --> 00:22:51,120 commodities or places you kind of hide if you like, other than 448 00:22:51,120 --> 00:22:54,600 obviously you mentioned going to bigger names as well when times 449 00:22:54,600 --> 00:22:57,440 get tougher and in anticipation of tougher times? 450 00:22:58,600 --> 00:23:02,080 Yeah, so because you can't put everything into, you know, in 451 00:23:02,120 --> 00:23:04,880 into those, into those area, you can't put everything into gold 452 00:23:04,880 --> 00:23:09,440 and cash. So we do probably. 453 00:23:09,440 --> 00:23:12,800 The other thing I would say is, is in volatile times, you know, 454 00:23:12,800 --> 00:23:15,000 to me, the most important thing is to have a plan, right? 455 00:23:15,360 --> 00:23:18,120 So what I'm going to do if I, if the market starts to turn down 456 00:23:18,120 --> 00:23:21,080 or if I think the market's going to turn down, what you learn 457 00:23:21,080 --> 00:23:23,520 through having those plans is that they don't always work 458 00:23:23,520 --> 00:23:25,160 right. And you kind of got to reassess. 459 00:23:25,160 --> 00:23:28,640 So, you know, what was interesting in, in leading into 460 00:23:29,360 --> 00:23:36,600 April 2 was, you know, we'd constructed the portfolio in a 461 00:23:36,600 --> 00:23:39,680 way that we thought would be defensive, but and so we had a 462 00:23:39,680 --> 00:23:43,880 reasonable amount in oil and gas, in particular oil and gas 463 00:23:43,880 --> 00:23:45,520 services. So we had whirly, which we 464 00:23:45,520 --> 00:23:53,280 thought would be defensive and we had amplitude energy, which 465 00:23:53,400 --> 00:23:56,440 East Coast gas should should be pretty immune for what's 466 00:23:56,440 --> 00:23:59,960 happening globally, right. But I think both those fell by 467 00:23:59,960 --> 00:24:03,520 15% in, in the month, right? So, so the best laid plans don't 468 00:24:03,520 --> 00:24:05,280 always work, right. But I think the key is to have a 469 00:24:05,280 --> 00:24:08,000 plan. So, but that's what you're 470 00:24:08,000 --> 00:24:10,480 looking for. And so a good example would have 471 00:24:10,480 --> 00:24:13,480 been uranium, uranium stocks actually performed really well 472 00:24:13,480 --> 00:24:16,040 through April. And that was on the basis of the 473 00:24:16,040 --> 00:24:20,000 spot price starting to kick up would be closer to to the 474 00:24:20,960 --> 00:24:24,200 contract price. And and so, you know, so we 475 00:24:24,200 --> 00:24:26,760 benefit from that. So you're trying to pick out the 476 00:24:26,760 --> 00:24:29,880 commodities that aren't quite as aligned to global growth or, or 477 00:24:29,880 --> 00:24:32,120 wherever that issue might be. Yeah. 478 00:24:32,480 --> 00:24:36,400 You, you, you spoke of the fact it's always a stock stock 479 00:24:36,400 --> 00:24:39,880 because market it's just, you know, you're always trying to 480 00:24:39,880 --> 00:24:42,360 find value, even if it takes time for that value to be 481 00:24:42,360 --> 00:24:45,960 recognized by the market. Your uranium exposure is next 482 00:24:45,960 --> 00:24:47,680 Gen. Yeah, yeah. 483 00:24:47,680 --> 00:24:49,360 World's best undeveloped uranium deposit. 484 00:24:49,400 --> 00:24:54,800 Yeah, Yeah, Uranium as a sector, I think it's really interesting, 485 00:24:54,800 --> 00:24:57,200 right, because what you've got is a small number of investable 486 00:24:57,200 --> 00:25:00,800 companies and it moves in and out of favour. 487 00:25:00,800 --> 00:25:03,440 But when it's in favour, you got a whole lot of money moving into 488 00:25:03,440 --> 00:25:06,600 a small number of companies That forces up their values. 489 00:25:06,600 --> 00:25:09,520 And I think particularly with the Australian listed companies, 490 00:25:10,880 --> 00:25:14,760 it's, it's very, you know, it's hard to find compelling value, 491 00:25:14,760 --> 00:25:18,160 right, Because typically their costs are higher and their 492 00:25:18,160 --> 00:25:22,480 volume production volumes either ramping up or, or in the OR, or 493 00:25:22,560 --> 00:25:24,360 what they're planning are relatively low. 494 00:25:24,400 --> 00:25:27,680 So it's difficult. So, so next Gen. 495 00:25:27,680 --> 00:25:30,480 I think is a stand out in that, as you're saying, it's a 496 00:25:30,840 --> 00:25:34,840 fabulous project. It looks like it's not too far 497 00:25:34,840 --> 00:25:39,680 away from final approvals. It's grade is is exceptional. 498 00:25:41,160 --> 00:25:43,240 And value wise, I still think it looks all right. 499 00:25:43,240 --> 00:25:46,280 I mean, I was doing a bit of an analysis the other day. 500 00:25:46,280 --> 00:25:50,320 If you look at Gazette a Prom and Kamiko, they both produce, 501 00:25:50,880 --> 00:25:52,400 you know, attributable production pretty similar, 502 00:25:52,400 --> 00:25:55,520 somewhere around £25 million per per annum. 503 00:25:55,520 --> 00:25:56,920 You know, can bounce around a bit, but that's it. 504 00:25:56,920 --> 00:26:00,600 You know, next Gen. is going to be producing I think £29 million 505 00:26:00,600 --> 00:26:04,800 for its first five years. Camico's market cap in 506 00:26:04,800 --> 00:26:09,000 Australian dollar terms is about 35 billion, Next Gen. is 5 507 00:26:09,000 --> 00:26:11,480 billion and it's probably got 3 billion to spend. 508 00:26:11,880 --> 00:26:15,520 So, so I think there's value there. 509 00:26:16,040 --> 00:26:18,560 Is that discount too big? It probably is. 510 00:26:18,560 --> 00:26:21,520 But as we know, they've also had a few sort of governance issues 511 00:26:21,520 --> 00:26:24,200 that have have probably had an impact. 512 00:26:24,200 --> 00:26:28,080 So, so I think you, you know, we, we like it, we think it's 513 00:26:28,080 --> 00:26:30,520 the way to play the sector. It's, it's going to be low cost, 514 00:26:30,520 --> 00:26:35,480 it's going to be big volumes. And I think I'd like to think 515 00:26:35,480 --> 00:26:38,240 that management have learnt from how the market responded to some 516 00:26:38,240 --> 00:26:40,680 of the decisions made. Won't do that again. 517 00:26:41,560 --> 00:26:45,080 Yeah, I think I did hear about some of that stuff on the 518 00:26:45,520 --> 00:26:48,560 development of the the project. They've got a new government in 519 00:26:48,720 --> 00:26:52,920 Canada now, but they preemptively took some steps it 520 00:26:52,920 --> 00:26:56,440 seemed on on the surface, on the outside to, you know, make 521 00:26:57,040 --> 00:26:59,960 resource development a bit easier to make there be a bit 522 00:26:59,960 --> 00:27:04,120 less friction between provinces, states in in Canada. 523 00:27:04,120 --> 00:27:07,240 Are you, are you more constructive on a timeline of 524 00:27:07,240 --> 00:27:08,560 them actually getting that through? 525 00:27:09,080 --> 00:27:12,240 Well, yeah, I mean, I think there's a couple of things, you 526 00:27:12,240 --> 00:27:15,480 know, and it probably, I think that, you know, what the US has 527 00:27:15,480 --> 00:27:17,760 been doing is probably a factor in that as well with Canada 528 00:27:17,760 --> 00:27:20,520 going. You know, we we need to, we need 529 00:27:20,520 --> 00:27:23,800 to stimulate our economy and one day, one way to do that is to 530 00:27:23,960 --> 00:27:25,760 stimulate resource sector investment. 531 00:27:26,920 --> 00:27:30,400 And I think much like a lot of the Western economies, they've 532 00:27:30,400 --> 00:27:33,640 been slowly moving and and bogged down in regulation. 533 00:27:34,120 --> 00:27:35,480 So I think, I think you're right. 534 00:27:35,480 --> 00:27:38,560 I think what's happening in Canada is what we're hearing is 535 00:27:38,560 --> 00:27:40,680 at the moment there's a system where you need provincial 536 00:27:40,680 --> 00:27:43,800 approval and then you need federal approval and there's a 537 00:27:43,800 --> 00:27:46,360 lot of duplication and and time frames blow out. 538 00:27:46,680 --> 00:27:49,640 I think where it's heading is that it will focus very much on 539 00:27:49,640 --> 00:27:52,640 the provincial approvals and and maybe won't require a federal 540 00:27:52,640 --> 00:27:55,440 approval. The positive that we've seen 541 00:27:55,440 --> 00:27:58,160 with both Next Gen. and also Denison, which is probably the 542 00:27:58,160 --> 00:28:02,880 other uranium projects nearest to production is there's been 543 00:28:02,880 --> 00:28:07,320 dates set for the final approval meetings, which around for 544 00:28:07,400 --> 00:28:11,000 Denison around the end of the calendar year and for for, for 545 00:28:11,000 --> 00:28:14,120 Next Gen. 2 meetings, one in November and one in February. 546 00:28:14,120 --> 00:28:18,280 So I can't see any reason why we shouldn't get final decisions on 547 00:28:18,280 --> 00:28:20,160 both those projects in that time frame. 548 00:28:20,160 --> 00:28:22,760 So for the first time in a long time, it's been locked in. 549 00:28:23,320 --> 00:28:25,720 I think it was probably 6 months behind where everyone thought 550 00:28:25,720 --> 00:28:28,840 for both those companies. But at least there is a date. 551 00:28:28,840 --> 00:28:30,600 So I think it's full steam ahead. 552 00:28:32,120 --> 00:28:34,440 Now we're talking about individual companies as well, 553 00:28:34,600 --> 00:28:37,800 Dave, let's jump back to gold for a moment because great land 554 00:28:37,800 --> 00:28:42,520 is a big part of the portfolio and yeah, not the first one. 555 00:28:42,520 --> 00:28:45,640 You need to have that as a sort of core part of the portfolio. 556 00:28:46,240 --> 00:28:50,760 Not yet listed in Australia, but they've had a terrific run. 557 00:28:50,760 --> 00:28:54,040 What are you making of sort of value in the stock and the 558 00:28:54,040 --> 00:28:55,920 company's prospects going forward from here? 559 00:28:56,520 --> 00:28:58,960 Yeah, it's, it's, it's been a really interesting story. 560 00:28:58,960 --> 00:29:03,640 And I think what's been encouraging is that the the, the 561 00:29:03,640 --> 00:29:06,960 economics and the, and the, the story behind it has got better 562 00:29:06,960 --> 00:29:12,000 since it did the deal. So, so basically Greatland 563 00:29:12,000 --> 00:29:15,640 listed in London owned 30% of Haveron, which is a, which is a 564 00:29:15,640 --> 00:29:18,440 fantastic project. The other 70% was owned by 565 00:29:18,840 --> 00:29:23,040 Newmont and Newmont also owned the Telfa mine and mill, which 566 00:29:23,840 --> 00:29:28,200 which is not too far away with with new Crest getting taken on 567 00:29:28,200 --> 00:29:32,200 Newmont, Newmont decided to sell that asset because Greatland had 568 00:29:32,200 --> 00:29:35,680 a 30% interest in Haveron. It kind of got first dibs at at 569 00:29:35,680 --> 00:29:41,160 looking at it. So so they bought it for 750 mil 570 00:29:41,160 --> 00:29:44,600 and to do that they need to to do a discounted capital raise. 571 00:29:44,600 --> 00:29:47,280 I think it was at a 30 or 40% discount. 572 00:29:47,280 --> 00:29:49,920 That was a record to buy into. And and so that was the 573 00:29:49,920 --> 00:29:52,880 opportunity at that point. There was still a lot of talk, 574 00:29:52,880 --> 00:29:56,480 you know is tell for an asset or is it a liability right in that 575 00:29:56,480 --> 00:29:58,400 it's a big mill and take a lot of feeding. 576 00:29:58,560 --> 00:30:01,640 But immediately you when it became like clear that they had 577 00:30:01,640 --> 00:30:05,400 the stockpile build up over the duration of months and months, 578 00:30:05,400 --> 00:30:07,080 Yeah, yeah. Then you. 579 00:30:07,680 --> 00:30:09,400 Yeah, you probably. Yeah, that's what you bought. 580 00:30:09,400 --> 00:30:11,520 So I should have you pieced together the fact they paid back 581 00:30:11,520 --> 00:30:12,800 in no time? Well, exactly. 582 00:30:13,280 --> 00:30:16,000 So so you know, jumping to today, right, They've owned it 583 00:30:16,000 --> 00:30:19,480 for just under 5 months. So they paid 750. 584 00:30:19,880 --> 00:30:23,800 It's generated something like 300 million in in free cash and 585 00:30:23,800 --> 00:30:25,320 that's cash that's sitting in the bank. 586 00:30:26,440 --> 00:30:29,240 And with a bit of drilling, they've increased the reserve at 587 00:30:29,240 --> 00:30:35,520 Telford to 750,000 oz and really we'll continue drilling and I 588 00:30:35,520 --> 00:30:38,040 think, I think they'll continue to increase and they've still 589 00:30:38,040 --> 00:30:41,840 got the stockpile there as well. So I think that's you know that 590 00:30:42,000 --> 00:30:44,520 so, so you know, they're going to they're going to pay their 591 00:30:45,280 --> 00:30:47,520 purchase, probably they're going to get their purchase price back 592 00:30:47,520 --> 00:30:51,760 in cash within 12 months, which will then give them something 593 00:30:51,760 --> 00:30:54,080 like a billion dollars in cash, which will help them develop, 594 00:30:54,280 --> 00:30:56,920 develop haver on. And haver on is probably, you 595 00:30:56,920 --> 00:31:01,080 know, like it's, it's probably been missed a bit by the market, 596 00:31:01,080 --> 00:31:05,520 but I think it's a very high quality asset. 597 00:31:05,760 --> 00:31:09,400 It's going to be very low cost. It's probably this of a you 598 00:31:09,440 --> 00:31:14,280 know, of a scale of probably less a scale than than degrade, 599 00:31:14,280 --> 00:31:18,040 but quality of resource, it's it's right up there. 600 00:31:18,160 --> 00:31:22,640 So, so at the moment, very few institutions own it. 601 00:31:23,280 --> 00:31:26,280 It's not really in any indices. It's going to list mid year in 602 00:31:26,280 --> 00:31:29,240 Australia. And on my calculations, it's 603 00:31:29,240 --> 00:31:32,880 still probably the the cheapest quality gold stock you can own. 604 00:31:32,880 --> 00:31:35,720 I think you know if you take the, the free cash generated in 605 00:31:35,760 --> 00:31:39,120 in March, in the March quarter and you annualize that you're 606 00:31:39,120 --> 00:31:45,160 looking at a 30% return free cash yield and a big resource 607 00:31:45,160 --> 00:31:47,200 base. Yeah, it's, it's fantastic. 608 00:31:47,200 --> 00:31:50,680 It's, it's, it's remarkable how quickly the market's perception 609 00:31:50,680 --> 00:31:53,200 has has changed of the company of the acquisition. 610 00:31:53,560 --> 00:31:54,680 How about that that little piece. 611 00:31:54,680 --> 00:31:57,320 One of the other concerns was that the stockpiles working 612 00:31:57,320 --> 00:32:00,840 through with have your own only coming online. 613 00:32:01,120 --> 00:32:04,240 Yeah, 2 plus years, yeah, they've tried to address that. 614 00:32:04,520 --> 00:32:08,640 Are you have your concerns been relieved on on that gap or? 615 00:32:08,640 --> 00:32:11,200 Yeah, I think, yeah, absolutely. So. 616 00:32:13,440 --> 00:32:17,040 So they haven't only been putting the stockpiles through. 617 00:32:17,040 --> 00:32:20,480 They've been doing some mining. And I think indications are 618 00:32:20,680 --> 00:32:25,440 there's a lot more ore at Delpha than than perhaps marketed and 619 00:32:25,440 --> 00:32:27,680 understood. And the drilling success has, 620 00:32:28,640 --> 00:32:32,800 has, has been very, very good. But you know, with, with, with 621 00:32:33,000 --> 00:32:35,440 it only being early days. And as I, as I mentioned, they, 622 00:32:35,520 --> 00:32:37,840 you know, they added 750,000 oz recently. 623 00:32:38,680 --> 00:32:41,360 So I think that you're right. That was really the question is 624 00:32:41,360 --> 00:32:44,240 can they main production and something like 300,000 oz 625 00:32:44,240 --> 00:32:46,000 between now and when everyone kicks in? 626 00:32:46,000 --> 00:32:50,280 And I think they can. I think it's a signing story. 627 00:32:51,560 --> 00:32:53,840 Would they go shopping in in the area? 628 00:32:53,840 --> 00:32:59,280 There's a couple of juniors. Look, I don't think they need, I 629 00:32:59,280 --> 00:33:03,160 don't think I need to do anything in a hurry, and that's 630 00:33:03,160 --> 00:33:05,080 probably not what those juniors want to hear. 631 00:33:07,080 --> 00:33:12,400 So I think ultimately it makes sense to add those in, but I 632 00:33:12,400 --> 00:33:13,600 don't think you'll see it happening. 633 00:33:14,720 --> 00:33:18,960 Yeah, Speaking of shopping, what's going to happen in 634 00:33:18,960 --> 00:33:23,120 Bellevue? Bellevue, I think they're in 635 00:33:23,120 --> 00:33:24,560 penance mode, aren't they? Right. 636 00:33:24,560 --> 00:33:27,040 So I think they've done the right thing and they need to 637 00:33:27,040 --> 00:33:29,040 step back and just reset the business. 638 00:33:30,160 --> 00:33:34,400 You know, I think Darren's a good guy and I think he's 639 00:33:34,400 --> 00:33:39,600 recognized that what he needs to do is just reduce the production 640 00:33:39,600 --> 00:33:44,160 rate, deliver on that, keep his costs down, start to generate 641 00:33:44,160 --> 00:33:46,760 free cash. He's pushed out the hedging a 642 00:33:46,760 --> 00:33:48,200 bit. Give him a bit of leeway to 643 00:33:48,200 --> 00:33:52,640 generate some cash. So it's been a frustrating time. 644 00:33:52,640 --> 00:33:55,440 We haven't really been an investor in Bellevue since, 645 00:33:56,120 --> 00:33:58,000 since it's commissioning phase. Do you? 646 00:33:58,040 --> 00:34:02,440 Think they get bought? Well, potentially, yeah, I think 647 00:34:02,440 --> 00:34:06,240 they probably need to demonstrate the operational 648 00:34:06,240 --> 00:34:11,239 capability of of the mine and business, but they deliver on 649 00:34:11,239 --> 00:34:12,920 what they're saying. So the good thing is now they 650 00:34:12,920 --> 00:34:17,199 deliver on what they're saying, then they look cheap, but they 651 00:34:17,199 --> 00:34:23,960 need rebuilding credibility. Yeah, maybe we move tax to to 652 00:34:23,960 --> 00:34:25,840 copper. There's a few name stays of your 653 00:34:26,159 --> 00:34:31,920 of your portfolio over time like kept tabs on it in the copper 654 00:34:31,920 --> 00:34:34,400 space. It's been, it was acquisition 655 00:34:34,400 --> 00:34:38,480 Corp and developed consistently. Yeah, both both run by kind of 656 00:34:38,480 --> 00:34:41,800 proven, you know, stewards of capital in, in mining. 657 00:34:42,040 --> 00:34:44,600 Yeah. What's been the enduring 658 00:34:44,600 --> 00:34:46,840 rationale? Well, we like copper. 659 00:34:46,840 --> 00:34:50,400 If you if you look across the commodity landscape, copper is a 660 00:34:50,400 --> 00:34:53,800 real stand out, right? And, and we're kind of looking 661 00:34:53,800 --> 00:34:56,600 through the noise a bit. Obviously a big driver of copper 662 00:34:56,600 --> 00:34:58,520 as a commodity is what's happening in global growth. 663 00:34:58,520 --> 00:35:02,080 And we've got, you know, the uncertainty with with Trump and 664 00:35:02,080 --> 00:35:05,600 China and all that, right? But we just think copper, it's a 665 00:35:05,600 --> 00:35:08,000 big market. It's hard to manipulate a lot of 666 00:35:08,000 --> 00:35:10,480 demand drivers, constrained supply. 667 00:35:11,400 --> 00:35:13,840 It is a commodity that you want to get exposure to and it's not 668 00:35:13,840 --> 00:35:15,440 easy to get good quality exposure. 669 00:35:16,320 --> 00:35:20,440 So Mac, we like, I think Mick's done a good job in taking an 670 00:35:20,440 --> 00:35:27,520 asset that hadn't been well run. Now we had to fund it in unusual 671 00:35:27,520 --> 00:35:29,480 ways at the time to get hold of that asset. 672 00:35:29,480 --> 00:35:32,520 So if there's a negative, it's, it's you know, they had 673 00:35:32,520 --> 00:35:35,040 mezzanine debt, they had streaming and they got royalties 674 00:35:35,040 --> 00:35:39,800 and all this kind of stuff that complicates the the story. 675 00:35:39,800 --> 00:35:43,120 But at its core, I think he's done a very good job in bringing 676 00:35:43,120 --> 00:35:46,080 down operating costs, productions heading towards 677 00:35:46,080 --> 00:35:49,480 50,000 oz per annum. The mayor and mayor and mine I 678 00:35:49,480 --> 00:35:51,560 think can be a bit of a kicker on top of that. 679 00:35:53,160 --> 00:35:58,760 So, you know, I think it's, it's probably marginally underpriced 680 00:35:59,560 --> 00:36:02,320 at the moment. So really you need a kick up in 681 00:36:02,320 --> 00:36:04,280 the copper price to really get it moving. 682 00:36:05,800 --> 00:36:10,040 But you know, it's a high grade mine probably probably, you 683 00:36:10,040 --> 00:36:12,600 know, arguably one of the highest grade outside Africa. 684 00:36:14,200 --> 00:36:17,040 So, you know, we're happy to be there and and what you want in, 685 00:36:18,080 --> 00:36:22,360 you know, in what has been probably a difficult project is, 686 00:36:22,480 --> 00:36:24,200 is high class management, I think. 687 00:36:25,840 --> 00:36:29,200 Do you think the like, is it as easy as a copper price going up, 688 00:36:29,200 --> 00:36:33,480 kind of high leverage, yada yada, Lots of talk because I 689 00:36:33,480 --> 00:36:35,120 don't want the copper price up too much because then the 690 00:36:35,120 --> 00:36:36,920 contingent copper price payment kicks in as well. 691 00:36:36,920 --> 00:36:38,880 There's a sweet spot where you want it to be high enough, but 692 00:36:38,880 --> 00:36:40,320 not. Yeah, not too high. 693 00:36:40,520 --> 00:36:43,080 So I think what you're saying is they're bringing, they're, you 694 00:36:43,080 --> 00:36:45,240 know, they're bringing down their debt, which I think is 695 00:36:45,240 --> 00:36:48,800 important and you know, refining the mezzanine debt, which which 696 00:36:48,800 --> 00:36:52,840 I think is all important, so. There were rumours that Harmony 697 00:36:52,840 --> 00:36:54,800 was was interested. Did you did you hear that too? 698 00:36:54,800 --> 00:36:58,760 Yeah, I didn't hear it was, but but yeah, yeah. 699 00:36:59,880 --> 00:37:04,440 So we'll see. So develop look, we really like 700 00:37:04,440 --> 00:37:08,600 it and and we did a site to it at Woodlawn last year and it 701 00:37:08,600 --> 00:37:11,480 highlighted a couple of things. One is I think the scope for 702 00:37:11,480 --> 00:37:15,840 that asset is, is more as far as production and and mine life is 703 00:37:15,840 --> 00:37:17,680 probably greater than what the market's expecting. 704 00:37:17,680 --> 00:37:21,960 But it also just highlighted what good management can do, you 705 00:37:21,960 --> 00:37:23,520 know, to have a good motivated team. 706 00:37:25,000 --> 00:37:27,520 And if you're going to back some of them resources, I think it'll 707 00:37:27,520 --> 00:37:30,160 beer Mont is is good guy to back right. 708 00:37:30,760 --> 00:37:34,400 So I think that's really interesting in that, you know, 709 00:37:34,600 --> 00:37:38,920 ideally develop should come into production this sorry Woodlawn 710 00:37:38,920 --> 00:37:40,480 should come into production this quarter. 711 00:37:41,480 --> 00:37:45,000 I think even at current copper prices, it's going to deliver 712 00:37:45,080 --> 00:37:47,400 and zinc prices is going to deliver pretty strong cash 713 00:37:47,400 --> 00:37:51,400 flows. It's looking to sell a 20% 714 00:37:51,400 --> 00:37:55,040 interest in the mine, which you can do that somewhere around NPV 715 00:37:55,040 --> 00:37:58,960 is, is really going to underpin the value of the broader group. 716 00:37:59,960 --> 00:38:02,120 And then you got to sell the springs and you got their mining 717 00:38:02,120 --> 00:38:05,600 services assets, which which I think also look good. 718 00:38:05,600 --> 00:38:08,920 So had a big run and I think it's probably still mildly 719 00:38:08,920 --> 00:38:12,160 underpriced and needs to deliver on the production and perhaps 720 00:38:12,160 --> 00:38:16,320 that sell down. But I think it's a stock that is 721 00:38:16,320 --> 00:38:18,800 going to emerge as a as a much bigger company over the next 722 00:38:18,800 --> 00:38:20,880 five years. On the mining service part of 723 00:38:20,880 --> 00:38:22,840 the business, obviously Bellevue's had a pretty 724 00:38:22,840 --> 00:38:26,120 tumultuous period, Yeah. Do you think that, I mean 725 00:38:26,120 --> 00:38:27,800 there's this folks about the contract there, but do you think 726 00:38:27,800 --> 00:38:30,240 that continues? Do you factor that in as 727 00:38:30,360 --> 00:38:32,960 continuing for for quite a period or what do you think? 728 00:38:33,640 --> 00:38:37,320 Yeah. Look, I mean, you never quite 729 00:38:37,320 --> 00:38:42,160 know in a situation like that, you know, what what led to the, 730 00:38:42,680 --> 00:38:46,600 the Bellevue issues. But certainly the, the, the 731 00:38:46,600 --> 00:38:52,280 feedback I get is it wasn't really the develop contract that 732 00:38:52,280 --> 00:38:55,440 that was a major problem there. So I think they're good at what 733 00:38:55,440 --> 00:38:58,040 they do. I think so. 734 00:38:58,720 --> 00:39:02,880 You know, I see Bellevue ideally the Bellevue asset recovering 735 00:39:02,960 --> 00:39:07,120 and and develop remaining there as a as a contractor for a long 736 00:39:07,120 --> 00:39:10,600 period of. Time just bring the the mic in a 737 00:39:10,600 --> 00:39:12,040 bit. The noise get cuts out when you 738 00:39:12,040 --> 00:39:14,160 speak softly yeah bring it closer towards you. 739 00:39:14,160 --> 00:39:15,040 Yeah. Oh, beautiful. 740 00:39:15,120 --> 00:39:21,400 Yeah, it's it's interesting, isn't it? 741 00:39:21,400 --> 00:39:24,280 I mean like the typical pathway you, you get close to 742 00:39:24,280 --> 00:39:28,600 production, you start producing rate rewrite and and do you 743 00:39:28,600 --> 00:39:30,800 think it's just effectively a matter of time where the market 744 00:39:30,800 --> 00:39:34,160 starts to believe with lawn is is capable of positive free 745 00:39:34,160 --> 00:39:36,240 cash? Well, I think so. 746 00:39:36,240 --> 00:39:39,800 I mean, I think if you look at its recent share price 747 00:39:39,800 --> 00:39:42,320 performance, the, the, the market's probably already jumped 748 00:39:42,320 --> 00:39:43,360 to that conclusion. Yeah. 749 00:39:43,480 --> 00:39:48,240 And I think that's a reflection on, on on how people assess the 750 00:39:48,240 --> 00:39:50,680 risk as it moves into production. 751 00:39:50,680 --> 00:39:54,280 I think they're saying this has been largely de risk and 752 00:39:54,280 --> 00:39:56,440 obviously they didn't have to build the plant, they just need 753 00:39:56,440 --> 00:39:59,560 to fix it up. Yeah, which which obviously is a 754 00:39:59,920 --> 00:40:02,360 the benefit. Have you got on, on that 755 00:40:02,360 --> 00:40:04,840 specific point there of investing in companies that are 756 00:40:04,840 --> 00:40:08,000 part of the, the rewrite, that sort of part of the Lasan curve, 757 00:40:08,240 --> 00:40:11,240 if you like, you know, just speaking as, as the novice 758 00:40:11,240 --> 00:40:14,920 mining stock hunter, what are the sort of key, the key bits 759 00:40:15,200 --> 00:40:17,920 lessons you can kind of share in getting that right? 760 00:40:17,920 --> 00:40:20,120 Because it's clearly something you've done with a few companies 761 00:40:20,120 --> 00:40:23,200 now and making sure you, you catch that wave in in the right 762 00:40:23,200 --> 00:40:24,840 way. And yet you manage the risk. 763 00:40:24,840 --> 00:40:28,080 And there's sort of unobvious parts of that that that have 764 00:40:28,240 --> 00:40:30,080 really stood out to you of your journey. 765 00:40:30,240 --> 00:40:32,640 Yeah, it's, it's a, it's a good question. 766 00:40:33,920 --> 00:40:36,920 Because you know, if you think about a Bellevue or you think 767 00:40:36,920 --> 00:40:41,240 about a line town or you think about Woodlawn, I think they're 768 00:40:41,280 --> 00:40:43,560 all really interesting and all really different kind of 769 00:40:44,360 --> 00:40:45,920 outcomes. You know, with Bellevue, we 770 00:40:45,920 --> 00:40:51,640 always had some, some concerns about the resource and how easy 771 00:40:51,640 --> 00:40:55,040 that would be to mine. And so we held it up until 772 00:40:55,040 --> 00:40:56,960 commissioning and then said, well, we're just going to stand 773 00:40:56,960 --> 00:41:00,800 back and see how all this goes. And, and, and that's obviously 774 00:41:00,800 --> 00:41:01,960 worked pretty well, which was good. 775 00:41:02,760 --> 00:41:06,200 Lion Town we probably had we had some concerns as well, right, 776 00:41:06,200 --> 00:41:11,120 because an underground lithium ion or spodumene mine of that 777 00:41:11,120 --> 00:41:14,920 scale was, was challenging and then the whole processing side 778 00:41:15,720 --> 00:41:18,040 is difficult as well. So we did the same thing. 779 00:41:18,040 --> 00:41:20,120 We stood back and and watched and and waited. 780 00:41:20,520 --> 00:41:23,160 Obviously the commodity price came down, which impacted them. 781 00:41:23,160 --> 00:41:29,440 But you know, I look back at, at, at, at the at line town and 782 00:41:29,440 --> 00:41:31,480 what they've been able to achieve in their delivery and 783 00:41:31,480 --> 00:41:38,040 it's been first class, right? So, so, so in general, we and, 784 00:41:38,040 --> 00:41:40,760 and then with, with Woodlawn, we probably took we, you know, 785 00:41:40,800 --> 00:41:44,600 we're happy to back management because one is the, the 786 00:41:44,600 --> 00:41:46,200 processing facility was already there. 787 00:41:47,080 --> 00:41:49,880 And two, we knew that management were very good at underground 788 00:41:49,880 --> 00:41:54,560 mines. So, so we kind of take it case 789 00:41:54,560 --> 00:41:58,640 by case. But in general in mining, if 790 00:41:58,640 --> 00:42:00,720 things are going to go wrong, often they go wrong in that 791 00:42:00,720 --> 00:42:03,480 commissioning phase. So if you don't need to be 792 00:42:03,480 --> 00:42:05,840 there, then then you don't be there. 793 00:42:06,080 --> 00:42:07,880 And so it'll come down to valuation. 794 00:42:07,880 --> 00:42:10,880 So if you know, if if you looked at a Bellevue at that time, it 795 00:42:10,880 --> 00:42:12,680 was kind of factoring in and all going well. 796 00:42:14,160 --> 00:42:16,640 So do you need to be there, you probably don't. 797 00:42:16,840 --> 00:42:17,760 So. Yeah. 798 00:42:17,760 --> 00:42:21,920 Has has your view on on lithium equity exposure changed over the 799 00:42:21,920 --> 00:42:25,120 last year? Probably not much over the last 800 00:42:25,120 --> 00:42:26,800 year. Well, the, so the positive is 801 00:42:26,800 --> 00:42:29,080 prices have all fallen further right and so there's better 802 00:42:29,080 --> 00:42:32,960 value there. The issue that I have is, you 803 00:42:32,960 --> 00:42:40,240 know, current spodumain price is roughly $700.00 a ton US and I 804 00:42:40,240 --> 00:42:43,320 reckon most of the major players. 805 00:42:43,400 --> 00:42:45,880 So so firstly, it's not a market where you want to be looking at 806 00:42:45,880 --> 00:42:47,800 2nd tier assets. So if you can say, you know, 807 00:42:47,840 --> 00:42:53,760 Bill Bro Bodgina, you know, Igo and Lion Town I'll probably put 808 00:42:53,760 --> 00:42:56,480 up there because, because they've done a pretty good job. 809 00:42:56,480 --> 00:43:01,840 But I reckon all those excluding green bushes, IGO, you know, I 810 00:43:01,840 --> 00:43:05,080 reckon they're, they, they're all in costs are probably 811 00:43:05,080 --> 00:43:08,760 somewhere around 8 to $900 US, right? 812 00:43:08,760 --> 00:43:10,080 So what? So what they're saying that 813 00:43:10,080 --> 00:43:11,640 lithium is no one's making any money. 814 00:43:11,640 --> 00:43:13,080 I. Think with IGO you've got like 815 00:43:13,080 --> 00:43:15,480 they're all in cost include Kwinana and they're probably. 816 00:43:15,480 --> 00:43:17,120 Probably the same, Yeah, Yeah. Well, exactly. 817 00:43:17,120 --> 00:43:20,760 So, so so green bushes. I mean, the green, green bushes 818 00:43:20,760 --> 00:43:23,600 I reckon is probably 100 bucks or or more lower than those 819 00:43:23,600 --> 00:43:26,000 others. And it's probably the only one 820 00:43:26,000 --> 00:43:28,920 selling a 6% con and that price is 6%, right? 821 00:43:28,920 --> 00:43:33,080 So, so, so the sector's still kind of underwater. 822 00:43:33,080 --> 00:43:36,440 And then it comes down to well, what's the long term price 823 00:43:36,440 --> 00:43:38,840 likely to be, right? And if you look at most of the 824 00:43:39,280 --> 00:43:41,720 commodity forecasters, they're saying maybe 1200. 825 00:43:41,720 --> 00:43:44,000 Firstly, they're saying it's going nowhere for a year and 826 00:43:44,000 --> 00:43:47,000 then maybe it gets to 1200 and 1200. 827 00:43:47,000 --> 00:43:49,360 If you back calculate and say, well, based on their production, 828 00:43:49,800 --> 00:43:51,440 they still don't look overly cheap, right? 829 00:43:51,440 --> 00:43:54,440 So, but that's the way markets work. 830 00:43:54,440 --> 00:43:56,920 So I think what you'll see at some point you'll see a spike. 831 00:43:58,040 --> 00:44:00,880 I think we're getting closer to the time where you could buy any 832 00:44:00,880 --> 00:44:05,920 of those companies, you know, an IGO, Pilbara or or Lyontown. 833 00:44:05,920 --> 00:44:07,600 Lyontown's got debt, which you don't like. 834 00:44:07,600 --> 00:44:13,960 So it's probably one step behind those others and, and take a 835 00:44:13,960 --> 00:44:15,680 view. And I know the way we often look 836 00:44:15,680 --> 00:44:19,200 at that is to say, look, it doesn't look overly compelling 837 00:44:19,200 --> 00:44:21,880 now, but do we reckon we can double our money in the next 838 00:44:21,880 --> 00:44:23,680 three years? So can we get sort of annual 839 00:44:23,680 --> 00:44:26,360 return of just over 30% per annum over three years? 840 00:44:26,680 --> 00:44:29,800 If you think you can then then then you buy you. 841 00:44:30,040 --> 00:44:31,800 Don't mind being early. Exactly. 842 00:44:31,800 --> 00:44:33,680 For the commodity prices. Exactly because what when it 843 00:44:33,680 --> 00:44:36,280 turns, it turns really quickly. And if you're not in, you miss 844 00:44:36,280 --> 00:44:39,680 out on that 30 or 40% gain. Yeah, you, you point on IG OS 845 00:44:39,680 --> 00:44:41,440 right. Though the good thing about IG 846 00:44:41,440 --> 00:44:45,200 OS, I've got 25% of of green bushes, which is a cracking 847 00:44:45,200 --> 00:44:46,520 asset. Unfortunately, they don't 848 00:44:46,520 --> 00:44:48,600 operate it. But because I think Ivan's 849 00:44:48,600 --> 00:44:50,800 actually done a good job and it seems to me he's adding good 850 00:44:50,800 --> 00:44:54,360 value to that joint venture, but it's all the other stuff. 851 00:44:54,360 --> 00:44:57,560 They got 2 hydroxyl plants that don't work, and they got nickel 852 00:44:57,560 --> 00:44:59,120 business that's pretty rooted, right? 853 00:44:59,120 --> 00:45:03,240 So there's a bit of tidying up to be done there, which I think 854 00:45:03,240 --> 00:45:04,960 he's doing, yeah. Yeah, yeah. 855 00:45:05,160 --> 00:45:07,000 It takes a bit of time. None of this happens sort of 856 00:45:07,000 --> 00:45:08,640 overnight. It's the same with success, 857 00:45:08,640 --> 00:45:09,400 right? Yeah. 858 00:45:10,120 --> 00:45:12,080 There's a notable absence in your Cop allocation. 859 00:45:12,200 --> 00:45:13,400 No sand fire. Why? 860 00:45:14,040 --> 00:45:15,600 We've owned it in the past, yeah. 861 00:45:16,240 --> 00:45:18,840 And value wise, I just thought it was getting up there. 862 00:45:18,840 --> 00:45:22,760 So what Sand Fire needs? So Sand Fire I think's done a 863 00:45:22,760 --> 00:45:27,880 fantastic job, right? So they've bought Mateo online, 864 00:45:27,880 --> 00:45:30,280 they've ramped it up really without a hitch, generating good 865 00:45:30,280 --> 00:45:31,520 cash. They've got their debt down 866 00:45:31,880 --> 00:45:34,720 doing everything. Well, I think the question is, 867 00:45:34,720 --> 00:45:38,560 well, what they need to demonstrate now is how they can 868 00:45:38,560 --> 00:45:45,520 grow the mine life at Mateo and, and, and that's probably the 869 00:45:45,520 --> 00:45:48,760 challenge they've got. So what what it doesn't have is 870 00:45:48,760 --> 00:45:51,160 production growth over above where it is now. 871 00:45:52,040 --> 00:45:56,600 But it's hard to criticize them. I think Brendan Harris and his 872 00:45:56,600 --> 00:45:59,240 team done an incredible job. We have owned it and we sold it. 873 00:45:59,240 --> 00:46:01,880 And if you look back over the last 12 months, we probably 874 00:46:01,880 --> 00:46:06,040 should have held that and maybe sold Mac, right, but on 875 00:46:06,040 --> 00:46:08,120 performance. But it kind of works itself out. 876 00:46:08,600 --> 00:46:11,360 Yeah, they've, they've done a remarkable job and sort of 877 00:46:11,680 --> 00:46:13,760 capital sort of flooding in like you mentioned before in a 878 00:46:13,760 --> 00:46:16,720 different scenario into a limited number of names is 879 00:46:16,960 --> 00:46:19,760 really been evident in, Yeah, in the copper space. 880 00:46:19,760 --> 00:46:21,840 Something we didn't mention before in the in the copper 881 00:46:21,840 --> 00:46:25,280 discussion was the tailwind from TCRC is just dropping off 882 00:46:25,480 --> 00:46:30,160 dramatically. Yeah, I think Mac quoted 15 ish 883 00:46:30,840 --> 00:46:35,000 cent per pound on a sort of C1 basis break kick essentially 884 00:46:35,000 --> 00:46:37,120 from the markdown at the beginning of this year. 885 00:46:37,160 --> 00:46:39,360 Yeah, that's awesome for all of those guys. 886 00:46:39,360 --> 00:46:43,280 Not so awesome for the the folks downstream, but yeah, real 887 00:46:43,280 --> 00:46:45,840 tailwind, right? It's, you're right, it's made a 888 00:46:45,840 --> 00:46:47,800 massive difference. And I think it, it's kind of 889 00:46:47,800 --> 00:46:51,880 stems from a lot of countries saying that you need to, you 890 00:46:51,880 --> 00:46:56,520 need to process, you know, the, the copper before you export it. 891 00:46:56,520 --> 00:47:00,240 And so there's a lot of over capacity, there's over capacity 892 00:47:00,240 --> 00:47:01,760 and, and so prices are coming down. 893 00:47:01,760 --> 00:47:04,760 So I think you're right at a time where every little bit 894 00:47:04,760 --> 00:47:07,840 helps as far as margin, it's it'll make a big difference. 895 00:47:07,960 --> 00:47:10,320 Yeah, yeah. That that trend of countries 896 00:47:10,320 --> 00:47:14,160 imposing that on their their miners is, is a big one on sand 897 00:47:14,160 --> 00:47:16,240 fire. Again, you mentioned lack of 898 00:47:16,240 --> 00:47:17,920 growth. Do you think they go shopping 899 00:47:17,920 --> 00:47:20,400 and you want to kick about some names if you think they do. 900 00:47:21,440 --> 00:47:24,040 Look, they've got, they've got another asset in the US and I 901 00:47:24,040 --> 00:47:26,680 think they're tossing up whether they develop that or, or sell 902 00:47:26,680 --> 00:47:29,240 that. So I think that's a possibility. 903 00:47:31,240 --> 00:47:36,240 I think what they'd like to do is to is to grow organically by, 904 00:47:37,080 --> 00:47:40,560 by building out their resource and reserve through exploration. 905 00:47:41,480 --> 00:47:44,120 It's the cheapest and best way to do it if you can. 906 00:47:44,160 --> 00:47:49,080 And I think they're actively at both their, their assets looking 907 00:47:49,080 --> 00:47:52,200 to do that. But the the, you know, the risk 908 00:47:52,200 --> 00:47:54,400 is you got to find something, you're going to do that. 909 00:47:55,120 --> 00:47:58,520 Yeah, they did a lot of looking at de Grusa and didn't come up 910 00:47:58,720 --> 00:48:01,920 much, but yeah, the brownfields way in particular, given how 911 00:48:01,920 --> 00:48:05,040 hard permitting is all around the world, yeah, they can tack 912 00:48:05,040 --> 00:48:06,320 things on. That'd be fantastic. 913 00:48:06,640 --> 00:48:08,280 Well, exactly. And you'd have to say, you know, 914 00:48:08,320 --> 00:48:12,840 Botswana and the copper belt there is pretty prospective. 915 00:48:12,960 --> 00:48:18,200 So you, you know, you'd like to think that if they, they put the 916 00:48:18,200 --> 00:48:20,720 dollars in the ground, they will be successful. 917 00:48:21,400 --> 00:48:23,160 Yeah, putting to the side of the fact that they are like 918 00:48:23,560 --> 00:48:26,720 relatively fully valued as as as far as the copper kind of 919 00:48:26,720 --> 00:48:31,200 producers go, I always like sand fire as a company entity feels a 920 00:48:31,200 --> 00:48:34,720 lot more likely to me to get acquired than it yes to be an 921 00:48:34,720 --> 00:48:37,200 acquirer of something else because it's, you know, for the 922 00:48:37,200 --> 00:48:39,200 most part a pretty pure black on a copper vehicle. 923 00:48:39,480 --> 00:48:41,720 Lots of lots of companies want more copper. 924 00:48:41,720 --> 00:48:43,880 Lots of gold companies want all of a sudden gold companies have 925 00:48:44,400 --> 00:48:46,240 better script, better capability to buy things. 926 00:48:46,560 --> 00:48:48,440 Sandfire's a company component if you were. 927 00:48:48,480 --> 00:48:51,880 To I think the only the only offsetting factor is, is mine 928 00:48:51,880 --> 00:48:55,560 life at Mateo Yeah, right. So but the, you know, the 929 00:48:55,560 --> 00:48:58,360 Spanish asset is is chugging away and that'll chug a lot 930 00:48:58,640 --> 00:49:02,320 along for a long time. So so I think you know as I 931 00:49:02,320 --> 00:49:04,400 said, I think the management team's done a really good job, 932 00:49:04,600 --> 00:49:07,080 good quality asset. I don't think it's excessively 933 00:49:07,080 --> 00:49:10,280 expensive, it's just not. It just doesn't fit our sort of 934 00:49:10,280 --> 00:49:13,160 valuation at. Nothing really cheap in the 935 00:49:13,160 --> 00:49:15,560 world of copper, is there? Exactly, exactly the the last 936 00:49:15,560 --> 00:49:17,200 thing I want to talk about, Dave, perhaps the most 937 00:49:17,200 --> 00:49:20,320 interesting, actually the most geopolitically interesting is 938 00:49:20,560 --> 00:49:22,400 rare earths. And you mentioned that you hold 939 00:49:22,400 --> 00:49:25,480 some of the, the clay projects in Brazil. 940 00:49:25,480 --> 00:49:29,560 So so why don't we start there? How are they going to fit into 941 00:49:29,560 --> 00:49:34,120 the the piece of this emerging rare earths cost curve? 942 00:49:34,880 --> 00:49:38,800 Yeah, Well, I think rare earths is, is is is a really 943 00:49:38,800 --> 00:49:42,800 interesting sector. And I don't have all the 944 00:49:42,800 --> 00:49:46,480 answers, I don't think, but I think maybe where you got to 945 00:49:46,480 --> 00:49:48,480 start when you look at rare earths, well, there's two areas 946 00:49:48,480 --> 00:49:49,920 you look at, right. What's happening in China? 947 00:49:50,280 --> 00:49:53,720 China totally dominates the production of rare earths and 948 00:49:53,720 --> 00:49:58,160 the processing of rare earths. And, and they mean, you know, it 949 00:49:58,160 --> 00:50:01,040 looks to me like there's been the prices have been depressed 950 00:50:01,280 --> 00:50:03,560 to make sure that no one else gets projects off the ground. 951 00:50:05,280 --> 00:50:09,440 So then you look at Linus and Linus are the you know, the the 952 00:50:09,960 --> 00:50:14,000 ex China major player, really the only one that has really 953 00:50:14,000 --> 00:50:20,200 successfully achieved the separation of of the rarest and 954 00:50:20,200 --> 00:50:25,720 DPR and now moving to the heavies, turbium and dysprosium 955 00:50:26,800 --> 00:50:30,320 and and and created a a business there but. 956 00:50:30,640 --> 00:50:34,120 Even what they produce very often does end up in China. 957 00:50:34,720 --> 00:50:36,840 Yeah, yeah. It's like 1 level of separation, 958 00:50:36,880 --> 00:50:38,720 then more separation. All roads lead to China. 959 00:50:38,720 --> 00:50:41,440 Yeah, yeah. But the issue is, you know, I 960 00:50:41,440 --> 00:50:45,240 think the point though is that their market cap, 7 billion and 961 00:50:45,240 --> 00:50:47,800 a current price, they make essentially no money, right, I 962 00:50:47,800 --> 00:50:49,280 think. They're losing a few $100 963 00:50:49,280 --> 00:50:51,160 million a quarter at the moment, last time I look. 964 00:50:51,200 --> 00:50:52,880 Yeah, yeah. But yeah, it's amazing. 965 00:50:52,880 --> 00:50:56,840 So, so, so you know, how much are you prepared to back the 966 00:50:56,840 --> 00:50:59,200 fact that railroad prices are going to rebound? 967 00:50:59,880 --> 00:51:04,440 So hence we're looking at at Brazil and I think the ionic 968 00:51:04,440 --> 00:51:10,400 clays are, have the have the ability to produce rare earths 969 00:51:10,400 --> 00:51:13,800 at a much cheaper price. And so we're not big there, but 970 00:51:13,800 --> 00:51:16,240 we've got some exposure, exposure through meteoric which 971 00:51:16,240 --> 00:51:21,040 we which we kind of like. And you know, I think it's 972 00:51:21,040 --> 00:51:25,120 progressing it's project. If if you take a view that NDP 973 00:51:25,240 --> 00:51:29,280 or rarest prices are you know 50 bucks a kilo or somewhere around 974 00:51:29,280 --> 00:51:33,360 that 50 to 60, it looks like the ionic clays are the only ones 975 00:51:33,360 --> 00:51:35,640 that, that can compete in that kind of market. 976 00:51:35,680 --> 00:51:40,520 But it's early days, early days. How do you think about the the 977 00:51:40,520 --> 00:51:44,200 technical risk that they need to to overcome importantly in that 978 00:51:44,200 --> 00:51:46,800 processing step? That's yeah, that's the big mark 979 00:51:46,800 --> 00:51:48,520 against all of these names. Yeah. 980 00:51:48,560 --> 00:51:49,920 Well, I think, I think you're right. 981 00:51:49,920 --> 00:51:52,320 It's kind of it's yet to be done. 982 00:51:52,320 --> 00:51:57,920 So I think you got to tread cautiously. 983 00:51:58,560 --> 00:52:02,560 Yeah. Yeah, yeah, yeah, I've got. 984 00:52:02,680 --> 00:52:04,160 Yeah. One, one last question for you, 985 00:52:04,280 --> 00:52:06,440 Dave. Al, it's actually 2 questions. 986 00:52:06,480 --> 00:52:10,720 Yeah, that's right. Biggest mistake the last five 987 00:52:10,720 --> 00:52:13,880 years. Oh, that's a good question. 988 00:52:16,400 --> 00:52:18,240 The biggest mistake in the last five years. 989 00:52:20,280 --> 00:52:27,800 Look, if, if I, if I look back, probably trying to, you know, 990 00:52:27,800 --> 00:52:30,880 changing the portfolio too much, like our out stock portfolio 991 00:52:31,720 --> 00:52:33,880 turnover is not that great, right? 992 00:52:33,880 --> 00:52:37,160 Typically we like to find positions and stuff, but I think 993 00:52:37,160 --> 00:52:39,600 you can overthink it, right? So you got to kind of, I think 994 00:52:39,600 --> 00:52:41,520 what you got to do is look through the noise and say, I'm 995 00:52:41,520 --> 00:52:43,960 prepared to wear a bit of volatility because I know I'm in 996 00:52:43,960 --> 00:52:47,240 good quality stocks and I'm in sectors that I think are going 997 00:52:47,240 --> 00:52:49,920 to do well. But what happens is, you know, 998 00:52:49,920 --> 00:52:53,160 the market is influenced by fear and greed and, and as much as 999 00:52:53,160 --> 00:52:56,600 you try and eliminate that, you know, when, when the market 1000 00:52:56,600 --> 00:52:58,960 turns down, often you go, I just want to have a bit more cash. 1001 00:52:58,960 --> 00:53:03,640 And you sell something and, and the markets, you know, delivers 1002 00:53:03,640 --> 00:53:05,920 a response very quickly where you go, shit, I should have just 1003 00:53:05,920 --> 00:53:07,760 done nothing. And April is a good example of 1004 00:53:07,760 --> 00:53:09,920 that. You know, we, we performed, I 1005 00:53:09,920 --> 00:53:13,080 think pretty well in, in a, in a difficult environment, we could 1006 00:53:13,080 --> 00:53:15,480 have done lots of things, you know, you could have shorted at 1007 00:53:15,480 --> 00:53:18,800 the wrong time or, or, or stuff. But I look at the decisions that 1008 00:53:18,800 --> 00:53:20,760 we made and we only made a couple of transactions. 1009 00:53:21,240 --> 00:53:23,560 And if I just done nothing, I would have performed better, 1010 00:53:23,680 --> 00:53:25,680 right? So it's probably just saying, 1011 00:53:26,160 --> 00:53:28,920 OK, you know, I've done the work. 1012 00:53:28,920 --> 00:53:31,480 I know these stocks I'm just going to hold through here. 1013 00:53:31,560 --> 00:53:32,760 I bought it because I had conviction. 1014 00:53:33,200 --> 00:53:34,320 Yeah, yeah, yeah. Yeah. 1015 00:53:34,480 --> 00:53:36,880 And on the flip side of that, the best decision you've made 1016 00:53:36,880 --> 00:53:40,000 for the last five years. The best decision? 1017 00:53:40,880 --> 00:53:42,520 Chance to talk yourself up. Yeah. 1018 00:53:43,560 --> 00:53:46,800 Well, I think, I think probably two things. 1019 00:53:46,800 --> 00:53:49,520 One is it's all about quality, right? 1020 00:53:50,640 --> 00:53:54,120 If you're buying quality assets, you're probably going to do all 1021 00:53:54,120 --> 00:53:56,880 right, as long as you're not paying too much for them. 1022 00:53:56,880 --> 00:53:59,080 So it's a, it's a balance between quality and value, but 1023 00:53:59,080 --> 00:54:01,360 if you got to choose, you go value. 1024 00:54:02,440 --> 00:54:05,720 So never compromise on value in the resource sector. 1025 00:54:06,040 --> 00:54:09,320 And the other, the other point is probably how we structured 1026 00:54:09,320 --> 00:54:12,960 the fund initially, right? So the fact that we can invest 1027 00:54:12,960 --> 00:54:15,640 in small caps and big caps, you know, we can invest in BHP and 1028 00:54:15,640 --> 00:54:17,640 we can invest in something in a mark cap of five mil. 1029 00:54:18,160 --> 00:54:22,120 The fact that we can go to 30% cash gives you flexibility to 1030 00:54:22,120 --> 00:54:23,640 protect yourself in a town market. 1031 00:54:23,880 --> 00:54:26,920 I think that's really critical. Dave, I've really enjoyed this. 1032 00:54:26,920 --> 00:54:28,720 Thanks for making the time and coming on money if not. 1033 00:54:28,960 --> 00:54:31,000 Yeah, thank you. So good to chat. 1034 00:54:31,280 --> 00:54:31,960 Yeah. Thanks, Dave. 1035 00:54:32,320 --> 00:54:34,680 Awesome. Fantastic. 1036 00:54:35,160 --> 00:54:38,520 There we go mate and a massive thank you to all our partners. 1037 00:54:38,520 --> 00:54:41,400 Firstly GRX get your tickets, they are in the show notes May 1038 00:54:41,400 --> 00:54:44,840 20 to May 22nd and extend that thanks to Mineral Mining 1039 00:54:44,840 --> 00:54:49,120 Services, branded Sandy Ground Sport, CRE Insurance, K Drill, 1040 00:54:49,480 --> 00:54:53,240 KCA Site Services, Black Diamond Drilling Services and Cross 1041 00:54:53,240 --> 00:54:54,880 Boundary Energy who drew money miners.