Friday money miners. We're giving hope to bag holders
today. We're talking about stuff out
out of flavour. Well, mostly rare earths, but
it's coming back in flavour I reckon.
Rare earth and rare earth applications I believe you're
gonna go into. Mate and we've got bloody a bit
of gold deals going on. Small for a big company, you'd
say. Totally mate.
There's it could be, could be, yes, a reason to be more excited
about the juniors if the if the majors are getting active on a
deal front. I don't need a reason to be
excited for Underground Operators Conference.
No 'cause I am and everyone else should be excited to get 100
bucks off a ticket. Rapidly, these are the.
Codes MONMOM 100 hundred bucks off a ticket like it.
It is the only place in the world where you get that offer.
So it's the greatest underground conference in the world and I am
going to have a fat time in Adelaide April 7th tonight.
Get your tickets now. It's going to be a sell out.
Is it? Underground is the conference
underground. It should be, yeah.
We're it's we're actually having it at an Olympic dam.
There's an idea for you, Jimmy Masters.
Right. Let's get into it Linus.
By the way lads, thank you for balance sheet tutorials today.
I have much more appreciation for half yearly's.
Probably should have learned it all before the half yearly
started getting released. You can pay me back in mining
knowledge, Maddie. Take it away, Linus.
Let's talk about Linus, a super interesting company.
So half yearly results came out that actually interesting
quarterly results with a bit going on between Mount Weld,
Kalgoorlie, obviously trying to get up to speed and everything
going on in Malaysia. So we're kind of put it all
together because I think there's a lot of interesting forces
moving this business at the moment, moving the the stock
price specifically. You've got all this drama about
the US, Ukraine, Russia, rare earth, very tense geopolitical
sort of moment in the face of very depressed rare earths
prices. So there's a there's a lot going
on for this 6 1/2 billion dollar mining company and I thought
it'd be. Interesting, a rich 70 year old
lady. Yeah.
Well, to you know, you can specifically mention her here
because I was going to compare Linus and MP Materials of which
that worthy woman is a substantial shareholder in both.
So Linus has for a long time been a much bigger company than
MP Materials, which sort of burst onto the scene through
that 2020-2021 period. But right now, as you look at it
in U.S. dollar terms, the market cap of Linus is 4 billion.
The market cap of MP Materials is 3.9 billion.
So just an interesting 1. You can slot that in your your
hedge fund as a bit of a pairs trade if you want, Maddie.
Because wasn't Linus is due to produce about double the NDPR?
Yeah, eventually. We're talking about.
The mountain pass isn't it? Yeah, 10 1/2 six, yeah, kind of
thing. So mountain passive.
Have done a lot more work on actually the the the downstream
like you've got magnet manufacturing going on now.
Yeah, Where is it? In Texas, isn't it?
The miners in California. But the the downstream.
They've done stuff, yeah. And I mean, liners to an extent
is trying to do stuff at at sea drift in, in Texas as well with
the with the heavies. But that's a a bit of ways away.
And that came off the back of a bit of helpful funding as well.
These these sorts of companies are pretty prone to getting
favourable financing. Yeah.
But the half year itself it wasn't a great result.
EBITDA was a 44% miss on consensus expectations that
largely came off the back of higher unit costs and we're
expected. So that's absolute terms because
they are sort of ramping up and producing a bit more than they
were if you look at the the previous sort of periods, but on
a unit basis as well. And they kind of point to that
being a result of a lot of one off payments, sort of FX
movements, these these kind of things which they don't say will
be a constant kind of feature. But there's a lot of moving
parts here. There's a lot of various bits of
kit being commissioned that's happening at Mount Weld, that's
happening at the new facility in Kalgoorlie and also in Malaysia.
So they're in a bit of a moment of flux.
They they call it, you know, they're still making money.
EBITDA was $38 million. But if you look at the CapEx
side of things, $267 million spent in this half year alone.
All up that means that the cash position has retreated over $200
million to about a $300 million cash position.
So that's. Could be running running the
Kitty pretty low by the end of this this half without a
liquidity injection of some sort.
Yeah, that's that's the crux of it, right?
The the sustainability of this rarest price environment for
everyone, including Linus at this moment in time is is very
tough and. So even in the low fifties, even
like it's arisen from the low 40s, that's still still not
cutting the mustard. Yeah, they'd, they'd love to see
it, you know, another notch higher than where we are today
to, to go beyond especially after this in, you know, really
intense period of capital investment in the business.
You want, you want a bit of a buffer, you know, you need, you
need a buffer in the business. And I think the, the question
we'll kind of get to today is, is that buffer running a bit
skinny? And are they going to have to
you know, look at various ways of of topping that up and to
having a bit more sort of support or insurance in the in
the business? There's, there's, there's a few
kind of cash drawers that have been at the company for a while.
The expansion at Mount Well, which I think is, is complete
the concentrator expansion. But the, the Kalgoorlie cracking
and leaching facility, which to the best of my knowledge,
they're still, they're still capitalizing expenses there.
So, yeah, even though they're the unit costs have gone up,
that's not baking in any OpEx from from Kalgoorlie because
that's still being capitalized. Yeah.
And I think we should just put that in a nutshell real quickly
for the for the mining folk, what we're kind of talking
about. Do you want me to explain it,
Jada? Go for it.
Are you confident it's, it's a, it's an accounting sort of
practice right before you hit, you know, in very simple terms,
before you hit commercial production, you can capitalize
your cost. You're looking at them as
investments in the business as opposed to thinking about them
as just cost of goods sold and netting them off against the
revenue that you're earning. Hence you can get an EBITDA
number that is a positive number when your actual cash balance is
coming off substantially. And it's not totally clear here
because I'm not saying that that whole CapEx number is just going
to be an ongoing capitalized expense.
A lot of that was a one off, you know, buying bits of massive
equipment. But what is the actual loss or
earnings on an ongoing basis of Kalgoorlie?
That facility specifically is an open-ended question which we'll
we'll find out in in due course. They've now reported that
they're at a period of continuous operations at
Kalgoorlie. There's a lot of ironing out
that needs to be done. In the December quarter, they
had impurities from the EMREC material.
These things sort of happened. I would love to see as DK
brought up with us when we first spoke with him the the Mcnulty's
chart just to see where they are on that, how they're actually
tracking against nameplate capacity.
We know that's very telling how you're tracking in the in the
first sort of half year and and beyond about what the plant is
actually going to produce that in the long term.
But, you know, they need to get to about 1/3 of their material
coming from, from Cal, from Cal feed to hit the target run rate
by the end of this financial year.
So that's, that's kind of pretty soon, you know, that's, that's
not too far away. So, you know, we hope they can
kind of get there. You've also got the acid
problem, which we've spoken about in the past.
They reckon there's a, there's a workaround.
It just comes at a slightly higher cost.
They said it's, you know, not not super material, but no
specific numbers on that one yet.
So we don't know what the actual cost is going to be that of
course coming from nickel W being shut down, that's sort of.
One thing on acid that when we're in the DRC where we
visited a couple of you know, copper copper oxide plants where
they're producing the copper from mining the oxide and then
putting it through a solvent extraction Electro winning all
these mines. They had acid plants built at on
site in some cases 2 acid plants on site to produce.
I think that mine was doing 50,000 tons of of of of copper
cathode per annum and the the capital required to just whip up
an acid plant. It seemed like it was, it was
like AUSUS 40 million I had in my head and they could like turn
it around pretty quickly. Which, yeah.
Contextual costs probably costs a bit more in Australia.
A lot more in Australia, but yeah, the the sulfuric acid
constrain that we talked about with uranium a lot just felt
contextualized in a different way after kind of seeing how how
like abundant these plants were and how how like quick the turn
around could have been to whip them up to.
Yeah. Absolutely.
Because what? The whole uranium thing isn't
it? Wasn't it the Italians are
building the one in Kazakhstan or something?
I don't know. They keep blaming the Italians
or something, Italian or French or something.
You've got to point the finger somewhere.
Right. Or is it getting the sulfur is
the? Well, you have to you have to
import these massive bags to, to be a part of that chemical
process. So it's yeah, it's there's big
logistics kind of involved in in making that kind of happen.
We'll sort of say just just to round out on Cow and the the
broader company in their production rate, 10 1/2 thousand
ton per annum. NDPR oxide is what they want to
get to the very steadfast. That's the goal to get to by mid
this year. But it's not totally clear what
what they're going to do beyond that, whether they just keep
keep that constant, what they look to expand, whether they
dial back given the unfavorable market conditions, whether they
have to. You know, they say that they
haven't had any problems marketing their material and and
selling it, but it always comes at a price.
And as a as a relatively larger producer in this market, do they
kind of tinker with it a bit? Do they pull a bit of supply out
of the market like we've seen lithium and other sort of
producers do when the market is quite bearish?
We'll we'll see. It's again another open-ended
question in this opaque market. So Lioness, can you say that the
Australia was there, they've got no incentive to acquire more to
produce more rare earths at another operation?
We do though. Well, would they, would they
acquire something else in Australia ever or they just
don't need to, I think. They're.
Be too dilutive not. In Australia, yeah, they, they
like, let's say they're ironic clays, you think come in lower
on the cost curve in the long run then yes, you do that.
But they're they're by and large, the better deposits are
not in Australia, Yeah. Yeah.
And right now, you know, that would come with not too distant
big CapEx, Bill, if you're gonna build the thing.
And that's not really what the market wants to see right now.
I think they're quite content with what they can do in the
they want to see them prove out the the capital investments that
they've done and that they can produce at this higher rate.
So I think, I think the market's sort of wanting to say that
first and foremost. Well, it'd be like like talent,
the Talison JV going to buy another lithium deposit.
It's like you never find one as good as that because Mount Wells
such a stand out. Yeah, that's sort of challenge.
I think we should make a couple of comments on the the railroad
market in in general and probably look like an idiot when
I say this because it's just such an opaque market.
But there has been a bit of a a bit of upward sort of movement
in the price. So just the end of December
we're talking about 49 ish bucks and now we're looking at 54
excluding that. So roughly 10% increase in in
the prices. So that's positive to start
with. You've then got some relatively
big news coming out of China and you know, this is in the form of
some draft documents that have come forward.
The crux of it is that we could see more consolidation in the
the Chinese market, which more or less is the railroads market.
I'm talking about the likes of Northern railroads and China
rare earths consolidating power hovering up some of those the
smaller producers. That is a draft, as I said.
So that would need to become legislation in time, but that's,
that's one to look out for as well.
And the the last sort of comment on the, the market and the
ramifications of this massive drawdown in price is just the
state of the juniors. Trev, you mentioned, you know,
the, the ionic sort of plays in Brazil, they're off 4050 sixty,
70% in some cases. It's it's similar across the
board. No matter what type of rare
earth project you are, it's it's pretty grim looking around.
So, you know, you could say that's an opportunity for for
the likes of Linus if they want to look at that different style
of of project or what have you, But it's not being the best 18
odd months or a bit longer now for a lot of these rare earth
plays. And I think that sort of ties in
with a weakening demand narrative.
You know, the outlook for wind turbines isn't as bullish as it
was in that to the early twenty 20s period.
There's concerns that these credits that you could get for
buying an electric vehicle might be repealed that could hit the
the demand side of things. There's new quotas coming out of
China in the next week or so. So we'll see what that sort of
does on the on the supply side. But I think everyone's a a bit
cagey mixed in with the the geopolitical angle that I
mentioned at the start. Oh mate, it was getting bloody
talked up down at RIU rehearses because obviously the Hastings
deal coming up so everyone's bloody dreadnought's getting
talked about for rare earths again like.
It's not a goal play anymore. No, no, I think it reconverted
back last week. I'm not sure I've lost track,
but but that, that was a bit of a different change in sentiment
around that. But yeah, as I said, those close
ones, you look at the charts, they they look like a lithium
nickel chart. It's just that long, bloody,
steady, steady descent. Yeah, there's a bit in common
with them as well, right. The the end users have a lot of
overlaps between, between lithium, you know, EV demand if
we're talking about that or anything.
So it's not a massive surprise, even though there are different
supply side dynamics at play, you know, it's not.
Yeah, I'm not shocked to see that they're both in the in the
gutter at the moment and maybe we'll see them in time.
Both sort of ebb upwards at the same time as well.
Well you think what Jane has got what, 8 and a bit percent of
liner, so it's a bit over half a bill.
Twiggy's now got 60% of Yanja banner potential to go to 70%
with another 20 mil. So the the magnets are going to
be fighting over rare. Earth magnets.
Magnets. Yeah.
Very good. Very good.
In fact, the yeah, the Twiggy 1 is interesting because what came
with the Hastings deal were 20% of the shares in this company
called Neo Performance Materials, which is a a magnet
manufacturer, which is a really interesting business, one of the
one of the few that exists ex ex China.
Well, and that, but that was the wasn't the whole thing that
Hastings was going to. They wanted to, really couldn't.
Yeah, yeah. Yeah, so something's getting
built or or I can rearros are the only thing that S WIC hasn't
drilled for. I could, I could like consider
an underground like it's all surface stuff.
Don't think there's any underground.
What rarer? So out of that 17,000,000 drill
meters probably getting closer to every time we say 17, it
means we're getting closer to 18,000,001 slope closer to
18,000,000. But I don't think they've done
rare earths. Can you imagine if they started
drilling for rare earths? What, like talk about a
saturated market if Swick started finding rare earths
underground? So flooded, oversupplied so.
Any way to put? It an absolute foundation of
underground exploration drill and boys and mate bloody and the
foundation of drill and belong beyond 2000 meters with the DPX
team. So mate, 2000 meters, 2000
meters mate just +2000. So just let your imagination run
wild. So mate, if you want a bloody
drill on one of their 90 rigs, just get in touch with Swig or
the Parenti team and mate go break some records.
Go swig, go swig. Just on, just on rarest.
Before we move on, Maddie, question for you JD.
Do you think Clowners will raise money?
So what I was tossing out is will they raise equity or will
they get another sort of friendly package from the
government? Will they look at something like
a prepayment given their their sort of stranglehold in that
market? Would they consider some form of
debt? They sell a stake in the
project. Would they sell a stake?
Yeah. Be really getting into yourself
in the long term if you're if you're thinking about it that
way, everything's on the table. I think equity is the the route
that they'll go down. And I, I kind of do think, you
know, I had a skim through some of these.
It's massive. It'd be a.
Huge bloody God, imagine that fighting that ticket.
Yeah, and it wouldn't even be massively dilutive.
Yeah, right. This is a $6.4 billion company,
I think. They're it's 400 in 2020, I want
to say. Yeah, I think that's the the
route they end up going down. I mean, you have a quick skim
through a lot of these research reports and we're all
forecasting a big tick up in rare earth prices to come in
very soon. And of course they are.
Yeah, of course they are. Exactly.
So I, yeah, I don't, I don't totally see it playing out that
way. I just think that needs to
happen way sooner than you kind of like.
And you're just running, running a bit too.
You're flying a bit too close to the sun, if you're, you're
honest. Why not just pop up to the tune
of a few $100 million? Top 20 shorter companies on a
Sxi think I think that I think the reasons, yeah, combination,
maybe the pairs trade, but more likely the funding.
Yeah, 9% short interest right now in in Linus and I think a
few people are in anticipating that one and I mean a.
Tie up with MP also, you know, if you if you agree a tie up,
then there's an opportunity for a sort of interim facility to
pop in there in the midst of the deal, which might tie tie any
loose ends over until that deal completes too.
Absolutely, although I think the the ratio is not not what it
once was and Linus are a bit more put off at the moment on
that front. Who do you think benefits more,
an Australian company or AUS company amidst all of the
geopolitical dynamics? Well, I mean, yeah, I do agree.
I think they're both relatively OK at the moment.
But you know, it's a, it's a, it's a bit of pill to swallow at
an individual level. If you've been, you know, such a
stronger market cap for so long and then you have to do the
deal, the big deal at A, at a real markdown.
There's there's another part that we didn't even get to and
that's like the changing ore body at Mount Weld, which I've
spoken to a bit in recent calls. Talking a lot about the heavies
and these sorts of. Things they spin it in a, in a
very positive way about having greater understanding of the,
the, the bigger upsized mineral resource.
But I, my, my layman's understanding is like a very
high grade kind of weathered part.
He's sort of depleting. And now they're getting to like
a different kind of section with a lot more, a lot of various all
types. And maybe the unit costs are
going up as a result of some of that too.
Yeah. You can.
You can spin that positively. But it's all just free dig isn't
it? Like the year I'll support.
It's like then. They're definitely not mining
constrained, are they? Not mining constrained, but.
Like the unit process cost of the.
The the grade of the carbon a tight is is super highly
enriched at the top. Yeah, you get this like
weathered zone and then and then the grade tape is massively I
think, I think Fact Check this afterwards, but that you know
they're they're getting to the lower grade part now.
So they did have the technical people on the half yearly call
to to speak through that. Yeah.
That that those sort of specific questions that were being.
Asked which, if that's the case, then you know the relative value
with MP makes complete sense and don't expect to, you know, be
the be the the bigger company in that tie up.
Time will tell. Right here's buddy, you want to
say on my just YouTube surfing check these bloody things out.
This could be bloody talking about prices of rare earths
rising. Have a watch it have a look at
this. AI powered humanoid robots are
officially here, and they're already being deployed at scale
in Shenzhen, China, a city known for its rapid technological
advancements. Humanoids powered by Deep Seek
AI and Engine AI robotics are now assisting in government
operations, public service, and even law enforcement.
Meanwhile, 70 AI powered digital employees have been deployed to
handle government paperwork, making decisions, interacting
with humans, and correcting errors with astonishing
accuracy. Engine AI Robotics is offering
the PM 01 at a starting price of just $13,700.
Wow 13,700 bucks USI assume to replace humans doing shit that
humans don't want to do. I'm getting one at my house for
for sure humanoid robots but like they.
It's the bull case. Well, you're just thinking, so I
I, I, I, I, I, I always reminded me of the.com bubble.
Like it's just anything with IOI on it at the moment is just, but
it's like friggin also, it's like bloody lithium.
It's that it's that many that abundant and it's all just a
branding market share race to the bottom thing at the moment.
And regarding that race to the bottom, I'll just show you
another video of CNBC last night.
Shortly after deep seek released its open source reasoning model,
open AI made a free version of its most advanced O3 mini
available from their products and features.
Entire models, even from the likes of Google, Microsoft and
XAI made available to users at no cost to them.
So essentially a land grab amid. This rapidly commoditizing
landscape. So you can see like you, you
talk to anyone that's building AI stuff.
It's all, it's like it's all open source central models.
It's all, they're all shared models.
It's all, it just seems like a lot of branding front end
changes and everything, but all lot the AI is there.
So it's, but and it's like, what is it all going to be used for?
So we've talked about data centres to death with the, you
know, uranium to potentially power them, the copper wire and
tin soldering bloody what else? All that chips, all the chips in
it and everything. So that's, that's the power to
power the IO. But then what's it going into?
So you look at these like, if this is potentially one thing
that could, we're looking at in the future that these humanoid
robots are going to be frigging replacing all the mundane shit
that we don't want to do and we essentially become redundant.
I'll be the first one become redundant, but what goes into
these friggin things can Can you imagine one of these in every
like in all the houses around the world eventually like
manufacturing, like mining? Yeah, yeah, a whole bunch of
applications could. Well, they're like the police
for imagine taking, putting. These in robot.
Well, that's what they're doing in in China.
They're using it for law enforcement.
So you imagine you haven't got a person there that if you shoot a
robot, who cares? Like, yeah, like it's like it
totally changes the risk to putting humans in enforcement.
Like going to be fucking intimidating.
Now you're going up to a robot. You're like, what's this thing
going to do to me? Like you can't reason with it.
It'll just fuck, just knock you out with a titanium fist.
But I thought, what goes into this, like the mining materials,
if this is where AI is heading, like, how's it going to affect
commodities? So if you look at what these
things are made of aluminium alloys and titanium for the
body. So I'm not sure how much
aluminium these will take compared to massive things of
aluminium. So what that'll do for bauxite,
aluminium and that, but like titanium.
So that's like, you know, the Ilmenot and Rotol industries,
that's that's where the titanium comes from.
Shit load of internal wiring and chips, obviously copper for the
wine, but then all these chips use the rare earths.
So like NDPR, like gallium, cerium, that's all comes from
monocytes. So that's great for rare earths,
the power and charging. So they're all going to have a
lithium ion battery, you would assume.
So that's like this. That could be a rebound for
lithium. All the motors, sensors,
actuators for the robotic limbs, that's all rare earth magnets,
so NDPR mainly. But then you know, like the the
heavy rare earths, the DYTB, that's what the temperature,
temperature tolerance for the magnets.
So that's what gets added, added into those.
So very, very interesting looking at that.
You're always thinking right, what's what's the next bubble?
What's the next thing to pop and what's the next thing we're not
thinking about? Looking at that last night, it's
like, fuck is this if that's already getting deployed in
China, flat out I'm getting I'm 100% getting one to clean the
ass and fucking cook me shit saved me getting Uber eats and
because I hate changing bed sheets, kids school lunches
right the. Possibilities are endless.
But yeah, it was fascinating, I thought.
And just just thinking of where this, the whole AI thing first
looks like a bubble, like not a bubble, the concept, but a
bubble of everyone trying to tack on using AI doing this.
But it just looks like it's so it's just going to get market
shared by obviously your deep sake, your Meta, you Google,
your Microsoft, your Alphabet and Microsoft and that and
they're just looking to do it for nothing at the moment.
What are your boys thoughts on all that?
Tech Tech advances wonderfully bring productivity improvements
and those productivity improvements might help us, you
know, in the ways that we use AI to help us already or, or they
can come in the physical world too.
I'm excited to see some of the physical world development
stimulus productivity improvements.
It'll be a wonderful application of the tech advancements that
we've had and a great thesis. If if the I'd love to know when
the first electric vehicle was actually kind of made.
What was the time between that and when you had kind of a
lithium market shortage, right? Because these things take a lot
of time to get real traction and adoption.
It's not just sort of like subsidized kind of adoption and
sometimes there's a, an app or a, you know, a specific use case
of people like, fuck, I need it for that reason, next reason,
And maybe it's a bit clunky until then, it gets a bit
better. But I'd love to know, you know,
how long can you expect? But these are pretty new.
I saw the first one when Tesla had their investor day last
year. So it's not, they're not like
it's not like they've been around for a long time yet.
But I'd love to to know what's the real time expectation before
you might be able to see some constraints in some of these
markets based on current supply? I think I, I keep going back to
the nickel boom, but it's when, when you're physical the last
one recent the boom that didn't really do anything.
Except the short squeeze. No, no, just the just the hype
around all these nickel mines getting developed, but the
actual nickel price just did not go to where they were
predicting. And that was all on a a thesis.
This this global thesis that was out there is like, we need more
nickel for long range batteries and that's it.
Like the the actual, the demand wasn't there yet, but everyone
started building mines because nickel was going to 16 bucks a
pound. So with this sort of stuff, it's
like we're interested to know once if there's just once the
global thesis changes, if that does similar to what nickel did.
And like prices start going up because everyone just wants it
before they actually need it. Yeah.
So. It's really interesting.
I always think about this, this, this like prologue to a book
that I read ages ago called, I think it's called Capital Cycles
by Marathon Asset Management. And they spoke, they speak about
capital cycles in heaps of different industries and they
highlight that they're very pronounced in natural resources.
They always think about it from two sides, demand and supply.
And they never put too much weight in the, the demand side
because they, they find that very hard to quantify.
They always look at the supply side.
So that's much easier to, to put into numbers, not easy, but
easier than the, the other side of, of the equation.
And I mean, these guys are sort of deep value investors, but
the, the stories that get spun and they give so many different
examples about the, the demand side, what's going to be the
next thing, what's going to blow off.
And most of them don't, don't kind of eventuate.
It's all they have. They just come about in a very
different form to what you might have thought earlier and it's an
interesting way to think about it.
But kind of investing with that support of of the cost curve.
And you know, when you're getting into say a commodity
that has had very little CapEx sunk into it over a long period
of time, then you've got a kind of stable foundation.
You pick an asset in the the lower quartile or half of the
cost curve going about it that way.
And, you know, maybe somebody bits during the boom and they
make 10 times their money in in half a year and they they make
all the returns these guys would make over a number of years and
they get there much quicker. Everyone's got their own sort of
style of investing. But yeah, it's it's very hard to
actually forecast where these demand actually comes into the
fore. When are you actually going to
see it? When are we actually going to
have these robots in our kitchen doing these things for us?
But completely agree. It's endlessly like fascinating
to watch these videos on YouTube to see the promos from Tesla or
I think Boston Dynamics are another one that make this sort
of humanoid robot. It's so, so interesting, right?
Yeah, and it's like, and there's one thing predicting when the
demands kind of come in, but it's the the equity hype.
Yeah. In the lead up to it, if you you
get. And nickel was the example, like
you could get on that train and get out.
And nothing even happened to the underlying commodity price,
except it went down afterwards. Yeah.
So. Oh, that's the, I'll have a good
punt. Yeah.
How good is it? Who's going to be the first
mover for humanoid robots in Australia, do you think?
Not an Australian? Company.
What about Quattro What what based on everything they've
invented for underground mining and what what I just didn't come
to Jeremy Palmer's the first person that come to my mind of
who's going to be doing party. I'm sure, I'm sure burn Cutter
likes and robots underground because.
It'd be cheaper. Like they they always turn up
for work. I reckon Quattro you're wanting
people. Maybe if you want to work for
Quattro, I'd get in quick because there's a good chance
they're going to be first movers in humanoid robots and they're
going to replace bloody They're going to be building pace
plates, pump stations, installing pace diversion valves
and everything with Quattro humanoid robots.
If I'm a mining company, I can just hire these guys.
Is that easy? You can APC gurus light surface
underground engineer design construct mate they've patented
bloody everything so I just. Best in the biz?
Don't jazz. Don't let these humanoid robots
distract you from your foundations of APC and inventing
great things for underground mines.
There isn't open pits and sorry surface constructions.
As efficient as they get in the, you know, the engineering stuff
mate, the APC sort of things and can see them just embracing the
efficiency of of the humanoid robots.
I'm excited. Go Quattro.
All right, they're back on.
Just to close off, it's amazing the people that educate me, the
tailings dam chat about Lakewood and that.
So just some great people out there.
Just think Maddie just needs a nudge in the right direction.
So you can actually, when we're speculating of how long this is
approved for this Lakewood TSF tailing storage facility, you
can actually go on to D word Department of Water environment
regulation or something. They just type in D word
license, that's it, something D word license in the Google.
And then you just type in Lakewood and you can find the
actual licenses and approvals that have been granted for any
sort of any tilings, any whatever relating to water and
environment. So like here's the actual table
showing that for Lakewood and we're talking about if it's five
years. So it says from August 2029, TSF
2 stage 5, which is the final stage approved under this works
has a 7.3 month duration. So it goes out till a bit, you
know, mid 2030. So it was five years.
But, and I'll bring up the pictures here of like when we're
talking about these, these lifts, where are these?
Bloody hell, they're in there somewhere.
So you can see how obviously each lift is built on top of the
tails inside it and it starts concaving in.
So, and you can only pour tailings in or tailings to him
at a certain rate of rise. So that's why you can see the
durations like, you know, TSF stage 120 months.
By the time you get down to stage five, it's seven months.
So the decision you can get further lifts approved because
like the original TSF one, that's potentially going to
stage 10 if they get it approved.
But for each lift, it's a CapEx versus how much tiles you can
put in. So the rough number I got tiled
was about 2 bucks a tonne. So like if you got a 1,000,000
tonne plan, it's going to cost you roughly 2 capitalized over
different periods. 2,000,000 bucks a year in in tailings
lifts. So but if you once you get to
the high bid, it's going to cost the same amount per or more to
add a lot less tilings to the future.
So that's where the whole balance comes in.
But if you're charging a shit load for toltrating and you make
it a better processing guard, you probably lift the tilings.
Damn. So that was bloody fascinating
stuff. Thank you to the astute
educators out there. Awesome man go D work right.
What's happening? So the I think we've talked
about this Bob about are they going to leave Australia at all?
But they're they're they're coming back in.
Not big, but yeah, yeah, this is expanding.
And like old Ashanti. They are indeed it it appears
Maddie JD Angle got Ashanti. They've, they've come out today
with mats of resources who have advertised that Anglo Gold
Ashanti execute a $101 million deal to pick up the Lake Kerry
gold project. Now there's a bit of mail on
that on that headline, which I'll, I'll tease out.
Anglo, we, like you said, we don't put the spotlight on them
too much, but we, we, we should, I mean, they're a big global
gold miner that doesn't even have an ASX listing anymore.
But that's in, you know, the other reason we maybe haven't
talked about them too much is because their deal activity in
Australia has been sweet fuck all.
And until today, really kind of it's it's it's emerged that that
this deal that they're doing with with with MATSA, what
they're going to do. It's an option agreement with a
few conditions. And the crux of it is that angle
gold Ashanti, they get the option to buy the Lake Kerry
gold project for for 18 months. They can execute it within from
the satisfaction of some conditions precedent.
The only real upfront cash is like 500,000 dollars, 8,000,000
bucks drips in so after the CPS are satisfied and the big chunky
part only if Anglo exercises the option.
The conditions I was talking about, they largely relate to
roofers or consents or approvals.
Nothing you really think will kill the deal but things you
just got to get ticked. But because Anglo has 18 months
to choose to pull the trigger or not, it sort of leaves some some
ambiguity here. Should should Anglo exercise the
option that will pay 1.875% of the in situ value of the 936,000
oz gold resource at that time in cash?
Let's say gold is four and a half $1000 and Angle will pay
four and a half. 1000 * 1.875% * 936,000 equals roughly
75,000,000 bucks. So they're they're effectively
paying a royalty upfront similar.
They're just, they're just breaking down the, the
calculation of how they get to the number, which, which is,
which is an informative thing. Like they're, they're, they're
kind of giving us the investors an, an opportunity to understand
what is the value of an in situ oz near a, near a mill of a
major. Well, in Anglo's case they're
saying it's, you know, 1.875%. Or less than you thought.
Well, I think, I think based on your royalty chat, the other
way, it just shows like if they're paying 75 million based
on that, yeah, imagine paying 75,000,000 for it and having a
1.8% royalty attached to it. Yeah, like it just shows the
value. Interesting lens of A.
Royalty, yeah, the, the there's also about 20 million bucks.
That is easy if there's more answers found, but I'm just
going to kind of write that down to a very small number because
it's deferred consideration that, you know, Anglo's in
control of. So it's it's in the never,
never. So I'll, I'll kind of put a
picture in here. Here we have it.
See Sunrise Dam, Matt. So they're, they're selling the
red tenure there. They're keeping the blue.
So there's a few sort of pits that that Matt just holding on
to. They're selling all the red
there. And you can see right there,
it's close proximity to Sunrise, Sunrise Dam.
That's a lot of ground. It's a lot of ground and the
ground is actually important, which I'll I'll get to for for
all intents and purposes, you know, they're getting a fair bit
of regional tenure. I thought the context on Sunrise
Dam is, is important because you know, when a, when a major
finally acts on some regional consolidation, it's why why do
they need the feed or what's going on here?
Sunrise Dam produced 260,000 oz for Angler Gold last year, which
was 10% of their total production.
They they refer to it as a Tier 2 asset amongst their portfolio
of tier one and two mines. So, you know, if context drops
at tier one, this is at Tier 2. And there's a big focus for them
lately has actually just been lifting the recovery at the
mine. One of the initiatives that
they've pulled the trigger on is that a concentrated Leech
project late last year that's going to take them 12 months to
complete. But again, they're they're
hoping to keep lifting recoveries, which averaged 85%
in 2024. They want to get another 3%
uplift from this concentrated Leech project.
The last thing to keep in mind is Sunrise Dam.
It's a combination of low grade open pit and underground ore
feeding a 4.1 million ton per annum bill there.
I think 1/3 of the ore is coming from the open pit at 1.25g per
ton and 2/3 is coming from the underground at 2.5g per ton.
So, you know, if there's regional oz at at higher grade
than that, you can see how there could be a, you know, a bit of a
sugar hit for, for Anglo, especially at healthy gold
prices and. I think it's got much left
either Sunrise Dam underground, from what I hear.
Yeah, I hear gay. I've heard less than two years.
Yeah, they, they still have a reserve on it of of 1,000,000 oz
and it's been 1,000,000 oz for, you know, years.
But yeah, yeah, you know, you've got better contacts for me and
what, what's there but the the. They're pretty deep at the
moment. Yeah, I think it's a very
lateral like I think, I don't know how deep it is, but I know
it's just a rabbit wire, very lateral.
Gotcha. There's two ozones they're
pulling from underground ones carry another one I've forgotten
the name of for now, but the. I won't, I'll, I'll caveat that.
I've heard someone said, oh, look, it might finish up in two
years, but I just said there's reserves there.
It might be might finish up if they don't spend more capital to
go to the rest of it. That's probably a better way to
say it. Sorry.
They, they, with those recoveries as well, keep in
mind, so 85% the big focus on lifting recovery.
So I do wonder if part of this deal as well is like, can you,
can you get a better blend to get better recoveries by kind of
mixing and stuff that Max has got here as well?
Is that part of part of the, the, the rationale for this
deal? And, and an interesting thing
that popped up to me when I was looking at Anglo's reserves.
There's actually, they've got this nearby satellite deposit,
which is 3G per ton, which Anglo mostly owns.
It's called butchers. Well, I've circled it here and
you can see how close it is to, to Sunrise Dam.
It's just on the other side of the lake there now.
It's a 7030 JV with Northern Star of all companies And, and
they just picked it up when by Saracen, it was Saracens back in
the day. There's, there's not an enormous
resource there like you know, it's like 320,000 oz at the
moment, but it's higher grade than the current, you know, all
that they're pulling from the. From from either the underground
or open pit at the moment, but Butcher's well is all open
pitable. So I kind of my first thoughts
here were that it'd be interesting to see if this this
option agreement with Matzo is actually a bit of leverage to
get Northern Star to come to the party faster with Butcher.
Well, if they were, I don't know, dragging their feet in the
JV, not entirely sure, but I got some late mail before we started
recording that. Part of the rationale involves
Butcher's well here because the mats are tenure, which you saw
before highlight. There's a, a, a huge part, part
of that comes with a Causeway that kind of traverses across
the lake. And for Anglo to get a new
Causeway approved across the lake, it it, it, it need a
federal approval process and it just would take them forever.
They'd never be able to do it. So a huge part of the value of
this, this fair for Anglo is actually just, you know, getting
the ability to to utilise the Causeway that is part of that's
his, that's his tenure here. It kind of unlocks that Butcher
Well deposit, which they can actively feed into Sunrise Dam,
you know? Maybe Petronas are going to
disrupt the deal. It's still got the.
You're in favour. Still got the on market
takeover? Yeah, well, doesn't that look
suspicious in hindsight? Hasn't.
Hasn't sold a share or don't they?
Yeah, no, especially when Max's stock is up like 40% at one
point today. All of this is just like kind
of, you know, contextual. But I think the theme, the theme
is important because the dominant theme of the last six
years in WA gold has has been of these major international gold
miners. We've done fuck all except
leave. Late last year we saw Gold
Fields actually try to acquire Corolla, but they weren't
successful. That was revealed in the
information circular. And now Anglo has made a move
for a satellite deposit. I'm hopeful that these, you
know, international major gold miners will will be a bit more
receptive to deal activity and and and and look proactively to
to do do deals to feed their, you know, maybe hungry meals or
displace and lower grade sort of all with higher grade stuff
nearby, because that's that's really healthy for the junior
gold market. And yeah, it just makes the
investment rationale for for juniors that have a higher grade
ounces in close proximity to meals a lot more a lot better if
you're actually seeing the deal activity that's substantiate
corporate outcome. Buddy, imagine, imagine if
either of those two companies got active on M&A in Australia
in the mid cap space. Jeez, that'd be exciting.
Yeah, Gold fields take it over the Murchison.
I can say it just take them all. Oh, I.
Wouldn't hold my breath, but we'll see it's.
Recorded right, buddy? Hold your breath in.
And there's no I got nothing. Get your tickets.
Hold hold your breath to an
underground operator's conference. 100 bucks off.
Don't sleep on that one. But you're like getting paid to
hold your breath pretty much. And our other great partners
that keep the lights on. Mineral mining services,
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See how I mixed them up there? Just keeping everyone guessing.
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contained in this episode of Money of Mine is of general
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financial situation or needs of any particular person.
Before making any investment decision, you should consult
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