Righto buddy Miners is I tipped all the bloody MD's out there
today 'cause it's right across the screen.
I'd start drinking. You'll feel you'll feel better.
Oh, I feel better every time I talk.
Just say the word axis mine and technology, the trusted advisor
and drill all survey instrumentation.
But you can't. Oh, we'll be selling them an
idea too, right? Everyone's gone to idea Special
Special mentioned coming. The one company that doesn't
have a bad day. Access, Access never just NE all
day long, right? We're getting to the end of
earnings and holy snap and duck shit, there's some, there's red
on the screen even for people that didn't have bad
announcements, but and there's a few that we're going to go
through that just aren't really hitting the mark.
You'd say, unfortunately, we've got Trav.
You're going to no doubt do min Reds.
Mate, I'd call it a lot worse than not hitting the mark.
I call it a reckoning. JD you got CR 32.
Yeah, a bit, a bit lighter on and then I think Ali's going to
get into the Goldies. Very good.
Bitter red and bitter West gold. I'm I'm a light start today, so
I'll just be here cracking jacks.
And we've got a bit of a copper chat coming out tomorrow, which
actually is. Yeah, it was.
It was good fun with former guest Ahmad.
So that was a good one. Look out for that.
He's an easy ring in, isn't he? Like love you.
Love your bloody work, Ahmed. Absolutely.
Later away, Trav min raise. You got up early for the call
this morning and she's down, what, 10% on the Spark chart?
Mate, it's. That's a fucking lot of money.
It's brutal. It's, it's a, it's a horrible
intraday move for a company that big on it, on it, you know,
results, you know, and keep in mind results will come a month
after a quarterly. You, you hope a lot of the, the
bad news, you sort of cleansed and then you deliver your
results and you're down 10% more.
So there's a few wrinkles today. And it's, I think it's, it's a
big evolving story. What's what's going on at
Minres? And I'm keen to unpack it in the
best way possible, Maddie. But you know, I don't want to, I
don't want to kind of understate the significance either because
I just think this is, yeah, this is, this is a big deal.
Maybe a quick caveat on like the, the differences between the
the quarterlies and just about and the earnings because you,
you might notice the, the majors, the the BHBS of the
world, they'll come out with the, the annual and the half
year. They're not under the same
basket as a lot of the juniors that we see who are required to
come out with these announcements, which is kind of
specific for oil and gas and Hard Rock mining exploration
businesses. They come out with the
quarterlies, but you know, you get a much deeper look into the
financials of the business when the the annual results and the
half year results come out. And then of course like a min
res, we'll do quarterly numbers and you'll get the update on the
the broader strokes. What happened on a financial
front. Do you know the, the operating
costs these sorts of things as well as the, the production
numbers for the, the yeah commodities?
And guidance is a big one too. The market's forward looking.
Guidance and more clarity on debt more than phone.
Yeah, exactly. Way more deep, yeah.
Yeah, exactly. You get the balance.
Sheet and you get cashless trade payables and stuff matters.
Yeah, right now what's paint picture, mate?
I'm a Ding Ding on a mini Oh. Allergy.
So allergy so. So I've got a red red.
That's why I've got a red wine today.
I mean they, they, they reported the full year results
aftermarket yesterday. They let analysts kind of digest
them overnight and then they held a webcast in Sydney where
presumably you know, the team are fronting institutions.
They're in stock over E there. We like we we saw how kind of
grim the numbers were in the in the results and we were, we were
looking on screen to see where the share price opened this
morning. JD was it was brutal in the
spark chart, down 10% in no time at all.
Share price made its way into the 30s.
It's floating just north of 40 bucks as we record at the
moment. If you, if you zoom out on the,
on the, you know, longer term chart, the stock is down about
50% since May. And like you and I both listened
to the call JD, we, you know, we've both looked at the numbers
and we both agreed that that the sell off's probably justified.
It was. I actually liked that they came
out with the numbers. You know you get a bit more time
to digest. They did that with the quarterly
as well. They have done this in.
Yeah. And look, I've, you know,
privately between US and sort of you know, some somewhat publicly
a little bit too. I've just been kind of getting a
bit louder about how nervous I'm getting with with Minres and as
Chris would call it being a nervous Nelly 100%.
I'm 100% nervous about the company.
And and it's because like there's a lot worth being
nervous about if, if you're a shareholder in this business as
they advance over the next 18 months in particular, I want to
talk about the most important things.
So I think the the balance sheet would be the the place to kind
of start that, right. Number one, balance sheet 100%
despite what, what, what Chris kind of speaks to in the call
and you know, like Minres is a cyclical business.
Like it's, you know, I mean he, he often talks about having,
having durability through the cycle because the mining
services business has these like long term contracts with low
cost clients in Reagento etcetera, etcetera.
But it, it's a sick Minarez is a cyclical business.
They're exposed to the commodity cycle and I don't think there's
any kind of skirting around that.
And being a cyclical business, they found themselves in the
unfortunate position of getting the cycle wrong from an
investment perspective. In, in a, in a, in a cyclical
industry, you want to be counter cyclical with your investment.
You want to be spending money in CapEx in the, in the downturn
the, the extent you can, you can fund it and then you know,
reaping the rewards in the, in the good times.
Because to put it simply, they've, they've loaded up about
a billion dollars in other lithium investments at at the
height of the lithium, the lithium boom to put it simply.
And that's just all lithium is just unwound as everyone knows.
And they are, as you said, extremely exposed to that at the
moment. Yeah, it's it's, it's probably
more than just the specky like lithium investment stuff that
they did. I mean that, you know, I mean
Onslow kind of it's like $3.3 billion in CapEx there.
There was, there was a lot of CapEx into their existing
lithium operations as well to you know enhance and improve and
expand, you know. I don't.
I don't think that billion counts what we don't know was
paid for Bald Hill either. Yeah, it's north of a billion, I
think. Yeah, yeah, yeah, yeah.
And I mean, look, they've, they've, they've like, because
the, the, the prices of the two commodities that they produce
iron ore and lithium, they have come off tremendously a long
way, leaving them with a giant level of, of debt and
increasingly challenged task of servicing that debt under the
kind of status quo scenario that the company exists today.
Specifically, let's, let's talk about some of the, the numbers
relating to the balance sheet, right?
The quarterly announced last month, they stated the net debt
was 4.4 billion US. Now like I know the, the
accounting technicality, but the like the $600 million prepaid
like was, was not classified as as debt, But if it, if it walks
like a dark and it cracks like a dark, it's debt.
So call it $5 billion net debt. Now net off the cash and the,
you know, and, and, and the statements today break it down a
bit. There's, there's this 5.4
billion in drawn gross debt at the moment, $500 million of that
is, is asset financing kind of which popped up a bit out of
nowhere, but hadn't heard anything reported anyone had.
And to kind of put it into perspective, like that's a $5.4
billion of drawn gross debt. That's, that's literally the
same as the, the equity value of men's market cap today in U.S.
dollar terms. So exact same amount of debt is
the got equity right now. If you just kind of think and
like when, when you, when you think of comparable like mining
companies, how often do you ever kind of see that, that ratio
for, for a miner this big? It's a, it's a pretty kind of,
you know, rare, rare occurrence, especially in modern history is
like a lot of the larger miners have have wanted to, you know,
maintain lower, lower debt levels.
So the, the big thing investors are looking for, you know, what,
what cash flow can actually be used to service that debt
because you've got to pay that down eventually.
Sure you might, you know, sure you can kick the can down the
road and and of course they don't have any, any principal
repayments or whatever until like FY20 7.
But even if you refi it, you've still got to pay the interest.
So the big question is like do they have the the free cash flow
or are they going to have the free cash flow available to pay
the interest expense on the debt, right?
Is that is that all they have to pay the interest?
Is any of that interest capitalised?
These are these are bonds like you know you've got a yes it.
Does not. Not capitalised, Yeah.
Yeah. I think, I think when you say it
like if they did not have the mining services division, that'd
be completely bloody rooted like that's.
Mining services is the is the driver of this business, yeah
And like I actually kind of have the thing I want to
contextualise is like where's the free cash flow in FY24?
Because if you, if you just look at the, the, you know, the, the,
what they report as kind of operating cash flow, they, they
report sort of 1.3 or $1.4 billion of, of operating cash
flow, right? But included in that for FY24
was a build up of $1.3 billion in, in working capital.
Basically trade payables growth right now.
That's, that's not, that's like you got, you know that that
stuff unwinds over time. You got, you should net that off
sort of really think about kind of thing.
So if you net that off like where's where's the operating
free cash flow in this business in FY24, it was basically non
existent. I'm not talking about any money
spent on financing on cash flows.
I'm not talking about any money spent on CapEx or investment.
This is operating cash flow. It's quite simple to think about
in the context you know, of iron ore and then breaking down
lithium. Yogan doesn't make money at the
current prices. They're shutting it down.
The Pilbara hub, you know, isn't really making money.
And then you can just see from the numbers they put out on Bald
Hill, Mount Marion and Wagner, they are just not making money
at these prices. And Chris said it himself, you
know, he said I didn't think lithium would fall below 1000
U.S. dollars for spot 6%. That would speak to EBITDAR and
and PAT, but those are you don't pay, you don't repay debt with
EBITDAR and PAT, you repay your debt with free cash flow.
So, you know, we're going to talk about real numbers here,
not the other numbers, accounting numbers.
So yeah, I just, I just think it's, you know, it's kind of, if
you think about FY24 as well. So you've got a year where like,
you know, after I make that deduction, where was the free
cash flow? I don't know.
Now since FY24 have commodity prices going up or down for
their commodities. They've they've come
substantially lower for the commodities that they're exposed
to what they would have realised in FY24.
So just adds a big shut like, you know, a big, a big amount of
uncertainty on the on the durability of their business to
actually generate free cash flow to service their debt.
It's not just the the free cash flow you're specifically honing
on in FI 24 as well, because it's no surprise that free cash
flow was hugely negative last year.
They sunk a phenomenal amount of money into Onslow.
It's you know, so it's no surprise that cash went back
massively. But even operational cash flow,
if you're not taking into account the money spent on
investing, you know, in that section of the cash flow
statement, you're still kind of scratching your head a little
bit. You know like it like we've sort
of said he'll point to mining services being AI think $550
million EBITDA business, but you know the the lithium and the
iron ore assets are are very much struggling.
I've got sort of probably four other big talking points.
What second one is that no dividend.
That's kind of unexpected because just, you know, you
always just sort of expect, yeah, it's run by a founder that
owns 11% who likes a dividend. You know, you kind of expected
to be even even a minor dividend, but.
And then the other major shareholder, which is what the
other founder lot the, I remember in the last call, he
says we're not stopping paying the dividend 'cause we like
that. Yeah.
That's a. That's a big call.
It's look like I commended in the circumstances for sure
'cause I think like, you know, what we're seeing here is a
theme of basically austerity at the moment, which is, you know,
the right move. It might be like come, come
later than we that should have, but it's the right move.
And So what else we got .3. I think there's a theme of cost
cutting, but, but you know, pretty bulky chunky CapEx ahead,
which makes you kind of a bit more have a nervous nally on the
on the on the, on the debt front.
So like, you know, Chris in the call, he's pretty emphatic about
the cost minimization wording, you know, around the business.
I think the, the fact remains though, that CapEx guidance for
FY25 is a staggering U.S. dollars 1.95 billion.
That's a hell of a lot more money that still needs to be
spent. So, you know, your net net debt
kind of is going to grow even further and kind of get even
more out of whack and it's going to require even more, you know,
free operating cash flow like to, to, to service it over time,
which that's where the fragility kind of lies, right?
So, and I, I think that kind of leads into, you know, point,
point #4 and that's that the, the Onslow ramp up sort of seems
to be readjusting there's. And I think this goes to the
point of my guidance changing and everything like that.
FY25 guidance for, for Onslow tonnes on a, you know, 100%
basis is now about 80 million tonnes.
Previously that number was 20 million tonnes.
So so there's a readjustment in what what Onslow is going to do,
you know, FY25 now that's a downgrade a month ago.
They they actually even spoke on the yeah, a month ago on the
call about accelerating to 50 million tonnes per annum
nameplate, you know, faster at Onslow and that that's
completely on ice now, but it's on ice after having put these
down payments and pre orders in for more transshippers to
service it. So, you know, don't know what
what happens to that money now. And I, I just like, you know,
with this, with this readjustment of, of Onslow's
ramp up, that's kind of the fragility.
What's, what's the cause of it? Why, why the downgrade?
You know, these things that that might actually, you know,
inhibit nameplate to some extent.
And and because the ability to service that debt all depends on
Onslow kind of coming online and and ramping up the plan.
In fact, there's not much room for error.
There's so there's so many moving parts with it, like with
the with the haulage and the shipping outside of the just the
mining, there's a lot, a lot of party that's that whole Rd like
that has to be humming. Yeah.
And it's I think it's important to to note like the whole roads
not finished. Yeah.
So they're what they're, you know, trucking and shipping at
the moment is because they're using this this service road and
and that presents it's own kind of challenges.
Like you can see this kind of awful picture here.
If if one of their their trucks is sort of, you know, tipped
over on the on the service Rd. Fucking the drum was all right.
So I mean, there's this, yeah, you obviously are faced with an
enormous amount of limitations when you're when you, you know,
you're trying to reach crazy kind of tonnage rates using,
using a road like that instead of, you know, the proper built
road. And then if you, if you just
like think of, OK, how much do you need it?
How much does min res need to produce to sort of service that.
Now Chris likes to talk about a $25 margin on on Onslow tonnes.
Personally, I think that's going to be pretty hard to achieve.
But like, let's take his his word for it.
So $25 margin on Onslow tonnes, assume it's a real number like
then it's it's spot prices, you know, min needs at least kind of
15,000,000 tonnes coming out of Onslow to pay the interest
expense on the debt. And if final prices compress
even more than you know. And if, if you kind of, if you,
if you take some of his numbers with a bit more of a grain of
salt, like how much, how much fat do you kind of have in
there? You know, how like how fragile
is is the the the the ability to service this debt kind of
especially when you think you've had challenging it is to bring a
new mine online. Like we've just seen so many
instances where you know, things aren't as novel or as
straightforward as our kind of Excel spreadsheet suggests.
And, and when you have just a very high, very large debt
quantum, it puts a lot of pressure on the equity.
So, you know, they need everything to go perfectly from
here. And, and, and there's the risk.
What what if there's a cyclone this wet season?
What if, you know, they get a bunch of rain up there?
Usually it's a cyclone Every Yeah, wet size.
And I think we've had a few decent like yeah, seasons
lately, you know, might be true. For one, they're just fragility,
right? And and and it makes equity
holders nervous. Now these which brings me the
the fifth point, like you touched on, Maddie, I think
they're just a lithium reckoning, you know, like, and
this was a pretty sombre part of the part of the coal jetty he
opened talking about like the lithium market.
Personally, I think Minres has a lot of explaining to do to
justify their market behaviour here.
You know, we were talking about like the lithium market with
last year as as sort of Minres was kind of, you know, aping
into all of these kind of hot copper lithium stocks, like at
the top of the market and lithium prices were were far off
the top then. But I mean it was min res and
you know, and Gina in some instances that were kind of, you
know, buoying up the the WA lithium.
Yeah, the the. Equities didn't pull back
proportional to the lithium. Because there was this, there
was this M&A, yeah. Like there was AM and a bloody
premium on it all. So like what?
Why? Like why was there FOMO at the
top? You know, it just, it's very
strange capital allocation like in it just, I think it just
requires some introspection and A and A and a bit of an
explanation to shareholders. But I think if you look at it
like, yes, it's, it's, it's shit now.
But if they're if they've got this fundamental long, long term
view on lithium, like might be something in five years time, we
come back and discuss and say, look, they fuck about they they
they struggled like fuck after it.
They paid a lot of money for these assets, but they did get
their foot on them and they whether they'll reap benefits if
the lithium does rebound in the future, we don't know yet.
It's like might be a lot of short term pain for long term
gain, but we just don't know. But it's survival during this
short term, as you said, just to be able to service debt that is
the is the biggest risk. Big time.
And I would argue that it's not appropriate to, to make those
sort of bets when you're, if you're, if it means you're
adding like further unnecessary pressure to your balance sheet
that could, you know, I just, I just think like, you know, could
a BHP do that? Because it's just a fuck, it's a
rounding error. It's not going to actually move
the needle to the equity. I just think it's a yeah, I
think there's a a different kind of mentality you need to have
when you're forecasting. At the time they were
forecasting their, you know, peak net debt to kind of be this
this half year we're in right now.
And you know, what have they done?
They've just kind of amplified that made everything more
fragile. And you know, because iron ore
prices have, have, have come down, then all all of a sudden
everything looks pretty grim and they can't couldn't sell what
they all that lithium stuff, what they paid for it.
I'd argue his mentality is possibly not saying he doesn't
care about the debt, but he just knows he can either get more
debt or raise money or he'll do whatever it takes to get his
hold on, get his foot on as much things as possible for the long
term plan for min rez. And it's yeah, I don't think he
lies when he goes off about his view of what others are saying
about his debt. I think he's like, I Will
Survive. Although honestly, I think he
thinks that. Yeah, I think you're probably
right. He probably does have a few.
It's just, it's just not, it's not like it's not sound capital
allocation, you know, it's like, yeah, that that.
Reminds me of Ford. It's Fortescue early 20 tens.
They're in sort of the same position.
Like they'll fucking levelled up way more than.
This they were but but the difference is like Fortescue
kind of built in a, in a in a down market and they reaped the
rewards over time. You know, they, the, the, the
Onslow expansion and, and the other thing too is like
Fortescue actually built rail, which like obviously produced at
a much lower cost than, you know, road.
And, but they had, they had the commodity cycle on their side.
They had, they expanded and, and grew into the, the growth of
China. And like these, these companies,
our industry timings, everything.
You know, you can't get the cycle wrong.
And if you get the cycle wrong with a, with a bunch of debt,
it's, it's a really challenging outlook for the equity like,
which is interesting because you hear this is one of the more
fascinating kind of snippets. I think this was, you know,
Speaking of the difference between the, the debt and
equity. I think, you know, Chris had
something to say about the, the different mentality between his
shareholders and his bondholders.
Have a listen to this guys. The time I get to this time next
year, you'll go. You'll be like my bondholders in
the US. They go, what's the problem?
What are these guys not getting? And I go, you need to go talk to
them. I mean, when I go to the US and
go to the bondholders, we just sit around and talk about
fishing and they go, we love the business, it's amazing.
Can we lend you some more money? And all right now I've got a
nervous bunch of money in Australia.
Count me one of those nervous numbers.
So good. What a legend.
Talking about fishing. But that but that's where the
the whole the Min Reds thing, the story and the belief and
everything, it's because he's like he gets on there and says
like that he's he's relatable. Like he's, he's, he's got such a
fucking brand behind him. I think that buys you time, but
it, it doesn't help you run away from an inability to service
debt, you know, like it. You know, he's, he's, you looked
at the share price sort of like 5 months ago and tremendously
resilient. It did the face of kind of, you
know, challenging kind of commodity markets.
And I think a bit of that is just like this, this, this real
vehement belief that kind of Chris will figure it all out.
And I don't know, I just, I just, I sense, I sense a bit of
a, a, a change in sentiment there as well, you know, broadly
in the market. What else you got from the call?
I I think it's worth just kind of pondering about about end
game a little bit like like, how do they, how do they navigate
out of this situation? And like how do they deliver the
balance sheet further right? Because like, you know, so well
and could to say in hindsight, but like, fuck it, 90 bucks a
share. They should have raised equity
and, you know, put the balance sheet question to bed and just,
you know, wrote out the cycle kind of without the worry of the
debt. But you know, that didn't happen
And, and we're here, but what are their what are their
options, right? Because like, personally, I
don't think like status quo or hoping commodity prices sort of
just rebound from here is like a, a, a corporately appropriate
plan. AI think like, you know, we, we
have to talk about the, the levers that they have to, to,
you know, at that their disposal to actually address the, the
balance sheet issue. First one asset sell down.
That's right. Like they sold down half of the
whole Rd. Like what else could they could
they do? And I want to play a bit of a, a
snippet here that kind of Chris had at the beginning of his arm
of his of his of his chat today when we get a.
Project like Onslow Iron or Mount Marion, we own the mining
services on those projects. At any given time, if we choose
to, we can go and sell our shareholding in the in the iron
or the lithium. But those projects that we got
for mining services are life and mines.
So Onslow Iron, it's probably around 50 years plus.
So it's kind of. Like a sub point to what he was
sort of saying, but to me it felt like he sort of slipped out
that there is this, you know, potential that they're looking
at. Yeah, just retaining the mining
services contract at at Mount Marion or Onslow.
Never said anything. Like that before, I don't think,
I know he's always said he's got a lot of levers to pull, but I
don't think he's ever mentioned selling down parts of projects.
Yeah, specifically. To my.
Memory. Yeah, well.
He has talked about the fact that their their mining services
contract's a life of mine and they stay even if they they
don't withhold it. But that the wording that time
just felt a bit more like, you know, a realistic labour that we
could pull is actually yeah, like, like like selling the so,
so I just, if you just think about their portfolio of assets,
like what, what could they sell and what could they get for
them, right? Like you think Wodgina, that's
their best asset, right? No, no, no, no denying.
I think that like if who would buy that they'd be bidders?
Like I'm sure Pilgrim would would love to have it.
And I mean, I mean, heck, Albemarle might even might even
have to sell their stake as well, the way things are going
for them. So 100% of it might be.
Yeah, I'd be. I'd be.
Interested to know if like if Wodgina is the best asset on a
mining front. I'd like to know if if it is the
best asset asset on cash flow for them.
Like the fact that with Mount Marion, just what they earn from
the mining services Afghan thing, even though it's a the
mining, the mining and the product isn't as good.
I'd be interested to know if that is sort of a better asset
for them. Yeah, well.
Let's think of the the perspective of a buyer who's
going to have to buy an asset with min as the mining
contractor. So you're kind of left with
whatever economic upside there is that min don't take for
themselves as contractor. In that case, you know, wasn't
it probably be the pick of the bunch?
And I'm sure like wasn't it would be worth a fair bit in the
portfolio of Pilbara because they traded a pretty hefty kind
of sum themselves for, for what? For what their cash flow is.
But yeah, so like that's a lever, but he didn't say Wodgina
on on the call. Then he mentioned Mount Marion
and he mentioned Onslow. And if you think of Mount
Marion, like, yeah, when you when you remove like I don't
think Ganthang can buy anymore like this, you know, fair.
But get in the way of that. Would you would you want to own
half of Mount Marion? Like if, if, if Min was a mining
services contractor? I don't know, just, you know,
you might just be a bit worried about what's kind of left for
you in that scenario. Onslow it's just the value of of
that if they were to sell down for that like what are they on
is this kind? Of TV 70. 57. 57 yeah so ish.
And it all hinges on the the performance of the whole Rd,
which is, which is currently unproven.
We need to wait for that. There's just kind of contingent
value that is a little bit unproven until we see how the
whole Rd holds up because some people are uncertain about that.
The gas like I don't I don't see how they could kind of get more
than 500 million bucks for for, you know, from a partner for 50%
yeah, like 50% of the gas asset. That could be wrong.
But you know, I'd like to be wrong, but it's just my gut feel
on that one. So other options maybe they
could, they could, they could actually do a sell down of
certain business units. Like I could see a world where
they they, yeah, brought, brought in a, a shareholder who
bought, let's say a 20% interest in just their mining services
business, right? Yeah.
And they've added and that. Would be pretty easy one to do
like, like there'd be some competition for that because
it's obviously it's a very proven business.
Yeah, yeah, yeah. And that's an interesting thing.
Maybe like, you know, someone mentioned to me that could spin
out their mining services business.
I think that's just a challenging thing to do, like in
a bit of a cash grab or whatever along the way.
But I just think that's too challenging because you leave
this strange miner with menace with a, you know, just, yeah, I
just don't think the pro forma quite works out if you did that.
But you know, they could even like, let's say they bundled all
their lithium business unit together and again, did it
didn't minor like maybe they could sell sell the entire
business unit or they could simply just sell, you know, 49%
of it. But they were, they were they
keep the rest. You know, I think those are
those eruptions and they might they might be explored in the
kind of the asset sell down space.
The glaring other one is, is raising equity.
What most kind of, you know, companies do is they, they have
sort of balance, balance sheet stress.
There's, there's a couple ways they could raise equity, right?
One is typical capital raise. You see them all the time at a
discount. I mean, they're in the 40s
today. Like I don't know when they,
when, when they pulled the trigger on that because, yeah,
there's like a lot of to, to admit you've got to raise equity
is a, is a challenging thing to do.
And especially if you've, if you've talked about not
diluting. So I I just don't know if if
they'd be as kind of sensible about the, the timing to do that
as as you might might see otherwise he'd he'd only.
Have to if they raised a billion, he'd only have to tip
in 100 himself to keep you prior.
Rather, he's probably he's. Probably.
Got 100 Yeah, I. Don't know, but the, the yeah, I
think he'd probably just get deluded to be fair, because I
don't if he runs his business that levered, I don't know.
Anyway, the, the, the other thing I think of though is
instead of doing a raise at a discount and, and, and in stores
and all that sort of stuff is, you know, there's, there's a
strategic kind of come come to the rescue a little bit.
And maybe, yeah, maybe end up owning 20% of min res or
something like that with a with a big cash injection.
And I'm thinking of like like a Gena, something like that.
You know, I wouldn't, I wouldn't, I wouldn't rule it
out. I think you'd just never quite
rule out Gena. Yeah, yeah.
And and with that, a lot of the project sell downs and it's,
it's just like this. It's all part of this long term
plan. It's like it's all there,
everything's there for a reason and it's like up to the position
now where they have to possibly alter the long term plan just to
pay service debt. But yeah, I, I just, I think
one, you probably didn't mention you'll, you'll just get more
debt. I.
I think the upper bound of that is pretty stretched.
Like I, yeah, like, like it's a good point you make, but I just,
I like, you can't just leave her up forever.
You know, like the, the more debt you have to capital
structure, the more fragility you add, especially if you don't
have the cash flows. I'm personally surprised that
the, the bonds that they've got in the US aren't trading
impaired yet. You know, like, like I'm, it'd
be interesting to see when the US market opens, but they're
still kind of trading like as if they're going to be kind of, you
know, repaid entirely on the whole and everything like that.
They're not, they're not trading like they're impaired yet.
So that that's one to watch, right?
Because the moment that happens comes a increasingly challenging
to add add any more debt to capital structure and the
incremental amount of more debt you add, you have to pay higher
and higher interest rates on that and becomes increasingly
challenging to ever generate a return sufficient to ever pay
higher and higher interest rates off.
So because they're not. Like they're not like knocking
out assets a lot, a lot of them like the the the onslide thing,
the value lot, the Onslow on to be yeah, that's we'll hopefully
make cash once the price goes up.
But it's if that area that district expands and they click
the ticket on every person using that haul ride, whether they can
get enough, there's enough time to get the trucks on there
because it's going to be that flat out anyway there.
There's so much value in that for them in the future.
So it's, yeah, I think it's obviously under underappreciated
how bloody valuable that services division is.
And they're little infrastructure jobbies.
I think that strategic. Equity investment at the Headco
makes a lot of sense and I think most would probably say from a
shareholder perspective might find that more palatable than
sort of divesting or selling down assets and it'd have to be
a placement. Yeah, like it's a so it's a
placement to a new cornerstone. Yeah, Yeah.
I don't know if the interest. Is there to be honest, like, but
you know, it's, it's, it's an option for sure.
I doubt he'd want to lose control.
Or have that, have that in that influence.
Yeah, that'd be a big one. Totally it.
I mean, there's. None of these options are good
options, right? There's nothing you're like, oh,
this is great, but you know, it's it's a predicament that
they're in because of pro cyclical investment, not counter
cyclical investment. And that to me is like corporate
finance one O 1 in cyclical businesses.
Yeah, that was summed up really well.
By Glenn Lawcock the question he sort of asked and I think the
the response from Chris was kind of telling how he.
You know he sort of without. Saying it, he kind of
acknowledged that they'd missteps perhaps in in the past
year or so and they've found themselves in or, you know, in
between a rock and a very hard place and that that
acknowledgement. Was important, you know, like I
think it was the first call that I've listened to where the tone
had changed to, you know, there was a recognition that austerity
is required now. Whereas beforehand, every kind
of call where Chris has been a part of it's been we're going to
do this, we're going to grow this.
We're we're adding this, we're adding this where, you know,
everything was kind of, you know, we're going as fast and
hard as we can. And I think this time was the
first call where it was there was an ounce of introspection
and acknowledgement that like, like you just need to trim all
costs and see things through right now.
Not yeah, strangle costs. Yeah, wonder if he'll.
Not that you get much money for him now, but he might like
whether he'll start unwinding somehow those all those minority
stakes in the lithium companies, yeah.
I mean, and that's you're not going to get those forum.
But like. Might have to.
And the optics is a. Challenge as well, sort of
having only, you know, invested in them a year ago and then
having to unwind them so quickly without sort of realising the
probably the full potential that they they wanted all those
assets and companies if you bought the optics of an equity.
Race is way worse though. Yeah, well I get them and get
the cash, but yeah, heck can you find a buyer?
You know, it's not like you can just sell these things on market
considering you bought Delta. At $0.90.
Kelly Metals at 70 like you know, what do you so you could
you could group those stakes and all of your your ownership in
your lithium assets kind of together and call it, you know,
your min res lithium business and do a do a 49% sell down of
that. So someone could have an
indirect 49% interest in those shares potentially, but yeah.
Yeah, we're white non lithium. We're white non lithium.
That's that's the I think got a. Kicker.
You're right. What do you reckon?
'S more sensitive lithium price or on oil price to them, so I
think. Iron ore just, it's just like a
volumes thing. I think the, the, the biggest
sensitivity then price is a big deal.
Like your final goes to 150 and stays there for the next three
years. Like things will be OK, right.
But but the biggest sensitivity is actually just, it's just
going to be that the time dependency of, of Onslow, like
we've had a recalibration now of, of tonnes and and meanwhile
they've already the pre selling future production at the same
time. So think things in the next sort
of 18 months, especially sort of, you know, 2-2 year, three
year period. That's that's kind of that's
kind of peak, peak risk in my opinion.
Because, because if, if if anything goes wrong at Onslow,
like it just yeah, leverage amplifies the upside and the
downside in in ways that, you know, can be wonderful and and
horrible. But as he said in the.
Paper It's a shitty time to be an MD, shitty time to be in
business. And like.
Especially what they've done to, you know, I don't know, the
whole rise's not finished yet, but all that trend, the trend
shipping stuff and like getting that online, that's pretty
bloody impressive. But just to come out the back
end with, yeah, prices dropping, it's hard work.
It's freaking. Hard.
Work. Fuck, of that I think stories A.
Lot a long way from finished and I'm very interested to see how
the next yeah little period goes because I, I think this could be
the corporate story of our generation, you know, like yeah,
I, I, I, I know I say that sure, I sure hope it isn't.
Yeah, like it? No it.
Could be. It could be either way.
It could be the corporate story of our generation.
Either way. You know, like, people have had
very similar, like, sentiment about Fortescue, like you said,
Maddie. And they come out the other
side, you know, could, but it's, you know, time before that it
was Sons of Gwalia, you know, like this is the story of our
generation, in my opinion. And I'm just I'm hooked.
Yeah. Yeah.
All bloody rooting for them because all the bloody people
that work there, yeah, just want to see you just just fuck it.
Just want everything up, everything.
As if I miss. Billionaire.
Said alright. Good work Trav.
Sensational dissection there mate.
S 32 JD Yeah bloody we'll be a. Bit lighter on here but I mean S
32 are not. Going to be the corporate story
of this generation, Gara tell you that.
Maybe well, the crux of today's announcement is that you know,
you can see it in the share price versus the share price of
in res S 32 was kind of flat, marginally up.
It wasn't a massive change on expectations, no massive misses
or anything like that. I still think it's it's
interesting to see the decision making for this this kind of
company, what they've done in selling Illawarra and how that
kind of plays out over time. I mean, essentially all the
money they're getting upfront for selling Illawarra like US
roughly a billion has been sunk in the past year and through
FY25 into MOSA. So that is just kind of
astounding to to think about the the kind of bit they're they're
putting on on that one. Obviously it's not quite a, an
Allison or Minres scale of bit, but it's, it's a big decision.
So, yeah, I mean, let's get into the the numbers today and sort
of see where this business is, is kind of that they did
revenue. This is taking, you know,
underlying numbers here. So taking into account the
period that in which they owned Illawarra because the sale
completed today, but 8.3 billion in revenue, underlying EBITDA,
1.8 billion and underlying EBIT of $890 million.
Now Illawarra made up 50% of that that.
So that's that's pretty fascinating and it wasn't
without its problems. It needed a heap of capital to
be sunk into it, you know, last year and in the foreseeable
future, you know, so we've sort of spoken from a stance of, you
know, a positive outlook on the commodity met coal.
But Illawarra wasn't, you know, without faults.
It it needed a lot of capital would be sunk into it.
There was a long one move that was done in the past year, but
its contributions. Were sort of like heavier in
that year kind of as a result of the aluminium aluminium market
kind of being pretty soft right exactly so if.
You're, if you want to take a snapshot in time from FY24,
ignoring Illawarra to get a feel for what the business is looking
like. We're talking about, you know,
top line revenues, 60% coming from alumina slash aluminium,
10% copper, 10% zinc, 10% nickel, 10% manganese.
They're all rough numbers, just to kind of simplify how to think
about South 32 and weird that it's not.
Silver anymore, you know, Cannington used to be the
highest grade silver mine in the world.
Obviously doesn't contribute much now.
Yeah, I mean, I think. Zinc.
Zinc is you know that attribute is.
Why is that zinc? Like a zinc equivalent?
Yeah, so in hang. On.
I think they produce a lot of silver at that KGHM, the the
Polish line that they've got as well.
There's a lot of silver there. How's the how's the balance
sheet right mate? It's looking a whole lot better.
Than than min res is, but you've got to kind of take it with a
huge pinch of salt given that they've sold Illawarra and
they're getting all the cash in the door.
So they announced a dividend US 140 million in divvies as well
as AUS $200 million buyback. So obviously having the.
The sale of the asset changes their balance sheet massively.
They were June 30th before the asset sale had gone through in a
net debt position to the tune of 760 million.
But that is on a sort of pro forma basis roughly US 100
million in net debt taking into account the cash as well as the
dividend and the buyback. So the business is in, you know,
great health if you if you kind of call it that.
But they've foregone a lot of future earnings.
And, you know, you can kind of look at that with the context of
Min Reyes, who we've just spoken about, and imagine what things
could kind of look like if if they had, or maybe if they do
have to sell an asset and they can get a decent price for it.
You know, yeah, things will all of a sudden look a whole lot
better. But you've sold a a decent
amount of what your future earnings are.
So the next thing I was pretty keen to zoom in on was
Australian manganese, given everything that's kind of gone
on there in the past six months or so, and that that had some
pretty positive announcements. So they got some insurance money
coming in. Oh, does that come in?
Pretty quick. That has come in very.
Quick quicker than 29 metals. Must have been ACRA Jobby has
has to. Must have been if it's that
quick. I don't.
Yeah, well, I don't know who else actually helps out with
mining insurance these days, mate.
I was. I was a standard A. $125 million
just like that. Yeah, that's Dave.
That's got Dave Harrison's name written all over it.
So do you. Yeah.
If there, if there's other people doing insurance, they're
probably not getting me. He calls today or is CRE is the
phone is off the hook, mate. Morning insurance only done by
one company these days. Yeah, Yeah.
Good job on that CRE. I'll assume it was you.
Well said so. They, you know, there's two
parts to it actually. There's the CapEx, 125 million
is the CapEx, they're 60% that they have to sink in.
And then yet you know you're still working on getting the
cash back for the the lost revenue.
Again, this is held within Chemco, which they own 60% of,
but essentially that's going to be spent over the next few
quarters. And, you know, they just submit
the thing and CRE pays him out. So pretty, pretty easy down
there. But you know, of, of note,
there's the, the Wharf that needs to be fixed.
We've seen the, the photos and everything at the time, but they
actually stressed themselves that it's not just the Wharf
that needs to be fixed. You've got bridges on, on Groot
Island there that need to be fixed as well as dewatering.
And they were, you know, showing off a few photos that that's not
a, you know, a super simple task.
There's a a lot of water. They spoke about the number was
36 gigaliters. Interesting to put that into
context. They say they get 10 gigaliters
annually on average. So it is a place again like
we're saying with minres that gets a lot of downfall.
It gets, you know, cyclones coming through every year and
you know, that's, that's just part and parcel of operating in,
in that part of the world. So in terms of guidance and
getting this one back online, they got it to 1,000,000 wet
metric tonnes which is under 30% or roughly 30% of what your pre
cyclone operating levels were and that's FY25.
They reiterated that it'd come online in Q3 of this financial
year. And interestingly, they will
pose the question, given everything going on at, at Anglo
and the trouble that they're kind of in, which became to kind
of scoop up their 40% of Gemco. And yeah, the, the answer was,
yeah, we'd we'd have a look, we'd be interested.
So nothing's happened on that front.
And they, you know, being a being the kind of organisation
they are, they were very, you know, they spoke very positively
of Anglo, said they'd been great partners, yada, yada, yada.
But I think they would be interested in, you know, talking
about kind of forced sellers. Anglo's another one that kind of
falls in that basket, I'd love to say on an earnings.
Call where they say they've got a shit partner, Is that ever
been? Said Chris Ellison.
He said it about. Albemarle, you know it, he he
said kind of, you know, that they're not a complete shit
partner, but this was a, a specific example where he was
pissed off and he, you know, he said it on the the earning
school and he said, oh, the one today talking.
About how they turned, stopped, turned off a trial.
I was back back in. Yeah, last cycle, kind of.
Yeah, that's what I said. I didn't agree.
With that. But he said don't put that in
the. Papers so we, you know, just
this didn't it didn't happen. It didn't happen.
This was one from. Yeah, he was talking about the
same issue, but when he'd spoken about it at the time maybe 3/4
ago, if I take, he was a bit more worked up about about
things and about their kind of execution capability I guess.
And how's how's Worsley? Going JD, that's a really
interesting. One, and there were a lot of
questions on this. This was one of the big
takeaways we had coming out of Diggers, just how hard getting
things permitted is in this day and age in Australia.
And you know, this is, this is WA with a lot of people kind of
throwing stones at NSW and, and Victoria, but this is very much
in our backyard here. And he had a few interesting
things to say to, to kind of sum it up, the, the take away, my
kind of gut feel was that they, they get a positive outcome to,
to give people a bit of a reminder.
There were a lot of conditions put on the approval that they
got given, and essentially they said that they're shackled by
those conditions and they just can't operate effectively with
them. So yeah, he he was alarmed about
a lot of things that were kind of pointed out, but things are
being kind of worked out. They spoke about getting a
result in early November and, you know, they were very
explicit in saying that we need a timeline by the end of this
calendar year to to make a decision.
So it does sound like things are progressing on that front.
Why I kind of say my inclination was that there would be
something positive that comes out about it is you put it in
the context of everything that's happened in WA about the lithium
industry, the nickel industry. You know, Yogan, a lot of jobs
are being rolled off and there's an election in WA next year.
You know, job losses aren't good for political, you know, the
incumbent political party. And I think with a sort of
veiled threat of we don't want to lay off.
I think 1800 people was was the number that they can come to an
agreement. And yeah, there's a few phases
to this. There's, there's always a nuance
with these things, but hopefully things get get worked out in a
sort of appropriate environmental front as well as a
appropriate kind of business front and they can kind of find
common ground that that works for everyone.
And that's S 30. Two, good on your JD.
The election. Remember, we're a liberal
podcast, JC. Now you're working, you've got
to like Liberal, but we're an apolitical.
Podcast. Ally JC.
You're back. Oh, all the.
Bloody YouTube. Fans will be very happy.
Oh, very. Where's GC?
Where is GC? Oh, she's back.
So no, I'll just finish off the day with a couple of the the
Goldie's annual annual results. So starting with West Gold.
So FY24 is yeah, bit of a what's been described by some as a
watershed year for them. Big transformation from
probably, you know, one to two years ago.
Everything up financially, notably free cash of 86 mil
versus you know only based basically break even last year
they achieved the revised production and cost guidance
sort of producing 227,000 odd oz at just shy of 2200 an ounce
Aussie and they're now completely unhedged and and debt
free. Interestingly, they had a slide
on the fact that total all in sustaining costs had reduced
year on year. But actually on and per oz basis
those costs are higher, about almost $200.00 an ounce higher,
larger because due to lower production with mining suspended
at Paddy's flat and they're paying out a 2.25 cents per
share dividend which was previously flagged.
I think the interesting one to look at which was raised on the
earnings call today is, is the cash build and the net credited
position. So cash and bullion went up from
192 million in FY23 to $263 million this year, so up about
37%. Interestingly, net creditors
doubled from 72 million to $141 million.
So the increase in the cash is almost equivalent to the
increase in the net creditors. Now note this is 3 merging with
Corolla, so this doesn't. Include what Corolla's payables
will be as well. Because that transaction
completed after the the year end, Yeah.
And look, admittedly they had quite a big growth CapEx year.
They spent $157 million so that you know, sort of cheques out
with the higher sort of little level of net creditors to to
some extent. Here's here's what they said on
the call. And he is asking a question
about trade payables. He's noticed an increase from 78
to 148 million. Tommy, would you like to comment
at all on trade payables and, and the reason for the increase?
Absolutely. Thanks.
Shane and thanks, Mark for the question.
Essentially as you see in FY24, it has been a heavy investment
year on our growth projects in Great Fingal Fender and the Big
Bell long haul open slope. Naturally, the creditors and
payments will increase as a result of that investment.
So as. We said, you know, totally fair
comment on the growth CapEx. It's, it was much higher than
our previous years. But surely higher CapEx would
just mean your cash build wouldn't be say as much or
perhaps neutral during this period however, and the whole
cash build thing's been quite a big selling point for West Gold
the last few quarters. They're really, really
emphasised on the call and sort of previous presentations that
that built, built net cash every quarter for the last six
quarters and the assumption in the market.
'S been and that's driven by operational efficiencies and and
high margin on your high gold price and all that sort of
stuff. But if it's if, if one of the
drivers is actually just, you know, delaying payment if you
have your creditors and that's, that's not as admirable.
Yeah. So I think.
One of the main reasons you know, for this reported, you
know, net cash field for you know, the last half a dozen
quarters, you know, a, a potential main driver of that is
actually because the payment of the trade payables is being
stretched out. Now why would you know, you
might want to do that? They have to pay or if they
have, they probably already paid it actually the cash component
of the KORA transaction. So that's like $125 million.
They've got the dividend that they've just, or they've
previously flagged that's worth around 20 million bucks and
they've obviously still got to run the business as well.
So I'm thinking perhaps they may have sort of gone about it that
way to make sure they've got enough cash to sort of tickle
those things off without having to draw on their corporate, you
know, revolver facility. So it'll be interesting to say
how this sort of washes through the next periods financials with
which would now incorporate, you know, Korora, perhaps it's just
a blip in time. And it'll be interesting to say
whether they sort of can ride through, especially with, you
know, rising gold prices and things like that.
And that will tie them over. But just an interesting one
there. I thought.
You think God with? God, with where it's at at the
moment and then being unhedged there, you couldn't ask for a
better set up in terms of, oh, absolutely got the.
Opposite of Min Rez. Yeah, no, they've got.
The the, the balance sheet there is as far as the hedge, no
hedging and no debt certainly helps a lot on that front and
the drill, drill hits. Coming out of Fletcher looked
pretty, pretty promising as well.
So if they can get that up and gown, you know, hopefully
compliment the other ones when great fingers gown.
That's yeah, you can say the path they're on.
But yeah, exactly. Yeah.
And as far as FY25 guidance goes, we haven't seen anything
just yet. They did comment on the call
that they're updating all their sort of reserves and resources
sort of corporate Carora and you know, just general updates in
early September, which is literally a week away, which
will be should shortly followed by the FY25 guidance.
But I mean, we've all seen in the presentations, you know,
they talk about themselves now as a, you know, plus 400,000 oz
producer. But as far as what that means in
a sort of exact terms and costs, that'll be interesting.
The other interesting thing will be to see at their maker
operations net because of the absence of Paddy's flat, how
that's sort of offset with more ore from Blue Bed S Junction,
which they just sort of put out a reserve and everything for
those sort of talked about having, you know, targeting at
least 1.2 million tonnes per annum by the end of this year
from there, you know, sort of displacing ore that they were
previously getting from Q. So they should definitely save
on some costs there. And then the other thing as
well, they'll be should be fitting in some ore from ore
Gold's nearby Crown Prince, which they're currently
negotiating an OPA for, which is pretty high grade open pit dirt.
And I'm a Ding Ding on that 10 that's in the allergy.
So. Small cap.
That's small cap, yeah. That's small cap OTF.
And. So between those extra all
sources in and around Maker that will allow them to expand the
capacity of Bluebird from what's currently 1.6 million times
round up to 2.2 without sort of spending too much money at all.
And that's larger because it's just easier with softer open pit
or. And he, Wayne and the team also
sort of talked about increasing the utilisation of the Corolla
mills and upgrades in hybrid power Higginsville to reduce
operating costs as well. So definitely a few different
leaves there they can pull from sort of a all source and sort of
cost basis as well. Yeah, I love these annual.
Reports because they're so bloody long.
So I like a good control F and the term I was looking for in
the West Gold one which none of these come up or couldn't have
believed it. Smack, variable speed, secondary
ventilation or VSDS weren't in the annual report.
Couldn't bloody believe the electrical partner of West Gold
saving them millions, millions, bloody millions staying in the
door from the bloody power savings from the VSDS.
They didn't shout them out. Isn't it?
I remember. When, when we visited Marty Law
at, you know, at his, you know, marvellous buddy, great, great
warehouse. He's got everything going on.
He said to me, I am certain that these will be adopted in the
industry over time. It's just a matter of time.
And like, you know, the, the, the reputation that the, the
1000 Volt ones have, you know, he's like, he's got a solution
to overcome that. So it's kind of like you just,
you've got to try it out. I think it's kind of like if you
if you know what I think it is. It's like, I don't think it is.
Just put it on. They've just done this.
Merger with Corolla, right? They've got these new assets
that don't have the VSDS in them yet and they want first dibs.
They want it. They want to fill out all, you
know, Beta hunt and the like down there 1st and that's why
they don't want to call them out because they know everyone else
in WA will be on to it just like that.
Oh no. The como factor.
Well, you do have to pay for. Them upfront but the amount of
cost savings like SMEC are effectively giving you money
they might even. They might even give you a buddy
an upfront and they can actually they could do a financing model
where they just give it to you and then with the cost savings
get repaid over time maybe. That's a wonder if Marty will do
that. You don't know if you don't ask.
Red 5 Bloody vault.
Sorry. Yes, good old vault.
Bloody vault with AV but he off 12% today.
Yeah, scraping duck. Shit, so we'll.
Probably get into. The reasoning for that to say a
lot of things. Are fucking off today, but this
is an awful lot particularly off.
Yeah, so. So what were the highlights?
From the financial year gone to to start with Ellie so their
underlying. EBITDA was just shy of 200
million bucks and underlying profit of around 50 million
bucks. Production costs were pretty in
line with guidance, so 223,000 oz at around just over 2000
bucks now all sustaining which was already previously flagged.
The net creditors were up a fair bid, but but essentially that
reflects the business basically doubling with the the
Silverlight merger complaining in June.
They closed the year with cash and bullying of around 450
million bucks. But post year end they paid off
all the remaining debt from the, you know, the Red 5 original
days. And also they received proceeds
from the block trade they did of their own shares, which, you
know, silver like acquired, you know, the strategic stake in Red
when prior to that merger. So by the time you sort of
figure that all out, they basically have just shot $500
million cash and bullying and no debt.
Something I thought was appears small, but I thought it was just
interesting of more so the location of this statement, a
statement of basically what their tax losses were on the
front page and one of the key highlight, you know, bullet
points. So they've said they've got
Aussie tax losses of 381,000,000 and Canadian tax losses of
Canadian 255,000,000. I mean the Aussie ones will
certainly come in pretty handy as they go into sort of cash
harvest mode at King of the Hills.
Not sure how much those tax losses will be getting.
Utilise it, you know, sugar zone anytime soon.
Maybe it signals they're going to buy.
Something in Canada or it or they?
Might be buying something. Oh, you know, either
jurisdiction. Really.
I just thought that was a really strange thing to put on the
front page of your annual annual results.
God bloody. Jeez, you'd have to have some
balls to buy something in Canada.
The market reaction to an Aussie.
Another Aussie gold miner bought in North American asset as a
producer or like that's a big gamble that's.
Yeah, they're Speaking of cash. You know, and we we spoke about
this a couple episodes ago, you know, what are they going to do
with, you know, half a billion dollars cash, no buybacks,
dividends or a hedge book cleanup or sugar zone race that
has been flagged just as yet. You know, those are all
potential options. Maybe it's a that's.
Why it's called a vault? Like it stays in there, it
doesn't come out for dividends or buybacks like the cash just
stays in the vault. They can keep some in the vault,
but they've. Got to let a little bit.
Every now and then. But the the financial year 25
guidance does give us some sort of initial clues and this is
arguably probably the reason why the stock is off so much today.
So they actually released FY25 guidance for the first time
midpoints 410,000 oz at 2350 announce all the sustaining
mixed reviews from the Street, particularly on or more so
negative views on the higher OpEx compared to FY24, which
was, you know, about 300 bucks an ounce lower and higher than
expected CapEx. So what's that CapEx?
Yeah. So they.
I'll put up the screen grab here.
You can sort of see how that's distributed across the
portfolio, but the main piece is sort of an accelerated waste
stripping at at cost than Matt Munger expected to be around
$105 million in addition to the all in sustaining costs.
And then there's $25 million of growth CapEx.
They're also doing studies on cough mill expansion, which is
again one of those things that we flagged as an area where they
might redirect that cash, still spending a bit of money.
Sugar zone as well, that's pretty elevated.
That's the one I was particularly surprised about 33
to $35 million to maintain operational readiness and
includes follow up, you know, follow up drilling to you know
update the the mineral resource there.
There wasn't. If they updated that, it's.
Putting like 100 kilometres, Well, however many I think
they're doing. More follow up drilling based on
the results of that drilling to then sort of culminated in one
big sort of updated resource. Yeah, to do.
It not not updated, yeah. So that.
Out, yeah. So and there wasn't much
indication in the in the results today about when or if that'll
get restarted. But I just felt that was, look,
I'm not a minor, but 30, three, $35 million to basically sort of
have an asset and care and maintenance is, is is pretty
chunky. Yeah, I think.
It rates of the old silver like a bit like how people have
explained the history lot. They're they're all in
sustaining cost guidance and whatever was always higher than
most, but they just seem to always deliver into.
It seem to always. Deliver and always hoard more
cash than most companies. Like they're obviously good cash
generator. So it'd be simple interesting to
see if that's going to be red 5 as well.
Yeah, as you said, the cost all in stone so spooked everyone,
but I just wonder in a years time if it all won't be that
sort of come together. Yeah.
And look and they'll be spending, you know, up to $20
million in expiration as well. So look from now getting into
that cash harvesting mode, particularly at cough.
So I I'm really keen to say them, you know, do something
with all this cash, not keep it all in the vault as we said.
So I mean, you know, Perseus is pack perhaps an example to look
at. You know, they've got US $587
million in cash. They're making lots of cash.
They they did a strategic stake in predictive that it doing $100
million buy back. They're doing a $0.05 per share
dividend and they're investing CapEx into developing the Yori
underground and, and Nanzaga. So obviously, you know, it's got
to make sense. You shouldn't just spend that
money just just because. But I feel like they, you know,
there's probably some labours they could pull there for sure
before this podcast. Ever finishes in history.
I want a guest request for Luke Tonkin to do an investor call.
I'd love. I'll just.
I'll wait. That'll make my day.
Come on, Tonks. We want to hear from you.
Oh, goodness. So.
I think that's some. I'm saying.
I'm keen to, yeah, say keen to say what they do with that cash.
And so we'll be keeping our eyes peeled.
I've got another final. One for the Goldie's just I
found this this radio segment that's what I was looking for
radio segment from in regards to Mcfillimy's Ben Fordham on 2GB
last week regarding the Tanya Plibersek's decision regarding
Regis's goldmine over there. Have a listen to this.
This is. I found this very interesting.
Tanya Plibersek. The Federal environment minister
says she cancelled the mine to protect Indigenous heritage as
requested by the Warajiri people.
In secret conversations, it turns out that only a tiny
Aboriginal group made up of only 18 people are against it.
It's led by an artist called Nyree Reynolds, who calls
herself a proud Weragerie elder. But here's where it gets
interesting. We've called around members of
the Indigenous community and spoken to a lot of Weragerie
figures and elders. And the ones we've spoken to
have never heard of Nyree Reynolds, who calls herself a
Weragerie elder. For example.
We've spoken to Uncle Graham, a Weragerie elder, he's never
heard of her. We've spoken to Auntie Chris, a
Weragerie woman, she's never heard of Nyree Reynolds either.
We've spoken to James, a local Weragerie man, he's never heard
of her. And we've spoken to Roy RCA,
Weragerie elder and the former chairperson of the NSW
Aboriginal Land Council. And you'll never guess Roy has
never heard of Nyree Reynolds, too.
And Roy's on the line right now. Who is Nyree Reynolds?
I asked the minister. Because I don't, I don't know.
I, I was born and bred on the banks of Macquarie River.
I'm a Radri traditional owner. And we've never heard of this
lady. I'm sorry.
I just, I'm just being truthful and I'm being honest.
We've never heard. I've never heard of her.
Sorry, Roy. Can I just say this having seen
the video of Nyree Reynolds on Tanya Plibersek's Instagram
page, and I don't know whether you've seen the video, but she
looks white. Nyree Reynolds says that she's
heard the voices of Aboriginal ancestors asking her to help
cancel the mine. Oh, come on.
Like, you know, say you didn't commit.
And you know what this does, Ben?
This makes a mockery of my people, my old people that
fought, fought for. Rights in this country.
And now it's about economic empowerment for us as Aboriginal
people. Right, there you go.
I found that fascinating. Good digging.
Benny Fordham what a time to be alive.
Yeah, yeah. Oh, we're like we'll finish off
bloody. We haven't even covered ERA yet.
We'll just the the did we cover that?
I think they're coming out on their day off.
You said they're going. Ahead with that big .002 cents
I. Hope you didn't buy shares
before that party. Hell we've got our eyes peeled
there. Interested to see with the
pending court case. If real putting the foot down
now and forcing people to tip money in into something with a
pending court case. So see Go Corporate Australia.
Oh, corporate Australia. As far, yeah, we'll keep you
posted on that one, right? Oh, good work.
Bloody team, sensational dissection lot going on.
Happy to contribute nothing and. We we, we skipped that many
companies today because it was too much.
Same for my IGO cost much others anyway.
Oh yeah, I think. There's a possibly a correction
to the director's special this morning.
I got informed of I think the IGO net debt wasn't 80 850, it
was 797,000,000 I think. Got that?
Got a bit of mail in Roger from the Big.
Dog all. Righty guys, right?
Oh, thanks to. Someone we didn't skip and we're
never going to bloody skip. Is Axis mining Technology the
trusted advisor who asked you a lot?
Do you reckon people are saying that in their head?
Trusted Advisor Drill survey You saw the the.
Email from the the fellow I walked past in car.
What did he say? He.
Mentioned three of our sponsors
in an email legend. Oh, good idea.
Did he mention MMS? He would've verified.
He would've mentioned three of these did.
Yep Yep. Verify spec power and
technology, DSI underground, Silverstone, CRE insurance,
Greylands equipment, K drill and get a spark chart up here.
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