1
00:00:00,040 --> 00:00:02,720
They're suggesting it's possible
they'll reach that name blank 

2
00:00:02,720 --> 00:00:05,720
kind of haulage rate while half 
the road is is still being 

3
00:00:06,000 --> 00:00:08,720
repaired, which would be a 
tremendous feat if truly 

4
00:00:09,120 --> 00:00:11,120
achievable. 
All right, money miners. 

5
00:00:11,280 --> 00:00:16,160
Mr. Ricardinho, we are in the 
thick of cordly season and we 

6
00:00:16,160 --> 00:00:20,560
picked out a couple stories to 
chat about Minrez and Emerald 

7
00:00:20,640 --> 00:00:22,240
amongst the sort of flurry of 
announcements. 

8
00:00:22,240 --> 00:00:27,560
Or Northern Star was getting a 
bit of a boat in after they had 

9
00:00:27,560 --> 00:00:29,640
to revise their gardens and a 
few other ones. 

10
00:00:29,640 --> 00:00:32,439
But we've picked a couple 
goodies in in Minarez and 

11
00:00:32,479 --> 00:00:33,520
Emerald. 
I reckon pick. 

12
00:00:33,520 --> 00:00:36,640
The two stories you yeah, you're
keen to to tell the most amongst

13
00:00:36,800 --> 00:00:38,600
them. 
Don't you find like when when 

14
00:00:38,600 --> 00:00:42,720
the when the month of April ends
because you had you had three 

15
00:00:42,720 --> 00:00:44,400
public holidays in short order 
True enough. 

16
00:00:44,440 --> 00:00:46,640
All all this time everyone just 
all released their their 

17
00:00:46,640 --> 00:00:47,880
operational quarterly at the 
same time. 

18
00:00:47,880 --> 00:00:49,920
I'd hate to be an analyst that 
actually had to write research 

19
00:00:49,920 --> 00:00:52,680
reports and update my model and 
and get all of that out today 

20
00:00:52,680 --> 00:00:54,320
because. 
It'd be a stinker. 

21
00:00:54,320 --> 00:00:55,680
Yeah, he. 
Covered a few, you'd be under 

22
00:00:55,680 --> 00:00:59,920
the pump today and tomorrow. 
Plenty of of calls as we are in 

23
00:00:59,920 --> 00:01:03,000
the second last day, but it is 
what it is man. 

24
00:01:03,000 --> 00:01:05,400
Speaking of plenty of calls man 
you know who who would be 

25
00:01:05,400 --> 00:01:07,480
getting plenty of calls right 
now? 

26
00:01:07,480 --> 00:01:10,880
Especially the gold price is 
going up and people are spending

27
00:01:10,880 --> 00:01:13,360
money on expiration once again 
looking for gold. 

28
00:01:13,720 --> 00:01:16,480
Who were they calling? 
Kay Drew 100% mate. 

29
00:01:16,480 --> 00:01:17,960
They are an experienced 
specialist team. 

30
00:01:18,560 --> 00:01:20,880
Would you believe 90 years of 
combined fueled experience? 

31
00:01:20,880 --> 00:01:23,840
Now that is, that is not one 
individual person with 90 years.

32
00:01:23,840 --> 00:01:25,000
There's no 90 year olds on that 
team. 

33
00:01:25,000 --> 00:01:26,520
You know the 90 year olds get to
retire. 

34
00:01:26,760 --> 00:01:29,080
But 90 years combined fueled 
experience mate. 

35
00:01:29,800 --> 00:01:31,480
Unbelievable. 
Mate, when you're an exploration

36
00:01:31,480 --> 00:01:34,640
company or you're a miner and 
the lifeblood of your business 

37
00:01:34,720 --> 00:01:38,440
is finding gold, finding 
lithium, finding copper, 

38
00:01:38,440 --> 00:01:40,960
whatever it might be, you want 
to go with the experienced team,

39
00:01:40,960 --> 00:01:42,920
don't you? 
You want experienced team, You 

40
00:01:42,920 --> 00:01:46,240
want people that know how to use
their rigs and get the most out,

41
00:01:46,240 --> 00:01:49,680
and we're talking about RC and 
diamond drilling cut in their 

42
00:01:49,680 --> 00:01:51,640
blood. 
This is specific expertise that 

43
00:01:51,640 --> 00:01:54,280
you know it traverses 
geographies and geology. 

44
00:01:54,280 --> 00:01:57,680
It is it is they are capable in 
challenging terrains all across 

45
00:01:57,680 --> 00:02:00,520
WA and when you get in touch 
with K dual mate, you deal 

46
00:02:00,520 --> 00:02:03,000
directly with people who have 
the field credibility, not 

47
00:02:03,000 --> 00:02:05,400
layers of admin. 
They get stuff done, they're 

48
00:02:05,400 --> 00:02:08,400
approachable, they're pragmatic,
you know, and when conditions 

49
00:02:08,400 --> 00:02:10,440
get tough, guess what? 
That experience matters because 

50
00:02:10,440 --> 00:02:13,920
these are people that can be 
very resilient and and and 

51
00:02:13,920 --> 00:02:16,000
operate when get get tricky 
there. 

52
00:02:16,320 --> 00:02:18,920
Safe, reliable, productive 
drilling. 

53
00:02:18,920 --> 00:02:21,680
Coal K drill. 
The Champions in RC and diamond 

54
00:02:21,680 --> 00:02:24,920
drilling. 
The irony of segwaying when you 

55
00:02:24,920 --> 00:02:26,720
say safe, reliable, productive. 
And now we're going to talk 

56
00:02:26,720 --> 00:02:29,080
about min raising. 
All right, all right. 

57
00:02:29,080 --> 00:02:30,560
Let's not, let's not get ahead 
of ourselves. 

58
00:02:30,560 --> 00:02:34,000
It was an interesting quarterly 
and yeah, the market is liking 

59
00:02:34,000 --> 00:02:35,360
it. 
Let's let's get into it mate. 

60
00:02:35,600 --> 00:02:38,520
I think they've they've eased 
some of the market fears today 

61
00:02:38,520 --> 00:02:41,120
with the with the quarterly and 
yeah, the, you know, min res 

62
00:02:41,120 --> 00:02:43,160
quarterly, they always seem to 
be a pretty interesting day on 

63
00:02:43,160 --> 00:02:44,560
the market. 
Lots of other companies reported

64
00:02:44,560 --> 00:02:47,240
today, but but a ton of vision 
for the minerals call. 

65
00:02:47,640 --> 00:02:50,040
And the important thing to to 
mention upfront is that the 

66
00:02:50,040 --> 00:02:53,800
market liked it that the share 
price is up a giant 15% today. 

67
00:02:53,840 --> 00:02:55,600
You know, in response to the 
disclosure. 

68
00:02:55,600 --> 00:02:59,560
And I used the word disclosure 
on ironically for once on on 

69
00:02:59,560 --> 00:03:02,040
minerals, because this quarter 
actually provided much more 

70
00:03:02,040 --> 00:03:05,640
granularity on on areas of the 
business that are forefront on 

71
00:03:05,640 --> 00:03:09,000
the minds of investors. 
And we have to commend them for 

72
00:03:09,000 --> 00:03:11,720
for doing that upfront. 
Specifically as it relates to 

73
00:03:11,720 --> 00:03:13,800
the whole road and ramp up of 
Onslow, we get some really good 

74
00:03:13,800 --> 00:03:16,480
detail about what they're doing,
what their plans are and how 

75
00:03:16,480 --> 00:03:18,120
they intend to, to reach their 
targets. 

76
00:03:18,120 --> 00:03:21,720
It's it's been a tumultuous few 
weeks just in the lead up to 

77
00:03:21,720 --> 00:03:26,040
this release, JD, notably the 
departure of three board members

78
00:03:26,040 --> 00:03:28,320
in very quick succession. 
And also the, the news about the

79
00:03:28,320 --> 00:03:30,000
class action that dropped 
earlier this month too. 

80
00:03:30,000 --> 00:03:33,240
But the, you know the talking 
points that that come out of the

81
00:03:33,680 --> 00:03:35,560
the quarterly today and the 
things I want to I want to touch

82
00:03:35,560 --> 00:03:39,880
on in conversation with you, 
it's all all relation to the 

83
00:03:39,880 --> 00:03:40,840
operating health of this 
business. 

84
00:03:40,840 --> 00:03:42,880
We're talking the balance sheet,
how Onslow's going, how's the 

85
00:03:43,080 --> 00:03:45,520
the haulage ramp up and 
bottlenecks going given the road

86
00:03:45,520 --> 00:03:48,440
repairs there, what's the status
of the lithium business and and 

87
00:03:48,440 --> 00:03:50,440
what's happening to the mining 
services margins. 

88
00:03:50,480 --> 00:03:53,480
Yeah, absolutely. 
And all the the sort of 

89
00:03:53,520 --> 00:03:55,920
tumultuous events that you 
mentioned there don't even 

90
00:03:55,920 --> 00:03:59,200
encapsulate what's happened at a
broader macro level, which has 

91
00:03:59,200 --> 00:04:01,160
been particularly wild as it 
relates to minres. 

92
00:04:01,640 --> 00:04:07,200
FX has fluctuated pretty wildly 
and mine or steel making is a 

93
00:04:08,480 --> 00:04:11,480
commodities that demand 
fluctuates with the growth in 

94
00:04:11,480 --> 00:04:14,480
the GDP of sort of developing 
nations and countries all around

95
00:04:14,480 --> 00:04:17,440
the world. 
So let's get into it at a micro 

96
00:04:17,440 --> 00:04:19,360
level now with the balance 
sheet. 

97
00:04:19,360 --> 00:04:22,720
That's the the first spot that 
people have always looked or 

98
00:04:22,720 --> 00:04:24,560
have looked at Glitz for the 
past couple of years, Minres. 

99
00:04:24,920 --> 00:04:27,120
Yeah. 
I, it's, it's no secret that 

100
00:04:27,120 --> 00:04:28,080
their balance sheet is 
stretched. 

101
00:04:28,080 --> 00:04:29,880
And when your balance sheet is 
stretched, what really matters 

102
00:04:29,880 --> 00:04:32,760
is what's your, what's your 
quarter on quarter change in 

103
00:04:32,840 --> 00:04:35,880
cash. 
And for, for Minres in their 

104
00:04:35,880 --> 00:04:39,200
March quarter, they, they ended 
that, they ended the quarter 

105
00:04:39,200 --> 00:04:41,800
with, with $250 million less 
cash. 

106
00:04:42,720 --> 00:04:45,880
So there are some, you know, 
operational wins that they've, 

107
00:04:45,920 --> 00:04:48,080
they've kind of point to and 
they've, they've certainly kind 

108
00:04:48,080 --> 00:04:50,640
of had in various, various areas
this quarter. 

109
00:04:50,640 --> 00:04:53,680
But I think the money miners 
should always just remember to 

110
00:04:53,680 --> 00:04:56,680
contextualize, you know, what, 
what could be potentially 

111
00:04:56,680 --> 00:04:58,880
accounting wins when the 
business is still losing 

112
00:04:58,880 --> 00:05:01,080
substantial cash. 
I think it's always, always 

113
00:05:01,080 --> 00:05:04,720
important to kind of keep us, 
you know, a questioning eye if, 

114
00:05:04,800 --> 00:05:06,480
if your cash is still not moving
in the right direction. 

115
00:05:06,920 --> 00:05:09,560
But if you look at look at what 
they've got, they've got this 

116
00:05:10,080 --> 00:05:13,000
$800 million revolving credit 
facilities undrawn at the at the

117
00:05:13,000 --> 00:05:16,880
quarter end. 
They've got $450 million of of 

118
00:05:17,200 --> 00:05:20,160
cash and cash equivalents 
remaining at a quarter end. 

119
00:05:20,160 --> 00:05:23,600
So combine those two and they 
point to to this $1.25 billion 

120
00:05:23,600 --> 00:05:28,720
of liquidity they called in at 
debt 5.4 billion as at the 31st 

121
00:05:28,720 --> 00:05:32,080
of March. 
What that has baked into it, you

122
00:05:32,080 --> 00:05:34,520
know, which isn't immediately 
apparent is, is the, the 

123
00:05:35,120 --> 00:05:39,120
revaluation on the on the US 
denominated like bonds thanks 

124
00:05:39,120 --> 00:05:42,560
to, you know, a slight FX 
movement is $80 million 

125
00:05:43,360 --> 00:05:45,160
favorable. 
It's also that 5.4 is also 

126
00:05:45,480 --> 00:05:48,720
excluding the the the the 
physical line or deliveries that

127
00:05:48,720 --> 00:05:51,400
they that they have to do under 
the the prepaid with traffic 

128
00:05:51,400 --> 00:05:52,320
here too. 
Yeah. 

129
00:05:52,320 --> 00:05:55,600
And and what about the the sort 
of levers as it relates to the 

130
00:05:56,000 --> 00:06:00,440
what the company has flexed or 
spoken about the potential to to

131
00:06:00,440 --> 00:06:03,160
flex if things get tighter going
down the track? 

132
00:06:04,000 --> 00:06:06,120
I thought there was like a 
noteworthy, noteworthy 

133
00:06:06,120 --> 00:06:09,240
difference in the way that CFO 
Mark Wilson discussed this. 

134
00:06:09,360 --> 00:06:13,480
I'll play a snippet for for you 
guys to to evaluate yourself. 

135
00:06:13,680 --> 00:06:16,520
And do you have any sort of 
active testing of the market on,

136
00:06:16,520 --> 00:06:18,680
on, on the asset sales at the 
moment? 

137
00:06:18,680 --> 00:06:20,640
And if you do, how do you 
actually order those options? 

138
00:06:20,640 --> 00:06:23,920
How do you think about actually 
ordering the those levers and or

139
00:06:23,920 --> 00:06:26,160
asset sales? 
The way I think about it is 

140
00:06:26,160 --> 00:06:30,840
this, there's a cost associated 
with every choice, right equity 

141
00:06:30,840 --> 00:06:34,680
raise as we keep being 
encouraged to do so by by 

142
00:06:34,680 --> 00:06:38,800
aspects of the market that in my
mind has a huge cost at today's 

143
00:06:38,800 --> 00:06:41,360
price, huge impact on 
shareholders who don't 

144
00:06:41,360 --> 00:06:44,480
participate. 
So I think of that as an extreme

145
00:06:44,480 --> 00:06:49,000
high cost alternative. 
At the other extreme, I've got 

146
00:06:49,240 --> 00:06:54,240
precedent transactions for the 
road at over a billion for half 

147
00:06:54,240 --> 00:06:57,280
of it that I know I could 
transact on if I needed to. 

148
00:06:57,400 --> 00:07:00,360
Again, I'm not saying it's a 
priority or preference, but I'm 

149
00:07:00,360 --> 00:07:03,560
giving an example. 
We've talked previously about 

150
00:07:03,800 --> 00:07:06,880
opportunity to do something with
the carry loan, which is sitting

151
00:07:06,880 --> 00:07:10,240
at 800 million. 
So there's a lot of capital tied

152
00:07:10,240 --> 00:07:15,080
up in those two assets alone. 
So normally when I, when I've 

153
00:07:15,080 --> 00:07:19,160
heard Mark talk about levers and
it's a common question, but like

154
00:07:19,160 --> 00:07:21,440
you often mentioned the carry 
loan first from my memory, I 

155
00:07:21,440 --> 00:07:23,440
mean, before they sold the gas, 
you'd mentioned the gas 1st and 

156
00:07:23,440 --> 00:07:26,960
then before they sold the, the 
the whole Rd. you mentioned the 

157
00:07:26,960 --> 00:07:30,080
whole road first. 
But I, I always read into a bit 

158
00:07:30,080 --> 00:07:32,520
the first thing you mentioned. 
And this time around, the first 

159
00:07:32,520 --> 00:07:34,840
thing you mentioned was the 
other half of the whole Rd. 

160
00:07:35,240 --> 00:07:37,360
selling, selling it for another 
billion dollars. 

161
00:07:37,360 --> 00:07:40,120
I mean, that's an intriguing 
point and kind of count me 

162
00:07:40,320 --> 00:07:43,280
doubtful that Minres would would
be able to get a billion dollars

163
00:07:43,280 --> 00:07:45,800
for the other half, but it's 
it's surely worth something. 

164
00:07:45,800 --> 00:07:48,720
And it's interesting that that 
was the first thing that that 

165
00:07:48,720 --> 00:07:51,240
came to his mind and came out of
his mouth when he when he was 

166
00:07:51,240 --> 00:07:53,400
talking about it. 
You know, the Australians also 

167
00:07:53,400 --> 00:07:55,440
talked about them selling bald 
Hill in in recent days. 

168
00:07:55,440 --> 00:07:58,080
I could say that too. 
And of course, you know, there's

169
00:07:58,080 --> 00:08:02,480
there's there's genuine 
potential of of minority sell 

170
00:08:02,480 --> 00:08:04,760
down in the in the broader 
lithium business or, or discrete

171
00:08:04,760 --> 00:08:06,760
minds. 
That's all of that's impossible 

172
00:08:06,840 --> 00:08:10,440
or even a prepaid as it relates 
to the to lithium too. 

173
00:08:10,600 --> 00:08:13,560
The big elephant in the room and
one of the reasons the market 

174
00:08:13,560 --> 00:08:17,080
has responded the way it has 
today, I think is the hardline 

175
00:08:17,080 --> 00:08:20,440
sort of stance that Minrez has 
presented in its its messaging 

176
00:08:20,440 --> 00:08:24,040
around equity raising. 
That that's basically it's like 

177
00:08:24,040 --> 00:08:27,240
on the front page, no equity 
raising is being considered. 

178
00:08:28,000 --> 00:08:31,920
And yeah, so I think the market 
market reads that, interprets 

179
00:08:31,920 --> 00:08:34,039
that and thinks, great, you 
know, there's like there's, 

180
00:08:34,080 --> 00:08:38,000
there's, yeah, like no immediate
short term risk of a cap raise. 

181
00:08:38,000 --> 00:08:40,280
And that, that's a, that 
explains a short term price 

182
00:08:40,280 --> 00:08:43,559
movement sometimes. 
And then to, to round out the 

183
00:08:43,559 --> 00:08:46,040
balance sheet. 
I do think you've always got to 

184
00:08:46,040 --> 00:08:47,520
talk about their, their bonds as
well. 

185
00:08:47,520 --> 00:08:51,280
And if you yeah, like, like 
historically mean, as I've 

186
00:08:51,280 --> 00:08:55,120
talked about refinancing their, 
you know, near term maturity 

187
00:08:55,120 --> 00:08:56,400
bonds. 
They've got some that mature, I 

188
00:08:56,400 --> 00:09:00,200
think in, in June 2027. 
They're the, they're the 

189
00:09:00,200 --> 00:09:01,920
earliest ones where the, you 
know, big chunky principal 

190
00:09:01,920 --> 00:09:06,360
repayment June 2027. 
Now the, the bond market is, has

191
00:09:06,360 --> 00:09:09,200
moved a lot in recent history, 
specifically Min Reza's bond 

192
00:09:09,280 --> 00:09:12,240
markets have been been very 
volatile themselves. 

193
00:09:12,240 --> 00:09:15,920
And, and yeah, Mark Wilson 
himself kind of spoke to the 

194
00:09:15,920 --> 00:09:19,840
fact that if they were to to 
refinance the near term maturity

195
00:09:20,360 --> 00:09:22,720
instead of paying an 8% coupon, 
which they are at the moment, 

196
00:09:23,000 --> 00:09:25,160
they'll be looking down the 
barrel of like a 12% coupon 

197
00:09:25,400 --> 00:09:29,680
right now that even though they 
can refinance as of May. 

198
00:09:29,720 --> 00:09:33,520
So, you know, in just days 
really without actually wearing 

199
00:09:33,520 --> 00:09:36,800
a, an, an early, an early cost 
associated with doing so. 

200
00:09:37,400 --> 00:09:39,640
They, you know, he he he 
actually played down the 

201
00:09:39,640 --> 00:09:43,640
potential of, of refinancing in 
the near term because I'd rather

202
00:09:43,640 --> 00:09:47,760
wait out for that, You know, the
implied coupon to to lower as 

203
00:09:47,760 --> 00:09:50,120
they ramp up and do risk. 
Now, whether that happens or not

204
00:09:50,120 --> 00:09:52,440
sort of is all up in the air. 
But I found that kind of 

205
00:09:52,440 --> 00:09:53,840
interesting to know what you 
thought, JD. 

206
00:09:54,160 --> 00:09:56,320
Yeah, yeah, fascinating. 
I mean I think we should talk 

207
00:09:56,320 --> 00:09:58,520
about ONS on the performance of 
Onslow because you can't really 

208
00:09:58,520 --> 00:10:02,240
talk about the bonds without you
know discussing the manner in 

209
00:10:02,240 --> 00:10:05,480
which Rampart is going and the 
additional color which they gave

210
00:10:05,480 --> 00:10:07,160
specifically on the on the whole
Rd. 

211
00:10:08,280 --> 00:10:10,160
I think this is a big thing to 
wrap your head around. 

212
00:10:10,520 --> 00:10:13,560
FY25 guidance has peeled back 
slightly. 

213
00:10:14,080 --> 00:10:16,760
March quarter volumes are are 
are are disappointing. 

214
00:10:16,840 --> 00:10:20,000
But Min Res has provided great 
detail on how it is navigating 

215
00:10:20,000 --> 00:10:23,160
its current haulage constraints.
And and don't get me wrong, the 

216
00:10:23,160 --> 00:10:26,000
plan seems pretty ambitious, but
the detail details good. 

217
00:10:26,320 --> 00:10:30,720
And you can see on this map here
the haulage route right right 

218
00:10:30,720 --> 00:10:34,320
now Minrose is hauling ore from 
Ken's Bore to port via both. 

219
00:10:34,320 --> 00:10:38,640
Its like they've got their own 
big jumbos, the big Minrose 

220
00:10:38,640 --> 00:10:41,920
jumbos which can take up to 330 
tons and also some kind of 

221
00:10:41,920 --> 00:10:44,960
normal sized Rd. trains, which 
are largely third party 

222
00:10:44,960 --> 00:10:48,000
contractor Rd. trains that 
they're they're utilizing now 

223
00:10:48,000 --> 00:10:51,920
they're they're undertaking 
upgrades on their whole Rd. 

224
00:10:52,280 --> 00:10:54,040
itself. 
That was that was announced 

225
00:10:54,920 --> 00:10:56,800
earlier in the year pretty 
substantial upgrades going on 

226
00:10:56,800 --> 00:10:59,320
there. 
So the and as they're doing 

227
00:10:59,320 --> 00:11:02,040
these upgrades on the whole road
and as faulting it, etcetera, 

228
00:11:02,600 --> 00:11:05,760
the the jumbos are actually 
continuing to use the whole Rd. 

229
00:11:06,400 --> 00:11:10,920
while the contractor trucks are 
running on the parallel access 

230
00:11:10,920 --> 00:11:14,200
Rd. for the first half of the 
the leg, then then on public 

231
00:11:14,200 --> 00:11:15,640
highways for the second-half of 
the route. 

232
00:11:15,640 --> 00:11:18,960
Like you can see on the yellow 
line here, minerals say that the

233
00:11:19,600 --> 00:11:25,200
the volumes of vinyl being hold 
in April in total is 1.3 to 1.4 

234
00:11:25,840 --> 00:11:28,240
million tons. 
And now this, this table I'll 

235
00:11:28,360 --> 00:11:31,800
flash up here, this table breaks
down the trucks, the payloads on

236
00:11:31,800 --> 00:11:34,920
the on the trucks and the cycles
per day of the trucks. 

237
00:11:34,920 --> 00:11:38,200
It's, it's, you know, it's great
granularity of what is being 

238
00:11:38,440 --> 00:11:43,120
done in April. 
And that's 1.4 you know, 

239
00:11:43,120 --> 00:11:46,600
1,000,000 tons per month 
annualized is just 15,000,000 

240
00:11:46,600 --> 00:11:48,160
tons per annum. 
That's a that's a long way from 

241
00:11:48,160 --> 00:11:50,320
the name blade of 35,000,000 
tons per annum. 

242
00:11:50,320 --> 00:11:51,920
That min resonates right? 
So status quo. 

243
00:11:52,040 --> 00:11:56,240
Yeah, 15 to 17 ish tons per 
annum at that run rate, but they

244
00:11:56,240 --> 00:11:58,800
give more detail on the next two
months. 

245
00:11:59,400 --> 00:12:01,160
Exactly. 
So this is, this is interesting,

246
00:12:01,160 --> 00:12:02,680
right? 
Exact same table, flash it up of

247
00:12:02,680 --> 00:12:06,920
what they expect in May, May to 
June, the remaining two months 

248
00:12:06,920 --> 00:12:08,040
of the quarter. 
They say they're going to be 

249
00:12:08,040 --> 00:12:11,720
able to get 2.7 to 2.9 million 
tons per month in May and June 

250
00:12:11,960 --> 00:12:15,080
and 2.9 million tons per month 
annualized is 35,000,000 tons 

251
00:12:15,080 --> 00:12:16,920
per annum. 
They're suggesting it's possible

252
00:12:16,920 --> 00:12:21,040
to reach that name plate kind of
haulage rate while half the road

253
00:12:21,040 --> 00:12:24,720
is is still being repaired, 
which would be a tremendous feat

254
00:12:24,880 --> 00:12:27,840
if truly achievable and how 
they're going to do it. 

255
00:12:27,840 --> 00:12:30,240
Well, you can, you can just 
interrogate the table. 

256
00:12:30,240 --> 00:12:33,880
They're doubling the number of 
contractor trucks while getting 

257
00:12:33,880 --> 00:12:37,040
25% more cycles out of the 
contractor trucks. 

258
00:12:37,080 --> 00:12:42,240
Plus they're adding 14 new of 
the new jumbos of their own 

259
00:12:42,240 --> 00:12:45,000
while getting 25% more cycles 
out of their own. 

260
00:12:45,040 --> 00:12:47,120
Yeah, jumbos. 
All while keeping the truck 

261
00:12:47,120 --> 00:12:50,680
payload constant, notably 
restricting their jumbos to 260 

262
00:12:50,680 --> 00:12:52,440
ton payload. 
Not, not 330 ton, Yeah. 

263
00:12:53,480 --> 00:12:56,520
And they're going to heavily 
utilize those additional routes,

264
00:12:56,520 --> 00:12:59,000
which obviously wasn't 
previously the plan. 

265
00:12:59,000 --> 00:13:02,160
But this is the, this is one of 
the points that the the market 

266
00:13:02,160 --> 00:13:03,520
must have really liked, I'd 
imagine. 

267
00:13:04,080 --> 00:13:04,960
Right, big time. 
Yeah. 

268
00:13:04,960 --> 00:13:08,440
And there's even this like quote
saying the above forecasted 

269
00:13:08,440 --> 00:13:11,280
cycles per day are currently 
being achieved. 

270
00:13:11,280 --> 00:13:15,080
So it's, you know, like a very 
ambitious thing to just double 

271
00:13:15,080 --> 00:13:17,360
the, you know, your wholeage 
bottleneck. 

272
00:13:17,600 --> 00:13:19,480
You've got a bottleneck in 
haulage right now and that's 

273
00:13:19,840 --> 00:13:23,480
reported to be capable of being 
kind of doubled month on month 

274
00:13:23,520 --> 00:13:26,200
effectively. 
That is, that's ambitious, but 

275
00:13:27,160 --> 00:13:30,600
it's, it's also like if they're 
providing, you know, guidance 

276
00:13:30,600 --> 00:13:32,520
and confidence to it. 
That's what I think is really 

277
00:13:32,520 --> 00:13:34,640
driving the, the market 
sentiment today. 

278
00:13:34,640 --> 00:13:37,320
And, and, you know, part of the 
reason why share prices, I think

279
00:13:37,320 --> 00:13:40,840
has responded so, so strongly 
and it's back in the 20s is, is 

280
00:13:40,840 --> 00:13:43,080
some belief that this might be, 
might be possible. 

281
00:13:43,080 --> 00:13:46,200
I think that that, you know, the
challenge is still going to be 

282
00:13:46,200 --> 00:13:47,840
for them to do it. 
You know, I don't think it's any

283
00:13:48,360 --> 00:13:51,640
main feat to just kind of double
your, your haulage month on 

284
00:13:51,640 --> 00:13:53,520
month. 
And keep in mind that they are, 

285
00:13:53,720 --> 00:13:55,960
of course, you know, that 
they've got, they're, they're 

286
00:13:55,960 --> 00:13:59,600
doing upgrades on the road. 
The more of their own trains 

287
00:13:59,600 --> 00:14:01,400
that they add to that road, the 
more productivity they get out 

288
00:14:01,400 --> 00:14:04,200
of those trains and all that's 
going to inhibit the kind of the

289
00:14:04,200 --> 00:14:06,000
traffic flow management that 
they've got. 

290
00:14:06,000 --> 00:14:08,560
So those two things are kind of 
going to be working against each

291
00:14:08,560 --> 00:14:11,480
other. 
And then on the on the 

292
00:14:11,480 --> 00:14:15,960
contractor trucks, yeah, I mean 
it's, they're also adding like 

293
00:14:16,000 --> 00:14:18,320
pretty significant volumes of 
them and, and of course they 

294
00:14:18,320 --> 00:14:20,040
can't carry as as much of A 
payload. 

295
00:14:20,040 --> 00:14:24,080
So the, the, the frequency that 
that those those contractor 

296
00:14:24,080 --> 00:14:28,080
trucks are using the highway is,
is, is pretty frequent as well. 

297
00:14:28,120 --> 00:14:30,280
Meanwhile, you know, relying on 
the Access Rd. pretty heavily 

298
00:14:30,280 --> 00:14:31,600
so. 
Because the speeds have come 

299
00:14:31,600 --> 00:14:34,880
down as well. 
The speeds, the speed's an 

300
00:14:34,880 --> 00:14:38,560
interesting point, right, 
Because the, the contractor 

301
00:14:38,560 --> 00:14:41,440
trucks can run at different 
speeds to the to the jumbo 

302
00:14:41,440 --> 00:14:42,160
trucks. 
That's. 

303
00:14:42,760 --> 00:14:46,920
They tend to be smaller. 
Smaller and go faster and I 

304
00:14:46,920 --> 00:14:49,760
think that's why they're they're
now operating on effectively 

305
00:14:49,760 --> 00:14:53,120
separate routes because your 
contractor trucks were, were 

306
00:14:53,120 --> 00:14:54,960
getting stuck behind Jumbo's 
presumably. 

307
00:14:55,680 --> 00:14:58,080
And if you're stuck behind a 
Jumbo that's going slower 

308
00:14:58,080 --> 00:15:00,880
because the it's got a bigger 
payload and it can't get up to 

309
00:15:00,880 --> 00:15:03,800
speed as fast, then that's a big
issue for your contractor. 

310
00:15:03,800 --> 00:15:07,200
So we're getting paid per tonne 
they're moving, but they're 

311
00:15:07,400 --> 00:15:09,640
they're they're limited by how 
fast they can go because they're

312
00:15:09,640 --> 00:15:11,840
stuck behind the jumbo. 
So now all of a sudden they're 

313
00:15:11,840 --> 00:15:15,600
separate routes and, and 
potentially a, you know, a path 

314
00:15:15,600 --> 00:15:19,240
forward, albeit it requires, you
know, considerable scaling of, 

315
00:15:19,360 --> 00:15:20,760
of contract trucks. 
Yeah. 

316
00:15:20,760 --> 00:15:24,920
And then and then sort of spoke 
to breaking up the repairs or 

317
00:15:24,920 --> 00:15:27,280
that really the redo of of the 
road in parts. 

318
00:15:27,280 --> 00:15:29,720
And I think the market took a 
bit of liking that one of the 

319
00:15:29,720 --> 00:15:32,200
smaller stages is already 
notched off that progress is 

320
00:15:32,200 --> 00:15:36,320
really being made on that. 
But if we if we look now at 

321
00:15:36,800 --> 00:15:39,960
mining services because mining 
services again relates because a

322
00:15:39,960 --> 00:15:45,080
lot of the tons come from Onslow
tons and you've got a yeah, 

323
00:15:45,080 --> 00:15:48,840
changes in, in EBITDA from half 
one to half 2 is quite 

324
00:15:48,840 --> 00:15:52,160
anticipated as as management had
sort of outlined what's the, 

325
00:15:52,160 --> 00:15:53,840
what's the latest thinking. 
There, I think there's a really 

326
00:15:53,840 --> 00:15:57,720
big point the mining services 
business is, is there's a 

327
00:15:57,720 --> 00:16:03,080
perception it's just that the 
backbone of min res and these 

328
00:16:03,080 --> 00:16:05,960
are its infrastructure like 
income, long life contracts, 

329
00:16:05,960 --> 00:16:07,560
margins just keep expanding over
time. 

330
00:16:08,360 --> 00:16:14,160
But what we've seen in in in the
quarterly today, I think 

331
00:16:14,160 --> 00:16:18,640
challenges that assumption. 
Now what what Min Rez recorded 

332
00:16:18,640 --> 00:16:22,880
for their their their earnings 
when they came out for the first

333
00:16:22,880 --> 00:16:25,040
half of this financial year, 
they said that EBITDA per tonne 

334
00:16:25,040 --> 00:16:28,120
in the mining services business 
was $2.60 per tonne. 

335
00:16:28,480 --> 00:16:30,880
And that was, that was record 
EBITDA, you know big charts 

336
00:16:30,880 --> 00:16:35,520
going up and to the right, you 
know of them doing more tons and

337
00:16:35,520 --> 00:16:38,960
getting more out of it now. 
To their credit, they didn't 

338
00:16:38,960 --> 00:16:41,360
want to pin the markets hopes on
that and they said even at the 

339
00:16:41,360 --> 00:16:45,400
call at the time that don't put 
that in your model going 

340
00:16:45,400 --> 00:16:47,880
forward, which they really 
emphasized again today. 

341
00:16:47,880 --> 00:16:48,520
I. 
Don't. 

342
00:16:48,640 --> 00:16:51,320
I don't know if the market was 
prepared for what eventuated 

343
00:16:51,320 --> 00:16:56,360
today because in Res is 
forecasting FY25 mining services

344
00:16:56,360 --> 00:16:58,800
EBITDA to be just $2.20 per 
tonne. 

345
00:16:58,800 --> 00:17:01,800
Now that's for the full 
financial year. 25 S forecast 

346
00:17:01,800 --> 00:17:04,880
tons for the second-half isn't 
changing that much for EBITDA 

347
00:17:04,880 --> 00:17:09,200
per ton to come down to 220. 
That means the second-half 

348
00:17:09,240 --> 00:17:11,839
EBITDA per ton will be $1.60 
thereabouts. 

349
00:17:12,079 --> 00:17:15,359
That's a massive erosion of, you
know, margin in the, in the 

350
00:17:15,359 --> 00:17:18,760
mining services business, $2.60 
to to 160 1/2 year. 

351
00:17:19,440 --> 00:17:22,839
You know, annualized that $1.00 
per ton is like $260 million of 

352
00:17:22,880 --> 00:17:26,000
EBITDA from the mining services 
business kind of gone from, 

353
00:17:26,800 --> 00:17:29,360
from, you know, what might have 
been in some people's heads and 

354
00:17:29,360 --> 00:17:30,920
why? 
Well, it's, it's the mining 

355
00:17:30,920 --> 00:17:33,240
services business that has to 
weigh the cost of the third 

356
00:17:33,240 --> 00:17:36,680
party trucking at Onslow. 
This is, yeah, I think this is 

357
00:17:36,680 --> 00:17:38,200
kind of an interesting point, 
right? 

358
00:17:38,200 --> 00:17:42,640
Because the, the mine code 
itself, the economics to the 

359
00:17:42,640 --> 00:17:44,760
mine code, which Minrez has JV 
partners. 

360
00:17:44,880 --> 00:17:47,000
Well, they're paying like a 
predetermined rate for the 

361
00:17:47,000 --> 00:17:50,880
haulage. 
However, Minrez is, is, is on 

362
00:17:50,880 --> 00:17:54,760
the hook to, to, to contract out
the all the cost of the third 

363
00:17:54,760 --> 00:17:57,600
parties to actually conduct 
haulage where it's clearly had 

364
00:17:57,640 --> 00:18:00,040
had some limitations. 
And that's that's going to, it 

365
00:18:00,040 --> 00:18:02,600
has to come out of something. 
And it's certainly hitting the, 

366
00:18:03,200 --> 00:18:05,160
you know, the, the earnings of 
the mining services business for

367
00:18:05,160 --> 00:18:07,040
the time being. 
Yeah, it really speaks to your 

368
00:18:07,040 --> 00:18:09,960
point of looking at cash at a, 
at a group level for, for a 

369
00:18:09,960 --> 00:18:13,280
company sort of nature and 
putting it all in into context 

370
00:18:13,280 --> 00:18:17,440
where you do the work on each 
individual bucket Here, you 

371
00:18:17,640 --> 00:18:20,320
know, in certain aspects Peter's
going to be paying Paul and vice

372
00:18:20,320 --> 00:18:22,000
versa. 
So you want to make sure the 

373
00:18:22,000 --> 00:18:24,920
company's making making money at
A at a group level. 

374
00:18:25,040 --> 00:18:28,640
Well, that's, and that's like, I
think that's the the point to, 

375
00:18:29,120 --> 00:18:33,360
to kind of dwell on a bit like 
I'm trying to get a grasp of the

376
00:18:33,400 --> 00:18:37,200
economics of of Mineco and you 
can sort of infer that by what 

377
00:18:37,200 --> 00:18:41,400
happens to the carry loan. 
So the, the carry loan, like the

378
00:18:41,400 --> 00:18:45,160
way that the carry loan works 
out is min res, it's kind of 

379
00:18:45,160 --> 00:18:48,720
entitled to to priority free 
cash flow out of out of Mineco 

380
00:18:48,720 --> 00:18:50,120
when it's sort of free cash flow
positive. 

381
00:18:50,400 --> 00:18:53,520
And that for for people just 
quickly wondering that's money 

382
00:18:53,520 --> 00:18:57,280
that Mineco sort of sits there 
that is owed to. 

383
00:18:57,840 --> 00:19:00,600
To min res from its JV partners.
Correct. 

384
00:19:00,720 --> 00:19:04,520
And that that didn't really move
too much. 

385
00:19:04,520 --> 00:19:07,040
It kind of got paid down sort of
I think it was like single digit

386
00:19:07,320 --> 00:19:08,480
digit. 
Yeah, it went down 5 million, 

387
00:19:08,480 --> 00:19:11,960
5,000,000 bucks. 
So you know what that tells me 

388
00:19:11,960 --> 00:19:15,680
is that that Mineco is is kind 
of still washing its face at 

389
00:19:15,680 --> 00:19:17,240
current volumes. 
It needs more volumes to 

390
00:19:17,240 --> 00:19:20,280
actually generate free cash flow
out of out of Mineco when you 

391
00:19:20,280 --> 00:19:23,480
really factor in kind of all, 
all of the cash flows there. 

392
00:19:23,840 --> 00:19:28,960
And that's keep in mind not 
factoring in the cost of 

393
00:19:28,960 --> 00:19:32,880
contractor, you know, trucking 
because Minres is wearing that 

394
00:19:32,880 --> 00:19:35,920
separately at 100% sort of 
Minres, you know, Mineco is only

395
00:19:35,920 --> 00:19:39,480
paying the the predetermined 
mining services right on the on 

396
00:19:39,480 --> 00:19:42,560
the haulage on that front. 
So yeah, I find that kind of 

397
00:19:42,560 --> 00:19:45,160
interesting to start with. 
The other thing that's kind of 

398
00:19:45,160 --> 00:19:47,480
interesting when you think of 
like Mineco economics is Minres 

399
00:19:47,480 --> 00:19:52,720
Steel hasn't declared commercial
production on, on, you know, on,

400
00:19:53,080 --> 00:19:54,320
on, on, on Onslow. 
Yeah. 

401
00:19:54,360 --> 00:19:57,440
And that's an accounting thing. 
Once you, once you do declare 

402
00:19:57,440 --> 00:19:59,480
commercial production, all of a 
sudden, you know, you can't 

403
00:19:59,480 --> 00:20:02,520
capitalize OpEx. 
The extent they're doing that 

404
00:20:02,520 --> 00:20:05,240
still kind of unknown entirely 
in my mind. 

405
00:20:05,240 --> 00:20:07,720
So I just, I just find all of 
that kind of interesting. 

406
00:20:08,640 --> 00:20:11,560
But that's why I always just 
think like you really want to 

407
00:20:11,560 --> 00:20:14,920
look at a group level changing 
cash to really get a snapshot of

408
00:20:14,920 --> 00:20:16,600
the health of the business at a 
point in time. 

409
00:20:16,760 --> 00:20:19,760
Yeah, and and to be in min res's
corner for a second, you 

410
00:20:19,760 --> 00:20:23,320
wouldn't expect them at A at a 
run rate of 15,000,000 tons per 

411
00:20:23,320 --> 00:20:26,160
annum when they call it 
35,000,000 being name plate to 

412
00:20:26,160 --> 00:20:28,080
have called commercial 
production just yet. 

413
00:20:28,160 --> 00:20:30,000
Yeah. 
Well, well, sometimes you call 

414
00:20:30,000 --> 00:20:32,000
commercial production when as 
soon as you start to get, you 

415
00:20:32,000 --> 00:20:34,240
know, sustainable free cash 
flow, but yeah. 

416
00:20:35,240 --> 00:20:38,120
I, I know a bit different to 
that sort of products and stuff,

417
00:20:38,120 --> 00:20:41,000
but there's like you sort of 
mentioned ramifications of 

418
00:20:41,080 --> 00:20:42,720
calling commercial production 
so. 

419
00:20:42,960 --> 00:20:44,560
Totally. 
And and sometimes you kind of 

420
00:20:44,560 --> 00:20:46,840
have to call it even when you're
not profitable. 

421
00:20:46,840 --> 00:20:49,560
I mean, like, yeah, line is 
finally declared commercial 

422
00:20:49,560 --> 00:20:51,560
production at at their Kabuli 
facility. 

423
00:20:51,560 --> 00:20:54,240
But yeah, show me the positive 
operating cash from that and 

424
00:20:54,240 --> 00:20:57,480
I'll I'll give you a Fredo Frog 
for free one day. 

425
00:20:57,480 --> 00:20:59,640
One day. 
What what about Ken's more just 

426
00:20:59,640 --> 00:21:01,360
quickly I. 
Want to do some more work here? 

427
00:21:01,360 --> 00:21:07,400
I, I find I found it intriguing 
that min min res like like 

428
00:21:07,440 --> 00:21:09,360
there's OK, there's three things
that are intriguing to me about,

429
00:21:09,400 --> 00:21:11,440
about the, the actual like mind 
gate. 

430
00:21:12,560 --> 00:21:14,960
So Ken's bore we all know was, 
you know, where, where they 

431
00:21:15,400 --> 00:21:17,320
like, where the whole road goes,
where the camp is, where they're

432
00:21:17,320 --> 00:21:19,160
bringing online initial volumes 
from. 

433
00:21:19,360 --> 00:21:21,600
It's a resort. 
It's resort yes. 

434
00:21:22,920 --> 00:21:28,520
Now what they've been like doing
is rapidly advancing to other 

435
00:21:28,600 --> 00:21:34,320
areas of their of of the of the 
project being it's Carter bore 

436
00:21:34,320 --> 00:21:37,440
East and upper cane. 
Now those are, those are kind of

437
00:21:37,440 --> 00:21:39,760
like 15 kilometers ish away from
Ken's bore. 

438
00:21:39,760 --> 00:21:42,760
So there's more kind of 
logistics to get it through the 

439
00:21:42,760 --> 00:21:43,840
whole road and all that sort of 
stuff. 

440
00:21:43,840 --> 00:21:47,160
But but it's those, those are 
smaller deposits. 

441
00:21:47,160 --> 00:21:50,600
So you don't have like as much 
kind of economies of scale, but 

442
00:21:50,600 --> 00:21:53,880
it's, but they do have slightly 
higher grade and slightly lower 

443
00:21:53,880 --> 00:21:57,160
impurities. 
And what Minres talk about is, 

444
00:21:57,200 --> 00:21:59,680
you know, the ability to kind of
blend it all and, and all that 

445
00:21:59,680 --> 00:22:02,320
sort of stuff. 
And Ken's ball becomes the, the 

446
00:22:02,320 --> 00:22:03,880
central hub where you can do all
of that. 

447
00:22:04,920 --> 00:22:08,360
Yeah, I find it intriguing. 
I I, I really want to dig into 

448
00:22:08,360 --> 00:22:12,320
this a bit more because I, I 
find it a bit, yeah, like a bit 

449
00:22:12,320 --> 00:22:15,200
suspicious that that, that, that
may be there. 

450
00:22:15,280 --> 00:22:19,160
You know, was this always, was 
this always the mine plan to, to

451
00:22:19,160 --> 00:22:20,920
bring these areas on as fast as 
they are? 

452
00:22:21,200 --> 00:22:24,600
Or is this kind of like a, you 
know, a strategy in order to, to

453
00:22:24,600 --> 00:22:28,960
really maximize the cash flow 
potential of your early product 

454
00:22:28,960 --> 00:22:31,280
because it's got the better 
grade and the lower impurities, 

455
00:22:31,840 --> 00:22:33,360
but there are longer term 
ramifications? 

456
00:22:33,600 --> 00:22:36,280
Or is, or is there also a 
statement about, you know, the, 

457
00:22:36,360 --> 00:22:39,640
the, the quantity of material 
that is actually, you know, 

458
00:22:39,760 --> 00:22:42,880
suitable at, at, at, at these 
enough realizations. 

459
00:22:42,880 --> 00:22:45,560
Atkins bore itself, which had a 
pretty big step up in its own 

460
00:22:45,560 --> 00:22:49,120
strip ratio in, in the quarter. 
I just, I just need to do more 

461
00:22:49,120 --> 00:22:51,120
work. 
Here is the gist of what I'm 

462
00:22:51,120 --> 00:22:52,200
saying. 
I don't have the answers. 

463
00:22:52,200 --> 00:22:54,080
I'm just, I'm very, I'm just 
curious. 

464
00:22:54,360 --> 00:22:58,000
Probably goes back to not 
actually two years ago seeing a 

465
00:22:58,160 --> 00:23:02,560
study come out on on the 
project, right, that it's harder

466
00:23:02,560 --> 00:23:05,440
to to reconcile. 
But obviously it's in their 

467
00:23:05,440 --> 00:23:07,720
interest to pull down payback 
and all those sorts of things. 

468
00:23:08,360 --> 00:23:11,360
Yeah, you know, not at the 
forsake of the the long term 

469
00:23:11,360 --> 00:23:15,640
life of the mind, but. 
And there was the the the leaked

470
00:23:16,560 --> 00:23:20,040
technical report that the Finn 
talked about, which spoke to the

471
00:23:20,040 --> 00:23:23,720
fact that, you know, that some 
of the material games bore has a

472
00:23:23,720 --> 00:23:27,800
lot of like these, like Tang 
material and clays and wash 

473
00:23:27,800 --> 00:23:31,200
plant for part of it. 
Now that that might be true 

474
00:23:31,480 --> 00:23:34,240
below the water table or it 
might be true for some, you 

475
00:23:34,240 --> 00:23:35,960
know, in the stuff that they're 
at mine at the moment. 

476
00:23:35,960 --> 00:23:38,840
I don't, I don't know right. 
But if if you've got a portion 

477
00:23:38,840 --> 00:23:41,080
of material and you're 
selectively kind of stockpiling 

478
00:23:41,080 --> 00:23:44,040
and then you're kind of, you 
know, the stuff that's got like,

479
00:23:44,240 --> 00:23:46,920
you know, less clays and it's 
got, you know, better 

480
00:23:46,920 --> 00:23:49,160
realizations and you you've been
quite selective about what 

481
00:23:49,160 --> 00:23:52,800
you're putting on the whole Rd. 
then I could understand that. 

482
00:23:53,000 --> 00:23:55,760
But I do think that that's kind 
of a, you know, part of the 

483
00:23:55,760 --> 00:23:58,720
economics that that typical 
analyst isn't really thinking 

484
00:23:58,720 --> 00:24:01,680
about the implications of 2. 
So I just need to do more work 

485
00:24:01,680 --> 00:24:03,240
here. 
If people have have answers or 

486
00:24:03,240 --> 00:24:06,280
insight, please reach out to 
metravis@moneymind.com. 

487
00:24:06,280 --> 00:24:07,480
I'd love to know all. 
Right. 

488
00:24:07,480 --> 00:24:10,040
Let's talk a bit about the 
lithium business, just quickly 

489
00:24:10,040 --> 00:24:13,440
to book in this one. 
So the lithium business they 

490
00:24:14,000 --> 00:24:16,880
yeah, the reported cost 
improvements in the, in the 

491
00:24:16,880 --> 00:24:19,920
lithium business like certainly 
stand out on, on paper. 

492
00:24:19,920 --> 00:24:24,240
They're, they're so remarkable, 
it's tricky to plausibly believe

493
00:24:24,240 --> 00:24:26,480
in their entire entirety. 
Like to the extent these cost 

494
00:24:26,480 --> 00:24:29,840
savings are, you know, have been
legitimately realized from, from

495
00:24:29,880 --> 00:24:32,640
the, you know, savings and 
headcount reductions in, in 

496
00:24:32,640 --> 00:24:36,040
various areas like, you know, 
kudos. 

497
00:24:36,600 --> 00:24:37,600
Yeah. 
Take Wodgina. 

498
00:24:37,600 --> 00:24:40,800
So this quarter they shipped 12%
less product than last quarter. 

499
00:24:41,480 --> 00:24:43,400
They moved 4% more material than
last quarter. 

500
00:24:43,400 --> 00:24:47,480
The grade was 7% lower than last
quarter and yet somehow the unit

501
00:24:47,480 --> 00:24:53,760
costs were lower, 23% lower at 
$775 per tonne SA 6. 

502
00:24:54,560 --> 00:24:57,400
I just can't reconcile where 
that cost saving has come from. 

503
00:24:58,320 --> 00:25:00,960
Yeah, I mean that can't all be 
recovery. 

504
00:25:00,960 --> 00:25:03,520
It's like, yeah, it's just 
really, really fascinating. 

505
00:25:03,560 --> 00:25:07,760
Like it's just a question mark 
that how they how they get that 

506
00:25:07,760 --> 00:25:09,200
one. 
So yeah. 

507
00:25:09,440 --> 00:25:11,080
Yeah. 
And I think you know, digging 

508
00:25:11,080 --> 00:25:15,160
into the detail there, costs 
have been overshooting guidance 

509
00:25:15,880 --> 00:25:19,760
year to date so far before this 
one, but they hadn't gotten rid 

510
00:25:19,760 --> 00:25:23,240
of that guidance. 
So they were expecting 

511
00:25:23,240 --> 00:25:27,120
improvement and then they 
factored in cuts in in costs. 

512
00:25:27,400 --> 00:25:29,240
But how do you get the, how do 
you get the physicals to match 

513
00:25:29,240 --> 00:25:31,120
the unit costs there when I 
don't know just. 

514
00:25:32,440 --> 00:25:34,600
I would think there's a lot of 
sort. 

515
00:25:34,600 --> 00:25:37,200
Of accounting tricks. 
A lot of accounting and you 

516
00:25:37,400 --> 00:25:39,640
know, pretty much everything 
that doesn't need to be spent, 

517
00:25:39,880 --> 00:25:44,240
which again talks to the the 
long term treatment of the asset

518
00:25:44,240 --> 00:25:47,480
being being cut for the sake of 
near term survival. 

519
00:25:48,320 --> 00:25:51,000
Yeah. 
But there's a few leaders on 

520
00:25:51,000 --> 00:25:54,000
that front to be pulled. 
There are so I I just think it's

521
00:25:54,000 --> 00:25:56,440
worth kind of, you know, 
wrapping up with with our 

522
00:25:56,440 --> 00:25:59,440
thoughts of, of where you know, 
where we think business is at 

523
00:25:59,440 --> 00:26:02,280
right now. 
JD, what are what are your 

524
00:26:02,280 --> 00:26:04,400
thoughts kind of having listened
to the call yourself? 

525
00:26:04,680 --> 00:26:08,960
I think they've really addressed
some of the concerns or played 

526
00:26:08,960 --> 00:26:11,120
into what they thought the 
market wanted, which is what it 

527
00:26:11,120 --> 00:26:15,120
did, which is the reason why 
it's jumped up so substantially.

528
00:26:15,120 --> 00:26:18,640
They haven't alleviated a lot of
those concerns. 

529
00:26:18,640 --> 00:26:21,520
They've just given more color as
to how they're going to do that,

530
00:26:21,880 --> 00:26:24,120
mainly on the road. 
It's it's the sort of be all and

531
00:26:24,120 --> 00:26:27,120
end all, you know. 
So there is still the execution 

532
00:26:27,120 --> 00:26:28,360
risk. 
They still need to get up to 

533
00:26:28,360 --> 00:26:32,480
that 35,000,000 ton per annum 
run rate for all the reasons we 

534
00:26:32,480 --> 00:26:35,080
outlined when we spoke about the
last a couple months ago. 

535
00:26:35,720 --> 00:26:40,680
So yeah, kudos to them for for 
giving the market what it kind 

536
00:26:40,680 --> 00:26:43,760
of wanted on that front. 
But it's still, you know, 

537
00:26:43,800 --> 00:26:46,480
execution, execution, execution 
on that front. 

538
00:26:46,480 --> 00:26:51,480
And that debt pile is getting 
closer by the day. 

539
00:26:51,480 --> 00:26:54,720
And yeah, we know what a 
refinancing kind of looks like 

540
00:26:54,720 --> 00:26:56,880
on on that front. 
What about you? 

541
00:26:56,880 --> 00:27:02,200
What do you think? 
Yeah, I, I think I echo your 

542
00:27:02,200 --> 00:27:06,680
sentiment entirely. 
I think the the execution, so 

543
00:27:06,680 --> 00:27:09,240
it's like what they've got to do
in May and June is effectively 

544
00:27:09,240 --> 00:27:11,880
double the whole age throughput 
where they've got real 

545
00:27:11,880 --> 00:27:16,440
constraints on the road. 
And and it's not going to be 

546
00:27:16,640 --> 00:27:18,000
like when you're kind of just 
doubling that. 

547
00:27:18,000 --> 00:27:21,640
It's not going to be fully known
what the risks are of doing that

548
00:27:22,000 --> 00:27:24,360
until you you do it. 
And then you put in pressures in

549
00:27:24,360 --> 00:27:26,920
certain areas along the way. 
So whether they can do it or 

550
00:27:26,920 --> 00:27:29,600
not, like, I don't know if it's 
possible if, like if they can, 

551
00:27:29,600 --> 00:27:33,680
if they can, yeah, kind of 
double, double the throughput on

552
00:27:33,680 --> 00:27:35,800
the road while half the road is 
offline. 

553
00:27:35,800 --> 00:27:38,800
I think that's a tremendous win.
And I think like the, you know, 

554
00:27:38,800 --> 00:27:41,880
the short term is, is rosy. 
If they can do that, that's a 

555
00:27:41,880 --> 00:27:45,400
big if it's a big if, right? 
Because yeah, like there's, 

556
00:27:46,360 --> 00:27:48,800
there's a lot of stuff that can 
still go, go wrong. 

557
00:27:48,880 --> 00:27:54,680
And then I think on the longer 
term horizon, the way, the way I

558
00:27:54,680 --> 00:27:56,680
interpret like what's going on 
with the actual road and the 

559
00:27:56,680 --> 00:27:58,200
repairs on the road and 
everything like that. 

560
00:27:58,200 --> 00:28:00,840
So there's like the asphalting, 
there's a cement and foam fill 

561
00:28:01,600 --> 00:28:06,160
now that's going to give the 
road sort of, you know, rigidity

562
00:28:06,280 --> 00:28:08,400
repair for certainly the short 
term. 

563
00:28:08,400 --> 00:28:11,240
And while the months are colder,
you would actually expect it to 

564
00:28:11,680 --> 00:28:13,480
to certainly be more, more 
durable. 

565
00:28:14,120 --> 00:28:19,640
It's going to be like the 
January, February where pressure

566
00:28:19,640 --> 00:28:22,520
is going to come to that road. 
And that's when I think we'll 

567
00:28:22,520 --> 00:28:27,440
know if the repairs have been 
sufficient or not or if there 

568
00:28:27,920 --> 00:28:30,440
are further fundamental issues 
that come about with the road at

569
00:28:30,440 --> 00:28:31,760
the moment. 
The road's forecast to be 

570
00:28:32,320 --> 00:28:36,640
upgraded by September, like they
could have some phenomenal like 

571
00:28:36,960 --> 00:28:40,120
performance on that road from 
the month of September to 

572
00:28:40,120 --> 00:28:42,320
December, while the while the 
month's still cool enough to 

573
00:28:42,760 --> 00:28:44,520
don't put that road under too 
much pressure. 

574
00:28:44,640 --> 00:28:46,960
If they're also, you know, 
restricting the payload of the 

575
00:28:46,960 --> 00:28:49,520
trucks to 260, they're up that 
to 3:30. 

576
00:28:49,520 --> 00:28:52,000
It's a very big difference 
because yeah, your Rd. damage 

577
00:28:52,320 --> 00:28:55,120
scales exponentially with, with,
with with a load it's. 

578
00:28:55,800 --> 00:28:57,640
Got to be built to last that 
debt balance, right? 

579
00:28:57,920 --> 00:29:01,440
And the debt, the debt like, 
yeah, so cash went down to 100 

580
00:29:01,920 --> 00:29:08,000
this quarter, but I don't know 
if the yeah, all of the interest

581
00:29:08,000 --> 00:29:10,320
repayments and on all of their 
bonds were actually kind of 

582
00:29:11,000 --> 00:29:12,680
payable in this quarter. 
They might have actually been in

583
00:29:12,680 --> 00:29:14,640
a second-half like a second 
quarter thing in this half. 

584
00:29:14,640 --> 00:29:18,200
So, yeah, it's not to be 
understated like the impact that

585
00:29:18,560 --> 00:29:22,880
$400 million of interest 
payments alone can have. 

586
00:29:23,520 --> 00:29:29,200
The good news is that, yeah, 
there's, there's, there's this 

587
00:29:29,200 --> 00:29:31,920
quarter could have been a lot 
worse as well, like 250 million 

588
00:29:31,920 --> 00:29:33,640
cash play. 
This could have been, they could

589
00:29:33,640 --> 00:29:36,240
have lost, you know, cash could 
have gone down by $200 million 

590
00:29:36,240 --> 00:29:38,200
more than that this quarter. 
And that wouldn't have been a 

591
00:29:38,200 --> 00:29:40,760
massive surprise. 
So I do think I do look at it in

592
00:29:40,760 --> 00:29:42,880
the context of like, things 
could be much worse. 

593
00:29:43,160 --> 00:29:45,080
Cash is still going down. 
That's not good. 

594
00:29:45,160 --> 00:29:47,800
They've painted a picture where 
it looks like next quarter could

595
00:29:47,800 --> 00:29:50,120
be a positive cash flow if 
everything kind of goes right. 

596
00:29:50,200 --> 00:29:51,640
And that'll be a big turning 
point. 

597
00:29:52,520 --> 00:29:55,040
But I don't think that's a sure 
thing at all. 

598
00:29:55,040 --> 00:29:57,280
In fact, I think it could very 
much go either way on that 

599
00:29:57,280 --> 00:29:58,160
front. 
Yeah. 

600
00:29:58,160 --> 00:30:02,120
And of course, we had the 
revisions just 6 odd halfway 

601
00:30:02,120 --> 00:30:05,640
through the quarter. 
We were revised on guidance and 

602
00:30:05,880 --> 00:30:08,360
sorts of things. 
So weren't coming totally out of

603
00:30:08,360 --> 00:30:09,880
the blue into this quarter? 
Yeah. 

604
00:30:09,960 --> 00:30:12,880
And overlaying all of that is 
just a commodity backdrop. 

605
00:30:12,880 --> 00:30:15,600
Like you're when you're very 
leveraged, you're also just 

606
00:30:15,600 --> 00:30:18,520
super susceptible to changes in 
in commodity prices that can 

607
00:30:18,600 --> 00:30:21,480
that can, that can be a 
wonderful thing or a dreadful 

608
00:30:21,480 --> 00:30:23,320
thing. 
So it's just vulnerability 

609
00:30:23,320 --> 00:30:26,920
still. 
Yeah, it's kind of keep on 

610
00:30:26,920 --> 00:30:31,080
chipping away at it though. 
And as you're chipping away at 

611
00:30:31,080 --> 00:30:33,520
it and as you're doing your, 
your earthworks on the road and 

612
00:30:33,520 --> 00:30:36,280
everything like that, you kind 
of need, you need some yellow 

613
00:30:36,280 --> 00:30:38,400
gear, JD, when you're doing 
earthworks. 

614
00:30:38,400 --> 00:30:40,040
What do you think of when you 
think of Yellow Gear Man? 

615
00:30:40,040 --> 00:30:43,400
I I need people, I need kit, I 
need equipment that can help me 

616
00:30:43,480 --> 00:30:46,040
with my civils and that is KCA 
site services. 

617
00:30:46,040 --> 00:30:50,520
JD just call KCA. 
Equipment, recruiting services, 

618
00:30:50,520 --> 00:30:53,080
equipment recruiting services, 
KCA. 

619
00:30:53,160 --> 00:30:55,600
You just got to hammer those 
ones together because if you 

620
00:30:55,600 --> 00:30:58,200
need either of those equipment 
or recruiting services, just 

621
00:30:58,200 --> 00:31:00,240
call KCA, right here's. 
Some of the equipment they've 

622
00:31:00,240 --> 00:31:04,040
got for hire right now anyways 
call them 412 C to Toyota Hiichi

623
00:31:04,040 --> 00:31:07,920
4 by 4 mine spec buses mix of 
issue fuse O tip a truck Volvo 

624
00:31:07,960 --> 00:31:11,640
5T5 ton excavator. 
You've got 2 brand new ITS If 

625
00:31:11,640 --> 00:31:15,120
you need anything from ITS to 
surface trucks to LVS to 

626
00:31:15,120 --> 00:31:21,520
excavators to greatest call KCA.
Just call KCA and if you need 

627
00:31:21,520 --> 00:31:24,320
people they've got service crew 
charger bugger operators 

628
00:31:24,560 --> 00:31:27,160
underground shift supervisors, 
mobile crusher operators open 

629
00:31:27,160 --> 00:31:29,560
pit all rounders underground HD 
fitters on all sorts of 

630
00:31:29,560 --> 00:31:32,520
different rosters. 
KCA, the name to remember for 

631
00:31:32,520 --> 00:31:34,160
all your recruitment and 
equipment higher needs. 

632
00:31:34,200 --> 00:31:38,960
Go KCA site services. 
Now join us, JD Jonas, Benedict,

633
00:31:39,040 --> 00:31:42,840
JBD. 
I'm really, I'm really 

634
00:31:42,840 --> 00:31:44,800
interested in what's going on 
with emerald. 

635
00:31:44,800 --> 00:31:48,240
I've got to admit Emerald, you 
know, we know they they produce 

636
00:31:48,240 --> 00:31:51,360
gold from Cambodia, but my 
knowledge is it's, it's not as 

637
00:31:51,400 --> 00:31:54,640
as elaborate as it would be for 
some of the other ASX listed 

638
00:31:54,640 --> 00:31:56,360
kind of more, more domestic 
producers. 

639
00:31:57,240 --> 00:32:00,280
But I'm very curious in the fact
that they've, yeah, they've had 

640
00:32:00,280 --> 00:32:03,320
a big, big drop down in what 
they actually produced this 

641
00:32:03,320 --> 00:32:04,960
quarter versus last. 
What's going on? 

642
00:32:05,000 --> 00:32:07,480
Yeah, there's, there's a number 
of reasons to be interested in 

643
00:32:07,480 --> 00:32:08,960
Emerald. 
I'm I'm sort of attracted to 

644
00:32:08,960 --> 00:32:10,840
them because they're a bit 
quirky in the sense that they're

645
00:32:10,840 --> 00:32:14,000
not just yet run-of-the-mill 
goldfields, mid size or mid cap 

646
00:32:14,000 --> 00:32:17,440
Goldie here. 
They operate in a a bit more of 

647
00:32:17,480 --> 00:32:19,720
a colorful jurisdiction in, in 
Cambodia. 

648
00:32:20,680 --> 00:32:23,440
And they're also one of those 
companies that have been a long 

649
00:32:23,440 --> 00:32:25,840
time performer now since they 
got Ochville up and running. 

650
00:32:25,840 --> 00:32:28,240
So they've got the, the quote UN
quote management premium 

651
00:32:28,560 --> 00:32:32,320
attached to them and they've got
a lot of growth factored into 

652
00:32:32,320 --> 00:32:34,080
the story. 
You might be paying for that 

653
00:32:34,360 --> 00:32:36,320
already. 
So I think for those reasons, I 

654
00:32:36,320 --> 00:32:40,520
was, I was keen to to get into 
what this company is looking 

655
00:32:40,520 --> 00:32:42,680
like today, what it could look 
like in a couple years and to 

656
00:32:42,680 --> 00:32:48,640
really kind of dig into why they
had that that downgrade on March

657
00:32:48,640 --> 00:32:51,200
quarter production as you 
mentioned first up. 

658
00:32:52,560 --> 00:32:55,880
Tell me mate, why did they miss?
Yeah. 

659
00:32:56,440 --> 00:33:00,800
So to put the missing context, 
they did about 19,000 oz this 

660
00:33:00,800 --> 00:33:04,960
quarter at a bit over 1300 US 
all in sustaining cost. 

661
00:33:05,240 --> 00:33:10,280
Now the quarter before that, 
they'd done 32,000 at 8:50. 

662
00:33:10,280 --> 00:33:15,560
So that's a pretty big drop off.
And as you suspect, the unit 

663
00:33:15,560 --> 00:33:18,400
costs commensurately jumped up 
quite substantially. 

664
00:33:18,400 --> 00:33:24,160
So putting the miss into context
why it's kind of happened, I 

665
00:33:24,160 --> 00:33:26,640
think it was a little while in 
the making, they don't spell it 

666
00:33:26,640 --> 00:33:27,640
out. 
They give you kind of three dot 

667
00:33:27,640 --> 00:33:30,400
points when they pre flagged 
this a month ago. 

668
00:33:31,120 --> 00:33:35,880
Now cutback activities at the 
operation in Cambodia limited 

669
00:33:35,880 --> 00:33:38,000
access to all. 
And they didn't say this 

670
00:33:38,000 --> 00:33:41,400
specifically, but I suspect this
kind of stems back to an 

671
00:33:41,400 --> 00:33:44,880
announcement of from September 
last year where there was a bit 

672
00:33:44,880 --> 00:33:49,520
of a pit wall slip that saw them
do these cutback activities a 

673
00:33:49,520 --> 00:33:51,680
bit earlier. 
So they would have been doing 

674
00:33:51,680 --> 00:33:53,680
these otherwise. 
It was, you know, all planned 

675
00:33:53,680 --> 00:33:56,160
out already. 
It just spurred them on to do it

676
00:33:56,160 --> 00:34:01,400
a bit sooner. 
Now that unfortunately led to 

677
00:34:01,400 --> 00:34:03,280
limited access to, to other 
parts. 

678
00:34:03,280 --> 00:34:06,560
And that leads to the second 
challenge that they had where 

679
00:34:06,720 --> 00:34:10,679
the areas that they did have 
access to didn't reconcile well 

680
00:34:10,679 --> 00:34:12,880
with the reserve grade. 
Now that's a, that's a big 

681
00:34:12,880 --> 00:34:13,960
problem. 
It's the first time we've sort 

682
00:34:13,960 --> 00:34:17,800
of seen a problem of this nature
at like I'm sure they've had it 

683
00:34:17,800 --> 00:34:20,000
in sort of parts, but they've 
been able to compensate 

684
00:34:20,440 --> 00:34:22,960
throughout the quarters by going
to to other areas. 

685
00:34:22,960 --> 00:34:26,080
But given they had limited 
access to the other areas of the

686
00:34:26,080 --> 00:34:28,480
pit, they were, they were stuck 
with this one. 

687
00:34:28,480 --> 00:34:30,679
And hence they were able to 
guard the market in March 

688
00:34:30,679 --> 00:34:32,920
already that hey, this, this 
wasn't going to be a good 

689
00:34:33,280 --> 00:34:35,480
quarter because they knew they 
couldn't do an awful lot. 

690
00:34:35,679 --> 00:34:39,560
So there's, there's two issues 
there. 1 is, yeah, reduced 

691
00:34:39,560 --> 00:34:42,320
access to, to good areas. 
And the other one is, you know, 

692
00:34:42,360 --> 00:34:44,480
reconciliation. 
It's the reconciliation that 

693
00:34:44,480 --> 00:34:46,760
would would worry me much more 
as a, as a, as a shareholder 

694
00:34:46,760 --> 00:34:49,360
because you worry about a, a 
potential for a, for that trend 

695
00:34:49,360 --> 00:34:52,520
to be expanded for life of mine 
or for a period of time. 

696
00:34:52,840 --> 00:34:55,400
Yeah, 100% it's a it's a real 
cause for concern. 

697
00:34:55,400 --> 00:34:57,800
It's something you really want 
to dig into and the company 

698
00:34:57,800 --> 00:35:01,080
understands this fully and tries
to alleviate all the concerns of

699
00:35:01,080 --> 00:35:02,760
the shareholders. 
So I'll just read out the line 

700
00:35:02,760 --> 00:35:04,920
that they said to describe this 
quickly. 

701
00:35:05,760 --> 00:35:08,360
The forward-looking grade 
control indicates that the 

702
00:35:08,440 --> 00:35:11,040
uncharacteristic 
underperformance of the reserve 

703
00:35:11,080 --> 00:35:14,840
in the areas access this quarter
is an anomaly and not a trend 

704
00:35:14,840 --> 00:35:17,840
specific to like the the point 
that you mentioned there. 

705
00:35:17,840 --> 00:35:20,720
You don't want this to be a 
trend, you want it to to be a 

706
00:35:20,720 --> 00:35:24,840
one off. 
And yeah, they reiterate further

707
00:35:24,840 --> 00:35:28,240
on that the cutback limited 
their ability to mitigate the 

708
00:35:28,240 --> 00:35:30,600
performance. 
And I'd be lying. 

709
00:35:30,600 --> 00:35:33,800
I'd be talking out of my ass if 
I could say whether this is 

710
00:35:33,800 --> 00:35:36,080
going to be a problem down the 
track. 

711
00:35:36,080 --> 00:35:39,360
I think that's a challenge that 
a geologist could sort of dig 

712
00:35:39,360 --> 00:35:42,120
into. 
But Even so, you've got limited 

713
00:35:42,120 --> 00:35:45,640
information standing outside the
walls of the company. 

714
00:35:45,640 --> 00:35:47,520
So it's just something you're 
going to have to scrutinize 

715
00:35:47,520 --> 00:35:50,840
quite a bit in many of the many 
of the quarters to come. 

716
00:35:51,320 --> 00:35:54,320
And the company gave pretty 
specific guidance quarter by 

717
00:35:54,320 --> 00:35:56,360
quarter going forward as well 
as. 

718
00:35:56,720 --> 00:36:00,080
Through. 
FY20 6 to really address these 

719
00:36:00,080 --> 00:36:03,840
challenges and to just spell it 
out a bit more, if you if you 

720
00:36:03,840 --> 00:36:07,520
look at the physicals table 
here, you can see a head grade 

721
00:36:08,560 --> 00:36:14,560
of 1.2g per ton in the quarter. 
We go back the past 3/4, we're 

722
00:36:14,560 --> 00:36:18,520
talking about about 2G a ton, 
about 1.8 and about 2.1g. 

723
00:36:18,520 --> 00:36:22,360
So that's a big, big drop off. 
And that puts into context the 

724
00:36:22,360 --> 00:36:24,440
challenge that they faced over 
this quarter. 

725
00:36:25,080 --> 00:36:28,720
On the positive side, they put a
lot of work into improving 

726
00:36:28,760 --> 00:36:31,320
recoveries and they're sort of 
bearing the fruit of that. 

727
00:36:31,320 --> 00:36:35,680
So if you look at the recoveries
line there, you can see 85.6% 

728
00:36:35,680 --> 00:36:41,240
for a quote, UN quote refractory
ore body is is not too bad and 

729
00:36:41,240 --> 00:36:44,000
it's been improving quarter by 
quarter. 

730
00:36:44,000 --> 00:36:46,200
Especially scrapes coming off 
for recovery. 

731
00:36:47,400 --> 00:36:49,840
Exactly. 
So that's a real positive that 

732
00:36:50,440 --> 00:36:53,600
shouldn't be missed because the 
the benefits of working on your 

733
00:36:53,600 --> 00:36:57,560
recoveries as they have been in 
that sort of way is you know, 

734
00:36:57,680 --> 00:37:00,320
it's a really positive thing and
hopefully they can keep them up 

735
00:37:00,320 --> 00:37:03,480
there as I'm sure they will 
because they did invest the 

736
00:37:03,480 --> 00:37:05,680
capital needed to to unlock 
that. 

737
00:37:05,680 --> 00:37:09,040
So I. 
Did look at the like like cash. 

738
00:37:09,200 --> 00:37:13,400
Cash actually went backwards for
for emerald. 

739
00:37:13,400 --> 00:37:15,640
I mean, they did have some big 
one offs, but it was surprising 

740
00:37:15,640 --> 00:37:18,800
to see such AI think they're 
almost the lowest cost producer 

741
00:37:18,920 --> 00:37:22,880
historically on the news on that
sex in in some quarters to to 

742
00:37:22,880 --> 00:37:26,280
actually, you know, have cash 
balance go backwards was very 

743
00:37:26,280 --> 00:37:28,040
surprising to see. 
Yeah, yeah. 

744
00:37:28,040 --> 00:37:30,600
Let's talk about cash. 
So to to your point on lowest 

745
00:37:30,600 --> 00:37:35,200
cost producer, even next year 
they are flagging guidance all 

746
00:37:35,200 --> 00:37:37,960
in sustaining costs to be under 
1000 US an ounce. 

747
00:37:37,960 --> 00:37:40,040
So that that is pretty 
competitive. 

748
00:37:40,800 --> 00:37:46,120
If we look at cash, 210 million 
cash and bullion is what they 

749
00:37:46,120 --> 00:37:50,440
closed this quarter at and they 
were about 243,000,000 where 

750
00:37:50,440 --> 00:37:55,000
they ended the year at. 
So the big one offs is the 50 

751
00:37:55,000 --> 00:38:00,480
million plus in tax that was for
FY24 that that's a big one off 

752
00:38:01,000 --> 00:38:02,600
that they had to wear this 
period. 

753
00:38:02,600 --> 00:38:06,480
But on the on the positive side 
for the the cash they actually 

754
00:38:06,480 --> 00:38:10,520
sold 55000 oz more than they 
produced over the last quarter. 

755
00:38:10,520 --> 00:38:14,040
So yeah, you know, ebbs and 
flies, that's a positive, but. 

756
00:38:14,480 --> 00:38:18,080
I've got a growth project in WA 
from the acquisition of 

757
00:38:18,080 --> 00:38:19,920
Bullseye. 
Where is that at? 

758
00:38:20,080 --> 00:38:21,320
Yeah. 
Let's talk about the growth 

759
00:38:21,320 --> 00:38:22,760
projects. 
This is pretty exciting for the 

760
00:38:22,760 --> 00:38:25,160
company. 
So camp installation is 

761
00:38:25,160 --> 00:38:27,760
happening. 
This is north of Laverton for 

762
00:38:27,760 --> 00:38:30,040
those wondering, and we'll flash
up a map so you can get a feel 

763
00:38:30,040 --> 00:38:32,080
for it. 
But 6,000,000 was invested in 

764
00:38:32,080 --> 00:38:35,640
the asset over the last quarter 
on, you know, develop, not an 

765
00:38:35,640 --> 00:38:38,440
awful lot on development and on 
the feasibility studies, but 

766
00:38:38,440 --> 00:38:39,560
there's been a bit of a hold up 
here. 

767
00:38:39,560 --> 00:38:44,360
So you got a project with a 
million oz at a bit over 1.1g 

768
00:38:44,360 --> 00:38:46,960
per ton. 
And if you go back to the annual

769
00:38:46,960 --> 00:38:50,760
report which came at mid 2024, 
it was planned for the DFS to 

770
00:38:50,760 --> 00:38:53,800
already be at, this was meant to
come out before year end in the 

771
00:38:53,800 --> 00:38:56,160
December quarter. 
That didn't happen. 

772
00:38:56,280 --> 00:38:59,640
So they spoke about some of the 
work they were focusing on. 

773
00:38:59,640 --> 00:39:02,160
That's resource definition which
did happen. 

774
00:39:02,160 --> 00:39:06,160
We had that updated mineral 
resource come out in the 

775
00:39:06,160 --> 00:39:08,480
December quarter. 
And the second point was that 

776
00:39:08,480 --> 00:39:10,360
they were working on the 
completion of environmental 

777
00:39:10,360 --> 00:39:12,720
assessments which leads into 
permitting. 

778
00:39:12,840 --> 00:39:15,520
And I would suspect that's been 
the hold up. 

779
00:39:15,520 --> 00:39:18,600
They didn't say explicitly what 
has held them up, but given 

780
00:39:18,600 --> 00:39:22,680
everything going on across 
Australia in WA, look at Matt 

781
00:39:22,680 --> 00:39:27,280
Gibson and other sort of similar
projects, permitting has been 

782
00:39:27,320 --> 00:39:30,160
the hold up. 
It continues to be the hold up. 

783
00:39:30,160 --> 00:39:34,080
And I think those sorts of 
reasons the, the company doesn't

784
00:39:34,080 --> 00:39:36,120
want to, you know, put the cart 
before the horse. 

785
00:39:36,120 --> 00:39:37,400
They don't want to talk too much
about it. 

786
00:39:37,400 --> 00:39:41,200
They just rather keep doing the 
work that's within their, within

787
00:39:41,200 --> 00:39:44,520
their sort of graphs, the things
they can do and wait because 

788
00:39:44,520 --> 00:39:48,400
there's been a lot of changes on
this front and it's really not 

789
00:39:48,440 --> 00:39:51,200
in the the hands of the company.
So, I mean, we've spoken about 

790
00:39:51,200 --> 00:39:54,000
it at length over the past 6 to 
12 months. 

791
00:39:54,240 --> 00:39:57,760
Yeah, I think you let you let 
you let permitting like decent 

792
00:39:57,760 --> 00:39:59,760
permitting pushes back 
timelines. 

793
00:40:00,240 --> 00:40:04,680
To let that be like a a slow 
release of expectations to, you 

794
00:40:04,680 --> 00:40:07,520
know, constantly possibly push 
back rather than all at once. 

795
00:40:07,840 --> 00:40:09,760
Yeah. 
Nevertheless, they still did say

796
00:40:09,760 --> 00:40:14,240
that they expect to make FID and
commence developing this year. 

797
00:40:14,240 --> 00:40:18,280
And there's a bunch of tenements
like if you if you look in the 

798
00:40:18,280 --> 00:40:23,200
map we flashed up before the 
chart on the left, that's a 90 

799
00:40:23,200 --> 00:40:28,000
kilometer long sort of area 
where they've got tenements are 

800
00:40:28,000 --> 00:40:29,480
adjoining. 
And then the the child on the 

801
00:40:29,480 --> 00:40:32,160
right is a sort of zoomed in 
area of the yellowy sort of 

802
00:40:32,160 --> 00:40:36,520
spots there. 
So they have mining licenses 

803
00:40:36,520 --> 00:40:39,320
that were granted in 2021 on a 
number of those areas. 

804
00:40:39,520 --> 00:40:44,040
Other ones are, as you can see, 
expiration licenses and whatnot.

805
00:40:44,120 --> 00:40:46,520
But I think it's a bit out of 
their hands. 

806
00:40:46,520 --> 00:40:49,320
You know, you can't build a 
project with kind of half the 

807
00:40:49,320 --> 00:40:50,760
permits. 
You need it all to kind of be in

808
00:40:50,760 --> 00:40:52,880
place so. 
They call this project Dingo 

809
00:40:52,880 --> 00:40:54,520
Range. 
What? 

810
00:40:54,520 --> 00:40:56,600
What kind of production profile 
are they expecting from it? 

811
00:40:57,800 --> 00:41:00,280
They don't give you too much 
color on this, but what they do 

812
00:41:00,280 --> 00:41:03,360
say is they want to be a 300 out
of 1000 oz per annum producer 

813
00:41:03,840 --> 00:41:06,880
with many operations. 
So I'll speak to Memet, which is

814
00:41:06,880 --> 00:41:09,920
another growth project in 
Cambodia in, in a moment. 

815
00:41:09,920 --> 00:41:17,720
But given the 1,000,000 oz, the 
1.1g per ton style of this, this

816
00:41:17,720 --> 00:41:21,120
ore body, I would sort of 
benchmark it to 100,000 oz per 

817
00:41:21,120 --> 00:41:23,680
annum with A10 year mine life to
to kind of start. 

818
00:41:23,680 --> 00:41:26,240
I'm sure other people have more 
kind of specific numbers on it, 

819
00:41:26,240 --> 00:41:29,320
but I think it's a rough kind of
rule of thumb that you could 

820
00:41:29,600 --> 00:41:32,640
use. 
And yeah, I'll talk in a moment 

821
00:41:32,640 --> 00:41:35,400
actually about what what cost 
could kind of look like for this

822
00:41:35,400 --> 00:41:38,320
because it's interesting to look
at the cash position and tied it

823
00:41:38,320 --> 00:41:40,480
all in together. 
If we look at Mamet for a 

824
00:41:40,480 --> 00:41:44,960
second, this is similar again, 
1,000,000 oz, 1.65g per ton, so 

825
00:41:44,960 --> 00:41:48,320
slightly better grade than than 
Dingo, very similar stage. 

826
00:41:48,320 --> 00:41:51,720
Feasibility studies are 
underway. 

827
00:41:51,720 --> 00:41:54,440
They're looking to permit and do
all these sorts of things, very 

828
00:41:54,440 --> 00:41:58,800
similar spend over the quarter. 
If we look at kind of what CapEx

829
00:41:58,800 --> 00:42:04,120
could look like here, given I 
think this is a similar scale to

830
00:42:04,400 --> 00:42:07,800
Okvale and even to Dingo range, 
I think we're all in that sort 

831
00:42:07,800 --> 00:42:11,120
of 100,000 oz plus or minus 
area. 

832
00:42:11,760 --> 00:42:16,160
Okvale cost about 150 million 
Aussie to build, 2 million ton 

833
00:42:16,160 --> 00:42:20,360
per annum plant. 
That was 6-7 years ago when the 

834
00:42:20,360 --> 00:42:23,840
DFS came out. 
So we've seen cost inflation 

835
00:42:23,920 --> 00:42:26,960
since then. 
That size plant would seem them 

836
00:42:26,960 --> 00:42:29,160
it to about 90,000 oz. 
I think it has to be slightly 

837
00:42:29,160 --> 00:42:31,880
bigger. 
It would be a very similar 

838
00:42:31,880 --> 00:42:35,600
processing plant. 
Recoveries are 85% plus is what 

839
00:42:35,600 --> 00:42:38,960
they call it. 
So I would sort of suspect 

840
00:42:39,280 --> 00:42:42,080
Aussie 200 million plus if 
they're going to build something

841
00:42:42,080 --> 00:42:46,080
similar. 
And to go back to what Dingo 

842
00:42:46,080 --> 00:42:48,640
could kind of look like. 
I think Mount Gibson is a good 

843
00:42:48,640 --> 00:42:52,400
proxy that one. 
Now Capricorn we know they 

844
00:42:52,520 --> 00:42:57,440
raised late last year, they had 
initially about $260 million 

845
00:42:57,440 --> 00:43:01,320
earmarked for for Mount Gibson 
similarly being held up on a on 

846
00:43:01,320 --> 00:43:04,600
a permitting front. 
But I think just to keep things 

847
00:43:04,600 --> 00:43:08,040
fairly simple, benchmark it in 
and around that same kind of 

848
00:43:08,040 --> 00:43:10,880
cost, 250 ish million. 
I mean, Capricorn have a great 

849
00:43:10,880 --> 00:43:13,640
reputation for getting stuff 
done time on budget. 

850
00:43:13,640 --> 00:43:17,120
You know, obviously when it's in
their hands, Emerald with 

851
00:43:17,160 --> 00:43:19,560
Ochville, again, that's a 
similar sort of reputation. 

852
00:43:19,560 --> 00:43:22,720
They got it delivered and 
exceeded a lot of people's 

853
00:43:22,720 --> 00:43:25,200
expectations. 
So I think you're, you're 

854
00:43:25,200 --> 00:43:27,840
feasibly looking at 400 to $500 
million. 

855
00:43:27,840 --> 00:43:30,680
I know I saw just one other 
estimate out there were hard to 

856
00:43:30,680 --> 00:43:34,400
come across info, but people 
were putting it a bit under 400 

857
00:43:34,400 --> 00:43:36,000
million. 
I'd, I'd be surprised if your 

858
00:43:36,800 --> 00:43:39,800
total CapEx for both of these 
projects comes in under 400 

859
00:43:39,800 --> 00:43:44,400
million, but who's to say. 
So you've got a company which by

860
00:43:44,400 --> 00:43:49,040
mid year could have 250 million 
and I think Okvao could deliver 

861
00:43:49,040 --> 00:43:52,520
them another $250 million over 
FY20 6. 

862
00:43:52,800 --> 00:43:56,880
A lot of numbers here, but yeah,
working Outback of the envelope,

863
00:43:56,880 --> 00:43:58,400
potentially a bit of a funding 
gap. 

864
00:43:58,400 --> 00:44:01,240
So it brings about the question,
how do you address that? 

865
00:44:01,400 --> 00:44:04,600
Well that that's a funny gap if 
they were so ambitious as to to 

866
00:44:04,600 --> 00:44:08,400
build 2 minds simultaneously. 
I think in reality you rarely 

867
00:44:08,400 --> 00:44:10,440
ever see that. 
Exactly, exactly. 

868
00:44:10,440 --> 00:44:12,720
I think what you do is you kind 
of offset them, which is kind of

869
00:44:12,720 --> 00:44:16,400
interesting if you dig into the 
details to see that they've, you

870
00:44:16,400 --> 00:44:18,160
know, they've lined them up. 
They want to start development, 

871
00:44:18,320 --> 00:44:21,400
both of them this year. 
You would have thought perhaps 

872
00:44:21,400 --> 00:44:26,040
they they staged them already 
and just plant expectations nice

873
00:44:26,040 --> 00:44:27,040
and early that they're on a 
stage. 

874
00:44:27,080 --> 00:44:28,440
But that's, that's not what 
they've done today. 

875
00:44:28,440 --> 00:44:32,360
Maybe they'll do that in future.
But for a whole, you know, range

876
00:44:32,360 --> 00:44:34,120
of reasons. 
They don't have any debt right 

877
00:44:34,120 --> 00:44:35,120
now. 
They've they've paid off the 

878
00:44:35,120 --> 00:44:39,240
last bit just recently. 
But yeah, do they look at 

879
00:44:39,240 --> 00:44:41,680
signing up a bit more debt just 
to see them through that period?

880
00:44:42,680 --> 00:44:44,880
They're they're valued fairly 
strongly. 

881
00:44:44,880 --> 00:44:47,840
There's growth built into the 
share price as it stands right 

882
00:44:47,840 --> 00:44:49,440
now. 
You know, I said maybe doing 

883
00:44:49,440 --> 00:44:53,160
$250 million in cash flow for a 
company that's capped at $2.6 

884
00:44:53,160 --> 00:44:55,080
billion. 
Yeah, A2. 

885
00:44:55,480 --> 00:44:59,480
Point $6 billion and and all of 
its production day from Cambodia

886
00:44:59,680 --> 00:45:03,640
two 2/3 in the into the future 
ones all growth is online still 

887
00:45:03,640 --> 00:45:07,480
in Cambodia and and yeah just 
always kind of question marks on

888
00:45:08,120 --> 00:45:13,760
on that Cambodia is not WA but. 
Yeah, 5 to 10% dilution would 

889
00:45:13,760 --> 00:45:16,480
not be the end of the world by 
by any means. 

890
00:45:16,480 --> 00:45:20,560
It would give them a big pile of
cash to just go at this again. 

891
00:45:20,560 --> 00:45:23,240
I still think they'd they'd 
likely stage them to an extent. 

892
00:45:23,240 --> 00:45:26,240
I think permitting will do that 
for them potentially. 

893
00:45:26,800 --> 00:45:30,400
So it'll be interesting to see 
which, which route they go down.

894
00:45:30,400 --> 00:45:33,560
We've, we've spoken at length 
about the risks of pulling in 

895
00:45:33,560 --> 00:45:37,640
debt and it, it's particularly 
when things are rosy and things 

896
00:45:37,640 --> 00:45:40,400
are good. 
Paladin comes to mind last year 

897
00:45:40,400 --> 00:45:43,760
when uranium price is flying 
there, they're starting to to 

898
00:45:44,040 --> 00:45:47,640
work through the, the stockpiles
of the previously mined product 

899
00:45:47,640 --> 00:45:50,000
there and then you sign up the 
debt. 

900
00:45:50,000 --> 00:45:52,200
So it's, it's always when times 
are really good that people 

901
00:45:52,200 --> 00:45:54,400
look, hey, we can, we can lever 
up the balance sheet a little 

902
00:45:54,400 --> 00:45:56,040
bit. 
So I'd be curious to see what 

903
00:45:56,040 --> 00:45:57,920
they do. 
I think they they can work 

904
00:45:57,920 --> 00:46:00,400
through it, but that's what you 
always kind of think right until

905
00:46:00,640 --> 00:46:01,240
you. 
Can't. 

906
00:46:01,600 --> 00:46:05,480
Yeah. 
The good news is like, and if 

907
00:46:05,480 --> 00:46:07,320
they were so ambitious as to 
build both at once, they're 

908
00:46:07,320 --> 00:46:10,240
still probably not going to need
a ton of debt given gold prices,

909
00:46:10,240 --> 00:46:11,560
operating cash flow and all that
sort of stuff. 

910
00:46:11,560 --> 00:46:15,440
It would be tricky to find like 
to think in your head that they 

911
00:46:15,440 --> 00:46:17,800
would get debt that would be 
onerous to the company. 

912
00:46:17,920 --> 00:46:21,000
And furthermore, they wouldn't 
need to get project finance 

913
00:46:21,040 --> 00:46:23,520
either because they've had to 
find assets that have a 

914
00:46:23,520 --> 00:46:26,720
corporate facility far less 
restrictive and a lot more 

915
00:46:26,720 --> 00:46:29,640
flexibility to to navigate some 
of the things that can be, you 

916
00:46:29,640 --> 00:46:32,760
know, pitfalls for for single 
asset developers. 

917
00:46:32,960 --> 00:46:35,160
Yeah, that, that can't be 
understated enough. 

918
00:46:35,560 --> 00:46:37,360
Debt can be super, super 
onerous. 

919
00:46:37,360 --> 00:46:39,560
If you've got your one project 
that you're trying to get into 

920
00:46:39,560 --> 00:46:43,880
production, the the more you 
produce, the, the more cash you 

921
00:46:43,880 --> 00:46:46,720
produce, the more assets you 
have, the terms become more and 

922
00:46:46,720 --> 00:46:48,560
more favorable to you. 
So. 

923
00:46:48,800 --> 00:46:54,600
One thing I do wonder with 
Emerald is like if there were, I

924
00:46:54,600 --> 00:46:57,360
wonder, I wonder how motivated 
they are to diversify their 

925
00:46:58,080 --> 00:47:00,600
their geographical risk. 
And clearly that's been a 

926
00:47:00,600 --> 00:47:03,520
motivation for them to enter 
Australia by dingo range. 

927
00:47:03,520 --> 00:47:06,440
And like, I think I think, yeah,
when they knock the I was their 

928
00:47:06,440 --> 00:47:07,640
only asset. 
They were, they were certainly 

929
00:47:07,640 --> 00:47:10,120
pretty hungry for something in 
Australia and they they got a 

930
00:47:10,320 --> 00:47:13,200
pretty, pretty interesting and 
good deal away to to get that 

931
00:47:13,200 --> 00:47:16,640
growth project. 
I do wonder if that will like, 

932
00:47:16,640 --> 00:47:19,800
yeah, increasingly look to 
diversify that geographical 

933
00:47:19,800 --> 00:47:23,480
risk, be it by buying, you know,
more assets. 

934
00:47:24,560 --> 00:47:26,760
Yeah, we've talked in the past 
about what's for sale in 

935
00:47:26,920 --> 00:47:29,840
Laverton and like you actually 
do something that's synergistic 

936
00:47:29,840 --> 00:47:32,960
when you when you group that 
together with with Dingo range 

937
00:47:33,320 --> 00:47:37,560
plus the other option they could
have is actually just is, is is,

938
00:47:37,920 --> 00:47:41,640
yeah, merging with one of the 
any mid tier gold producers that

939
00:47:41,640 --> 00:47:44,880
we have with Australian domestic
production, but no growth. 

940
00:47:45,640 --> 00:47:49,160
If you merge with them, they 
they suddenly they get growth. 

941
00:47:50,440 --> 00:47:52,760
I just think there's probably a 
bit of spread and everyone got 

942
00:47:52,760 --> 00:47:55,000
to get comfortable with that. 
But if the motivations are high 

943
00:47:55,000 --> 00:47:58,480
enough, I think it's also a 
possibility that probably can't 

944
00:47:58,480 --> 00:48:00,400
be discounted as well. 
Yeah, absolutely. 

945
00:48:00,400 --> 00:48:02,800
For the same reasons we spoke 
about the capital raise, 

946
00:48:02,800 --> 00:48:04,440
potential capital raise just a 
moment ago. 

947
00:48:04,840 --> 00:48:08,080
Doing a deal could be favorable.
They'd argue the opposite, 

948
00:48:08,080 --> 00:48:09,640
saying they're coming into 
growth and all this sort of 

949
00:48:09,640 --> 00:48:12,040
stuff. 
But yeah, given where they are, 

950
00:48:12,040 --> 00:48:13,480
I'm sure they'd be looking at 
their options. 

951
00:48:14,800 --> 00:48:18,240
Very interesting mate. 
I think that's a good spot to 

952
00:48:18,240 --> 00:48:21,280
leave it mate, as we come into 
our last day of court at least 

953
00:48:21,280 --> 00:48:23,360
tomorrow. 
I can't wait for it to be over 

954
00:48:23,600 --> 00:48:27,320
and I similarly am just very 
thankful to all our partners. 

955
00:48:27,920 --> 00:48:31,440
Yeah, let's run through it. 
JRX, get your tickets to the 

956
00:48:31,440 --> 00:48:34,120
conference, the Mining 
Innovation Conference. 

957
00:48:34,160 --> 00:48:38,360
You need to get tickets to May 
20 to May 22nd in Brisbane and a

958
00:48:38,360 --> 00:48:41,120
big thank you to Mineral Mining 
Services, Grounded Sandy Ground 

959
00:48:41,120 --> 00:48:44,760
Support, CRE Insurance, K Drill,
WA Water Bulls, Quattro Project 

960
00:48:44,760 --> 00:48:48,360
Engineering, KCA Site Services, 
Black Diamond Drilling Services 

961
00:48:48,360 --> 00:48:49,920
and Cross Boundary Energy. 
Who Duru? 

962
00:48:49,920 --> 00:48:51,920
Who Duru? 
The information contained in 

963
00:48:51,920 --> 00:48:54,720
this episode of Money of Mine is
of general nature only and does 

964
00:48:54,720 --> 00:48:57,520
not take into account the 
objectives, financial situation,

965
00:48:57,560 --> 00:48:59,600
or needs of any particular 
person. 

966
00:48:59,880 --> 00:49:02,920
Before making any investment 
decision, you should consult 

967
00:49:02,920 --> 00:49:05,960
with your financial advisor and 
consider how appropriate the 

968
00:49:05,960 --> 00:49:09,640
advice is to your objectives, 
financial situation and needs.