Right eye buddy Waters. Welcome to another week, Jay Say
welcome back. You're a regular.
You're gonna be a regular cause the fans love you, Trav.
Jason, could you friggin imagine if on the weekend you're
drilling some exploration holes in your jar?
I broke. Can you imagine that?
Bad, bad, bad. Stand down costs everyone money,
but if you're using Axis gyros 24/7 they pick up the phone and
they will ship on the weekend. Life saver.
Law absolute absolute godsend of a company and I'll tell you what
money miners yeah bloody ring him up this week and you drop
money of mine to get a free trial.
That is a deal Sean. He's numbers in the shy nights.
Give him a ring. 22 week free trial.
You got today. Flying out the door, mate.
Travel. You're going on the big
landscape. It's like we're not building.
We're buying these days. And OHS, no.
Maybe BHP's building. Yeah, maybe Ryo's buying.
Yeah, that anyway. But there's some, there's the
two biggest, you know, miners that we think of when we think
of big mining companies. There's deal rumours about big
copper, deal rumours about them going around.
So we're going to talk about BHP, Lundeen, Philo and we're
also going to talk about Rio Tech.
My Dolly snapping dog shit. It's bigger than the Trump
assassination scandal. That story.
Right now Bellevue come out with the early quarterly.
Now I can only surmise that they've put it out.
So I did not have my attention diverted to any other mining
companies and they wanted me to give it a full suite of a
segment and I've done. That there's a carton on the
line, Maddie. There now, yeah.
Well, I think my landscapes changed.
Mixtape Cheese Say you've done a bit of around the ground.
Around the grounds with a disgraced quarterly.
Today we got the Lion town done, small offtake and also Mika
Metals as. Well, Oh yeah, blowing up some
bloody cheap mills. I like the way they're
operating. Like it.
Right, Let's get into it. Trav's big news from the big
miners. Is M and I about to?
Really. It's rumours about mate.
Really start happening. Yeah, I'll start with the more
material, more material sort of deal on the table right now.
Well, look, BHP has apparently been approached by Lundeen to
put forward a joint bid for Filo Mining.
Late late Thursday, BHP actually came out with the news of nickel
W would go into care maintenance until at least 2027.
We didn't get a chance to chat about that on the body potty
cause we, we, you know, we ripped the show by then.
We put up an interview on Friday.
So made big news. I suppose the one, the one thing
out of that travel was like shows how much money they'll
probably losing if they're willing to pay for $150 million
a year to put it in the care and maintenance, Phenomenal.
Dreadful. But yeah, I was.
I was that. I was like, geez, this is big
news. Didn't impromptu Twitter Spaces,
Tommy Wallrich jumped on, Koala jumped on.
We barely talked about Nicole West, but we did, you know, have
a pretty interesting chat about the state of capital flows in
the mining industry. It was actually pretty
insightful. So don't know, maybe maybe we
put it as a bonus audio only episode on on Wednesday.
So yeah, if you watch this on YouTube, make sure you jump on
Spotify or Apple or whatever. And so you can get that one on
Wednesday. Mate, nothing defamatory and
Twitter spaces that one. Bloody risky though.
Twitter Spices. I'll have to read, listen to it.
Actually, I'll probably said something I shouldn't anyway.
Now to the actual news though. So Friday, on Friday, fellow
share price showed up as much as 10%.
And then it gets gets halted, right?
Lundin mining shares briefly dip and then recover.
And there's this story that emerges in Bloomberg saying that
Lundeen has approached BHP to pitch them to jointly bid for
Philo. There's some context that is
important when we talk about Philo and Lundin and everything
like that. Unless you've been, you know,
paying close attention to the Pecunia district dynamics, a lot
of that context will probably be lost on you.
So I'll, I'll try my best to summarise the higher level
points for the for the money miners here.
The Vacuna District in is is an emerging kind of copper super
district, as you know, high grade, well, sort of lowish
grade, but you know, there's just copper porphyries, large,
large, large scale copper porphyries almost everywhere.
And then I know, I know little Lacey isn't isn't a poorly, but
there's just buddy Copper everywhere and it's all in this
kind of condensed district called the Koonya.
Which and it's sort of chilly Argentina, it's near.
The ball, yeah, yes, correct. Yeah, it's the, the, the, the,
it's not without its obstacles like, you know, there's, there's
water politics, infrastructure, like you said, you know, into
country kind of dynamics. But the size of the prize looks
worth it. The, the, the tenure kind of
most of it all used to sit within Lundeen.
The Lundine spun out NGEX and Philo into separate listed
vehicles so they could independently fund the drill out
of the, the various kind of perspective projects that were
within that package. Simultaneously, both Philo and
NGX have independently had like a lot of success doing just
that. Lundin Mining, however, owns the
the most advanced project project in the in the region are
being Jose Maria. In fact, Jose Maria is Maria.
Jose Maria is permitted to finally ready.
It's in San Juan. So Jose Maria is it's it's not
as sexy a project as Philo del Sol just to the South of it, as
you can see in this map here. But Jose Maria is permitted and
Argentina now has a supportive regime, right?
You got Miley very pro business. You know, there's just the time
is now in Argentina if you think of it so.
So for the Lundens who who think about the long term, planning
the development with the long term in mind means optimising
for the synergies to be realised with Philo too.
Now, London Group retains a 33% stake in Philo and BHP owns a 6%
stake in Philo. So is there like you might have
this later but can BHP only do something if they're on board
with the land deeds here? Like the landings have a lot of
control over the area. Massive.
I mean they retain 33% of fellow so BHP can't.
They can't do anything without the support of of London Group.
So it's a little bit if you can't beat them, join them.
Well, yeah, I mean, this is that were that were separated from
the from the London from the London group into this
independent vehicles. And that's enhanced the
acceleration of, you know, the timelines of this whole super
district. And and now in order to actually
get, you know, sort of the the right funding and the right
infrastructure in place, there's got to be some reunification
plan because the funding's kind of got to be in a collaborative
sense about the whole district rather than just the independent
project level. And that's where, as you stop
stuck Subsec article written in February last year by the Koala,
you talked about this scenario where the Lundens could actually
emerge with a fully funded pathway to develop Jose Maria
via takeout of Philo and a partnership with BHP.
Given the developments on Friday, it's it's aged
relatively well. But in a nutshell, he reckons
Lundin Mining would end up issuing stock to Philo
shareholders. Filo shareholders would
potentially also get a spin out of a royalty on Philo del Sol,
which could be worth a lot of money.
BHP would commit to $6 billion to you know sole fund Hose Maria
CapEx and in exchange get a 30 between 30 and 49% stake in the
Koonya Argentina, which would you know be in a JV which that
Vicuna Argentina would involve both Josemaria and Filo del Sol.
Jesus cross spinouts, JV's and fucker.
That's unbelievable isn't it? That are spinning all that out
then spinning a royalty out there, having a JV for the whole
thing. It's phenomenal, isn't?
It, well, yeah. And it's a, it's a nifty kind of
potential funding strategy that could, could be pretty
attractive to, you know, all, all three parties there.
If you think about it, London mining gets control of the
development then because they retain, you know, they retain
majority interest in Pecunia Argentina.
So like they'll actually be in control of the development
pathway. Jose Maria is effectively fully
funded by BHP. And recall London minings market
cap is only like 9.2 billion and the, the CapEx there is at least
6 billion. So it's, it's, it's challenging
to fund that on your own and then Lundens get a partner to
fully fund that, which is pretty attractive.
And it would allow free cash flow from Hosea Maria to go
towards the pre strip of FILO and which is kind of pseudo
funded by BHP if you know what I mean.
It is bloody nifty eye, but guys, better than nifty.
And like, on top of that, you know, if you, if that, if that
royalty spin out a part of it as well, it's, it's a pretty
interesting kind of proposition for, for fellow shareholders
too. So let's see what actually
emerges in time. But the logic for the deal is,
is pretty compelling, you know, for all of them.
I think one of the key considerations for, for Lundin
mining was they'll sensitive about potentially, you know,
requiring a vote of their own shareholders.
And when you issue more than 25% of your, your, your stock
shareholders need to vote on that.
That's where the fellow royalty, you know, can play a role
because it basically reduces the number of shares issued in Filo
Mining to go to fellow shareholders.
Taho that that role to You might have said it before.
Who's who's gonna hold that royalty?
It would it would be a this spun out, but you as a a fellow
shareholder owner today would would be entitled to a
potential. I mean none of this is like
really Daniel, this is just Koalas conjecture at this point.
Like would that that sounds like that would end up in a friggin
Franco Nevada or something. Or not.
It'd be a separate. Separate spin out listed
vehicle, which in its own right could be yeah, pretty, pretty
attractive standalone or could ultimately end up taking over at
depending on training dynamics. But you know, you could imagine
a world where it's worth a lot of money because the I mean some
people have like compared if you like Del Sol to to Escondido and
imagine having like a a 2% NSR for a fucking long time.
Exactly. Talking like 100 years of my
life in these giant sort of projects, and that's like a
royalty with 100 years of my life is pretty fucking
attractive. Royalty and shit, yeah.
I think with this hypothetical, you know would do you think BHP
would potentially take issue buying the minority in that JV?
They, they pretend, I mean, like, yeah, I'm sure, I'm sure
they potentially would, but it's just about having like who,
who's really who's really who's really gonna be calling the
shots here. Because the, the, I think the
reality is like the Lundens have far more say in how this is
going to go than measly BHP who owns just immediately 6% of
Philo and you know, not more, not much else.
This is going to be like a deal on the table for BHP to step up
and say yes to. I wouldn't be surprised to see,
you know, if BHP is not there for it, then I wouldn't be
surprised to see, you know, the equivalent proposition put
forward to the Sumitomo's of the world and things like that.
And you might actually get, you know, like it might not be the
same stake, but you, you might see some real, real
contributions from the Japanese trading houses instead.
But like, and if you think of BHP right, they've, they've
talked very recently, I think it was their, their own head of
copper said super recently that they're much more interested in,
in buying than building. And this is building, not
buying. And it's a, but it's a deal on
the table for them right now. At the time when copper growth
is, is, you know, such an important objective for them.
I, I, I think that they should pull the trigger on this.
I don't know what their final, you know, proportion of, of a,
of a JV they might end up with, but it's also don't know how HP
really makes, makes their decisions.
But yeah, you know, in a, in a world with very little
attractive like copper growth, this is attractive copper
growth. And the, the Lundens, it's not
like they're like they're that that's a great partner to have.
They're super, super well regarded and like, not too many,
not too many people have phenomenal working relationships
in Argentina. Guess what the London family
does? Yeah.
And, and it's pretty light. And it sounds like this could be
the only way that BHP will get exposure is working with them.
And it's similar to, again you'd say Riyadh stake in Escondida.
It's not the big one, but they've got exposure to it.
Yeah, with BHB, it's not as big as BHB's.
And this might be what BHB has to do to get exposure to this
district by not being the big dog, just being the partner.
They're really attractive thing did I see for the landings in it
all is if is if they can yeah, like basically shuffle the free
cash flow of Jose Maria into the pre strip of of of Philo.
If it was if it was BHP in control, would that be would
that be the location that BHP chooses to allocate that
marginal like free cash flow or would run through there their
capital allocation framework and it might not, you know, go go to
that location on the timeline you wanted.
So it's a really attractive proposition to me if if mundane,
retain operating control of that region and they can, you know,
really just shorten the timeline to to bring Jose Maria online as
much as possible. Sorry to bringing Filo del Sol
online. It's possible.
It seems to me it's sort of like you were saying, Maddie, like
BHP seemed to be happy to sort of forgo their previous thoughts
around M&A to get this, this copper exposure is worth it more
to them. Wonder if they'd be doing this
if the Anglo deal fell over. Yeah, well, who knows what
they're gonna come out with and if they say yes or no to this,
But yeah, I, I, I got no idea. Maybe you got no idea, but
probably not, I suppose. Yeah, it.
Hasn't happened yet. Hasn't.
We're talking about in the theoretical.
Sense, but we're trying. You're that fucking far ahead of
the market like steps ahead. You're like you're thinking that
you're thinking about next week's cuts underground.
You're not thinking about getting the one on the deck
today. No, this is what separates you
from the pack. Thanks, Mattie.
There. It's just good vibes.
It's an inclusive environment, buddy.
Right? What?
So what's happening with Rio then?
So that's the BHP. Specification.
You'd think BHP would would steal the show, but apparently
Rio Tinto has moulded takeover offer for tech.
This is. This is an interesting story and
there's a big time pack here too.
But according to Sky News, yes, Sky News, who isn't exactly
known for breaking stories in the mining industry.
They say that Rio Tinto had drawn up detailed proposals for
a potential takeover for Tech, including approaching banks
about financing a deal. That same article says a source
close to Rio said there was no imminent takeover offer for
Tech, though. So I think there's some
important context here. Firstly, it was it was literally
Thursday last week that tech completed the sale of its 77%
interest in Elk Valley Resources or VR.
That's the the steelmaking coal business, which they divested to
to Glencore for about 7 billion U.S. dollars.
But it's a really, really like top quality coke and coal
business that tech is one of the few companies with a fantastic
kind of copper growth pipeline. And with that divestment of VR,
there's like no more fossil fuel exposure and its production.
With the ramp up of QB, they reckon they're gonna double
copper production to 600,000 tonnes per annum this year.
So of course, mostly pure applied copper company with
growth is damn attractive to the major miners.
Fascinating that this deal, potential deal leaks literally
the day after Elk Valley, um, divestment kind of complaints,
but. Anyone would think, Rayo said.
Oh look, if you get rid of all that, maybe we'll come to the
party. Ohe yeah, yeah, yeah, yeah.
Getting a deal done would be, would you know, would absolutely
not be straightforward though as well, right?
Because if you remember, last week, the Canadian government
literally, literally said it would only green light foreign
takeovers in the most exceptional circumstances.
So it's the exception, not the rule.
I think this one's a lot bigger than 1.3 billion.
Which one? Yeah, that was the threshold.
You know, potentially $30 billion kind of take out would
be involved and I don't imagine it would be a a particularly
straightforward pathway to control on the shareholder
approval. So you got the regulatory doubt,
which it's the exception, not the rule that Canada would allow
it. And then you've got the
complicated shareholder pathway as well.
So tech, they've got this stupid dual class voting system.
There's Class A shares and Class B shares.
Now the Class A shares get super voting rights and they are
largely controlled by the civil family in in April last year it
was agreed to phase out the dual share structure in six years
time. But they they still exist today
and for all intents and purposes, the key for family
still have the ability to to defend any Rio Tinto offer in
their own right by way of these super voting shares.
Codes. The Caval family?
Never heard of them. Just really.
No, they've got like 4 generations of of history with
with tech. It's yeah, it's one of those
like, yeah, really well established mining families over
in Canada. Ah, right, there you go.
They sound rich. They.
Probably gotta gotta couple of Bob to him.
Yeah. Evil family, There you go.
Yes, as today the like you know, the keepers have not been
particularly receptive to to unsolicited offers.
Didn't Glencore bid for the company last year?
They certainly did Allie. It was, it was emphasised by
Gary Nagle, the CEO of Glencore that, you know, the, the offer
was, the proposed offer was, was script merger.
So textural holders would retain upside exposure.
And if the Rio rumour is true, it sounds like they're planning
at least a partial cash over. I mean, they talked about
getting financing in place with banks.
I don't think you do that unless you planning to be with a good
chunk of cash. Ultimately the Glencore bid for
tech, which was implied, you know, value of 23 billion in, in
Glencore script last year got shelved and then a deal to just
buy VR instead sort of went through.
But the, the tick tacking between the companies back then
was, was really fascinating. In fact, I want to play this
brief snippet from a BFA conference last year Text CEO
Jonathan Bryce. Morning to you all.
I do understand that in his presentation this morning, Gary
Nagle made reference to tech. Now Gary and I have had the
opportunity to chat several times over the course of the
last year. And interestingly, I've learned
that Gary and I actually have quite a lot in common.
We each had long careers in mining, we're around the same
age and we're both relatively new to the role of CEO.
And as it turns out, we both want to run tech.
I think I remember you playing that last year.
Yeah, pretty funny. That was yeah, mate May last
year for reference. Look, I think it's I think it's
too early to really get in the weeds.
I wanna deal could look like and like I said, it's it's a
complicated pathway to control for Rio or frankly any mining
company for that matter. And and throw in the fact that
the possibility of more interest from other miners to Koala
mentioned on on the spaces that we did the other night that that
the final home for violates base metals business would be tech.
So there's, you know that that's that's another possibility
throwing throw out there as well.
I'm leaving leaving kind of vile apparel focused on line or so.
Yeah, I mean, look, the the the marsupial is keen to follow up
Thursday night spaces with an Australian appropriate time
zone. So it might have a chinwag at
7:00 PM per time tonight on on those two stories as well, which
is very much in his his wheelhouse.
They are the big, the big, the big M, and a big, big end of
town. MNA Maddie.
Yeah, nice. He would.
Azz. You can't see what he's wearing
on spaces. He's probably got a nice dress
shirt on. He was, well, he was much more
succinct than usual on on Thursday.
OK, Koala. Yeah, you would.
You would have actually. You would have actually liked
it. Retained some of it.
Yeah, one last comment just on just on multiples.
Alright, so, so I just wanted to simply talk about the EV EBITDA
multiples of some of these listed copper producers.
I put it on this table here a little D next to the ones if
they're big diversified miner and the others are, you know,
mostly pureplay kind of copper miners.
And these multiples aren't perfect.
It's it's based on kind of consensus next 12 months, some
of them are ramping up substantially.
So next 12 months isn't really representative of steady state
on have or anything like that. But the point is pureplay copper
companies command. Much juicier multiple than the
diversifies. Take take Freeport for example,
just as the benchmark there, you know, you could think of them as
like steady state, not much ramping up of new production.
They trade it, you know, above 8 times next 12 months.
Ever compare that with the diversifies, the larger
diversified miners, which you know, traded around five times?
Yeah, I can. I will.
I can. You can see why bloody Ivanhoe's
frigging screaming at at 14.8 times.
It's not because of bloody Robert Friedland, did you say?
Saw it in the director's special The Bloody Ivanhoe Verifier
model. But.
That got that, got the absolute shit clicked out of it on the.
Newsletter It was the most click thing in that day.
Yeah, yeah, yeah, there. There's your bloody multiple
proof. Like, look, I couldn't believe,
I'll bring it up here. I couldn't believe the frickin
blanket of copper that is at this joint Air is just a metric,
absolute shit tonne of copper there.
And look, I wouldn't have known that if it wasn't for Steve to
John and the team taking me to the mine via the Verify model.
Virtually mine tour, social site tour, Save me.
Look, I didn't get the frequent flyer points if I flew to the
Congo, but I didn't have to pay the cash to go there either.
I went there via the Verify model I thought.
About sits in the DRC and I thought, you know what, I'd much
rather stay in Perth and just click through the fucking
verify. So stay in the Verify team.
Thank you very much. Anyone, anyone just Google
verify Ivanhoe mines model Ivanhoe verify model site to it
and you got the whole site too. You see the whole body it's
bloody brilliant. So look if you want your you
wanna trade it 15 times and just make your life great like mine
is now. Get bloodier verifier model
granted verify dot. Com and get the verify EBITDA
multiple rewrite. Yeah, yeah.
Easy, easy. Simple, right?
Bloody. Yeah.
Right. So what would?
OK, zooming out, Trav. Yep.
For the Rio side. What do you think?
If if the story is true from me, it would suggest a couple of
things. Firstly, like three months ago,
Rio Tintos Copperhead said he sees much more value building
mines rather than buying existing assets.
So an acquisition of tech might seem contrary to that statement,
but it's a bit nuanced, I think because text cop portfolio, you
know, includes growth assets which have pretty attractive
capital intensity about them as well.
Unlike, and then the other point is like, unlike BHP, Rio
actually has a really attractive copper growth profile ahead of
themselves already. Over the next five years, it's
going to grow from 700,000 tonnes to 1,000,000 tonnes per
annum, mostly thanks to Oriental guy.
So if if we were still hungry for more copper despite it
having a pretty damn attractive growth profile, that that says
something. Yeah, yeah.
What are they? They're expanding Olympic Dam,
aren't they? Yeah, proposing too.
But comparative or your toggle, right?
Yeah, you know. Get the bloody double whammy
there. With you.
Told Uranium. Dwarfs Adam, yeah.
Yeah, yeah. Bloody fascinating.
Good stuff, mate. OHS appealed.
Look, God, that's gonna be some big news segments that'll fill
us out there. God, man.
God, they better not. Both happen at the same time,
far right. Well, I don't think they're, I
don't do this too much of the radio tech one just yet.
And it sounds like you really think you get approvals.
It might be the last we talked about that one.
But the the BHP like fellow Lundeen, that's the story and I
think that's going to that's. Probably the best thing.
If it doesn't manifest with HP, it'll manifest in another way
with someone. Else I'd say it's been stewing
in the background for a while. Yeah, now good stuff.
Right on to the next, uh, Bellevue Gold add 36 million to
the balance sheet that they said free cash flow 41, but they
added 36 million to the balance sheet.
The definition of free cash flow should include first interest
repayments. Yes, cause it wasn't a principal
repayment, it was a capitalised. Interest not capitalising
interest and then classified it as principle and then paid down
that. And therefore we don't wanna
upset the CFL again. But anyway, as I said, they
thought of, they obviously didn't want me to get
distracted. So I've just we've done a full
segment for him. They got it out early.
Bloody good on you. So look, 36 mil for the quarter,
pretty bloody. That's a bloody good result for
mining ramp up. We don't know payables and
everything but that's just what what we know today.
Like considering W Guild only added 16 mil last quarter and
they they're unhedged and don't have any debt.
So look well done to the bloody Bellevue team.
Sure it's it's fucking hard to build them on and they've done
it and we've seen numerous cases recently that haven't lasted the
distance. So Congrats to all involved, I'd
say let's let's get into it, my Bureau butter and a mop of it
before we get into the. Segment I was gonna say, mate,
you're you're much more complimentary than you were just
chin wagging beforehand. Well, just just there's always
questions, there's always questions, but I feel good now.
Alright, so they've still got debt of 219,000,000.
I'll bring up the waterfall chart is so 5 million was paid
off is like debt, it's interest. Yeah.
So that's so they maintain 219 mills.
So they've got the neck, the there's a principal payment
coming up in 30th of September. So that's 6.8 million they've
got in restricted cash. So the Argonaut model has them
repaying about 60 million in debt per annum.
So it takes it out three or four years before that that quantum
is is pied off, so. And what are you boys thinking
this water flow chart? They've broken one of my rules,
site expenditure, including growth capital.
What was one of my rules, Maddie?
Gotta separate. It separated, right?
What do you like? What's your growth cap?
What's so they've they've they've grouped apex with
whatever they're spending still sinking a shaft and all that
sort of stuff for vent. Like I want to see that
separated. You can't say you didn't inform
everyone, Trav after your brilliant segment.
But anyway, let's just like, let's light the waterfall chart.
Let's get on to the nitty gritty.
So they, they processed 2. I'll bring up the table of the
physicals what and I guess what, what can we summarise from it?
They processed 240,000 tonnes, so pretty bloody close to that
name plate, 1,000,000 tonne per annum.
So it looks like the mills, the dirts getting through the mill,
but they only mined 200,000 tonne of awe.
So effectively mining hasn't kept up with processing.
And you could also say there was a lot more capital development
than operating development. So the operating advance is
about half of what it was in the last quarter.
Operating development is pretty much the old development plus
everything sort of close to the your.
Once you get past all the the escape ways and the stockpiles
and everything, that's when capital development turns into
operating development. It's all the operating
developments, the stuff that goes to the ore.
So odd surmise from that. I reckon stopping is right up
the ass of development. Like the development isn't shit
loads ahead and I think probably a better development pressure
on, which is always going to be a challenge in in hard ground
because you're just trying to get bloody as far as you can
ahead and putting all your capital infrastructure in.
But the rock just won't let you get there quick enough.
So that's that's my prediction. Was gonna say merry for the
money miners and for the non technical heads out there like
myself. Can you explain what the
difference is between development and stopping or?
OHS yeah, cause well, that's funny is it will cause and that
was the other one and I'll I'll I'll on the back of this.
So stop stipple haulage 167,000 tonne, which is about what they
need every month. And then but the development or
was down because the obviously the development advance is down.
So you, I remember, I think it was the Northern Star, one of
the quarterlies previously there, they said they target and
I'm pretty sure everyone's saying they're targeted about
2/3 stopping all and 1/3 development or so your
development. Nor is what comes out when the
Jumbos developed the ore drives, the four and a half by 4 1/2
excavations tunnels that you'd use to get the machinery in.
And then the stopping ore is what comes out between the two
the development drives. So that's like the big bloody
narrow mining, the bloody gold vein and and a bit of shit
around it. That's your bulk mine and that's
where that's the money maker. But The thing is that's how you
get the most or out quickly is the skipping all but the
development or like say with narrow vein mining, which is
what this is not all of it, but most of it is you have to mine 4
1/2 metres wide. So I bet you're stops, you might
try mine them as thin as possible to just get the vines
out. Might be, you know, two, 2 1/2
three metres wide. So you're grade for your
development drive is lower because you're taking more waste
on the outside, whereas the stopping or you're cutting it a
bit Luna. So if you have too much
development or and you're not getting enough stopping or out,
your overall grade gold grade is lower because you're diluting it
with more development or hopefully then the stopping or
catches up, which means lower grade through the mill.
So that's why they target 2/3 stopping 1/3 development.
So that 167,000 tonne that they got out of stopping for over
250,000 tonne run rate is bang on 60.
That's 67%. So that's 2/3 striping.
But because of the development, they looks like there might be a
bit behind getting to the next level of development or they or
they didn't have as much and they'll probably focusing more
on capital. The development was down, which
bring the total down. So, yeah, so look, looks like
there's a lot of work ongoing to properly set up the ventilation,
the pumping and the power infrastructure.
Because there, there there was a comment, comment in there saying
that explicitly signed infrastructure will like
continue into FY25, which is talking about the, you know,
pump, pump stations, ventilation drives and I shouldn't
ventilation rises power, which is like substations.
And that will help increase development rates.
And look, because the challenge with Bellevue is not not just
the hardness of the ground. You look at the verify model
here again, publicly available is that it's a very laterally
spread out mine. So H or body like because it's
there's one over here, one over here, one over there.
Yeah, like, you know, you independent ventilation for
those areas, independent pumping infrastructure, more substations
to get the power over there. So it's it's a lot more to set
up compared to, you know, compared it to Spartan before
when you've just got sort of one decline going past each or body,
you can then pump all the water out together.
You can set up the power independent, but at the same
area such that it's just a challenge of the way the all
body is. So and because you got more,
more vent, more substations, more stuff to set up that can
chew up the jumbos because you need more.
It's more capital work. That's all class, That's
capital. But the more capital work you
do, the more you take away from getting to the all quicker.
It's more stuff to set up. So and just it it just slows.
It can slow the mind down while you're setting all this up
because you you're waiting on getting another substation in.
So you might your power might be tripping you waiting on getting
vent drives in and rises pulled through.
So you might be getting our vent to get enough trucks down to
everywhere to get the dirt out quicker.
If you haven't got the pumping infrastructure set up, means you
might be pumping the water out quick enough.
It's all flooding the decline all the time and it just, it
just slows the whole operation down.
It just feels like they're still in that they are ramping up.
They're still in that phase of getting the infrastructure set
up. This is what happens.
Yeah, Yeah, it's fine. Fuck it hard.
It's easier talking about it on a body.
I can tell you that. That's why I give it away.
Well, I'll just, I couldn't cut the mustard.
So yeah, I think and I, I think all of that combined is linked
to the fact they're processing recovery was 90%.
Now, you wouldn't think that would.
You no, no, because the what the feasibility study was 95%.
Yeah, I think they were above 95 like per load, but I don't think
that you can directly relate that to having it out of the
mill because the mill, the mill has been designed for, I think
the reserve grade was 6.1 grammes.
So you can say that the Deacon load high grade is like 9697%
metallurgical recovery. But when you run it through a
mill that is designed for 6.1 grammes, you can't just Chuck
high grade in and get that. It's gonna like it's optimised
for that, that grind or and I'll get to why that so and so why,
why would the processing recovery be low?
Because and as I said, the Montanans are less than the
processing tonnes because you want that the other way around.
You want you want to be building up stockpiles on the ROM side
that can be fed into the mill at the optimum blend.
So you want to get your high grade ship, which is their
Deacon stuff and the low grade other stuff.
Blend it down to get it at around 6 and then you know that
you're getting the given that given the best chance to get the
best recovery. And look, they're great.
They're Stockport. Their processing grade was six.
But I'm, I'm, I'm thinking because if the mind dirt is
chasing the processing dirt, especially the fact that they're
in, they want to get a good quarterly out, they're in ramp
up. So you have a high grade dirt
sitting on the room in and it's friggin 3 weeks till the end of
the quarter and you gotta leave it sitting there waiting for
some low grade stuff to come up to blend it in and maybe not
feed the mill? Or are you gonna throw it in,
get the answers and sacrifice a bit of recovery?
I reckon you gotta throw at it once you get the cash because I
need the cash. I made the market to show that
they're producing the answers, which means you sacrifice a bit
of recovery. And I'd say that's might be
what's happening because they're chasing their tail a bit,
getting the dirt up there. So we're going to get so much
more frigging info by the end of the month when they release the,
you know, the production and cost guidance and where the
mines going. But can I or can I only No, I
won't say that, but you know what I mean?
Or can only do what I can do? Do you know what I was about to
say no. What were you gonna say?
I look, I look forward to seeing what I was a bit disappointed
not to get details of the cost guidance and FY25 guidance in
this quarterly, Maddie. So now we gotta wait till the
end of the month. I couldn't remember if they said
it was going to come out in the quarterly or maybe that's why
the quarterlies coming out early and get that like going out
later. And then I'm reading broken
notes about a potential plant expansion to 1.5 million times
per annum. And I just, I, I don't know, I
just always that's always read these things and just like I, I
couldn't quite. So there's obviously an analyst
site visit and now that analyst is writing about a plant
expansion to 1.5 million. But I can't understand why why
you why you do that expansion now or why it wasn't your base
case. You're just body built the
thing. Why don't you build it the right
size to start with? Or is it the right size now and
this? Is just yeah, yeah, Great story.
I've. Got a bit of a I've got a bit of
a theory cause then that was in the front page of and read that
out yet that they've stuck commenced to a scoping study for
a processing plant expansion from 1 to one and a half million
tonne per annum. Think of might relate to what I
was talking about before about this.
Blending like this is because to do this, you you'll have to,
they'll have to bring forward, I would assume additional mining
areas that aren't included in the plan as of yet that will,
you would assume be lower grade because if they're higher grade,
they'd be trying to fucking mine them now.
But they're going to, you know, bring forward other the other
areas low grade that weren't included in the original plan.
So, and as we've seen from, because we gotta find half a
million tonne a year that which means more gear, more areas,
more it has to come from somewhere.
So we've seen from the infill drilling of that Deacon load,
which is the honeypot for Bellevue, it looks like the
grades are looking to be higher than originally forecast.
There's that high grade shoot that they were talking about.
So there might be like a a positive reconciliation because
they wouldn't have they wouldn't have wanted to overcall the
Deakin in that stage two study because they've real fucking
committed. Then you always want to under
promise and over deliver, especially when dealing with
high grades. I don't know they and at no
point did I get the impression that Bellevue was under
marketed. Definitely not under marketed,
but really you could, but they could really shoot themselves in
the foot if they aren't conservative on a real high
grade or body that could have variance.
So and it looks like there so there might that might be yeah,
might be a thing might not be. So if if that is the case, if it
is over reconciling and the mills being designed for this
frigging 6.1 gramme reserve, maybe expanding the mill and
bringing on some lower grade areas is not just about adding
more ounces to the profile, which it will, but it might
actually be about giving them more flexibility to blend down
that Deacon load to optimise the plant recovery.
Because if we've if we're if I'm right in saying that they've had
to haven't had the material on the rum to blend the Daken lie
down and they've had to throw out through maybe getting more
lower grade and getting more stocks up there gives them a lot
more flexibility to maintain to optimise that plant and
recovery. So I'm not not sure like look
and it's more answers which would hopefully mean more cash,
but it is more capital cause like look that extra 5% recovery
that they say they've sacrificed 5% recovery this quarter at
seven and a half million cash on the answers they produced like
because that would have been sold at the spot price.
The thing I don't understand ready and if if this is the case
and further Trev Trev's point before this would have already
been known before they started binding, so why wouldn't they
have started this at one and a half million tonnes to begin
with? A lot more capital they would
have been a lot more debt, a lot more risk.
I think staged approach is. That's why.
Is it? Doesn't every all body have an?
It's a perfect an optimal rate at which you can mine it.
Not when they're spread out like this, because they they do when
they're when it's like I guess one U1 going down.
But when you've got additional areas that you can go mine
independently, no, it doesn't because it can, you can set up
additional mining fronts. You do need additional capital
and additional fleet, but you can add to it a lot easier when
it's laterally spread out and independent like this, so.
You know what a cynic would propose.
Ohi, I reckon it's exactly what I'm thinking.
Too, Well, it's a, it's a, like you said, it's more capital, but
it's a, it's a positive spin on more capital and.
It's a it's a story. It's a story, but you know, I
mean, I don't know, maybe I just you wouldn't you wouldn't you
wouldn't be surprised to see us a growth story kind of now, now,
now that we've proved where I'm cash flow positive, you might be
able to take some of the some of the, you know, medium term
stress off the the hedging and the debt repayments and stuff
like that. If if you have a bit more better
capitalization and yeah, and you have a growth story.
You're talking about a capital rise.
Maybe. Maybe it's a it's it's building
up as a potential story to wrap around a capital raise, isn't
it? Oht could be.
Cause that, that I saw one number floated for the mill
expansion at 80 bucks. But that's, that was just a
research not. But then you got the if there's
additional mining fronts to be mined, that's additional
development capital for the mine as well to create another half a
million tonnes. So it starts starts creeping U
and if the God if there another one to keep the eye on is
because if they have development is a bit of a bottleneck there,
then develops. They're doing it and like
they're probably the quickest at doing friggin underground
development. They're a bit over halfway
through their contract there as well.
I think it was a bit under 4 four year contract.
I think they've been there two and a bit years now.
So it'll be interesting to see if they return depending on
develops plans, if they retain the contract there or if they go
down their own owner operator routes with developed something
to keep the eye on there. But they having them there doing
the development is a freaking pretty bloody important, I
think. But yeah, I think there's.
Yeah. Well, with 219 million in debt,
there's potential to fund it with operating cash flows, but
it remains highly levered, highly debt leveraged and a lot
of everything's got to go right to keep producing that
operational cash flow, which look, it can be done.
Or Will and I've got a bit of cash balance here.
I don't know what they are trade creditors position is right now
because I didn't report that. Have to wait till till a later
date for that. Yeah.
But then yeah, like you say, there's a yeah that there could
be, there could be like they're in the deck and load, which is
happy days. And could you, could, you could
cash fund it or, or you could look to be prudent in a, in a
time when you've got a full valuation and equity fund a
growth plan, but also also, you know, over, over, over fund
their growth plan and. Take the pressure.
Take the pressure off the cap structure to know each other.
Go. Yeah, I sound like you, mate,
because last time I bet against them during cap raise and you
bet that they would. And now I'm coming the other
way. I think you've gone the other
way. No, I, I still still got my eyes
peeled, put it that way. It's just like they're, they've
and look, it's they're, they've just been adamant that they're
not going to cause they want, they want to be the management.
They wanna be the next Capricorn sort of thing.
Executed fully, pretty much fully funded.
They did do that bit of a raise last year.
That was for the Tribune decline.
I'll add a few raises. Yeah, yeah, yeah.
But like for the project was. There's a lot of equity that's
going into this. Yes.
Anyway I will get will get more info by the end of the month for
the production and cost guidance because yeah, it's one of those
ones you'd want to say it like. And what I guess what the market
and myself are looking for is a keen look.
If they are a fucking aluminium or a potash producer, I wouldn't
give it this much attention, but it's underground mining and I
love it. So shoot before it.
But you you wanna say, you wanna say mining outrunning processing
and hitting that 1,000,000 tonne rate before we even start
thinking about getting to 1 1/2. But but there's yeah, it sounds
like there's still a lot of once that infrastructure gets
properly set, U yeah, wanna see those physicals bloody
outweighing each other. So yeah, but look, cost
guidance. Just scrap those friggin days.
DFS numbers, yeah. And that and that should not be
a surprise to the market that they're going to be much higher
than the DFS you would anticipate.
Yeah, I don't know. Just don't know what brokers are
running through their cost assumptions.
And there's a lot of yeah, yeah, holds or or buyers with the
target price just above current price and stuff like that.
So what if they had to revise lower on the cost?
Does that actually hinder, hinder the share price?
I don't know. Yeah, don't know.
Yeah, buddy. Love it.
Our goods go morning.
Go fighting. Actually going off on a bit of a
tangent. We were talking about it this
morning, the the Trump assassination attempt, right?
Over the weekend. Just absolute madness, right?
This is like literally the stuff you say in movies.
And look at this picture here, right?
I mean, look at Trump. This is an incredible image
regardless of what side of politics you're on.
He's literally just been hit by a bullet.
The Secret Service, allegedly. Allegedly.
Depending on the conspiracy theorists, you listen.
To the glass off the teleprompter I've heard.
But yeah, anyway. The Secret Service is all
rallying around him to protect him, and he's raising his fists
to the air to all the supporters.
I mean, no matter the adversity he encountered, he's just
dedicated to his cause and his country.
And the only person I know that is more dedicated than Trump to
his cause and country is Maddie Hall again.
With solutions. Maddie Ohl making water grade.
Again, making water great again. If the Gateway bladders weren't
already sensational enough, Maddie Hall has now got a brand
new offering for the miners out there.
Bladder rentals. OHS really?
Bladder rental? Rental bladder.
You can now rent a bladder. Yeah, right.
Try before you buy. Try before you buy.
Yeah, goods that. It's like bringing back
Blockbuster, but for bladders. Yeah, yeah, cheap, cheap
Tuesday. Get a pizza in the bladder.
But with Santa and party ready to go, how?
Good is so good. Buddy Hall so you could get What
do you get for Jay on a rental? So you can rent out a get wet
bladder to your mindset for as long or as little as you need.
You get the full get wet service with installation and all the
supports included just as if you were buying one.
It helps miners reduce their CapEx.
I mean, what more could you? Want so is there more?
You know what, I don't know? I don't know if you can get
better than that. I mean, like big props to Maddie
Hall and the teams dedication to putting clients needs first.
They're backing the bladders. Go get wet and go straight.
Have a look at. Look at him here.
Look at him with his. Look at him.
Flawed. Go get.
Go get wet. And go Australia, lover.
Good, good work, Jason. That's bloody.
I can't believe you found that image.
That is, it's a powerful thing, mate.
What's going on around the grounds, Jacey?
So the first one, first cab off the rag.
Grey put out their calling in Ding Ding Ding.
I am a shareholder. Lots of cash.
Cash, lots of cash. So they ended the quarter with
$867 million of cash in the bank and that was after raising 600
mil or 600 bucks, sorry, during the quarter, so much cash.
They've earned over 5 million of interest just for the quarter.
They should be earning more than that soon if they get in A5
percenter that's bloody 40 bucks.
Well, that's 600 only came in late.
Yeah, yeah. So they should be getting about
10 mil 1/4 after this interest. Yeah, fantastic.
You want equity returns, not fixed income returns.
As a shareholder, I don't. I don't want to.
If I could interest the bank I want share share it.
At least it's paid for. The bloody, The raising.
Fees OHT. The clips, That's weird.
So the key takeaway is there's not much new news.
Credit approved term sheets was you know received from a
syndicate of banks for a $1 billion senior debt facility and
an additional $130 million cost overrun facility that was
announced during the quarter. Degree saying that the that debt
package and existing cash are expected to fully fund the
estimated capital cost of Hemi. I like the use of the word
expected there formal docks on the project financing is
anticipated to get all sorted by the end of this calendar year.
Nath and EFA, the two to government agencies, are
considering participating in that debt syndicate.
So that new news, I didn't, I didn't heard them.
Before that was, I think that's the first time I've seen them
that was included in the in the quarterly so.
How do you feel about that as a taxpayer?
Well, given that most of the other no funding hasn't gone
that way, hopefully this time it's different.
I mean, I haven't really dabbled in gold too much, so it'll be
interesting to see how this goes.
I mean, a lot of their previous forays have been in what, like
bauxite, potash, Carrie. You know, sense.
Mineral sands, all of that so and final debt drawdown is
primarily subject to the receipt of enviro approvals and FRG by
the company. Looking at the enviro approvals,
the second section in their quarterly, it seems that like
they're progressing but on the slower side.
Just quote from the quarterly. These approval pathways are
consistent with those published in the HEMI DFS from September
23, although the timing of receiving such approvals is
uncertain. Lots of progress and various
items on the project development front, including expressions of
interest to contractors for a PC or APCM bids for the Hemi plant.
And we saw also a few days ago the release of the Hemi regional
study, which adds like around another 140,000 oz per annum to
Hemby between years 4/9. Fuck this, I'm going to just
sign it to grey. Makes me nervous.
Hmm, what? What makes you nervous about it?
Maddie, let me go through my nerve wracking reasons, right.
1.2 green refractory deposit. That is fucking huge.
It is being built as a huge operation.
I'm like, is there is there a a chalky risk to this that it
might not be that big and get downgraded in the it's not as
big as everyone thinks it is. I don't know if that's gonna
happen. It's in the bloody pill brats.
So it's going to be dealing with friggin cyclones all the time.
And it's like imagine the imagine the quantum of randomise
that would make the Oz that are attributed to any cyclone delays
up there. And yeah, it's just, yeah,
there's so many moving parts. It's a brand new, I know you can
recruit anyone you want, but a, you know, a new company to build
one of the biggest gold mines, definitely the one of the
biggest recently built gold mines in the country.
And established in the process, but one that does not exist here
in Australia yet. No, no, it's yeah.
Makes me nervous. And.
Ding Ding Dong. Yeah, and a team that needs to
prove themselves, not one that is proven.
Nah, and talk about a friggin trial by fire.
It's but yeah, it's just, I don't know.
I don't know. God, if it was fucking 1/2
grammes, maybe there's a refractory.
Well, as you say, just a .1 gramme a tonne movement when you
when you're mining or you're processing, I mean in absolute
terms it's not huge, but in the case of a 1:00-ish gramme per
tunnel body, that's 10%. Yeah.
And that, that's 12%, that's a guy.
Imagine a freaking 10% variance in the recovery if the pox isn't
work when it performing like yeah.
That's so not without it, some without its challenges, but very
keen to see what. Happens like travel.
I think you got listened to by some people from the Fr.
I was listening to the Chanticleer.
I didn't listen. To this the other the other day.
What would they say? Shout out Macca, the guest, the
colleague he had on. I forget it.
I'm sorry, No apologies for that.
But she actually talked about mining and I think I don't know
if it was specific about mining, about impacts of rainfall being
negative, but and she said that there's never been a mention of
cost of guidance uplifts due to better than expected rainfall.
Oh really. And I feel that that came from
you. Is it Miriam?
Yeah, I think it was. Miriam she So she writes Rear
Window. She listens to the shout out
Miriam. That would be why.
She's the one that wrote the cram care article off the back
of our work that she got from the she got the inspired from
the party. Ohe shout out, I'll just bloody
confirm it was her cause I'll sound like a dickhead otherwise.
No Vesna. OHP fuck.
Sorry, Miriam, it wasn't you it was based on.
Yeah. So yeah, give trap credit next.
Time. No, no, no.
I'm sure she got independently. Right.
It's good. Jason, what's next?
Line Town quick update, they added another off take for
initial ramp up volume, so 100,000 tonnes to Beijing Sino
mine over 10 months commencing this September.
The pricing is a little bit different to some of their
existing offtake, so it's going to be determined using a formula
referencing market prices for battery grade lithium carbonate,
not spodumene index indexes. But the sign this the pricing is
the same as all the other pricing is that you never know
the pricing. Yeah, pretty much, yeah.
And in addition to the the existing long-term off takes
they've got with Tesla, LG and forward, this one will be and
this provides them with a bit of flexibility to sell spodumene
that may not match the product quality specs that are in their
existing Co off take agreements and the expected delivery before
30 September. I think it's quite interesting
is you wouldn't do that if you weren't pretty bullish on your
ramp up going bang on. Hmm.
So that's that one there. Right.
I saw, I saw that one. They're they're pretty they got
a lot of contracts in place in the early years now.
And yeah, like, and I think I raised this round, they came out
with the connote. But like, what happens if they
can't meet all of the contractors problem, right?
Yeah, Anyway. Gotta buy it off someone off
something I don't. Think it depends on the sponge
mean spotlight, it depends on the terms.
Not not all of them are not all tax structure that way and
oftentimes you off takers will be flexible when you have
challenges. But I'd love to know the details
of that one. That's probably an easy answer
to it, but. Yeah.
And last one for the day, we had make a medal.
So they picked up a 750 kilowatt ball meal for their merchants
and Gold project. It's claiming to expand their
processing capacity by 30% to 640,000 tonnes per annum,
cutting back some of their ball mill CapEx compared to the DFS
and reducing the the lead time as well by 33 weeks.
So it's expected to be on site this September and by doing that
sort of allows some previously excluded answers from their
recent DFS that were excluded due to mill capacity constraints
to come in. And also some ore stockpiles
that have built up in the, those initial years to be taken
advantage of with the, the expanded capacity.
And they're doing an updated DFS off the back of this, uh, later
this year. And I think that would dragging
out the sort of the processing life based on the mill capacity
and the last one. Yeah.
Probably compressing it. Now compressing it now, which is
much, much more sensible just to get that cash flow more of it up
front. Um, and the funding that with an
existing secure bridging loan which they announced the other
month, which they also used to buy some of the camp
infrastructure from De Grasa, which is not too far away, which
was also at, at a fraction of the defects CapEx estimate.
So I think a good proactive move by maker to sort of minimise
costs and, and lay times where they can.
We are expecting credit approval for the the main project finance
facility for Murchison this month.
The DFS has 44 mil in pre production CapEx.
They're about A50 mil market cap company last I checked.
I expect the, I would expect the project finance to be around
that 30 mil mark sort of give or take 5 mil.
And then obviously they'll have to solve for the balance, you
know equity or some other alternative.
But you know, even if they get sturdy million in project
finance, that's still 15 mil, they'd have at least 15 mil
because you'll have a bit of working capital leading into
going into production as well, which you know, 15 mil equities
around 30% of the current market cap.
So that's pretty chunky. So I'm keen to see what sort of
financing solution they come up with saying as we haven't really
seen a single asset gold developer come into production
super recently, well, there hasn't been many.
So I'm keen to see what they come.
Up with daily Macquarie funding it.
Yeah, Nah, Nah. At least it's like it's
brownfields, at least a lot of existing infrastructure and
mine. So it's not like you wouldn't
say it's easier, but it's like it's a lot more established than
yes, slightly build. No, we've seen how bloody hard
it is to build a brand new one from scratch.
It's a prick of a spot to be in when you're on that small cap
end and you're you're trying to sort financing and the whole
market knows that you're there might be an equity portion and
they don't wanna bloody couldn't they just wanna wait for the.
Equity that. The joys have been on the
smaller end of town. Yeah, tough going.
No good on it. I like I like this sort of shit.
I can get the dribs and the dribs and drabs around the
joint. Saving money they got got a lot
of skin in the game. The boys that are running it.
So the treating it like a business.
I like it. Yeah, hopefully, hopefully,
hopefully it's it's a palatable debt quantum that comes to
market because yeah, some of the historic troubles is you put too
much debt in it really high risk to bring new developments on
mine and on online. Sometimes that the structuring
of whatever project finance is in there is to onerous for
whatever hiccups come along and equity has to buddy save the day
which is bad for shareholders. So hopefully that doesn't happen
this time. Yeah all these cars you'd rather
have 30 mil than 219 yeah, but you'd rather have a lot more oz
too. So true to pay off the 219 have
good work JC fucker love avid Yotti.
You know, you're on it most weeks now.
Yeah, just like. Yeah, you got my weekly segment.
Below it. Another day that we have too
much news I didn't even get to talk about.
The Rumble in the Jungle is a bidding war on Frasier Rotor.
Could you believe it? Anyway, I can't believe that.
Unfortunately I just have to save it for another.
Day oht mate, there better be no news out tomorrow so traffic can
give you the bloody Sierra Rutile the attention it
deserves. Quarterly season?
I doubt that's the case mate. I know Bellevue threw a spanner
in the works getting it out early today or pump me up for a
Monday, right? I thanks all the bloody
partners. Axis morning technology.
Remember the two week free trial if you ring Sean and sigh money
of Mon Primark guide mineral mining services MMS verify get
wet solutions to DSI underground Silverstone CR insurance WI
waterboards kidro. Sorry, yeah.
Else what else would you use than Spark Chart?
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person. Before making any investment
decision, you should consult with your financial advisor and
consider how appropriate the advice is to your objectives,
financial situation and needs.