1 00:00:02,320 --> 00:00:06,320 The Christmas countdown is on. Two weeks to go but we ain't 2 00:00:06,320 --> 00:00:09,320 stopping now. We've got an eye look at Iniaba 3 00:00:09,320 --> 00:00:14,280 Deep Love Spectacular today you boys, It's all happening 4 00:00:14,280 --> 00:00:15,960 alright. It's one of those, one of those 5 00:00:15,960 --> 00:00:20,560 stories earlier that just makes me angry, mad, disappointed, 6 00:00:21,080 --> 00:00:23,480 frustrated. All of the feelings. 7 00:00:23,560 --> 00:00:25,880 A lot of feelings, yeah. Just it's a, it's a head 8 00:00:25,880 --> 00:00:27,640 scratcher on a whole bunch of levels, which we're gonna get 9 00:00:27,640 --> 00:00:29,800 into. But yeah, one thing that maybe 10 00:00:29,800 --> 00:00:33,240 didn't make you unhappy or or us unhappy was your weekend. 11 00:00:33,240 --> 00:00:34,280 How was your weekend, Ellie? It was. 12 00:00:34,400 --> 00:00:38,080 Good. So I was at the the CBH over the 13 00:00:38,080 --> 00:00:39,760 weekend. So for our non Western 14 00:00:39,760 --> 00:00:42,920 Australian listeners, that's the Cottesloe Beach Hotel, right in 15 00:00:42,920 --> 00:00:47,720 the heart of the infamous 6011. And I was waiting in line for a 16 00:00:47,720 --> 00:00:51,280 drink at the bar when I saw something very peculiar on the 17 00:00:51,280 --> 00:00:54,160 back wall which I didn't think to say. 18 00:00:54,160 --> 00:00:57,120 So here's a picture. Can you guys spot it? 19 00:00:58,320 --> 00:01:00,920 Am I looking at a hat with a little blue logo on it, Ellie? 20 00:01:01,240 --> 00:01:03,840 I think that might be the one. Wildcat. 21 00:01:03,840 --> 00:01:08,600 There's a Wildcat hat on the back of the bar, which is you'd 22 00:01:08,600 --> 00:01:10,920 only say that in the six O1 1, so I love that. 23 00:01:10,920 --> 00:01:13,800 But there's actually something else in that picture. 24 00:01:13,800 --> 00:01:17,280 So if you take a closer look. Look at that. 25 00:01:17,440 --> 00:01:22,200 It's true, but having a tuner so drew from K Drill, he can meet 26 00:01:22,200 --> 00:01:26,880 up with you anytime, anywhere in the six O1 one or beyond to help 27 00:01:27,080 --> 00:01:29,800 sort out your 2025 drilling contract. 28 00:01:29,840 --> 00:01:32,480 With K Drill. It's been a bunch of ASX small 29 00:01:32,480 --> 00:01:34,520 caps. We've been saying doing the 30 00:01:34,520 --> 00:01:38,240 heaps of last last minute raises for the year to sort of set 31 00:01:38,240 --> 00:01:42,280 themselves up for a strong start to 25 S to all of those 32 00:01:42,280 --> 00:01:44,760 companies. Make sure you've got Rhino, 33 00:01:44,760 --> 00:01:47,680 Sullivan and the rest of the casual tape up at your site in 34 00:01:47,680 --> 00:01:49,920 the new year punching RC and Diamond. 35 00:01:49,920 --> 00:01:53,120 Holes, Ellie, It's like Patrol's colours are red. 36 00:01:53,200 --> 00:01:54,680 It's Christmas. It's Christmas theme. 37 00:01:55,040 --> 00:01:57,600 Yeah, you've got Rhino doesn't take a break over Christmas. 38 00:01:57,760 --> 00:02:00,360 He he's punching RC and Diamond holes through Christmas. 39 00:02:00,680 --> 00:02:03,320 He's punching them every day of the week, punches them in his 40 00:02:03,320 --> 00:02:05,480 sleep. So make it your new New Year's 41 00:02:05,480 --> 00:02:09,400 resolution to get K drill up in your site punching RC diamond 42 00:02:09,400 --> 00:02:10,639 holes. Get in contact with Juba. 43 00:02:10,639 --> 00:02:13,280 His details in the show notes. Thanks for your support K Drill. 44 00:02:13,400 --> 00:02:16,320 Go K drill. Alrighty, let's talk about Iluka 45 00:02:16,320 --> 00:02:19,560 resources, guys. This was a big one on Friday. 46 00:02:19,560 --> 00:02:23,000 The funding package that has been sort of long negotiated 47 00:02:23,000 --> 00:02:27,040 between Iluka and the government came through and the market did 48 00:02:27,040 --> 00:02:31,800 not like it down 10 percent. So wow, it, it was fascinating, 49 00:02:31,880 --> 00:02:33,640 right? The the call had a lot of 50 00:02:33,640 --> 00:02:35,920 interesting questions. Analysts trying to piece through 51 00:02:35,920 --> 00:02:39,440 the call was put on a relatively short notice with a lot of info, 52 00:02:39,440 --> 00:02:43,280 a lot of assumptions baked into it, a lot of footnote footnotes 53 00:02:43,280 --> 00:02:46,560 that you have to go and read. So we've got we've got plenty to 54 00:02:46,560 --> 00:02:49,360 chat about on this one for. For context, JD like what? 55 00:02:49,920 --> 00:02:52,560 What is like the, you know, the background to this whole, you 56 00:02:52,560 --> 00:02:54,640 know, any other railroads facility in the funding package 57 00:02:54,640 --> 00:02:57,280 with the government? Yeah, Let's give a bit of a 58 00:02:57,920 --> 00:03:01,240 recap on everything that's kind of happened because it's been a 59 00:03:01,240 --> 00:03:03,320 few years in the process now, right. 60 00:03:03,320 --> 00:03:07,240 So in early 2022 you had I look at pressing go on the Enieba 61 00:03:07,240 --> 00:03:11,200 rare earths refinery to the north of Perth in WA. 62 00:03:11,200 --> 00:03:15,600 Now final investment decision was taken with the aid of a 1 63 00:03:15,600 --> 00:03:19,720 billion and 50 million non recourse loan from our 64 00:03:19,760 --> 00:03:22,240 government. So this was done through the 65 00:03:22,320 --> 00:03:25,120 government entity of Export Finance Australia. 66 00:03:25,400 --> 00:03:29,000 Now I look at the time would contribute $200 million plus the 67 00:03:29,000 --> 00:03:33,000 any other any ABBA stockpile. So that is a stockpile that had 68 00:03:33,160 --> 00:03:36,600 been building for a number of years goes back quite, quite a 69 00:03:36,600 --> 00:03:39,600 while now. So this refinery importantly 70 00:03:39,600 --> 00:03:43,280 would be designed to handle not just the any other stockpile, 71 00:03:43,280 --> 00:03:47,120 but any other Aluca feedstock. So we've got a few projects in 72 00:03:47,120 --> 00:03:50,640 the works which which had about there plus potential third party 73 00:03:50,640 --> 00:03:54,120 feed. That was, yeah, that was, it 74 00:03:54,120 --> 00:03:55,800 was, it was, it was interesting at the time. 75 00:03:55,800 --> 00:03:57,680 I don't know if too many people were expecting this FID. 76 00:03:57,680 --> 00:03:59,440 It kind of just popped up out of the blue, and I think it was it 77 00:04:00,040 --> 00:04:03,000 popped up the week before the standing government went into 78 00:04:03,000 --> 00:04:04,400 caretaker mode. So kind of go figure. 79 00:04:05,200 --> 00:04:09,200 And the the whole, you know, the, the loan that was provided 80 00:04:09,200 --> 00:04:12,200 at the time by the Australian government was so like the terms 81 00:04:12,200 --> 00:04:14,960 were so out of market with any concessional finance that had 82 00:04:14,960 --> 00:04:18,160 been kind of provided at all in any, you know, critical minerals 83 00:04:18,320 --> 00:04:21,640 like area whatsoever by a mile. It was, it was, you know, kind 84 00:04:21,640 --> 00:04:25,240 of remarkable at $1.05 billion non recourse loan terms were 85 00:04:25,240 --> 00:04:27,200 sweet as all hell. You know, I didn't have to repay 86 00:04:27,200 --> 00:04:30,040 it forever, but it was just everything was was honky Dory 87 00:04:30,040 --> 00:04:32,360 about it. But interestingly, at the time 88 00:04:33,200 --> 00:04:35,640 when they when they did announce that, that FID, they talked up 89 00:04:35,640 --> 00:04:39,240 the prospects of also being able to process their, some of their, 90 00:04:39,440 --> 00:04:43,160 their, their deposit at Wimmera through this reverse facility as 91 00:04:43,160 --> 00:04:45,080 well. Wimmera, these are the Wimmer 92 00:04:45,080 --> 00:04:46,640 project is 1 of it. Like, you know, they've got a 93 00:04:46,640 --> 00:04:49,520 bunch of these Wim style deposits in their portfolio. 94 00:04:49,520 --> 00:04:51,600 They're in Victoria. They were actually kind of 95 00:04:51,600 --> 00:04:54,760 delineated by Conzink back in the 80s. 96 00:04:54,760 --> 00:04:58,080 They haven't been developed yet for must have been a long time, 97 00:04:58,080 --> 00:04:59,080 right? But they haven't been developed 98 00:04:59,080 --> 00:05:03,400 for a few big reasons. First one is incredibly fine, 99 00:05:03,400 --> 00:05:06,440 which makes separation of the of the zircon really, really 100 00:05:06,440 --> 00:05:08,120 challenging. And the other one is that 101 00:05:08,120 --> 00:05:09,840 they've got high levels of impurities, which makes 102 00:05:09,840 --> 00:05:12,720 purification of a salable kind of zircon product really, really 103 00:05:12,720 --> 00:05:15,520 challenging. On that first point I look at 104 00:05:15,520 --> 00:05:19,800 they figured out a, a solution to to separate the, the zircon 105 00:05:20,200 --> 00:05:23,760 in 2018. But the second point on, on the, 106 00:05:24,200 --> 00:05:27,480 on the impurities that they've done some kind of purification 107 00:05:27,480 --> 00:05:29,840 or zircon purification in a lab, but they still need to prove it 108 00:05:29,840 --> 00:05:31,040 up. It's sort of scale and they're 109 00:05:31,040 --> 00:05:34,080 doing a demonstration plan now. But there's no guarantees 110 00:05:34,080 --> 00:05:35,920 though. And the attractiveness of those 111 00:05:36,880 --> 00:05:40,920 of those whim style deposits is actually they're high zircon 112 00:05:40,920 --> 00:05:43,760 great. So despite all this, and the 113 00:05:43,760 --> 00:05:46,480 challenge is to actually get a saleable kind of zircon product 114 00:05:46,480 --> 00:05:48,520 out of it. I look at they did put a reserve 115 00:05:48,800 --> 00:05:53,400 on Winrar in 2022 and that assumed that would mine it sell 116 00:05:53,400 --> 00:05:57,600 the kind of lowish value ilmenite products produce a rare 117 00:05:57,600 --> 00:06:00,280 earth concentrate which would go to any other. 118 00:06:00,400 --> 00:06:03,640 But the zircon product isn't assumed to be recoverable for 119 00:06:03,640 --> 00:06:05,320 the purposes of the reserve there. 120 00:06:06,520 --> 00:06:11,360 And you Fast forward to Friday's announcement, we get a bit of an 121 00:06:11,360 --> 00:06:14,640 indication of how Luca might actually be thinking about its 122 00:06:14,640 --> 00:06:17,600 feedstock options here. Because you in the, in the 123 00:06:17,840 --> 00:06:20,680 interim since they announced FID, you know, a few things have 124 00:06:20,680 --> 00:06:22,320 happened. They did a deal with, with 125 00:06:22,320 --> 00:06:26,520 Northern Minerals in 2022 to, to try and get some supply from 126 00:06:26,520 --> 00:06:29,120 their Browns Range project to feed any other refinery. 127 00:06:29,480 --> 00:06:33,440 They also progressed their Bell Reynolds mineral sands project 128 00:06:33,440 --> 00:06:36,400 in NSW. And hence the scenarios that I 129 00:06:36,400 --> 00:06:40,240 look actually put forward on Friday were impacted by these 130 00:06:40,240 --> 00:06:43,560 developments. So Trev, what the sort of three 131 00:06:43,680 --> 00:06:47,040 scenarios that Aloka have have put forward now in the context 132 00:06:47,040 --> 00:06:50,200 of all those what they had and those recent developments in the 133 00:06:50,200 --> 00:06:53,160 last few years? If you if you look at like you 134 00:06:53,160 --> 00:06:55,840 can see the the pictures of that kind of they show here. 135 00:06:55,840 --> 00:06:58,840 So 3 scenarios, one just you know, 35 year life 136 00:06:59,480 --> 00:07:03,360 underutilised, you know, refinery because they're only 137 00:07:03,360 --> 00:07:08,000 assuming that it's using Aloka's any other stockpile, Al Reynold 138 00:07:08,240 --> 00:07:11,800 concentrate from Al Reynold and when there are I'm constant 139 00:07:11,920 --> 00:07:15,160 concentrate as well. The second scenario is the same 140 00:07:15,160 --> 00:07:19,080 as above, but now they kind of they throw in northern minerals, 141 00:07:19,080 --> 00:07:21,040 but look at what happens when they include northern minerals 142 00:07:21,040 --> 00:07:24,480 as feedstock. It actually displaces Wimera to 143 00:07:24,640 --> 00:07:27,960 later in the refineries life and I think that's telling 144 00:07:27,960 --> 00:07:29,960 personally. And then the last scenario, they 145 00:07:29,960 --> 00:07:33,480 call this the financing case, which only processes any other 146 00:07:33,480 --> 00:07:35,640 stockpile and Bell Reynold, no Wimera. 147 00:07:36,240 --> 00:07:38,360 So just like look at those 3 scenarios have changed. 148 00:07:38,360 --> 00:07:42,280 I think there is a read through that there are doubts about the 149 00:07:42,280 --> 00:07:47,920 economics or timelines or both of Wimmer, which makes a pretty 150 00:07:47,920 --> 00:07:50,120 big impact when that was kind of, you know, your big baseload 151 00:07:50,640 --> 00:07:53,440 long life part of the feed of of our Lucas. 152 00:07:53,920 --> 00:07:56,480 And Trev explained to me and probably the other money minders 153 00:07:56,480 --> 00:07:59,600 who are as clued up about mineral sands and the rest of it 154 00:07:59,800 --> 00:08:02,920 and and whereas Bell, Reynolds and Wimmer are mineral sands 155 00:08:02,920 --> 00:08:05,080 projects. So why are they getting talked 156 00:08:05,080 --> 00:08:10,560 about in the context of a rare earths being feedstock for rare 157 00:08:10,560 --> 00:08:13,200 earths refinery? Is it some sort of byproduct? 158 00:08:13,600 --> 00:08:16,560 Exactly or absolutely yeah, when when you're when you're 159 00:08:16,560 --> 00:08:22,080 processing mineral sands that you're often times a typical 160 00:08:22,080 --> 00:08:25,400 byproduct of that process is a is a monocyte concentrate. 161 00:08:25,640 --> 00:08:29,920 That monocyte concentrate is, is is is is often times, you know, 162 00:08:30,200 --> 00:08:33,400 rich in rare earth elements, which if you, if you plug it 163 00:08:33,400 --> 00:08:36,280 into a, a refinery, which is, you know, you're cracking and 164 00:08:36,280 --> 00:08:40,679 leaching and, and also also a hydro net plant, you, you can 165 00:08:40,679 --> 00:08:44,360 get some, some separated railroad oxides out of it. 166 00:08:44,600 --> 00:08:48,880 So to to round out on the assumptions put forward, the key 167 00:08:48,880 --> 00:08:51,680 point of the negotiations happening over the last year is 168 00:08:51,680 --> 00:08:54,280 because the CapEx blew out. So initially that was pinned at 169 00:08:54,480 --> 00:08:59,600 1 to $1.2 billion, hit a stumbling block in late 23, blew 170 00:08:59,600 --> 00:09:05,720 out to 1.7 to $1.8 billion with 320 million of that money being 171 00:09:05,720 --> 00:09:08,400 spent to date. So you had a bit of a stalemate 172 00:09:08,400 --> 00:09:12,360 as Iluka and the government battled over who's going to chip 173 00:09:12,360 --> 00:09:16,760 in and fund the the rest of it. And to clarify guys, this CapEx 174 00:09:17,080 --> 00:09:19,880 relates to this indie ABBA refinery. 175 00:09:20,080 --> 00:09:24,760 So any CapEx to bring online this Wimera project which I 176 00:09:24,760 --> 00:09:28,040 think is currently at DFS stage, that would be in addition to 177 00:09:28,040 --> 00:09:30,360 that, right? Yeah, Wimmer's CapEx is not 178 00:09:30,360 --> 00:09:33,280 insignificant. It's like I think they're sort 179 00:09:33,280 --> 00:09:36,840 of PFS assumptions, nearly a billion dollars there from my 180 00:09:36,840 --> 00:09:40,800 memory. So yeah, that's they're actually 181 00:09:40,880 --> 00:09:43,400 this is exactly right. That's not included in this. 182 00:09:43,600 --> 00:09:45,640 Absolutely. This is just the refinery. 183 00:09:45,960 --> 00:09:49,320 And so that brings us now to last Fridays announcement. 184 00:09:49,320 --> 00:09:53,360 So what's been the funding update that's come through 185 00:09:53,360 --> 00:09:55,800 recently? So to get them there, EFA are 186 00:09:55,800 --> 00:10:00,280 going to contribute for $400 million on the same terms as 187 00:10:00,280 --> 00:10:04,720 that 2022 agreement. And you've got Iluka adding $214 188 00:10:04,720 --> 00:10:08,280 million in cash equity. That includes $82 million for 189 00:10:08,280 --> 00:10:12,760 working capital once the plant is built, but you're waiting for 190 00:10:12,760 --> 00:10:14,760 that first cash flow to come in the door. 191 00:10:14,760 --> 00:10:17,720 So in total, from an Iluka perspective, there's another 192 00:10:17,720 --> 00:10:20,720 $300 million that needs to go out the door because. 193 00:10:20,760 --> 00:10:23,160 From their pocket. From their pocket because that 194 00:10:23,240 --> 00:10:25,960 initial 200 million is not all yet spent. 195 00:10:26,200 --> 00:10:28,840 So just looking at the, you know, in simple terms, the 196 00:10:29,160 --> 00:10:32,560 amount of money going forward versus the proportions that were 197 00:10:32,960 --> 00:10:37,520 paid up in 2022, Iluka is contributing a greater a greater 198 00:10:37,600 --> 00:10:40,280 portion. And if you start to look at of 199 00:10:40,280 --> 00:10:43,160 how cash flows are going to kind of be distributed, it gets 200 00:10:43,160 --> 00:10:45,520 pretty interesting The annual interest charges. 201 00:10:45,520 --> 00:10:49,000 So like you said Travis super friendly, but you know we won't 202 00:10:49,000 --> 00:10:51,760 go through the full waterfall, but you still need to pay that 203 00:10:51,760 --> 00:10:53,720 back. And there will be an annual 204 00:10:53,720 --> 00:10:58,200 interest charge of about $116 million per annum on the fully 205 00:10:58,200 --> 00:11:02,320 drawn debt plus accrued interest that doesn't leave much cash 206 00:11:02,320 --> 00:11:05,760 flow from the sweep in the in the first four years. 207 00:11:05,760 --> 00:11:09,240 So that is just using the stockpile scenario, that 208 00:11:10,040 --> 00:11:13,040 scenario C as we showed in the chart just before. 209 00:11:13,040 --> 00:11:15,920 And that's also making a big assumption which we're going to 210 00:11:15,920 --> 00:11:19,240 talk about a good bit that the ramp up goes smoothly. 211 00:11:19,600 --> 00:11:23,480 We've said it many times in the past, rarest, rarest processing, 212 00:11:23,720 --> 00:11:27,120 just not simple by any stretch of the imagination. 213 00:11:27,120 --> 00:11:29,640 And I think you could almost comfortably take the other side. 214 00:11:29,640 --> 00:11:32,480 That ramp up is going to be a smooth process here. 215 00:11:32,640 --> 00:11:35,520 Yeah, well, that's that's the interesting point though, right? 216 00:11:35,520 --> 00:11:37,520 Is like it is, it is a big interest rate. 217 00:11:37,520 --> 00:11:39,480 You do have to pay that back. But keep in mind this loan is 218 00:11:39,480 --> 00:11:42,760 non recourse. So it's like to the extent you 219 00:11:42,760 --> 00:11:45,520 know, the Australian government has a has a claim, it's it's 220 00:11:45,560 --> 00:11:47,400 it's I think it's limited to that refinery code. 221 00:11:47,400 --> 00:11:50,120 It doesn't extend to other good other assets. 222 00:11:50,120 --> 00:11:53,360 Yeah, which you know the management are keen to keen to 223 00:11:53,360 --> 00:11:56,600 point out and I think one of the analysts sort of called it, you 224 00:11:56,600 --> 00:11:59,520 know, in a sense it's an it's an option on rare risk prices 225 00:11:59,520 --> 00:12:01,520 ticking up because you don't have that recourse to the rest 226 00:12:01,520 --> 00:12:03,920 of your balance sheet. Yeah, I described that tweak to 227 00:12:03,920 --> 00:12:05,760 the funding. It's kind of like, yeah, there 228 00:12:05,760 --> 00:12:08,240 was this, this relative relatively kind of, you know, 229 00:12:08,960 --> 00:12:11,200 commercial adjustment which allowed for more money to go 230 00:12:11,200 --> 00:12:12,760 away. But it wasn't, it wasn't skewed 231 00:12:12,760 --> 00:12:15,200 entirely in the government's favour, but it was, you know, 232 00:12:15,680 --> 00:12:18,400 you're making this commercial adjustment on an already kind of 233 00:12:18,400 --> 00:12:20,840 completely out of market concession it. 234 00:12:21,640 --> 00:12:25,880 Was so, so friendly to, to put it lightly, it was order of 235 00:12:25,880 --> 00:12:29,920 magnitude above any of the other cheques we've seen written in, 236 00:12:29,920 --> 00:12:32,520 in Australia at least, you know, the US, they throw about a fair 237 00:12:32,520 --> 00:12:35,280 bit of money to just round out on that funding piece as well. 238 00:12:35,280 --> 00:12:37,920 There's $150 million cash overrun facility. 239 00:12:37,920 --> 00:12:41,320 You know, it's worth mentioning because we've already seen a not 240 00:12:41,320 --> 00:12:43,520 insignificant uptick in the CapEx. 241 00:12:43,520 --> 00:12:47,440 So that would be split 5050 between Iluka and the 242 00:12:47,440 --> 00:12:49,000 government. And then there's an important 243 00:12:49,000 --> 00:12:51,920 caveat as well that additional funding is subject to offtake 244 00:12:51,920 --> 00:12:55,600 agreements that the Australian government is happy with trading 245 00:12:55,600 --> 00:12:58,440 between the lines, not China. So there was a good question 246 00:12:58,440 --> 00:13:00,960 that was asked about this in the call that happened right after 247 00:13:00,960 --> 00:13:04,360 the announcement from a UBS analyst asking where will the 248 00:13:04,360 --> 00:13:06,720 buyers emerge from? And, you know, it's the right 249 00:13:06,720 --> 00:13:09,160 question to ask. So Alluca came back and said 250 00:13:09,160 --> 00:13:11,360 there's a number of EV manufacturers around the world 251 00:13:11,720 --> 00:13:15,080 looking at Korea, looking at the US, there'll be a range of 252 00:13:15,080 --> 00:13:19,480 markets that we can sell into. But you know, really thinking 253 00:13:19,480 --> 00:13:22,400 about who is going to buy this, that there are no industrial 254 00:13:22,680 --> 00:13:27,000 buyers in Australia of this project and the company. 255 00:13:27,160 --> 00:13:29,840 Of the product from the project. Yeah, yes, yeah, yeah, that's 256 00:13:29,840 --> 00:13:31,960 right. So the company said we're going 257 00:13:31,960 --> 00:13:34,680 to come out and announce these off takes closer to the 258 00:13:35,160 --> 00:13:39,280 completion of the plant build. But just looking around the 259 00:13:39,280 --> 00:13:43,440 world, right, you've got China, we can't sell, but that is 8590% 260 00:13:43,520 --> 00:13:45,240 of the market. Then you've got Japan. 261 00:13:45,560 --> 00:13:48,480 Japan is wrapped up by Linus. Linus do everything they can to 262 00:13:48,480 --> 00:13:52,560 sell into Japan or sell into Vietnam, which is kind of Japan 263 00:13:52,600 --> 00:13:55,880 owned facilities there as well. Plus you've got MP materials the 264 00:13:56,000 --> 00:14:01,200 the US rail rest maker who are very eager to sell into Japan 265 00:14:01,200 --> 00:14:04,760 too. Korea and the US, they're just 266 00:14:04,760 --> 00:14:06,400 not there yet. You know, you'd be making a big 267 00:14:06,400 --> 00:14:09,880 assumption that their markets grow as you build this project 268 00:14:09,920 --> 00:14:13,400 and you can sell into them. But that again is a big, big 269 00:14:13,440 --> 00:14:15,520 assumption. So I mean, it kind of brings us 270 00:14:15,520 --> 00:14:19,200 to the Aussie government and are they going to be the ones on the 271 00:14:19,200 --> 00:14:22,920 hook for putting up an off take agreement and buying this after 272 00:14:22,920 --> 00:14:25,000 they wrote the massive loan? I'm not sure if you guys have 273 00:14:25,000 --> 00:14:29,720 like thoughts on that, but it's it's delicate situation, right? 274 00:14:30,120 --> 00:14:32,240 This is this is a big head scratcher. 275 00:14:32,240 --> 00:14:34,840 How do you how do you, how do you draw down your debt without 276 00:14:35,160 --> 00:14:36,640 off takes in place? When it comes to niche 277 00:14:36,640 --> 00:14:39,480 commodities you need, you need an off take that has some, you 278 00:14:39,480 --> 00:14:43,160 know, some degree of comfort for the financier, which usually 279 00:14:43,160 --> 00:14:45,560 means it's got to be, you know, the price link price flaws or 280 00:14:45,640 --> 00:14:47,960 something like that, right? You know, you're not financing 281 00:14:47,960 --> 00:14:50,520 is not going to be comfortable unless unless you've got like 282 00:14:50,840 --> 00:14:52,800 some degree of certainty around what your price is actually 283 00:14:52,800 --> 00:14:55,840 going to be on on this. I don't see where I don't see 284 00:14:55,840 --> 00:14:58,240 where they're going to be able to get this off take from. 285 00:14:58,240 --> 00:15:02,960 But I but I have a I've been putting together some dots and 286 00:15:03,600 --> 00:15:06,400 yeah, this is part of the reason I get sick in my stomach about 287 00:15:06,400 --> 00:15:07,760 what could really be going on here. 288 00:15:08,000 --> 00:15:10,240 Run us through it. The whole financing case is is 289 00:15:10,360 --> 00:15:14,280 is based on bifurcated markets by not not selling to to China. 290 00:15:14,280 --> 00:15:17,800 So what they assume these long term Atomus Atomus like 291 00:15:17,800 --> 00:15:20,400 forecasts of NDPR, which is like what like three times the 292 00:15:20,400 --> 00:15:23,200 current spot price, their thereabouts of NDPR, which is 293 00:15:23,200 --> 00:15:27,200 like, go figure. But I'm not I'm not sure if you 294 00:15:27,800 --> 00:15:31,480 like read the news about the the change in the future funds 295 00:15:31,480 --> 00:15:34,880 mandate a few weeks ago, JD and Ellie, but this was like a 296 00:15:34,920 --> 00:15:37,280 pretty divisive topic. The future fund, Australia's, 297 00:15:37,280 --> 00:15:40,200 you know, sovereign wealth fund supposed to be kind of changed 298 00:15:40,200 --> 00:15:43,880 its mandate to include funding national priorities, including 299 00:15:44,400 --> 00:15:46,400 building more housing, supporting the green energy 300 00:15:46,400 --> 00:15:48,400 transition and improving infrastructure. 301 00:15:48,400 --> 00:15:52,200 And while that sounds a little bit, you know, innocuous, this 302 00:15:52,200 --> 00:15:55,480 is a a big deal. And it was understandably kind 303 00:15:55,480 --> 00:15:59,040 of divisive because of the perception the money gets to go 304 00:15:59,040 --> 00:16:01,560 towards potentially uneconomic pet projects of the government 305 00:16:01,600 --> 00:16:04,000 of the day. And a few months before the 306 00:16:04,000 --> 00:16:08,400 future funds mandate changed, I had a had someone give me a call 307 00:16:08,400 --> 00:16:11,520 and they, they, they told me something that they'd heard on 308 00:16:11,520 --> 00:16:13,440 the Grapevine or, or word on the decline. 309 00:16:13,640 --> 00:16:16,440 I even put it in in Word on the decline in our daily email a few 310 00:16:16,440 --> 00:16:19,360 months ago. But you know what, what I was 311 00:16:19,360 --> 00:16:22,720 told is that a vehicle is expected to kind of pop up 312 00:16:22,720 --> 00:16:25,400 backed by you know money of the future fund which will 313 00:16:25,400 --> 00:16:29,120 explicitly underwrite the off takes of rare earth projects. 314 00:16:29,640 --> 00:16:33,440 So the future fund potentially agreeing to underwrite the price 315 00:16:33,440 --> 00:16:36,360 and volume of production to come out of presumably any other and 316 00:16:36,360 --> 00:16:40,000 potentially other facilities to to, to enable kind of that 317 00:16:40,000 --> 00:16:44,040 financing case to be comfortable at, you know, potentially, you 318 00:16:44,040 --> 00:16:46,880 know, absurd, absurd prices that could be up to like three times 319 00:16:46,880 --> 00:16:48,880 higher than whatever their prevailing spot prices for 320 00:16:49,120 --> 00:16:52,400 product in China, assuming that the green premium emerges in the 321 00:16:52,400 --> 00:16:54,920 West. That's just a a kind of a kind 322 00:16:54,920 --> 00:16:57,400 of baffling, a baffling proposition, don't you think? 323 00:16:58,080 --> 00:17:01,120 I could not agree more. And it becomes a mechanism for 324 00:17:01,360 --> 00:17:05,599 one government entity to to sort of save the potential 325 00:17:05,599 --> 00:17:09,000 embarrassment of another one because they've made a hugely an 326 00:17:09,000 --> 00:17:11,760 economic bet. And it brings out the question, 327 00:17:11,760 --> 00:17:15,480 should the future fund be completely separate from the 328 00:17:15,480 --> 00:17:18,680 government just like a central bank should be? 329 00:17:19,319 --> 00:17:22,480 Or is it going to be used for the government of the day, 330 00:17:22,480 --> 00:17:25,480 whoever that might be, to fund any sort of project at their 331 00:17:25,480 --> 00:17:28,600 whim that they want? And you know it, it sets off 332 00:17:28,600 --> 00:17:31,160 massive alarm bells because the future fund is, you know, it's 333 00:17:31,160 --> 00:17:33,080 the, it's the money of the Australian people. 334 00:17:33,200 --> 00:17:35,920 It should be invested in the future for the best return 335 00:17:35,920 --> 00:17:37,320 possible for the Australian people. 336 00:17:37,320 --> 00:17:39,600 You'd hope you get a fucking compound interest return on 337 00:17:39,600 --> 00:17:42,800 that, not just like throwing it at things that you know what 338 00:17:42,960 --> 00:17:47,000 under it's anyway. Like this is still like weird on 339 00:17:47,000 --> 00:17:48,920 the decline that this would happen, but if it does come to 340 00:17:48,920 --> 00:17:51,320 fruition I'll be particularly fucking pissed off mate. 341 00:17:51,320 --> 00:17:53,520 Like as a taxpayer, what a fucking joke. 342 00:17:54,640 --> 00:17:58,520 If it if it sees the light of day, though, it's sort of would 343 00:17:58,520 --> 00:18:02,320 explain why our Luca may be so adamant about pushing ahead with 344 00:18:02,320 --> 00:18:04,600 the project. I think they've sold off 10%. 345 00:18:04,600 --> 00:18:07,040 I think a lot of the, the rhetoric and and commentary 346 00:18:07,040 --> 00:18:08,720 about it is this project uneconomic? 347 00:18:08,720 --> 00:18:11,400 Why are you pushing ahead with, with financing? 348 00:18:11,400 --> 00:18:13,040 It makes no sense, right? And. 349 00:18:13,400 --> 00:18:15,240 Do they know something We. Don't do they know something we 350 00:18:15,240 --> 00:18:18,120 don't? I look isn't run by numbers like 351 00:18:18,320 --> 00:18:20,440 I look as directors for decades have had a lot of connections 352 00:18:20,440 --> 00:18:23,600 with W farmers, right? Tom O'Leary, the current CEO 353 00:18:23,640 --> 00:18:30,160 since 2016 ex W farmers and and as we can see report in the West 354 00:18:30,160 --> 00:18:32,840 last week, W farmers are even exploring for rare earths in the 355 00:18:32,840 --> 00:18:35,120 gold fields themselves. Like none of this capital 356 00:18:35,120 --> 00:18:39,200 allocation makes much sense, and Wesley's pride themselves on 357 00:18:39,640 --> 00:18:42,240 being best in business at capital allocation doesn't make 358 00:18:42,240 --> 00:18:44,400 sense unless you have high conviction about the government 359 00:18:44,640 --> 00:18:48,480 underwriting higher prices, hence underwriting their 360 00:18:48,480 --> 00:18:51,600 downside. So the thing like the thing that 361 00:18:51,600 --> 00:18:55,040 sort of confused me about all this and I guess a bit of a 362 00:18:55,040 --> 00:18:59,160 question a lot to put to you to is, you know, everyone's always 363 00:18:59,160 --> 00:19:04,680 banging on about Australia needs to, you know, invest and develop 364 00:19:04,680 --> 00:19:09,280 its downstream, you know, capabilities and industries and 365 00:19:09,280 --> 00:19:13,520 things like that. You know, which would inevitably 366 00:19:13,520 --> 00:19:16,480 involves some sort of, you know, government, you know, assistance 367 00:19:16,480 --> 00:19:19,480 or incentives or in some sort of form. 368 00:19:20,160 --> 00:19:23,640 But then trying to reconcile and balance that with, as you guys 369 00:19:23,640 --> 00:19:26,800 have talked about, sensible capital allocation. 370 00:19:28,280 --> 00:19:33,280 If if this is not the right way or the best, the best way to go 371 00:19:33,280 --> 00:19:36,360 about setting up these industries and investing in 372 00:19:36,360 --> 00:19:40,480 these industries in Australia, how else, how else can we do it? 373 00:19:40,480 --> 00:19:44,840 Is there is there other ideas or ways we could go about it? 374 00:19:46,000 --> 00:19:51,960 This is a picking winners strategy, right And I think the 375 00:19:51,960 --> 00:19:56,320 way we've spoken about it in the past which I stood a standby is 376 00:19:56,320 --> 00:19:59,440 setting up the infrastructure if you are going to allocate the 377 00:19:59,440 --> 00:20:02,640 capital to have. You know, it be to the benefit 378 00:20:02,640 --> 00:20:06,480 of a market based sort of system that can still sort of allocate 379 00:20:06,480 --> 00:20:10,200 capital effectively as opposed to just allocating 2 billion 380 00:20:10,200 --> 00:20:13,200 bucks to a project and saying here you go try and try and make 381 00:20:13,200 --> 00:20:15,360 it happen. That's in in an in a nutshell, 382 00:20:15,720 --> 00:20:18,360 how I kind of think about it. The price mechanism is a 383 00:20:18,360 --> 00:20:23,160 tremendous tool at, at, you know, at filtering what is and 384 00:20:23,160 --> 00:20:27,720 isn't financeable and, and, and do we want to distort the price 385 00:20:27,720 --> 00:20:29,320 mechanism? Well, guess what, we're going to 386 00:20:29,320 --> 00:20:32,680 end up like regretting that with taxpayer money. 387 00:20:32,680 --> 00:20:34,960 Like to your point exactly, there's, there's two things that 388 00:20:35,400 --> 00:20:37,280 we could do. And you know, we, we had a 389 00:20:37,280 --> 00:20:40,720 conversation like like before, before turning on to these exact 390 00:20:40,720 --> 00:20:44,400 two points #1 why, why, why would we be uncompetitive in 391 00:20:44,400 --> 00:20:46,440 this industry? A huge part of it is our 392 00:20:46,440 --> 00:20:50,600 nonsensical energy, energy black landscape in Australia and WA. 393 00:20:50,720 --> 00:20:51,880 It's baffling. Its bizarre. 394 00:20:52,320 --> 00:20:54,400 East Coast, no exception. East Coast, no exception. 395 00:20:54,400 --> 00:20:56,920 We should focus on an energy abundance that actually gives us 396 00:20:56,920 --> 00:20:59,440 a, you know, a competitive downstream industry in the 1st 397 00:20:59,440 --> 00:21:01,280 place. There is no way we would have a 398 00:21:01,280 --> 00:21:06,080 competitive downstream industry in in WA with with our like 399 00:21:06,520 --> 00:21:09,920 without without cost of energy. Like unless you focused on like 400 00:21:09,920 --> 00:21:13,080 energy abundance, all forms of energy and like invested reduce 401 00:21:13,080 --> 00:21:15,440 the timelines to make that happen, like real capital 402 00:21:15,440 --> 00:21:17,560 investment in in energy projects. 403 00:21:17,560 --> 00:21:21,000 Then like, like say goodbye to, to, to that proposition and the, 404 00:21:21,080 --> 00:21:26,280 the other, the other point is like on creating the settings 405 00:21:26,280 --> 00:21:29,040 that enable the private sector to make its own investment 406 00:21:29,040 --> 00:21:30,840 decisions which stack up on its own merit. 407 00:21:31,120 --> 00:21:34,120 What does that look like? Well, you know, an example is, 408 00:21:34,120 --> 00:21:36,560 is what Indonesia's done with, with Marwali, right? 409 00:21:36,840 --> 00:21:40,240 We had 53 joint ventures. Are there they, they provided, 410 00:21:40,720 --> 00:21:43,640 you know, a special economic zone, which, which enabled like 411 00:21:43,640 --> 00:21:46,760 tax breaks for a tax holiday of like 7 years that encouraged 412 00:21:48,240 --> 00:21:51,400 phenomenal capital investment to really build out a downstream 413 00:21:51,400 --> 00:21:55,080 industrial sector there, which, which like, you know, it's, it's 414 00:21:55,080 --> 00:21:58,240 just got like that's the private sector moving. 415 00:21:58,240 --> 00:22:01,560 The private sector is, is, is like looking OK, the settings 416 00:22:01,560 --> 00:22:03,680 are right for us to make investment decisions in this 417 00:22:03,680 --> 00:22:05,800 area. You saw that in, in, you know 418 00:22:06,080 --> 00:22:08,560 what the, what Rio Tinto and both BHP have talked about 419 00:22:08,560 --> 00:22:11,760 investing in, in Argentina in the, in the last six months. 420 00:22:12,040 --> 00:22:13,960 It's the policy settings in Argentina that are very 421 00:22:13,960 --> 00:22:16,080 attractive right now and it's why they're comfortable 422 00:22:16,080 --> 00:22:18,600 investing in, in that jurisdiction in that country. 423 00:22:18,920 --> 00:22:22,320 We've got the exact opposite situation in, in most of 424 00:22:22,320 --> 00:22:24,480 Australia. It's completely unattractive to 425 00:22:25,000 --> 00:22:27,680 commit significant like private capital for projects when you 426 00:22:27,680 --> 00:22:31,440 have uncertainty, high cost of energy, like, you know, tax 427 00:22:31,440 --> 00:22:33,680 regimes and royalties that keep going higher and higher. 428 00:22:34,120 --> 00:22:36,200 There's there's there's no incentive for the private sector 429 00:22:36,200 --> 00:22:38,520 to like, like, you know, come up with it's private projects that 430 00:22:38,520 --> 00:22:40,760 stack up on its own merit. Focus on that and you'll have an 431 00:22:40,760 --> 00:22:43,040 abundance of competitive projects that all want to like 432 00:22:43,040 --> 00:22:45,200 come and invest in their own, do their own thing. 433 00:22:45,240 --> 00:22:49,040 But if it doesn't stack up on private metrics, then you just 434 00:22:49,040 --> 00:22:53,560 like limit yourself to like perpetual subsidisation of of 435 00:22:53,560 --> 00:22:55,320 something that will never be competitive in the long run. 436 00:22:55,320 --> 00:22:57,840 Like that's not good for anyone. It's like, should the government 437 00:22:57,840 --> 00:23:00,840 pay people to just dig a hole? Like, no, it's got to be 438 00:23:00,840 --> 00:23:04,560 productive. Yeah, agreed that the money's 439 00:23:04,560 --> 00:23:06,280 going to come somewhere at the end of the day and it comes from 440 00:23:06,280 --> 00:23:08,840 the tax base pocket. So to to continue on with that 441 00:23:08,840 --> 00:23:11,080 and to make it, you know, draw it back in with Ilook and the 442 00:23:11,080 --> 00:23:14,720 project, we should provide the, the economics and how they kind 443 00:23:14,720 --> 00:23:16,960 of stand in the scenarios that the company is given. 444 00:23:17,880 --> 00:23:19,480 There's a few really important pieces here. 445 00:23:19,480 --> 00:23:22,400 So obviously you've got the price assumptions, then plant 446 00:23:22,400 --> 00:23:24,320 utilisation. It's different under each 447 00:23:24,320 --> 00:23:28,400 scenario as we've been through, but that is a super, it's a high 448 00:23:28,600 --> 00:23:33,400 sensitivity aspect of whether the economics stack up here and 449 00:23:33,400 --> 00:23:35,480 commissioning. Another one we'll touch on in a 450 00:23:35,480 --> 00:23:37,960 moment. We'll start quickly with the, 451 00:23:38,000 --> 00:23:40,880 the revised economics is Elucasies and just read out a 452 00:23:40,880 --> 00:23:43,600 couple points. So they're using 8.25% discount 453 00:23:43,600 --> 00:23:45,960 rate. You've got 2 broad scenarios, 454 00:23:45,960 --> 00:23:48,440 pricing scenarios that is. The first one is this Adamus 455 00:23:48,440 --> 00:23:51,720 one, which we've commented on a few Times Now. 456 00:23:51,920 --> 00:23:56,240 They are a price forecaster and you know by and large they are 457 00:23:56,840 --> 00:24:00,040 higher prices than the second scenario, which is the 10 year 458 00:24:00,040 --> 00:24:03,280 average price. So just quickly, under scenario 459 00:24:03,280 --> 00:24:07,280 A, you've got $1.7 billion, under scenario B you've got 3.3 460 00:24:07,280 --> 00:24:10,720 billion, and under scenario C you've got $870 million. 461 00:24:11,240 --> 00:24:15,160 Then under the 10 year average price assumption, the economics 462 00:24:15,160 --> 00:24:18,320 fall back dramatically. You've got $650 million in 463 00:24:18,320 --> 00:24:23,840 scenario A, 1.9 billion scenario B and $230 million in scenario C 464 00:24:24,280 --> 00:24:28,240 noting that the scenarios exclude the $320 million that 465 00:24:28,240 --> 00:24:32,240 have already been spent, so they are MPVS from this point in 466 00:24:32,240 --> 00:24:34,880 time, not taking into account the sunk capital. 467 00:24:34,880 --> 00:24:36,240 Well, it's been already done, yeah. 468 00:24:36,240 --> 00:24:38,960 And to be clear, all these scenarios now include the 469 00:24:39,400 --> 00:24:42,680 processing of monozite concentrate from Bell Reynold as 470 00:24:42,680 --> 00:24:44,160 well. All of them. 471 00:24:44,240 --> 00:24:45,720 All of them include Bell Reynolds as well. 472 00:24:45,720 --> 00:24:46,680 Ally. Yeah, yeah, yeah, yeah. 473 00:24:47,080 --> 00:24:50,480 And Bell Reynold isn't your usual kind of mineral sands 474 00:24:50,480 --> 00:24:53,240 mine, is it, Trev? It's it's actually, yeah. 475 00:24:53,240 --> 00:24:56,440 It's like different conventional mineral sands operation that the 476 00:24:56,440 --> 00:24:58,280 norm is, is like, you know, surface mining. 477 00:24:58,280 --> 00:25:00,280 You see that a lot like kind of be down South. 478 00:25:00,440 --> 00:25:03,360 The other, the other common some type of mining is dredge mining 479 00:25:03,360 --> 00:25:05,400 with with mineral sands. Like, you know, Tronox does a 480 00:25:05,400 --> 00:25:06,720 fair bit of that over E for example. 481 00:25:06,720 --> 00:25:09,520 But bell rental is is neither of those two. 482 00:25:10,480 --> 00:25:13,440 It's it's, it's actually quite a lot higher grade than the the, 483 00:25:13,480 --> 00:25:16,320 you know, the typical mineral sands project that comes online 484 00:25:16,320 --> 00:25:18,360 these days, But it's that's because it's underground. 485 00:25:19,440 --> 00:25:21,120 Yeah, right. Underground mineral sands mine. 486 00:25:21,400 --> 00:25:23,080 Jeez, you want to make sure they've got some sand, big 487 00:25:23,080 --> 00:25:24,600 ground sport all over that joint. 488 00:25:25,360 --> 00:25:28,680 I would have thought so Ally, I would have, but the mining 489 00:25:28,680 --> 00:25:32,840 method is it's a bit bit funky to you know what we used to talk 490 00:25:32,840 --> 00:25:34,360 about. I'll read this from the DFS. 491 00:25:34,360 --> 00:25:37,520 It says a novel internally developed underground mining 492 00:25:37,520 --> 00:25:40,440 method utilising directional drilling technology has been 493 00:25:40,440 --> 00:25:42,680 developed. It says underground mining will 494 00:25:42,680 --> 00:25:47,480 use mining unit plant MUP and ancillaries, mobile mining plant 495 00:25:47,480 --> 00:25:50,480 MMP and subsurface equipment. So you're not, you're not like 496 00:25:50,480 --> 00:25:53,160 using a jumbo kind of thing alley these, you know, it's 497 00:25:53,160 --> 00:25:56,440 these big kind of bulks processing infrastructure, but 498 00:25:57,000 --> 00:25:59,920 you could be on to something I think because I also read this 499 00:25:59,920 --> 00:26:03,280 bit in the DFS, it says an area of poor geotechnical conditions 500 00:26:03,280 --> 00:26:05,440 has been identified in a geological zone above some 501 00:26:05,440 --> 00:26:09,280 sections of the ore body. Mining this material during T3 502 00:26:09,280 --> 00:26:11,800 proved problematic and it's estimated that only 30% of ore 503 00:26:11,800 --> 00:26:13,960 was recovered in the trial. There's also this bit here I 504 00:26:13,960 --> 00:26:15,800 read too. It said Stokes are designed with 505 00:26:15,800 --> 00:26:17,720 one metre pillars separating each stoke. 506 00:26:17,720 --> 00:26:20,840 Every 10 Stokes make a panel with one stoke left in situ for 507 00:26:20,840 --> 00:26:24,360 ground support between each panel Geo ticket issues leading 508 00:26:24,360 --> 00:26:27,720 to to poor or recovery in situ Stokes for ground support. 509 00:26:27,720 --> 00:26:30,960 If if anything can can fix that alley, you know what can. 510 00:26:31,280 --> 00:26:33,360 It's sandpit ground support they can do. 511 00:26:33,400 --> 00:26:36,200 It's in the name, literally ground support. 512 00:26:36,360 --> 00:26:39,240 I mean, and then now they've even got that new odour free 513 00:26:39,240 --> 00:26:41,840 resin that Maddie's been telling everybody about. 514 00:26:41,840 --> 00:26:43,480 How good's that? Excellent points. 515 00:26:43,600 --> 00:26:45,360 It's not. It's not just meshing bolts, 516 00:26:45,440 --> 00:26:48,520 alley injection resins and foams, mineral products for rock 517 00:26:48,600 --> 00:26:50,680 reinforcement, resin, capsules and other chemicals. 518 00:26:51,400 --> 00:26:53,920 Love it. Hit up Derek Heard from Sandvik 519 00:26:53,920 --> 00:26:56,680 Ground Sport. Get one more Sandvik order in 520 00:26:56,680 --> 00:26:58,760 before Christmas. Go Sandvik. 521 00:26:58,960 --> 00:27:00,280 Thanks guys. Cheers, Derek. 522 00:27:00,840 --> 00:27:02,240 All righty. So we got to talk a bit more 523 00:27:02,240 --> 00:27:05,760 about pricing. This is a super, super important 524 00:27:06,040 --> 00:27:11,200 detail, very pricing. Prices rather are very depressed 525 00:27:11,240 --> 00:27:12,360 at the moment. No secret. 526 00:27:12,360 --> 00:27:15,800 You listen to any Linus call or a Luca call for that matter over 527 00:27:15,800 --> 00:27:19,440 the the past few quarters, past couple years now. 528 00:27:19,440 --> 00:27:21,680 And yeah, you hear it all the time. 529 00:27:21,680 --> 00:27:23,360 So Aloka have been encouraging everyone. 530 00:27:23,360 --> 00:27:24,960 They said it again on the call on Friday. 531 00:27:25,160 --> 00:27:26,960 They actually contract with buyers. 532 00:27:26,960 --> 00:27:30,600 Now that kind of gets back to the green premium and all these 533 00:27:30,600 --> 00:27:33,040 sorts of things that we've touched on already. 534 00:27:33,040 --> 00:27:36,640 But for those that don't follow rare earths closely, it's a 535 00:27:36,640 --> 00:27:39,000 highly, highly manipulated market. 536 00:27:39,000 --> 00:27:42,840 It is dominated by China. We're talking 90% China 537 00:27:43,160 --> 00:27:46,280 dominated. And the NDPI price right now is 538 00:27:46,280 --> 00:27:48,800 about US 58 bucks last time I looked per kilo. 539 00:27:49,080 --> 00:27:53,080 That includes VAT. That said, you've got to make a 540 00:27:53,080 --> 00:27:56,560 price assumption when you're putting out a study like this. 541 00:27:56,560 --> 00:28:00,800 So at current prices, any Abbott does not make any money. 542 00:28:01,240 --> 00:28:05,680 And the question to ask is how do Iluka have the confidence 543 00:28:05,920 --> 00:28:08,760 that they will receive an economic price so that they can 544 00:28:09,160 --> 00:28:12,080 make FID or continue building the project. 545 00:28:12,080 --> 00:28:14,680 And I know they're getting a very, very friendly loan as 546 00:28:14,680 --> 00:28:17,120 we've touched on, but they are still putting hundreds of 547 00:28:17,120 --> 00:28:19,440 millions of dollars on the table here. 548 00:28:19,440 --> 00:28:22,400 And you hope they're not suffering from any sort of sunk 549 00:28:22,400 --> 00:28:27,600 cost fallacy. I should say we rather, and I 550 00:28:27,600 --> 00:28:30,000 really hope we're not suffering from any kind of sunk cost 551 00:28:30,200 --> 00:28:33,160 fallacy here and I and I use the word we pretty deliberately 552 00:28:33,160 --> 00:28:37,040 because our government again is contributing hugely. 553 00:28:37,040 --> 00:28:40,480 Taxpayers should be asking the question, is it right for 554 00:28:40,600 --> 00:28:43,120 Australia to write a cheque of this sort of magnitude? 555 00:28:43,120 --> 00:28:47,720 The the life of mine NDPR price assumptions for scenario A&B are 556 00:28:48,000 --> 00:28:53,280 US $148 a kilo, bearing in mind I just said 58 bucks is where 557 00:28:53,280 --> 00:28:57,840 we're at right now. For scenario C, it's US $129 a 558 00:28:57,840 --> 00:29:01,120 kilo, but that is more than double, you know, nearly sort of 559 00:29:01,120 --> 00:29:05,360 triple in the prices we're at. And as we kind of touched on, 560 00:29:05,360 --> 00:29:07,600 maybe the company pulls a rabbit out of the hat. 561 00:29:07,720 --> 00:29:11,040 It's it's very hard to see in terms of an off take. 562 00:29:11,360 --> 00:29:13,440 I just don't know where that kind of comes from. 563 00:29:14,000 --> 00:29:18,480 How does how does assuming like those those prices long term 564 00:29:18,480 --> 00:29:21,600 price assumptions? How is it a financing case to 565 00:29:21,600 --> 00:29:25,240 assume prices bifurcate? Like, how is that a financing 566 00:29:25,240 --> 00:29:28,400 case? Like, like, like who who's 567 00:29:28,440 --> 00:29:30,960 making these decisions? It's just like it's nonsensical 568 00:29:30,960 --> 00:29:32,480 in my opinion. I think they the only reason 569 00:29:32,480 --> 00:29:34,400 they can do it is if they, if they have line of sight to. 570 00:29:34,880 --> 00:29:36,640 Yeah, like the government underwriting the off day. 571 00:29:36,800 --> 00:29:42,000 They just love to be a fly on the wall there and hear whether 572 00:29:42,000 --> 00:29:45,320 they actually seriously spoke about not going ahead with the 573 00:29:45,320 --> 00:29:48,640 rest of the build, $320 million has already been spent. 574 00:29:49,080 --> 00:29:50,960 It's not a negligible amount of money. 575 00:29:51,280 --> 00:29:54,360 It's, you know, it would be to the detriment of Aluca as well 576 00:29:54,360 --> 00:29:59,480 as the taxpayer, but you, you don't really get the impression 577 00:29:59,480 --> 00:30:02,480 that that was seriously considered at all. 578 00:30:02,960 --> 00:30:06,920 There's just so many, like assumptions on assumptions on 579 00:30:06,960 --> 00:30:08,640 assumptions here. Like a lot. 580 00:30:08,640 --> 00:30:10,080 A lot of things have to go right. 581 00:30:10,080 --> 00:30:13,560 And who knows, maybe the rarest price will get that one day. 582 00:30:14,520 --> 00:30:17,960 Who will wait to comment or know that you know it's but the 583 00:30:17,960 --> 00:30:19,800 thing. Is your financing case like? 584 00:30:19,840 --> 00:30:23,920 But it's yeah, to use that as your sort of base case price, 585 00:30:24,920 --> 00:30:29,160 you know, in a, in a model to, to make a decision on this where 586 00:30:29,160 --> 00:30:32,760 I don't know if you'd call it spot, but perhaps the whatever 587 00:30:32,760 --> 00:30:37,600 the current prices are today, it makes you a bit nervous, right? 588 00:30:38,080 --> 00:30:41,040 And that's yes, they've got this extra money in the door, which, 589 00:30:41,360 --> 00:30:46,480 OK, that's all lovely. But all these, you know, 590 00:30:46,600 --> 00:30:50,040 projected economics and things like that are still on the basis 591 00:30:50,160 --> 00:30:54,720 of these prices two to three times without today, not as at 592 00:30:54,720 --> 00:30:57,720 today A. 100% your base case scenario is double. 593 00:30:58,200 --> 00:31:01,680 It's double it's and you know, the analysts were really 594 00:31:01,920 --> 00:31:05,000 touching on this in the in the questions they were asking. 595 00:31:05,000 --> 00:31:07,480 So Glenn Lawcock from Barry and Joey, he asked some great 596 00:31:07,480 --> 00:31:10,120 questions and he was really quizzing management on these 597 00:31:10,280 --> 00:31:13,320 points, sort of getting at how long is the market going to be 598 00:31:13,440 --> 00:31:17,440 in the dark on whether this project makes money, IE when are 599 00:31:17,440 --> 00:31:20,600 we going to get an uptake, an update on the offtakes. 600 00:31:21,160 --> 00:31:24,640 So you know, if you look at the the analysts, what they've kind 601 00:31:24,640 --> 00:31:28,080 of said or what they're reporting, any other is carrying 602 00:31:28,080 --> 00:31:33,000 a negligible or negative in some cases value in the NAV 603 00:31:33,200 --> 00:31:35,520 assessments that a lot of the equity research analysts have 604 00:31:35,560 --> 00:31:37,720 have put out and. That's even including the, you 605 00:31:37,720 --> 00:31:39,280 know, the the generous concessions. 606 00:31:39,280 --> 00:31:42,200 They're basically saying, yeah, the including the NAV to Iluka 607 00:31:42,200 --> 00:31:44,040 per share is negative. Yeah, and. 608 00:31:45,000 --> 00:31:50,280 The the long term consensus for a lot of these analysts is 20-30 609 00:31:50,280 --> 00:31:52,200 bucks higher from where we are today. 610 00:31:52,200 --> 00:31:57,080 So you know, let let alone at what spot is right now and it's. 611 00:31:57,320 --> 00:32:00,560 Still a fair bit lower than what seems to be assumed. 612 00:32:00,800 --> 00:32:02,960 Than what the company has assumed yeah, yeah, that that 613 00:32:02,960 --> 00:32:04,480 that's right. And the company again they'll 614 00:32:04,480 --> 00:32:07,320 they'll point to this growing market they put a number of 615 00:32:07,320 --> 00:32:10,880 slides in the the presentation comparing 2024 the size of the 616 00:32:10,880 --> 00:32:15,080 market to 2035. They spoke to this in the in the 617 00:32:15,080 --> 00:32:17,800 Q&A. Again, like you said Ali, 618 00:32:17,920 --> 00:32:21,800 another big assumption to just assume that the market grows to 619 00:32:21,800 --> 00:32:26,960 this very, very big level. And you know what you're banking 620 00:32:26,960 --> 00:32:31,000 on massive EV adoption and wind turbine adoption amongst the 621 00:32:31,000 --> 00:32:33,840 other, you know, uses of these these magnets. 622 00:32:33,840 --> 00:32:39,840 And I mean, forecasting anything 11 years out is it's almost a 623 00:32:39,840 --> 00:32:41,760 mug's game, right? It's super, super hard. 624 00:32:41,760 --> 00:32:46,440 Like forecasting commodity prices is very hard. 625 00:32:46,440 --> 00:32:49,280 That's why we look at where we are in in the cost curve and in 626 00:32:49,280 --> 00:32:51,280 the cycle. And you can't really do that 627 00:32:51,280 --> 00:32:54,960 with this stuff because there's not really a normal cycle. 628 00:32:54,960 --> 00:32:56,880 Very tricky because it's so manipulated. 629 00:32:56,880 --> 00:32:59,640 So yeah, again, I think we kind of come back to the point. 630 00:32:59,640 --> 00:33:02,200 Maybe there are details and maybe we're talking way out of 631 00:33:02,200 --> 00:33:03,800 school because there's things we're just not Privy to. 632 00:33:03,800 --> 00:33:06,760 Maybe, maybe there are agreements that the company has 633 00:33:06,760 --> 00:33:09,360 come out with, you know, with. Well, even if that's the case, 634 00:33:09,360 --> 00:33:12,360 like it's either it either makes no sense from a capital 635 00:33:12,360 --> 00:33:16,080 allocation perspective from our Luca, or it makes no sense from 636 00:33:16,080 --> 00:33:17,680 a capital allocation perspective for the taxpayer. 637 00:33:17,680 --> 00:33:19,600 Either one, you've got to ask questions like, what the fuck's 638 00:33:19,600 --> 00:33:20,960 going on here? Yeah. 639 00:33:20,960 --> 00:33:23,280 And, and, and if the government does like kind of underwrite it 640 00:33:23,280 --> 00:33:26,520 or the taxpayer underwrites it, maybe maybe that's because they, 641 00:33:26,600 --> 00:33:29,560 they can underwrite, they've got these agreements to distribute 642 00:33:29,560 --> 00:33:30,840 these strategic stockpiles to the West. 643 00:33:30,840 --> 00:33:32,720 And this is going to be the source of strategic stockpiles 644 00:33:32,720 --> 00:33:36,880 of like an NDPR oxide like and there's your bifurcated market. 645 00:33:36,960 --> 00:33:37,720 Yeah, great. Thanks. 646 00:33:37,880 --> 00:33:39,600 Cool. How about, how about telling 647 00:33:39,600 --> 00:33:41,680 that to us? Like, just not, you know, 648 00:33:41,920 --> 00:33:43,000 there's a lot to be filled in here. 649 00:33:43,040 --> 00:33:45,840 That, that stockpile point is one that that comes up and up 650 00:33:45,840 --> 00:33:48,640 and up and it's something the Chinese have done, you know, 651 00:33:49,040 --> 00:33:50,680 very well. They've been great over the past 652 00:33:51,120 --> 00:33:53,760 two decades. It just hoovering up commodities 653 00:33:53,760 --> 00:33:57,480 when they're, they're at Lowe's. There's not, not the situation 654 00:33:57,480 --> 00:33:59,080 here. It's not really how it's been 655 00:33:59,240 --> 00:34:00,920 pictured. You wouldn't be scooping up 656 00:34:00,920 --> 00:34:03,760 prices when they are super low. You know, the Australian 657 00:34:03,760 --> 00:34:04,920 government would almost do better. 658 00:34:04,920 --> 00:34:08,280 Just don't buy them now if they can be getting them, getting 659 00:34:08,280 --> 00:34:13,639 them a bit cheaper. So yeah, it's a it's a it's a 660 00:34:13,639 --> 00:34:15,880 super interesting one, right? And it's even more fascinating 661 00:34:15,880 --> 00:34:18,719 in the context of the the news in the in the past week or so 662 00:34:18,719 --> 00:34:21,600 with gallium, germanium and antimony, again, you know, 663 00:34:22,159 --> 00:34:26,120 making headlines, just highlighting that these product, 664 00:34:26,199 --> 00:34:29,920 these byproduct minerals are, you know, strategically 665 00:34:29,920 --> 00:34:35,679 important around the world and China, their ideology, we'll use 666 00:34:35,679 --> 00:34:39,320 these as utensils as sort of pawns in a trade war. 667 00:34:39,320 --> 00:34:45,880 So these things are important, but I'm not sure from the 668 00:34:45,880 --> 00:34:51,440 perspective of an ASX listed company Pressing Go on a project 669 00:34:51,440 --> 00:34:54,199 like this with these sort of assumptions makes complete sense 670 00:34:54,199 --> 00:34:56,920 to me. I think the other point you, you 671 00:34:56,920 --> 00:34:59,680 know, we should really hone in on, it's just like the 672 00:34:59,680 --> 00:35:02,520 assumptions on commissioning, Like JD, this is an area where 673 00:35:02,720 --> 00:35:06,120 there's a tremendous amount of risk in the spreadsheet, like 674 00:35:06,240 --> 00:35:08,840 not just not just commissioning, by the way, but also just CapEx 675 00:35:08,840 --> 00:35:11,360 blowouts, like CapEx already blown out. 676 00:35:11,360 --> 00:35:16,320 Like these, these projects absolutely renowned for more and 677 00:35:16,320 --> 00:35:18,080 more CapEx blowouts. Wouldn't surprise me to see that 678 00:35:18,080 --> 00:35:20,200 blowout again. And what does that do to your 679 00:35:20,680 --> 00:35:24,560 Yeah, yeah, economics kills it. But on commissioning you, you, 680 00:35:24,600 --> 00:35:26,200 you guys know about McNulty curves? 681 00:35:26,200 --> 00:35:27,640 Oh. Gee, it's been a while since 682 00:35:27,680 --> 00:35:30,480 we've talked about them. Give us the rundown, Trev, for 683 00:35:30,480 --> 00:35:32,680 those who aren't familiar with those. 684 00:35:32,880 --> 00:35:35,280 McNulty curves in in, you know, mining ramp up. 685 00:35:35,280 --> 00:35:39,360 They used to model like the time and efficiency required to to 686 00:35:39,360 --> 00:35:42,400 bring an operation from kind of, you know, like the point it 687 00:35:42,400 --> 00:35:44,760 starts that when the plants turned on into into full 688 00:35:44,760 --> 00:35:46,040 production, like how long does it take? 689 00:35:46,320 --> 00:35:48,080 So like. And importantly, the the steady 690 00:35:48,080 --> 00:35:49,920 state, yeah, you get to. Get to how? 691 00:35:49,960 --> 00:35:51,640 How long does it take to get to nameplate right? 692 00:35:51,640 --> 00:35:54,640 Like ramp up typically follows this sort of like sigmoid S 693 00:35:54,840 --> 00:35:58,560 shaped curve starting sort of slowly as you know, equipment's 694 00:35:58,560 --> 00:36:01,880 tested in that commissioning and then and processes are refined, 695 00:36:01,880 --> 00:36:04,880 sort of accelerating as efficiency improves and then 696 00:36:04,920 --> 00:36:07,640 like eventually kind of levelling and tapering off at a 697 00:36:07,640 --> 00:36:09,960 steady state. Like you talked about JD, but 698 00:36:09,960 --> 00:36:13,880 the these McNulty curve, they put the time from the plant 699 00:36:13,880 --> 00:36:16,320 turning on versus, you know, the plant output percentage of 700 00:36:16,320 --> 00:36:20,480 nameplate on the Y axis. And the research on these, you 701 00:36:20,480 --> 00:36:23,720 know, McNulty curves kind of categorises them into into four 702 00:36:23,720 --> 00:36:26,640 types of of curves. Top one curves model the the 703 00:36:26,640 --> 00:36:29,840 ramp up of well established processing facilities in 704 00:36:29,840 --> 00:36:32,520 locations where the technical expertise is abundant. 705 00:36:32,520 --> 00:36:35,600 It's a well Trotten path. You know, people, people who 706 00:36:35,600 --> 00:36:37,000 know what they're doing and doing the job. 707 00:36:37,240 --> 00:36:40,320 And and then they then you can expect these type 1 curves. 708 00:36:40,320 --> 00:36:43,280 Think conventional kind of gold plants in, in WA. 709 00:36:43,280 --> 00:36:46,680 So you, you ramp up pretty fast to nameplate honky Dory. 710 00:36:46,680 --> 00:36:48,600 You know, it's happy, happy days. 711 00:36:48,800 --> 00:36:54,200 Then type 4 models the ramp up of complex processing techniques 712 00:36:54,200 --> 00:36:58,280 for advanced commodities or processing in in regions that 713 00:36:58,280 --> 00:37:01,360 also do not have inherent technical expertise in these 714 00:37:01,360 --> 00:37:03,680 areas. And, you know, built by 715 00:37:03,680 --> 00:37:06,280 contractors who maybe you know, haven't, haven't built something 716 00:37:06,280 --> 00:37:08,600 like this before. Think, think the, you know, 717 00:37:08,600 --> 00:37:13,400 lithium hydroxide facilities in WA Type 4 curves are, are still 718 00:37:13,400 --> 00:37:17,440 in ramp up in, in year 3 and they're still in ramp up three 719 00:37:17,440 --> 00:37:20,080 years after the plant turns on. And they never actually get get 720 00:37:20,080 --> 00:37:22,360 to the name plate number that was supposed to, they get to 721 00:37:22,360 --> 00:37:27,120 like far, far, far left less of that over time, you know, 722 00:37:27,840 --> 00:37:32,040 processing methods and plants, they can become, you know, 723 00:37:32,320 --> 00:37:34,520 better understood. And a curve that was once a type 724 00:37:34,520 --> 00:37:37,560 4 can become a type one. That's what happened with H 725 00:37:37,560 --> 00:37:40,880 pals, the 1st generation of those H pal plants. 726 00:37:40,880 --> 00:37:43,360 You know, I think the ones in WA Ravens thought Mara Mara and 727 00:37:43,360 --> 00:37:46,920 Coors Bulong, they were, they were type 4 big disappointments. 728 00:37:47,800 --> 00:37:51,240 But the Chinese built on that technology over decades, they 729 00:37:51,240 --> 00:37:55,720 got much better and efficient at building them and that's what 730 00:37:55,960 --> 00:37:58,440 they built in Indonesia in a phenomenally kind of efficient 731 00:37:58,440 --> 00:38:03,320 manner on tight capital budgets and ramp them up super fast. 732 00:38:04,360 --> 00:38:06,240 Is these. So now you can say hey to bounce 733 00:38:06,240 --> 00:38:09,320 over type 1 curve. So apologies for waffling on 734 00:38:09,320 --> 00:38:13,720 about McNulty curve so much. But if I look as spreadsheet is 735 00:38:13,720 --> 00:38:17,040 assuming anything other than a type for McNulty for any ABA, 736 00:38:17,440 --> 00:38:20,840 they are kidding themselves. This is like the, the most 737 00:38:20,840 --> 00:38:25,080 advanced, you know, stuff when it comes like we all, everyone, 738 00:38:25,080 --> 00:38:27,520 everyone says where it's the most, this is the most 739 00:38:27,520 --> 00:38:29,680 challenging, like metallurgically challenging, 740 00:38:29,680 --> 00:38:32,000 like chemistry set stuff that there is in our industry. 741 00:38:32,160 --> 00:38:34,960 This is this is super advanced. And, and what they're going for 742 00:38:34,960 --> 00:38:37,560 is the full vertical integration shebang. 743 00:38:38,240 --> 00:38:40,720 It's not just the cracking and leaching bit, which Linus is 744 00:38:41,120 --> 00:38:44,280 done in Kalgoorlie and is struggling with big time, but 745 00:38:44,280 --> 00:38:46,360 they want to build a hydromet plant on top of that, which is 746 00:38:46,360 --> 00:38:50,640 like, you know, compounding the complexity, complexity in a lot 747 00:38:50,640 --> 00:38:54,040 of ways. So I just think what what 748 00:38:54,040 --> 00:38:57,800 happens here if inevitably ramp up takes way longer than 749 00:38:57,800 --> 00:39:00,600 expected. And so the working interim 750 00:39:00,600 --> 00:39:03,520 working capital is massive. Like the cap explodes out to, 751 00:39:03,520 --> 00:39:07,120 you know, 2 1/2 billion plus and you're and you're and it takes 752 00:39:07,120 --> 00:39:09,040 what if it takes like six years and you're still not at at 753 00:39:09,040 --> 00:39:10,680 nameplate? Like who's on the who's on the 754 00:39:10,680 --> 00:39:12,040 hook for that? Right? 755 00:39:12,040 --> 00:39:15,720 Like does the does the taxpayer keep underwriting more 756 00:39:15,720 --> 00:39:18,320 advancements and more advancements because otherwise 757 00:39:18,600 --> 00:39:20,640 the economics don't stack up or does it leave other kind of 758 00:39:20,640 --> 00:39:24,280 precarious situation? I just like, I think that's why 759 00:39:24,280 --> 00:39:26,160 the stocks come off. It's just like people have run 760 00:39:26,160 --> 00:39:30,000 the roller over this and just thinking like, what are you 761 00:39:30,000 --> 00:39:34,320 doing? So I think that the TLDR version 762 00:39:34,320 --> 00:39:37,960 of what you've sort of gone through, Travis, what I'm 763 00:39:38,440 --> 00:39:41,200 getting is essentially it's naive. 764 00:39:41,440 --> 00:39:44,640 It's not to say that it can't be done, but it's naive to think 765 00:39:44,640 --> 00:39:48,600 it's what without its complexities, challenges, you 766 00:39:48,600 --> 00:39:52,080 know, potential cost and time blowouts and things like that. 767 00:39:52,080 --> 00:39:54,400 So it's just important to keep that in the back of your mind. 768 00:39:54,480 --> 00:39:56,360 Yeah. And because the government's 769 00:39:56,360 --> 00:39:59,720 picked a winner like when you have the the timing and CapEx 770 00:39:59,720 --> 00:40:02,400 like blow out like snowy hydride, does that mean the 771 00:40:02,400 --> 00:40:04,000 taxpayers on the on the hook for that? 772 00:40:04,200 --> 00:40:08,240 Like again, like I just think that this is the the where 773 00:40:08,240 --> 00:40:10,920 things get really. Like dubious in my opinion, by 774 00:40:10,920 --> 00:40:13,320 picking winners, like create the policy settings that encourage 775 00:40:13,320 --> 00:40:15,560 private investment. Don't pick winners. 776 00:40:15,560 --> 00:40:19,160 It's just fucking an easy, it's an easy point to make, but it's 777 00:40:19,160 --> 00:40:21,720 also a very like easy philosophy to bring to the table when 778 00:40:21,720 --> 00:40:24,960 trying to like like address these complex problems I think 779 00:40:24,960 --> 00:40:27,200 today. And recoveries was one of the 780 00:40:27,240 --> 00:40:31,680 other assumptions you guys flagged as well to have a look 781 00:40:31,680 --> 00:40:32,800 at. Yeah. 782 00:40:32,800 --> 00:40:35,920 I mean credit to Rare Earth Observer for this one, but it 783 00:40:35,920 --> 00:40:38,640 just hammers home what what you've said there, Travan. 784 00:40:38,680 --> 00:40:40,960 I mean, maybe it goes one step kind of further. 785 00:40:41,360 --> 00:40:44,600 The company gave this worked example on just the any other 786 00:40:44,600 --> 00:40:48,600 stockpile feed scenario and it's just a sort of simple 90% 787 00:40:48,600 --> 00:40:53,960 recovery assumption. That implies 90% overall, IE 90% 788 00:40:53,960 --> 00:40:57,600 after processing, after cracking, after leaching and 789 00:40:57,600 --> 00:41:01,240 separation. It's not 90% at each step of the 790 00:41:01,240 --> 00:41:04,400 way because that would be .9 * .9 and so on. 791 00:41:05,440 --> 00:41:09,680 It's 90% all up. That is a big, big assumption to 792 00:41:09,680 --> 00:41:12,240 make. Again, to your point, Ali, just 793 00:41:12,240 --> 00:41:15,440 another assumption. And yeah, coming out the back of 794 00:41:15,440 --> 00:41:17,720 this, we've probably sounded pretty critical. 795 00:41:17,720 --> 00:41:21,480 I'm sure Iluka is well aware of of the challenges. 796 00:41:21,480 --> 00:41:26,240 They they would understand this. I mean, it's, yeah, it's very 797 00:41:26,240 --> 00:41:30,320 interesting from from their perspective because they have 798 00:41:30,320 --> 00:41:35,400 gone from just, you know, they go to mineral sands, play with 799 00:41:36,240 --> 00:41:40,160 iron ore exposure through their doTerra shareholding to now a 800 00:41:40,160 --> 00:41:44,720 kind of convoluted, you know, mineral sands, iron ore and this 801 00:41:44,720 --> 00:41:47,920 wacky big rarest thing. It makes their investment 802 00:41:47,920 --> 00:41:51,040 proposition as a complete sort of side note, a whole lot 803 00:41:51,040 --> 00:41:54,040 different. And who knows what their their 804 00:41:54,040 --> 00:41:56,320 shareholders were. You know, what they kind of 805 00:41:56,320 --> 00:41:57,440 think. I mean, some of them voted with 806 00:41:57,440 --> 00:41:59,800 their feet last Friday what they think about that. 807 00:41:59,800 --> 00:42:02,480 So I'm sure some were hoping that this would have just gone 808 00:42:02,480 --> 00:42:05,320 on the back burner and they would have called this Enyabba 809 00:42:05,960 --> 00:42:09,480 for a bit of a day. But it's not been the case and 810 00:42:09,800 --> 00:42:12,040 some of them have left now. Notice what They're not willing 811 00:42:12,040 --> 00:42:16,440 to part ways with JD. So, so they've, they own 20% of 812 00:42:16,440 --> 00:42:19,560 the terror, the dividends from the terror they they pass 813 00:42:19,560 --> 00:42:21,240 straight through to their own shareholders. 814 00:42:21,240 --> 00:42:23,480 So the dividend that I look at pays is basically what they're 815 00:42:23,480 --> 00:42:26,840 getting from the de terror royalty that they they still 816 00:42:26,840 --> 00:42:28,960 own. And they're not, they're not 817 00:42:28,960 --> 00:42:31,840 willing to monetize that stake because too expensive. 818 00:42:31,840 --> 00:42:35,960 They said, well, whether it's too expensive or like, think of 819 00:42:35,960 --> 00:42:38,040 what happened, like there's a lot of. 820 00:42:38,320 --> 00:42:40,880 A. Lot of shareholders, old stocks 821 00:42:41,200 --> 00:42:43,560 in Australia, superannuation fast, blah, blah, blah, we'll be 822 00:42:43,560 --> 00:42:46,360 frank dividends, happy days. Do you get rid of that? 823 00:42:46,400 --> 00:42:49,080 Where's the cash flow in this business that actually goes back 824 00:42:49,560 --> 00:42:51,680 shareholders like it's it's not there. 825 00:42:51,680 --> 00:42:53,160 It's absolutely for a very long time. 826 00:42:53,440 --> 00:42:56,960 So like, I think, I think what happens to share price if you 827 00:42:56,960 --> 00:42:59,280 got rid of that? It's, it's the, it's the more 828 00:42:59,760 --> 00:43:03,240 unnerving thing. Completely agreed. 829 00:43:03,320 --> 00:43:07,320 And yeah, I think that's that's enough said for that one. 830 00:43:08,280 --> 00:43:11,440 Wow, I've learned so much about mineral sands and rarest. 831 00:43:12,960 --> 00:43:14,960 Best way to learn, Ali, Just don't nurse yourself in it. 832 00:43:14,960 --> 00:43:17,560 Absolutely. All righty, We've got a couple 833 00:43:17,560 --> 00:43:19,800 partners to thank. Thank you to Mineral Mining 834 00:43:19,800 --> 00:43:23,000 Services, Grounded Sandy Ground Support, who we had in the show, 835 00:43:23,000 --> 00:43:28,360 CRE Insurance, Kaydrill, Dasat, Saltbush Contracting and Get Wet 836 00:43:28,520 --> 00:43:29,840 Solutions. Hodoro guys. 837 00:43:30,080 --> 00:43:33,640 Hodoro The information contained in this episode of Money of Mine 838 00:43:33,640 --> 00:43:35,960 is of general nature only and does not take into account the 839 00:43:35,960 --> 00:43:39,600 objectives, financial situation or needs of any particular 840 00:43:39,600 --> 00:43:41,640 person. Before making any investment 841 00:43:41,640 --> 00:43:44,680 decision, you should consult with your financial advisor and 842 00:43:44,680 --> 00:43:47,840 consider how appropriate the advice is to your objectives, 843 00:43:48,040 --> 00:43:50,040 financial situation and needs.