Buddy, mine is the Q&A episode that was asked for a couple of
weeks ago. It's here, it's here, and who
better to bloody be the partner for it than salt Bush
contracting mine? Doesn't that just make sense?
The bloody the turnkey bulk college site support.
They handle everything once you mind the orgy say.
Yeah, once that all all's out, they'll look after everything
for you, right? That anything you want they will
Polish the ore for you. And just remember when a job is
too hard on your mind site, you get fucking saltbush to do it.
That is the saying you should have in your head.
Whether it's building a road bloody mind rehab equipment
hire. Why buy it when you can get some
off saltbush? Go saltbush.
Well done salt, and do you remember the questions for this
bloody while ago? Yeah, No, there was a bit, we
had a a little bit on. I remember we talked about
copper, we talked a little bit about Indonesian mining.
I think we we talked about ore body geometry.
Oh, that's true. I learned a lot about that.
That was cool. Well.
The the intricacies of what's a good and bad geometry for for.
Underground plunge and all plunge.
All these fancy words. There was actually some finance
lingo as well for the non non financy people too.
I'm devastated that there was a lot of macro stuff and it's two
weeks too early because like I am now a macro guru.
After all, the Trump. Stuff and I feel like I'm not
going to be reflected accurately in this video to what my prowess
is at the moment, but I'll I'm happy to wear that so.
I did a good learning curve in the last two weeks, hasn't it?
Right now let's get into the Q&A or we could just talk about K
Drill, that's I got you on the chapters there didn't.
I not just an. RC and diamond drilling company
JC Drilling the holes is the easy part in exploration.
It's creating the K drill culture that the bloody drillers
want to work for, that the offsiders want to sweat their
guts out for. And who else to do it for than
Ryan O'Sullivan? He is the man that people want
to work for. And especially in this WA hate
we've been experiencing this summer, you know, so far, I
mean, that's a lot of sweat. Mate, you wouldn't do it for
anyone, but like the only way to possibly become as good of a
driller, a manager and a bloke as Ryan O'Sullivan is to work
for Ron O'Sullivan. You might get close if you're
exposed to him. Just go help Kaydrill keep the
mining industry alive faster and diamond experts.
Go Kaydrill. And just people, experts,
righto, we'll get into it now. Righto Muddy 1 is.
We asked you asked and we're about to answer.
That's that was the process. We asked for Q&A.
Users have given us Q and AJ CS gonna run AQ and.
A Let's. See how good's that?
No thanks to all the money miners that submitted a whole
bunch of different questions to us during the way.
Thank you for that. We've taken the time, I've taken
the time to whittled them down to a few that we're gonna ask
the ask the time, all sorts of topics and companies,
commodities, the shit that's happening in general.
Please tell me there was a question about your stock
holdings. You know what?
There wasn't, and I'm so glad that gets talked about enough.
Ali's got all the power, though. We wouldn't even know.
Oh yeah, we've gotta go through, back through and check those.
You've intentionally withheld these questions from us, so
we're. Yes and so yeah, you guys
haven't seen the questions so it'll be your your first crack
at em so. This exposes me, Jason.
Now you'll be all right. You'll be all right.
I can still edit the video true. Thank fuck for that.
So let's let's kick things off. So we had James and Aisha from
Twitter who asked about and actually a few others who asked
about what you guys think about the outlook for copper in the
sort of near term. And you know, James also asked
about, you know, there's, you know, not too many pureplay
copper plays left on the on the A6.
What were you guys thoughts just on that and then the copper more
generally for this year? She's pretty consensus long
right like that. That's the, the, the feature of
it that kind of scares me in a way that everyone wants it,
especially, you know, you have the, the mining sort of fundies
and then you have the, the generalist as well.
And when every man and the dog loves something, you're not
going to get it cheap. And you see it in all the
transactions. There's been some hot M&A deals,
big mines, you know, many billions of dollars.
And when you have that many people looking at the, that many
miners looking at the transactions, because every big
miner wants copper, you're not getting them cheap.
So you're really paying for that narrative as opposed to buying
something that's deep into the cost curve where you might be
getting it on a a discount because everyone hates it and
everyone's running away. That's the sort of first thought
that comes to my mind. Well, on the yeah, on the big
scale, it's like, you know, big Trump, he's gonna have a massive
effect on, you know, China growth of China bloody and
'cause you know, China is the determinant on what copper
demands gonna be. And if there's any slowing
there, that's obviously you can pick the best stock you want,
but if the underlying price doesn't go up, good for bloody
bugger all. So but then on the yeah, pure
like getting pureplay of scale as well.
Like, you know, AIC for instance, like yeah, it's
pureplay copper, but it's not producing shit loads of copper.
You know, like to develop with Woodlawn and that lock.
It's not they're not going to be like big, like they're not going
to be at 50,000 tons of copper. Yeah, whereas what Mac they're.
45,045 get over 50. Yeah.
So it's like trying to find something of scale in here
without going to like a frigging gown to the vicuna, like to a
porphyry or something. Yeah, that requires bloody shot
loads of CapEx. The lack the lack of copper ASX
names is reflective of the lack of quality in ASX in Australian
copper projects. Yeah, like you think I remember
scale at least. Well, de Grocer.
Was what were they, 6065 thousand tons of copper?
Because it was, you know what, one half million, 1.6 million
tonne at near 5% copper. But to find that now like look
at like what half a billion dollar company, Firefly, that's
probably going to be 1 1/2% copper.
So that'll have to be like to get that to 4050 thousand tonne
of copper equivalent likes no, over 3,000,000 tonnes of ore
from a kilometer down. So it's to find that whereas you
know, Mac, Mac is coming from what, 1.8 kilometers down.
But that's got the grade. It's got 5, 5%, yeah.
So I was a distressed asset for a reason, yeah.
So. Near term outlook for copper
probably about the same as where it is right now.
And I think you're better off like like you said, it's the,
it's the corporates who are, who are maybe maybe getting a, you
know, looking, looking on the outlook and saying there's a
shortage. And so they're paying high
multiples for the, you know, the acquisition targets to, you
know, a bit of a tip to the person who asked the question,
those acquisition targets and not on the ASX.
Listen to that episode with Tom Orwreck and he'll he'll talk
about yeah, like maybe some of the, some of the other kind of
targets that could could get covered up, but they're by far
and above, yeah, skewed towards the, the, the North American
listings. And a bit of this is another
question, but sort of related topic.
This is from Risk It for the Biscuit on Twitter.
I'm not sure if it's a he or a she.
Oh no Anthony, sorry Anthony. So I've just seen the name
there. Will 2025 be the year that the
small medium Mount Isa copper projects start to gain
mainstream attention and traction?
One example is Glencore committing to a long term
partnership with Carnaby. Partnership's a funny word,
isn't it? You'll love you'll love to see
the juniors use the word partnership with the commodity
trading houses. But it's always a bit more devil
in the detail there, Al. Bancora rather on the way out
than on the way in to Mount Isa, that's how to sort of think
about their approach to that area.
So I think you're hoping for a few things to go your way at the
end of the day, they're they're higher cost assets and if the
copper price goes up, I've got a lot of talk to the price, but
they are high cost and you're running the risk when you when
you own them. Yeah, what?
What would Glencore sell the smelter for and all that there?
Mount Ozer exposure? What's?
The liability. Don't know it's.
I couldn't tell you if the I wouldn't know.
Tough one. So yeah, you pretty much need
some big dog to come in and consolidate the whole region
because it appears, as you said, Glencore's on the way out, so
they don't want to do it. Like who will do it?
Yeah, Glencore conscious of their social licence as well.
They've still got enormous, you know, economic activity in
relation to the coal mining in that state.
They don't want to, yeah. They want to preserve their
social licence in in Queensland too, So no.
That's a good point. Bit of a change of tech.
So I'll direct this to our finance gurus, Trev and JD.
So hankle hankle Gogo up and rising staff and coming here.
So Hankle Gogo from from Twitter says, can you guys go over the
terminology related to the ways of valuing companies like a back
to basics for some of the new money miners now, I mean the
segment like this, you know, you could go on for for hours, but
why don't we do? Why don't we do a couple like
MPV? What what the Hell's MPV for for
a very any intro to our finance? I could zoom out a bit and I, I
would like preface it with saying the way you value, you
know, mining companies changes over time.
You go from this like, you know, in situ resource in the ground
and then, well, you know, hopefully blue sky discovery
people get ahead of themselves. And then as you get nearer and
nearer to cash flow, people use the DCF.
And whenever we're talking about these multiples, we often like
say stuff like P NAV, well, we're just sort of shortening
things. It's price divided by the NAV
per share and that's what we mean by P NAV.
And then NPVNPV is a simple one. You're working out what is the,
the net present value of the, the future cash flows from this
upper from, from this mining project.
What, what the NPV is kind of like a, a thing everyone looks
at in the, in the feasibility study or the PFS or even the
scoping study or PEA. And what's your CapEx out late
at the beginning? And then what are your your kind
of free cash flows overtime taking into account the?
Time value of money, exactly, Yeah.
So that's why we always pick on the discount rate, which is the
percentage you use to discount those cash flows.
We talk pretty commonly, some of the miners who you know will
reference EV to EBITDA multiple, which is taking into account the
the value of the company on the Stock Exchange, incorporating
their net debt and then comparing that with their
EBITDA, which is a sort of crude cash flow metric.
That's, you know, we sometimes use it often more often for
copper miners and so on. It's more of an industrialist
kind of metric. I think it's more preferred in
the mining space to use net asset value and that's related
to these projects having a definitive mine life.
Yeah. Plus the the corporate level,
there's often these adjustments for for your NAV as well-being
the cash and debt cap structure in the money options which are
reflected in NAV per share. Yeah, IRI is another one.
That's another one bankers will Chuck around.
And that's just similarly when a study is being put forward,
trying to just put your returns into a percentage term so you
can understand what the returns might be, again taking into
account the outflows, the inflows of capital over time.
I guess the interesting thing, which I think we touched on in a
previous episode is with, with, with mining assets, you know,
especially really long life ones, because things like MPV
and IRS take into account the time value of money.
You know, you might have a, a copper producer, a gold producer
that you know, produces for 50 years or something.
But the MPV, because you're taking into account the time
value of money, penalises or doesn't penalise, but it makes
those cash flows that are 4050 years out so small when
actually, jeez, if you can produce for 40-50 years, that's
like a, a great thing. But the the the, you know, the
Excel spreadsheet sort of doesn't give too much
recognition for that. Big time the thing that Excel
spreadsheet doesn't give you credit for is commodity markets
are volatile and relatively frequently there are these like
short term shortages and price flexes up massively.
So, you know, miners might just, you know, wash their face for,
for seven years and then have one year where they make 7 years
worth of profit because the, the price of their commodity shot up
massively. That's, that's like, you know,
you get in the realm of, yeah, where the spreadsheet kind of
fails. It's just our, our, our
assumptions on pricing and how volatile and, you know, de
minimis earnings can be for some periods and then highly
lucrative for a very short period of time.
But people talk about the NPV not capturing the option value
of a mining asset or or or or longevity that comes from
enduring mining cycles. Coal assets over the 2022 period
is the most recent example of that way.
That's a good example. Prices go through the roof and
these companies just buy back their shares, issue dividends
and all sorts and it pays for a lot of the bad years.
Yeah. Now, I think there's some good
things to sort of grains of salt to take in when you're looking
at those sort of multiples and figures and things like that.
Moving on. Actually, you sort of touched on
it before, Maddie. Lots of lots of questions about
Trumpy coming in and what that means for commodities, commodity
prices, things like that. I'll flash up a few of the
questions that came through. Neil asked the world of
commodities in the context of the new Trump presidency.
How does the team see this playing out in 2025?
A couple of other ones were predictions for renewable
commodities with the cancellation of the EV mandate
in the USA. Also, any insights regarding the
drill baby, drill rhetoric in other jurisdictions you say like
Australia and Canada, how that may affect prices.
I don't know if you guys had some high level views on what
that might look like this year. Well, they're definitely, if
you're an Aussie, Aussie miner in Aussie dollars, you're
definitely getting the good tailwind of an exchange right at
the, at the moment, like, you know, going from what, 6 within
1/4? It's going from 69 to 62 cents.
So if Trump's good for the US dollar, it's going to keep
strengthening that and the our realised price.
But then it's, you know, they talk about the if the there's
still a lot of gold buying around the world.
The I think the ATF flies have always seemed to from what I've
been told of the US dollar, US gold price movement of always
outweighed with the realised price that Australian miners get
for it just with the the VNX funds and everything.
So but they'll, you know, be in the position where they got look
at Regis. They got what nearly they're
going to rapidly have nearly bloody the 3rd to half of their
friggin EV in cash so in a couple of years.
So pretty phenomenal. I'll be just like metals accent.
If you look at other sort of policies, ones that we spoke
about heaps over the past year and a bit like the Inflation
Reduction Act, IRA talk that they might trim that down, can
it, who knows. I don't think a lot of that
value or the benefits was really actually coming through despite
all the talk about it to a lot of the miners.
Regardless of that anyway, the US for EVs is like 10 odd
percent of the global market. They're not, you know, more than
50% of global sales are actually done in China for electric
vehicles. So they're not a huge player in
that market anyway. And who knows if they even, you
know, cancel. It remains to be seen.
I think there will be shorter term volatile action as as Trump
and I guess he's kind of competitors in a way, Xi Jinping
and stuff and how they kind of act on other sides.
We saw it with aluminium in December.
We saw it with more niche metals as well.
As they sort of posture about what's going to happen, they
start flexing their muscles on the parts of the supply chains
that they do have strength, Aluminium being a stronger point
in China, the US being more reliant.
So I think you'll see like sort of short term movements like
that and then you'll see 50 juniors talk about how they've
got this niche metal in their backyard and all these kind of
things. And yeah, well, remains to be
kind of seen, but I think there's a lot of a lot of talk
and you got to kind of wait to see what actually gets put into
legislation. It's the interesting one which
has come out then the last week or so.
Is this project Stargate that sort of 500 billion worth of
investment into AI infrastructure?
I mean, we're sort of you guys have touched on that in
interviews with a whole host of guests late last year around
that driving, you know, you know, critical, you know,
minerals demand as opposed to the, you know, traditional EV
theme we've seen for a while. I mean that it's a lot of money.
Well, it's a lot of potentially a lot of copper, a lot of.
Uranium. Uranium for this, because you
know, the, I was watching, I think it was CNBC the other
night and it was just the first question that always comes up
about that, about that Stargate was like, right, how are we
powering them? So and gas and gas and nuclear
are the essentially the only ways for things of that scale.
It's a solder, Yeah. Shit loaders market.
Shit loads are sold I. Reckon every single miner can
wrap that around their narrative and just plug in and play you.
You need every sort of electrification as well as
energy type to to get those sorts of things off the ground.
And that's a bigger scale than we've ever spoken about.
It's a biggest scale than most people have ever spoken about in
a quicker time frame, so be suspect of how much of the
money's actually going to go into the ground over what sort
of period. But regardless, it's a it's a
huge kick up. I think the it's a it looks
pretty convincing It's going to happen.
Remember the what what, two years ago, the everyone's lot
now the metaverse is the next thing that just died in the ass.
But I guess this data centre and AI thing looks pretty convincing
that it's it's heading down that path and it's pretty good.
Like how the variances in the the whole EV not bubble bit of a
lot, a bit of a nickel bubble really like the whole nickel
thematic that didn't come to fruition.
But this looks pretty set for yeah, copper energy, shit load
of solder for the tin. So.
So yeah. It's one point on the
geopolitics stuff. It's like, it's like, it's so
hard to sometimes like, you know, think of all the 2nd order
impacts, all that sort of stuff. But the general comment on the
markets is like there's a lot of froth in parts of the markets a
a a lot, right, like you know. Speaking of froth, actually we
did get a question from Nick on Facebook.
Can we get a call on fartcoin for 2025?
Also Trump and Melania coins. Oh, that's just America's
bizarre. Yeah, but no, yeah, I think
you're right, Trev. I mean, if I mean that that
that's, you know, even in the main coin space as a, as a bit
of a funny example, but yeah, no, just even more broadly as
well. It's just crazy, isn't it?
I. Reckon on on that particular
call there's probably more chance of fart coin outperforms
Trump and Milani just historically celebrity coins
have not done very well nothing against Trump or Melania but
yeah the long the long yeah but we'll see that the.
But I do think there's a reflection to have on just the
state of the market because when things are really frothy, that's
usually a predictor of, you know, things being pretty like a
lot of turmoil. A lot of people are just like
maximally deployed. But the reality is the best
opportunities come in moments of like a liquidity panic or crash.
Whenever a market crashes and all of a sudden some people have
too much margin or like funds blow up or whatever, they've got
to sell everything and they're for sellers.
And those are wonderful buying opportunities.
So I just think it's one of those years where like it's just
going to pay dividends to have like some dry powder to deploy
if those events or an event like that pops up.
That's my that's my fuel. I think I've got to, I want to
get my head around these other timeline for these data centres
and the projects, how long it's going to take.
Because if if they're so energy dependent, it's not going to be
just uranium, it'll be powering them like fucking could be like
could be huge for thermal coal, could like, could be lithium for
like extra storage, like could be a bit of everything needed to
power it. Look how cheap natural gas is in
the states. It's insane.
It's it's 3 or 4 like $4.00 when I last looked Henry Hub that
that is crazy. Like everyone would be trying to
use that first and then complement it with things like
nuclear and other sources so they can meet the targets that
they've put forward in these things.
But they take a lot of time naturally S is much sort of
quicker and reliable means of getting your power if you want
it soon. So I'm completely with you
though, very keen to see the the timeline of these builds.
Yeah. It could be could be diesel
Jenny's powering at the start, which is like a fucking shit
load oil, which is going to be the whole drill baby drill
thing. What is it?
Land man says got to be between what is it 73 and 88 bucks a
barrel for optimum conditions for the global economy.
Yeah, and, and look at Scott Bezant, the incoming peak for
Treasury Secretary. Super interesting guys.
Worked with Druckenmill and and Soros in his time in in the
hedge fund world, ran his own hedge fund for a long time.
And one of the the pillars of his sort of policy he's putting
forward is 3,000,000 more barrels of oil coming out per
day in the States. And that would be enormous.
That would bring down costs. And obviously he's saying that
to make industry hum even more in the states, see if they can
sort of get there. But that is one of the three
explicit targets he's put forward, as well as a, you know,
the other targets on GDP and these sorts of things.
This is this Treasury Secretary, by the way.
He's a fellow that in the past who stated that he thinks the,
you know, the US dollar like US will default in this debt like
the reign as the supreme currency will end like.
Yeah, Golden bugs. Want to want to get a hard on?
Go listen to his. He did an awesome chat on the
Capital Allocators podcast. Yeah, it's called Macromave, and
it was fascinating. The guy's got decades and
decades of history in the game. And yeah.
He's fun. There's plenty of gold in it,
Yeah. I think what was Musk?
Musk obviously puts it very simple, but what's he saying?
Very soon the interest will be the same cost as the whole
defense budget or something like that.
Just Yeah, I. Think it might have just edged
it out last year. Yeah.
And that is a big military
spend, yeah. Oh, Speaking of Gold Phone, you
guys talking about that? We've got Nathan from Twitter
who asked Gold Junior developers which ones can realistically, in
your opinions, fund and move into production themselves,
Which ones will be taken out and which ones are pretenders?
I mean, that's worthy if it's all home, you know, for the
episode. But you know, we could perhaps
look at a few company examples, but perhaps maybe the
characteristics that you tend to say in the ones that can move
into production themselves or you know, you know, attractive
for a take out and, and, and things like that.
You guys have any thoughts? Ali, this is this is one for
you. I reckon this is your bread and
butter. Or or I think.
I'll have something to say, yeah.
Nice. I reckon the well and look the
best performing producer last year I think based on our chart
the other week was catalyst into just terms of share price
performance and you know they're growing printing cash.
I think they'd be looking for a for a deal or would they maybe
look at broad stuff for the same Stein because that's going to
need a lot of capital to get that because that's potentially
not a bad hub coming up for some big pits.
But it's going to need a plant, likely need a plant.
Makes sense to put a plant at the sandstone project.
So yeah, I think catalysts might be looking around to like, you
know, they're makers down the road from them, but just don't
know if it's got the long term scale.
We touched on in our in our first week back the Bullet
bullying deal that will be trading again in April, a few
years away from production. It'd be a developer with an
asset just need to go through the the studies and everything.
But more generally, those kinds of deals are the assets that to
be honest. Are off your radar.
Completely off my radar. I had no idea about it
happening. They're really interesting ones
and I'm sure there's more than a few that people are working on
in the background. But yeah, very keen to see how
that that trades. I'm sure it'd be interesting
when it when it comes back online I think too.
Things I've learnt, particularly in the from last year as well,
is as far as the, the speed and the sort of most streamlined
path forward you can get from, you know, being a developer to a
producer, I think is having optionality and having your
permitting under control. Just those having those two
things I think so important, you know, just, you know, it's times
to get, you know, MLS and then native title agreements and
environmental approval, especially if you have to build
a, you know, a processing plant and things like that.
They take a lot of time. An optionality.
I mean, yeah, I could do it myself.
Yeah. I could get taken out by, you
know, a big neighbor down the road.
Yeah, I could do this. The more optionality you've got,
you've sort of got I think a bit more firmer ground to put your
two feet on and go actually no, this is how I'm going to
maximize the value out of, you know, this asset, this company
sort of thing a bit more. Feel like you're leading into an
MMS plug or something? One more.
That kind of comes from, I'm not a classical developer, but Wolf,
they've got, they're building Kiaka that's going to be
producing in half a year's time and they're no longer trading at
the level they were when they just had Zambrado.
But I mean in share price, they did a capital raise and
everything added sort of 60-70 cents from the level they kind
of were. But there's a step change again
as they start producing over 400,000 ounces, probably a
year's time once things have ramped up and everything.
So that's that's one I'm sort of watching, obviously with a
massive caveat of risk in the area that's in some countries
heightened in recent times, but that's the opportunity that
throws up for other people. You think like this, this scale,
the scale premium or like the fact that they've got 2
operations? I mean, even if they're getting
marked on the same sort of cash flows or whatever that they were
going from one asset to to doubling that way more Oz coming
at the ground, the cash flow jumps up substantially.
Yeah, we'll kind of see in time. But I think people have
definitely been risk off in West Africa over the past year.
And I think that's an opportunity for other people
that can play with that sort of risk.
It's Ding Ding on that one for me.
I. Reckon now we're gonna yeah
enter an era of of cash takeovers in the in the gold
space. Cash takeovers, yeah, I mean, if
you just like look at the lay of the landscape, the gold miners
are increasingly unhedged cash generative and sitting on large
cash balances without growth projects, it's going to be
competitive to buy stuff and yeah, just we haven't seen cash
takeovers in a fair while in the gold space.
I expect that to come back this year.
I also think that the the there'll be some really good
opportunities for larger gold miners to sell assets in this
kind of market too, for them to like rationalize their
portfolio, maybe sell some of their higher cost stuff because
they'll get really good value for it.
And there are now all the mid tiers really cashed up to to pay
up for, you know, maybe, you know, the not so best asset in
the larger company's portfolio. I.
Think Newmont's a good example of that over the past six
months. Just Bang, Bang, bang.
I mean, they've been working overtime, but just the speed at
which they knocked out all the the non core assets.
And I think by and large they'll be getting more money than
consensus was begging it for. Yeah.
Single asset producers, I think a bit vulnerable to because
they're, yeah, somewhat discounted because they're so
much more exposed to single asset risk and and maybe
they'll, you know, trade skinny enough that people will, yeah,
find value there. OK.
It'd be interesting to see if Gold Fields gets active in
Australia again, if they sort of just stick to what they've got
or they divest or invest because there's definitely a lot of
options for them and lockers and Anglo Goldishani with I still
think, you know, with the cash that Regis is generating and you
look at the deal that Greatland got off Newmont, Regis could
pull 100% of trop out of Anglo Goldishani AGI, which they would
have first ride on is that'd be that'd be a big play for them.
And because there's a, you know, a lot of future there once that
a lot of underground potential there after the sort of pit
finishes in a couple of years. So it'd.
Be worth a lot of money. Hey that.
Should be big, but do you reckon you if you're going to get the
best deal possible you'd probably get it out of a big
company then a small one? Especially if you've got the pre
emptive, Yeah, that's a lot. Yeah, but they're stay paid.
They paid 900 million for 30% when gold price was like 3000 an
ounce, I think. I want to say yeah.
Yeah, I'd be I'd be interested to saying, but that a lot of
that was probably paying for like, you know the big pit and
and everything. I think if the not as much as
proven up underground and it knows that there's going to be a
lot more capital to go into it with a downsized and cutting the
mill in half. It's like, well, whether they
might be might be able to get it a bit cheaper because you've got
to they mightn't want to AGI mightn't want to put the capital
in sure what? Do you reckon on goldfields
more, less or sort of equally involved in Australia in a
year's time? Just so slow moving.
Well, it's you don't know it's like like, you know, I think
it's a pretty pivotal year for Bellevue if they're going to
like because the gold's there like it is a freaking high grade
mine. It just as I said, just needs
that reset or Ding Ding Ding as well.
But just, yeah, it's just whether someone will look at
this pricing environment, think not yet 1 1/2 bills, you know,
we'll pay that or we're going to wait for a bit more distress if
they can't pull a couple of quarters together and try get
them for 1.2. Not sure, but I think I reckon
that that company would be amenable to it for a liquidity
event for the major holders. You know, BlackRock a bloody 15%
shareholder now in it. So I think, yeah, I think it's
going to be, that'll be interesting this year.
Yeah, we remember gold fields, they were revealed to have tried
their luck at getting hold of Corolla subsequent to West
Golds. I think this, the scheme
implementation deed was signed, but they tried to, they had bank
local bankers and we're trying to get hold of that.
They're going for a site inspection.
Yeah, well, that the, the scheme, the scheme, but with the
information circular revealed that they, they loved a beard at
a better, a better price, but more conditionality.
And the, they did have a change of, of, of management a bit
before that, I think maybe six or eight months before that.
So yeah, my God, is that they're they're much more amenable to
doing things in WA. Not that we've seen it yet.
It was interesting in that region I just saw announced
today the new non executive director for Pantoro is Stuart
Matthews from Goldfields. He was one of the senior
Goldfields. OK.
So which and then there's, you know, there's been the talk
about, you know, wet potentially W Guild Pantoro with that, you
know, sort of consolidating that Southern Goldfields region a
bit. So oh, nice.
Very nice. We're going to change tech of
jurisdiction and commodity now. So we've got palm tree capital
and ASICS commodities investor from Twitter asking about
Indonesian mining. So Indonesian mining, in
particular ASICS listed companies, massive resources of
gold, nickel, copper, low cost environment and but you know,
still close to Australia, but you know, there's still, you
know, risk factors around Indonesians growing rapidly.
And then ASICS commodities investor asked Nickel, what's
your outlook by mid year given Indonesia scaling back
production in conjunction with the various operations that were
mothballed last year? Close to Australia, but a very
different jurisdiction. Yes, it was interesting to see,
I think over the past week or so that they were talking about
giving out less permits, making a bit less happen in the nickel
space so that, you know, they can stop the just huge boost in
supply that's come out over the past few years.
So they want to find a, a, a price level.
I think they're just playing a balancing act, right, where they
can disincentivize anyone from doing any more production around
the world, but get the biggest bang for buck that they possibly
can. And yeah, I mean, so much money
has gone in, it's already sunk there that the nickel is going
to be pumped for for years and years and years.
As for the the other commodities you mentioned, they're obviously
done a heap of work in copper to they've forced Freeport.
Freeport spent 1.2 billion US this quarter in CapEx choices,
mainly getting the smelter, the smelter at Grasberg that they're
forced to do because they're no longer able to export, just
concentrate. So they need to make, they need
to go a bit further downstream, very similar to what we saw with
nickel. Indonesia wants to get more bang
for their buck across the the board there and Freeport weren't
going to walk away from Grasberg.
So it's a balancing act. Lots of other countries have
tried that unsuccessfully. They've managed to do it OK.
When you have enough of the market or whatever, you can kind
of do it too, right? Like Guinea's the the other
example who are, who are, you know, following a similar path
in relation to the bauxite, Add more, more, more refining,
smelting in country even, which they're going to be able to do.
And yeah, it's, that's actually a good thing for the for the
miners strangely enough to globally because you you have a
surplus of refining and smelting capacity, which means like lower
TCLCS on you, Yeah, which means you bank a bit more of that
margin. Freeport's going to get active.
Look, oh, they produced what, 400,000 tonne of copper this
quarter and you know, has said tried it, such a bloody good
multiple, good paper. Do you think they're going to
they never really get talked about for copper acquisitions.
It's always like, you know, BHP, Rio, Glencore and the names that
get thrown around like. Yeah, it's Freeport.
Yeah, I think it's a worthy conversation.
There's Grasberg's unpalatable to Rio and BHP, just the the
fact that the the the tailings run off into the ocean down
there, down the mountain. BHP got good history with Yeah.
OK, Teddy, Not sure how you say that one, but Teddy.
Yeah, Teddy. Yeah.
And Rio had the original pseudo royalty on Grasberg itself,
which they had to divest tragically because of the
pushback from the the tailings of of the operation.
Yeah. I mean, remember we spoke about
last year nor just wouldn't invest in them because of their
interest in in Grasberg. Yeah.
Oh yeah. But do you think Freeport will
invest in about like a will it will you say done more in South
America and stuff? I'm sure they're looking at it
as much as anyone and you know, potentially they've got more
richly valued paper to to kind of do a deal with given they get
all these kind of general funds and all these sorts of things.
But I mean talking way out of what I kind of know.
Didn't they used to own 10K? They they sold it in 2016
because they did all these oil and gas deals at the beginning
of the 20 tens almost went tits up in 20/15/16 when every
commodity came off and they were fighting for their life and that
to sell some some really good assets.
We fired it with the Lundin. They both sold out, yeah.
But yeah, it's a good one, Maddie.
Very interesting. So we've got Ian from Facebook
asked how to spot lifestyle companies.
What are some good rules of thumb or sort of screens or red
flags that you guys like to use? When you say looking at a
company, are you going through a quarterly or something?
They go like this is a smells to write.
Probably a lifestyle company. Too many, too many corporate
videos and podcast interviews. High, high sort of amounts of
related party transactions. They're not all bad, you know,
but just look into the, the details on them.
If there's, you know, hiring your, your brother's firm to do
this, your uncle's firm to do that, those sorts of things.
Just look into the the weeds there.
Yeah, if you own a, a junior and it's in there the business of,
of expiration, you're owning it because you, you expect a
catalyst to move its share price from where it is now.
You're fighting gravity because the company has a burn rate and
that burn rate is it's overheads to keep the lights on and pay
all the bills and all that sort of stuff, which means that, you
know, a couple times a year they're going to knock the door
for, for new funds from investors.
And if they're a very small company, then sometimes the
dilution is so extortionate just to keep the lights on rise.
If they're 5 million market cap, they got to raise too.
That's a lot. That's a lot of dilution, right?
I think I do that twice a year. You know, quickly you're, you're
1% interest in the company becomes like a .1% interest in
the company just because they've diluted the, the shares so much.
So what you, I think you really should be looking for is like,
are they doing anything to get to the catalyst you're expecting
them to do? Or are they, are they simply
just dormant? Like are they, there's, there's,
there's not much work happening, there's not much news flow.
There's, you know, there's pretty substantial overheads
which are going to result in the need for new capital to come in.
If they can manage the, the capital spend, like if they can
manage the overheads, then that's not so bad a thing.
If they got like decent cash and that and they keep they're
running things really skinny, then you can you can wait a bit
longer if you got to wait for a different kind of price cycle
for the catalyst to come. Yeah, and I think I'll caveat
that new slow with planning this or thinking about this and and
you know people are you see a lot of companies put
announcements out like you know about that sort of stuff.
It's like OK, but like when have you are you actually drilling on
the ground? Have you completed AGF survey?
Have you actually done all of these things?
Some companies just ship me when they put, oh, we're thinking
about this evaluating this, which look, you have to do.
But if like if that's the only news flow and then you've got
like you say, Trav, this corporate spend just going on in
the background just to keep the the lights on.
It's it's frustrating, that's for sure.
But yeah, looking at the in the quarterlies, it, you know, does
split it out, you know, corporate admin spend, you know,
exploration spend, you know, all all that too.
So, you know, he has, you have periods with all ebbs and flows,
but if it's, you know, pretty consistently very minimal on the
operational activities front, it's probably worth looking to,
that's for sure. Yeah.
What are you getting for that burn rate?
You know, yeah. That's right.
This one's for you. Specifically for you, Matthew.
So this is from No Pants Vance from Twitter.
It's I will flash up his question on the screen.
But I think the the crux of what he's trying to understand is how
does all body geometry? So that's, you know, the shape
of, you know, the BLOB of metal that's in the ground.
How's that important? When you then go from, say, like
a resource definition stage to go, OK, now we've got to RIP
this thing out the ground and, you know, build a pit or build
a, you know, underground mine that wraps around it.
You know, how can the geometry affect the engineering side of
things given your, you know, sort of previous life experience
in that world? I'll try not to blab on with too
much shit, but well, open, open pit wise, like if you got to
start with a pit, you know, the more vertical the ore body, the
sort of you can't have a pit for as long because you're the
deeper you go, the, you know, the more stripping is required
to sort of follow that down. So you look at, you know, the,
what are the, some of the great pits?
Look at Capricorn Karla window. Like that's just the, it's just
pretty much the pretty flat plunging sort of ore body that
the the pitch just follows and, you know, low strip at the start
and they just keep following it down.
It's obviously very consistent and good continuity and like
that's why they've made good money.
So you know, mount Gibson will be different.
Well, that's, you know, vertical.
You see that there's not big massive pits that we go on
underground a lot quicker. Then I guess when you do get
underground, it's the the dip of the ore body is the most is the
the biggest factor at play. So obviously it's nice having a
not a vertical a vertical ore body is just easy because it's
just not as soon as as soon as there's a bit of angle on it.
You got to you mind the Stokes to to that angle, but that that
hanging wall. The more angle, the more chance
you've got of that falling in and diluting the grade.
So you know you're simplest minds like you are a bander for
diverse or Ding Ding Ding as well.
Just vertical like. Daisy Milano that was like thin
and vertical, but it was a lot faulty like that was that
created a lot of issues trying to stay on the ore body.
But just yeah, just you just nice vertical, just follow the
vine. Just nice and simple.
That's what a lot of a lot of Northern Stars narrow vine mines
that they've had over the years were just like that.
So and then like so you look at the mines around like your
Leonora where they go down instead of being 90°, they're
like, you know, 40° thirty. So Gwalia is like 40°.
So it's obviously dilution. Controlling the dilution becomes
a problem recovering the ore on the foot wall because it's one
thing controlling the dilution there.
But when it's laid right over, I think the natural angle of
repose for dirt to run down a hill is 55°.
So essentially once it goes past 55° and it's flatter, the ore
will sit on the foot wall and you either have to wash it down
or you have to take more angle out of the football and take
waste to get to that, you know, 5560° to get to get it to real.
So you can bog it. And then the more it dips over
the, you have to do a lot more sort of you have to do you have
to, you have a lot more development per vertical meter
in the OR drives. Because if you had 20m level
spacings, but it's dipping at 45°, it's like a 30m drill hole
to reach the other level. So you have to condense the
levels a lot closer. So, and which could be it's less
decline development, but it's a lot more operating development
too. But it's and it's just, it's
just a bit more difficult and then so that's, that's deep.
But then like, look, while they've been doing it for
frigging, you know, 1000 odd meters vertically, I don't
under, I don't think it was like that the whole time.
But they've, you know, once rinse and repeat, they get it
down pat and they've obviously got a way to recover it the best
they can, but then proven up the answers.
The other one is plunge that we talk about the shape.
So Gualia has a big plunge, Paulson's had a big plunge.
And that means there's your dip of your body looking this way.
But then if you spin around 90°, it's where where the ore body's
going. I'm also like, is it just going
like? This or is it turning around
going that way? So like Agnew Warunga for
Goldfields that was like just dead vertical, like it's just a
decline that just spiraled next to it.
Paulsen's for instance, had a has a big plunge.
I think Fireflies one has a big plunge.
Gualia has a big plunge. So what happens there is to
actually infill drill as you go down to get the confidence in
the ore body becomes more difficult because if it's got
the big plunge to drill 300 meters below, if you were just
drilling from next to the ore body to get the angle on it is
impossible because it's so far away.
So you've got to develop these long exploration drives to get
over the top of it to get a better angle.
So that obviously costs more, but then it's trying to get the
geological confidence to geological confidence is what
drives your guidance for the next year because you got to
know pretty bloody close what the grade is.
So you tell the market we're getting 200,000 oz.
But if you the apple a factor in the grade doesn't come out of
that number. So plant plunge is another one.
And then for that's why Gualia doesn't have it, doesn't have a
shaft in it because they never got to the point.
It just kept it obviously kept going and going, but they never
got to the point to say, right, we have enough confidence in the
ore body down here and we're going to pick a point to put the
shaft in here because because the ore body is plunging, you
can't like it's too hard extend the shaft later on because the
ore body keeps getting further away from the shaft.
So you have to pick a point to put it in.
There you go that. Was actually very interesting.
But 10? Percent of bloody everything
you'll need to know there, yeah. But the take away basically
being that I sort of got from that is basically the the all
body geometry depending on what sort of if you're developing as
an open pit or an underground can impact basically your
material movement. And the more material you're
having to move, the more that's going to cost and also the
logistics that's involved with, you know, more difficult
material movement at angles and things.
Like that well, and geometry is also if you look at where the
location as well, because let's look at Spartan Spartan's got
never never then you know, Peppers right next to it then is
at 4. They got 4 pillars sort of up
strike from that. And they're sort of all lined up
next to each other. And they've got the decline
coming in from the pit and they'll just go past each ore
body and then keep going down and sort of they can piggyback
off off the infrastructure, like off the ventilation, the
pumping, the power as they sort of go down.
And they're accessing multiple ore bodies all from sort of the
one entry point, what from the one decline.
Whereas Bellevue, for instance, like Bellevue's got, you know,
crack and grade crack and ore body.
But there's a bit over here, there's a bit over there,
there's a bit bloody behind me. So you've got sort of
independent mining areas accessing all these places with
which need independent infrastructure like like pumping
ventilation power. And you got to sort of spread it
out everywhere, which is you would anticipate why they're,
you know, struggling to get the answers out of the hole is
managing the complexity of the constraints of infrastructure.
So once you once you pile all that together, they all, there's
good bits of it and bad bits of each of it, you'll figure out is
it good or not? Yeah.
Or or or you you have a vote on whether it's good or not.
Alright, no, that was a very comprehensive one there like
that. Well, I was only there for
bloody 14 years and I know about 10% of what I need to know.
So it's just that's why when someone's been mining for 30 or
40 years, you're frigging listen to what they have to say.
Absolutely, yeah. But Trev, we've got one from
Nick Huntley, who are Stam. So this is for those who don't
know Stam. As Samuel Terry Asset Management
in their last quarterly noted, they're now holding a gold
producer. Who do you think it is?
Well, actually did not know that.
I didn't read the last quarterly.
I read the one before that. That's a great question.
Who would stand by there? They didn't name it.
They didn't name who. Yeah, apparently don't know,
according to Nick Nye. Knowing those guys, it'll be
something funky where there's a bunch of latent value that the
market's not quite seeing. Yeah.
Like they're, they've got a good eye, Those those guys.
Not entirely they, they hold a bit of gold bullion as well.
Jada. Yeah, I could be wrong.
They did last time I read one of their reports.
Yeah, pretty sure. So I, I don't know Ally, I don't
know it'd be. Someone left field wouldn't.
It it would be 100% would be left field.
They yeah, just find value where you usually just look past it.
Value and sort of catalysts where they can kind of make
something happen in a way. Catalyst is a big one.
I think they are, yeah, exceptionally good at creating
catalysts. Yeah.
Like, yeah, if anyone wants to look up a just look up Nam on
the ASX, it's Namwa Cotton. Namwa Cotton.
Oh, yeah, check, check. Just just go over the the series
of that company's announcements over the last 12 months and I
think you'll kind of see the value creation stem are capable
of of creating for shareholders. It was an announcement almost
every week, so I have a fair bit.
Of rating and I'm going to do one last quick round table each.
I've got a question for each of you and after you played a lot
of golf over the summer. Break I did.
Tito trades from 2:00 to US. What's Maddie's handicap?
I was 15. I got 2 I think sort of.
Sort of. Yeah, yeah.
Now I think I hit 17 the other day playing on 15, about 15.
Very good. Bloody volatile.
It's like, what stock would I compare my golfing to?
Nah, but the shells I ain't get in at the bottom.
What I think is the bottom. What would you compare it to?
A. Certain uranium company you
hold. Maybe yeah it's on and I'd be
one day the drivers gone good and the irons are fucked, then
next day the bloody drivers bloody shit itself and I'm
smashing the irons and then usually the pot is fucked the
whole time. So it's.
Like. Good fun.
Anyone that wants a game on a Friday from Galford hit me up I.
Love it. Actually, I had on a separate
thing I had to think about the other day.
We were talking about what's like the, the, the finance or
the the West Perth equivalent of of word on the decline.
And I think I've thought of it. Oh, what is it?
I think it's the WhatsApp on Hay Street.
What'sapp on Hay Street? Yeah, that's good.
I love it. That can be for finance Goss.
We can do WhatsApp on Hay. Street, Yeah, 'cause everyone's
like. WhatsApp send anything on
WhatsApp, it's safe. This guy, the guy's one of the
biggest insider trains. Yeah, it was in Australia.
Like, don't worry, it's all good.
We're talking on WhatsApp. But that's what they wrote in
WhatsApp. It's fully.
Encrypted. And then you got the Australian
Federal Police reading it all. Oh, it's golden.
Crazy JD, what was your favorite book you read over the summer
break? Not sure anyone's going to chase
me up on this one, but I read a book called Kaput.
I spent a bit of time in Germany, got family and stuff
from there, and it's on the the struggles of the German economy
going forward. We've spoken about the energy
problems, reliance on Russia and all these sorts of things.
So it was seriously interesting talking about a, a lack of
investment in appropriate industries, a lack of sort of
resilience in critical parts of your economy.
Yep. And getting a bit sort of
sidetracked by certain ideologies and and those sorts
of things. It was.
It was really interesting. Awesome.
And finally, Trev, what was your favorite dog friendly pub you
visited over the summer? Oh, I didn't go to any dog
friendly pubs over there. Oh no, I did.
Yeah, it went down to Bridgetownish area.
There was a cider cidery in Nanup.
There's like a very cool, No, it's Bridgetown.
Bridgetown cidery. Yeah, that was.
Just on the outskirts of town there.
Yeah, yeah, yeah, years ago. It's awesome spot down there.
Yeah, Yeah. So that was good.
But what took once there? Yeah, it's.
Good. Love it.
Very good guys. Thanks for answering all those
questions from the the money miners on the fly that.
Was you? You hosted so well.
JC No. I don't.
It's such a good body Q&A. Moderator.
They take the. Spot at conferences.
Righty there we go, well facilitated as JC.
You could just dead set consult yourself around Perth and the
Greater Australia being AQ and a facilitator.
Oh, that was so well. Done so well done.
Learn tapes too, so. What a job we have.
I know if today is anything to go by.
We get paid for this. It's amazing.
But. Go to the mining industry.
Oh mate, pay yourself a favour as well and get a freaking
underground operators ticket and you can pay.
It's effectively paying yourself 100 bucks because you get $100
off using the code MOM 100. Lincoln is in the show notes the
greatest underground conference in the world.
April 7th the 9th in April in Adelaide we've.
Got to thank the. Greatest open pit mining
contractor ever Mineral mining services.
Greatest camp builder ever Grounded.
The greatest The greatest source of keeping the rock up
underground. Sam.
Big ground support. Yep.
Definitely the greatest insurance brokers ever.
See our insurance K drill. Like you could say the greatest
driller ever, but you you would say Ron O'Sullivan is the
greatest bloke ever. As well, Yeah.
Salt Bush contracting the greatest bulk college specialist
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Salt Bush contracting sweet jeez possibly 78 million drill
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underground diamond driller ever outside Quattro project
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Just the greatest engineering firm ever cross boundary energy.
Well, Tim Taylor's the greatest bloke ever that has provided
independent power solutions and on AGC you're the greatest, just
the greatest sidekick on a bloody.
Podcast. Outside this week.
Good. Work.
You've been the greatest partner I've had in the podcast this
week. This week, your only partner.
Have a good weekend. Money miners tutoring money
miners. Information contained in this
episode of Money of Mine is of general nature only and does not
take into account the objectives, financial situation
or needs of any particular person.
Before making any investment decision, you should consult
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