Great one was sitting there with have you on.
They were the obvious buyer of the rest of have you on from
from Newmont. And if anyone bought that, why
the hell wouldn't you want Telfa?
You know, they, they haven't managed to push that decline in
as fast as people thought. How many tons do you get out of
an anagram? It's not going to fill Telfa.
So you know, something extra is required in that region.
You know, that's not just my view.
There's obviously enough people in the market who keep buying
Antifa. Right on Buddy Waters we had a
bloody impromptu surprise visit from a great friend of the show,
Henley Widdip. Line selection, Kurt, good short
notice recruit and Travis. What a lucky coincidence that he
happened to be available in in town the exact same day I
messaged him. We had such a wicked
conversation about every school gold junior you can think of.
Maddie. We asked I.
Was surprised how many gold juniors you across.
Have you got a new? Found passion.
I cut my teeth in that sector. Maddie, I once you, once you're
across, once you do the gold comps in corporate finance, you
never forget the companies. They're all had Reg paid
histories, but yeah pretty much went through frigging everything
other than a mid cap in guards. We can talk about them.
Yeah, and if they're potentially producing or bloody, Yeah, he's
no, It was a frigging good yard. It's awesome.
Keen to hear it guys, Maybe they'll last sort of get their
big day in the sun as we're starting to see.
Jade, have you heard if Vice aren't have thrown that offer to
Gerard James yet? WA Waterboards.
Cannot confirm or deny Maddie but I've I've got a sort of
price that I think gets the deal over the line in my mind.
What are you thinking? Mate, if you've got a contact
there, Matey reckons 30 mil would do it.
But based on the fact that the best bloody mud Rotary drillers
in the world are at WA water balls, they'll probably make
that in a year and a half. So that multiple doesn't even
make sense for me. So vice, Ange.
Checks. Checks the box for.
Open up the checkbook. I reckon you might be mate.
They they find water with gold in it in this bloody
environment. So we're talking bloody bore
field installations. You want to find water?
You want to fuck water off? You want to bloody do anything
water related mate. You can even drill paste tiles
in the underground with the WA water balls team and the bloody
vertical angle. Anything anything.
They are the absolute gurus and. God will come out of them.
Pretty pretty much you can flush it's gold straight up the bloody
paste tile into your into the back of your truck if you want
go Gerard James, go vice on by and Gerard James open your.
Check. Let's let's do WA water balls to
be clear. Yeah, yeah, but no.
Well, bloody maybe. One and the same.
Yeah, 2 transactions, righto. Let's get into it with headers.
Righto buddy. Miners Headley by Kay while the
sun shines, mate, this is your time to do as many podcast
interviews as you can. Oh, tell you what Headley, we're
at Law and Selection Group. How are you mate?
I'm well, thanks, Maddie. And I must say it's a great
privilege to be sitting at this round table, which has become
quite famous. I've been, I've been blessed to
be on your podcast before, but never in this office.
So this feels like. Table mate.
Feels like a first time for me. It's, it's, it's pretty
impromptu and serendipitous. I sent you a text message this
morning and I said, mate, when you're in Perth next, I was
thinking like this is this is Gold junior time and you are Mr.
Gold Junior and, and, and you replied and said, I just landed,
I'm I'm here, do you want to get a beer?
And I said, well, why don't we have a beer miked up and you've
popped in. Well, you said, you said when
you're coming to Perth, I thought, shit sounds like an
invitation, I'll book a flight. No such thing as a free lunch,
mate. I didn't want to have a beer.
We're getting an episode. Out I even managed to organise a
site visit for tomorrow, so, you know, legitimise the whole
thing. Awesome, I heard you're visiting
a deposit with my my name. That's right, the mighty Ricky.
Ricky. The Murchison region.
I don't want to. Well, it sounds like.
I mean, you know, they say don't kiss and tell.
I haven't even kissed this one yet.
So what's it like? So what's it like that you've
since we first interviewed you last year, you're one of the, I
guess, more publicized early movers seeing the value in
junior gold stocks And they're they've all had a bit of a run
and a lot of yours, most of yours have had a pretty good
run, some yet to probably run as much as you like.
What's the vibe like? How do you feel about picking it
and it's finally sort of happening?
I think I've been working in mining finance now for 18 years
and then there was 10 years of mining before that.
And I think one of the things which you recognise after that
long in the industry is how cyclical it is.
And you know, there's good times, but you got to recognise
when there is a good time because you need to, like you
said, make hay when the sun shines.
They don't last forever. At the moment we've seen the
gold price rocket away and we started buying into the junior
golds just thinking that they were the most depressed, as in
they've been sold off the hardest, particularly when
critical minerals were all the rage was like who gives the
stuff about gold? So we're investing in it at that
time, feeling contrarian, but also feeling that the risk
profile across the entire junior space was very much skewed.
And if you're paying a lot for critical minerals at that time,
you're also taking marketing, metallurgical, etcetera, risk.
And in gold, that is a risk which is generally much, much
lower, if at all, you know, you can dig gold up, separate it and
sell it a lot easier than anything else.
So if you're getting it cheap, it's a great time to be in it
and then you wait and, and hopefully it goes up.
So that thesis played out and it feels great.
But you know, now we start to think where does this lead?
And I guess nobody knows the answer to that, but I do feel
like quit quite early. Well, and it seems like a very
basic overview of it. It feels like they were so many
companies were stuck in the whole of very small market caps
beating up like anything inability to raise cap that much
capital that can actually get a much.
Now there's actually a bit of equity and momentum in the mall.
They're right. Like just the, the tailwinds you
get from being able to raise, you know, 2 figure amounts of
money and now just set up. It just seems it's either one
end or the other and it just really feels like that's pushing
them all at the moment. Yeah, well, I mean last year if,
if, if you took the first half of last year and then even
trickling through into September, October, a big raise
was 10 million bucks if you're a gold company and even if you're
really advanced. Replacement capacity.
Yeah, yeah. Well now I mean you've got
companies raising 30 million bucks every second day and and
not much has changed other than the gold price.
But yet, I think the, the, if you look at it from a a value
perspective, you're still a long, long way behind what you
would be buying in terms of dollars per oz or whatever
metric trick you want to use that kind of values what a
company might be able to produce versus the producers.
The producers have benefited from the gold price, maybe not
as much as you would have expected in a 1980s style cycle
or a 90s or even naughties style cycle where gold starts going
quite hard and and a lot of speculation starts to get built
into the equities. I think we live in a world now
where gold is being bought by such a large market, which
doesn't necessarily include a lot of Western speculators,
whereas it's the Western speculators in the Western
markets which need to purchase the equities.
So whatever is driving the gold price isn't also applied to the
equity price. And in the past, that leverage
would have been much more significant than what we see
now. And I think that has probably
had something to do with the lack of feed through into the
development space and the junior space, although there's a lot of
relevant recent history which probably has put people off of
taking those risks as well are. You are you still saying a
pretty substantial like disconnect between the the
equity valuations of the, you know, the undeveloped juniors
versus the producers and and kind of how are we quantifying
that? Yeah.
How do you how do you measure a whole sector?
Not so much in valuation that that that's a harder piece,
Although I would say subjectively, non empirically,
yes, I I see that that as a big, big difference.
If I just took aggregate prices and the way that they trade and
you say, well, you know, if someone's got some good answers
to come out of the ground, then that group of companies with
good answers should be trading in a similar pattern to the
people who are producing good answers.
And there must be good answers because you're producing them
and you're making money. Some are better than others, but
you know, there's good that make money and there's bad that
don't. I suppose if you just draw that
very black and white distinction.
For the last three years, the gold producers have taken
advantage of a robust semi solid, now almost vertical gold
price and they've been able to expand their revenues.
They've been very fortunate to be doing that against a backdrop
of prices not inflating all that heavily.
Price inflation in the mining market has been driven by iron
ore in the naughties and coal at the same time.
We've had the critical minerals boom and all these new lithium
mines that had to compete with the labor pool that wasn't
expanding, but the amount of mines wasn't contracting.
So that that pushed costs amazingly and that's not a
factor at the moment. A lot of those jobs are falling
away. So the gold industry I think is
able to make more money at the same time as costs not chasing
it up. And we haven't seen the kind of,
you know, let's all push our pit optimizations out and start
mining marginal material to make more answers that make less
money. I'm sure that'll come, but we
haven't seen it yet. So the producers have runaway,
they've had that price trend for three years.
In that same three years, the developers have been on a
downward trajectory, I would say until very early this year or
late last year when the the junior slash Explorer class, if
you just take it as a whole and I'm sure you could pick out the
ones which are the better performance versus the worst
performance. But if you just take a median
across a very large group of maybe a hundred, 120 of them
that sit below a 200, two, 150 mil market cap, that ticked up
as of last year and that broke a very significant three-year
trend. So it wasn't the gold price
which pulled it out of that. I think it was money coming down
from the producers and saying where can we take a bit more
risk to expose ourselves to a bit more performance.
So I feel like that corresponds with the raisings that got
bigger. You know, the two seem to go
hand in hand. So if I had to say, you know, it
is now the time for gold juniors.
Yeah, I think we're into we're into that era now.
I. Think Connor bit bit devil's
advocate against what you said about the the labour pool and
everything dropping off. Like I agree with the the
lithium and the nickel providing putting a lot more people into
the market. But I guess what's happened in
in parallel with, you know, with gold, like you got more
obviously a lot more of a underground mining pool that you
have to pick from and you know, word on the street the amount of
people that Northern Star are consuming for this Kalgoorlie
expansion is really chucking a lot of pressure on the
employment pool at the moment. There was a lot available, but
it's like that expansion is really taking a lot of people
out of the market. So and, and when we get to the
point where like these prices are up here, they're not and and
lithium's dead, like how how we're not producing as cheap.
Yeah, like those big operations are actually sucking a lot of
people. Well, that's true.
And I suppose that there will be other gold projects which are
also expanding or you know, bringing more people on.
I'd just contrast that if you, if you were to take now and the
expansion of the Super pit, and perhaps that's another hundred,
150 people, I don't know, rough numbers, you might know better
than me. But I can think back to when I
was finishing up being a geologist and moving into mining
investment. That was when iron ore was going
from 40 bucks to 100 bucks. And that was a case of you used
to get paid 60 grand a year as a truck driver and suddenly it was
120 and then it was 150. And it was just they needed bums
on seats and it was expansions that were bringing in thousands
of people, not not hundreds. So I think that you know that
and that was in a market which needed to expand in order to do
that. My sense would be that if
Northern Star or anyone else in the gold space says we need a
couple of underground operators, we need a hundred of them.
You put an ad in the paper and you're more than likely to have,
you know, a large proportion of that pool that apply.
Have some experience that they can bring to it in which case
they can be picky. So it's probably not having to
expand the labour pool too much. Whereas you know the the case of
the truck drivers in the Pilbara and the the naughties to the
late naughties, I would say there was very few of them went
with any experience. Got to ask had the if, if, if
the gold juniors have kind of picked up already and some of
them are fairway off their lows. You know, some some of them are
are yet to really tick up yet. But certainly it feels like that
tide's turned. Why, why are you not fully
deployed? I mean at 303131 Jan, you had
what was it $61.3 million in, in investments, but cash and term,
term deposits of $47 million. Don't you wish you had that
deployed before or they just weren't like ways to actually
deploy in that size in the junior market?
Part of me does, but we're not traders.
So the part of me that wishes we were deployed would also be the
part of me that was now sitting there going well, if I want to
top up in anything like a satin minerals, which we did
yesterday, sorry, yesterday was Sunday.
So we announced that today if we wanted to top up in anything,
we'd be needing to sell something and you'd be, you'd be
crystallising a return. But when you go to sell anything
to follow your money, you're, you're stressed and you might
not be making the best decisions.
So I know that's probably a weak defence for not being fully
deployed. I must say it's difficult to
time when you think a market is really going to run.
But what we've been focused on, I mean, we, we exited the market
to a large extent in 20/21/22. We went to 90% cash.
We felt like we were at the top of the market.
There was opportunities to sell some big investments and I don't
know, opportunity meets preparation I guess.
But at the same time, you're probably only half clever.
You're also very lucky and but you know, found ourselves in a
situation which I don't think too many other asset managers
were to be fully cashed at the top of market.
And then as that market and our market is the juniors fell away,
the purchasing power of that increases.
So the temptation to be coming into the market was always
there, but it was also met by, are you going to be investing
too, too far before that market turns around.
And because we feel that the the investment return which we're
hoping to get off of this pool of assets is going to be over
let's say three to five years in.
In practice, it could be longer, it could be a bit shorter.
But I suspect 3 to 5 is probably fairly near to what the ultimate
boom phase might be. And to crystallise value, some
of them are going to have to make discoveries, extend their
deposits, develop mines. We can't be looking to sell once
we've had the return that we have.
So I think in that same quarterly it would have said
we'd invested about 31,000,000 bucks.
And that pool of money which has been invested just in Australia
was up about 52% at that marker. It's up by more now, but you
know the, the, the market is fortunately moving.
We can follow that money and every single one of those
companies. They're gonna need more.
Is is at risk of needing more capital?
There's one. There's one I don't think they
will, but the rest of them do. So let's say across the
portfolio, we need to be prepared to follow our money.
And when you're following your money, you're probably waiting
for another low price move marker because no one, you know,
very few companies in that space get it right where they go
right, we've gone from 10 to 50. Let's raise all the money we
need now. You know, they, they kind of get
to a point where they come issue and if they'd hit 50, they'd
come right back to 35 before they raise money again.
So you're, you're probably always getting a bargain when
you're putting fresh money in. So we're very conscious of
following our money to that extent because our position as a
visible shareholder is sometimes something which can influence
the success of a raising as well, particularly in a market
which is not yet roaring it. I think it's going well, but
we're also cognizant that if we're, you know, a 10%
shareholder in something someone's raising money and we
go, we're not interested. You know, that book might not be
as full, it might put pressure on the price.
And it's, it's often something that we're either there and
we're investing or we're finding a way not to be there.
And there's not too much in between that the market will be
happy with if there's a raising on it's.
Probably a weird question, but with the market I, I, I guess
yeah, rewriting to some extent. Is your investable opportunity
set bigger or smaller than it was 12 months ago?
Well, the investable opportunity set has probably got most of the
critical minerals in it now, whereas 2 years ago I would
argue they weren't. And it's, you know, there's no
objective marker. It's what I think because if I
decide I'm not interested, then I won't do the work, right.
So, so I think, you know, there's some of those which I
could be quite skeptical about, but if someone came in with a,
what is obviously a large and attractive, you know, sector
leading lithium deposit or rare earths, I'm, I'm happy to have a
look at that. I'm happy to think contrarian.
It might not be something that we put a large amount of our
money into, but it's something that we're very happy to think
about and see how that's going to play.
Because if the lithium price starts to move, the most
leveraged thing that you can be in is the biggest, best grade
undeveloped deposit that's in that space.
And that's that's where we often try to put our money.
So I mean, we'd put money into rare earth and that was the
mentality we had. Look for that.
If it doesn't exist, don't do it.
But so that's, I would say that that opportunity set has
broadened. Now it's easy to say when the
gold price is almost doubled in that period of time that the
critical minerals couldn't possibly do that.
We've seen them all come off quite horrendously in many cases
and probably been the worst performers across much of the
commodity market. So how can you be so contrarian
about that when, you know, gold was maybe a bit obvious?
We're biased by the performance that we've seen.
It's difficult to make that comparison, so I'm open minded
to looking at them. But the other thing to think
about with gold is that, like I said before, they tend to be
lower risk. So if you've got 10 bucks to
spend in the mining market and you want to do 10 stories,
there's a pretty good chance to have all the things you assess.
Four or five of them are going to be gold that race to the top
just because of pure weight of numbers.
And if you're risk influenced, if you want to hold something to
three, three to five years and see it grow, see the project be
successful and the value which you've, you know, come up with
in an empirical way is realised by the market because it's time.
You need to have that time for that to play out, which means
you can't, you can't take an institutional approach to
something that starts off being capitalised at 10 or 15 because
you might be right, but then you're trapped in a lobster
trap. And, you know, if it's just new
liquid stock, you might never get price discovery.
So we've, we've, there's a lot we've got to manage in that
sense. And we, you know, we often get
shareholders will often come in and say, oh, did you see this
trade? You know, I made a lot of money
off of it. And it's buying an esoteric
option in a company which was, you know, a death's door and
something happened and squeezed and the options went great.
It's like, well, you know, there's about 50 or $0.60 of
liquidity in that I wanted to put half 1,000,000 bucks in
would have swamped it. It's it's impossible, couldn't
get in, couldn't get out. So there's a lot that happens in
the junior space where, you know, for an institution to
invest, you have to be very careful about what you pick just
because that money can influence prices in the wrong way as well.
Right, you want to extract 100% of these bloody resources that
headers is talking about? You need a pace plant.
You need, you need an EPC contract in a designer pace
plant. Quite your bloody pace plant,
you know. Oh, they quattro, they, as you
said, design engineer construct and that pace has to go
somewhere, goes into the pace fill Retik pipes underground,
they put those in that goes through a quattro pace diverter
valve to optimise the flow of this pace so you don't have to
bloody turn the plan off. I think in the future that the
generic word Pace Phil will be termed Quattro Phil because they
have just freaking taken over the world of Pace Phil and it's
going to be like Band-Aid or Red Bull.
There is no underground engineering that these guys have
not, you know, wrapped their their fingers and hands around.
This is this is their bread and butter.
They are, you know, just Jeremy. What, what, what?
An entrepreneur starting a company, having a crack,
building something special with Quattro Get around.
Them mate, they've been it's decades long now, so absolute
APC gurus keep an eye on them for at underground operators
conference and get them to tell you how good they are instead of
me. Don't Quattro as well.
Let's get back into it. What do you think about if
you're going to split up the gold juniors at the moment, the
ones that have performed well, performed not as well as those
who are well in terms of the information they have out.
I'll pluck a few names, ones that have really outperformed of
light, like Medallion, like Astral Maker.
They all have like a there's a bit of there's a study, there's
some numbers that you can wrap your head around of like
hopefully what will happen. One that probably hasn't
performed as well and starting to go is probably great.
Boulder doesn't have a study yet that looks like they're trying
to get to 1,000,000 oz before they actually wrap a plan out.
Another announce the other week that you know, bring on some
people to progress studies and everything is that is that
influencing the performance of these juniors.
If you like, they've got some got some numbers for the
investors to sign up that makes sense or don't want a bar of.
It well, short answer is yes, I think that's very important.
But I think you've also got to take step back and I've seen
some very clever people in the mining space.
I'm not going to give you their names, but you'd probably guess
it pretty quickly. They know their story back to
front. If you put them in front of a
purely retail audience and you say you've got 15 minutes spewed
out, they'll hit you with grades, they'll hit you with
tons, they'll hit with timeframes and costs and all
this other stuff. And the retail people just go,
what the hell are you talking about?
I don't understand. Like it, there's no relativity
around a parcel of 10,000 oz. There's no relativity around how
many millions of dollars it costs you to produce that.
So studies are useful because it gives you the basis to announce
something and then to put that into a layperson's terms.
And I think that's probably where the magic is, is having a
story where you can genuinely say we have done the study.
So if you've got the time and the intelligence, go and read it
and digest it. Come back with questions if you
like. But but I can say with
confidence that this is what we're going to do.
And I think those companies which have proceeded, sorry,
have have really flourished in this market have been ones who
can say things like we have a plan a la a study.
We are advancing and they've made tangible progress towards
being in cash flow and in many cases they've been able to
procure some kind of a surprise or at least a step down in terms
of how much it was going to cost.
So they're not standing before the market and saying it's going
to cost us half a billion dollars to build a project and
that is all we can do. You know, we're, we're a small
company and one day we're going to need that capital in the case
of Medallion, which is I like talking about that because we
put 1,000,000 bucks in at $0.10 and last I looked it was 20
something 20. 5 1/2 tonight. 25 There you go, they.
IPO D at 25 yeah, come back they I think it went down as low as
like 3. Yeah, but we didn't get any in
the IPO and we didn't get any at 3, but we did get some at $0.10
not long ago. So what they did was you know
they had a study and it showed we're going to go into
production. We've got a great inventory and
it I think it's a very well drilled deposit.
You know, it's well understood from a geological perspective.
It's not a new resource and that there's an advantage in that,
but one of the disadvantages, it's been sitting in the ground
for a long time and people say, well, what what straw needs to
break this camel's back to pull it out of the ground.
And I think in this case, the straw that broke the camel's
back was stepping away from, we have to spend, I can't remember
what the CapEx was going to be, you know, was it over 150 to
build a brand new plant? And by the time you're doing
that for one deposit, which has copper with gold oxide,
transitional and fresh, you need to be able to try to come up
with a CapEx solution which meets as many of those
requirements. And as you know, I mean, if it's
plain gold, you can use one plant reasonably simple.
By the time it's copper, you need to think flotation.
And by the time you add weathering into that it, it can
be a nightmare. The nickel collapse happened,
IGO found many of its operations unsustainable.
So they've been able to get access.
Well, they've got an option on the Cosmic Boy plant, which is
150 odd KS by Rd. which is, you know, it's not next door, but it
it still makes sense when you're taking. 2 grand.
Yeah. Oh, yeah.
I think it's a bit more than that that comes out of the
ground. But it, it enables them to go in
with a smaller development footprint, smaller CapEx and get
into business. And I think there is an element
of the market which in the last, I would say call it two to four
years has been much more open to, you don't have to develop
something which is going to be 100,000 oz per annum because
there's so many deposits which were shoehorned into that.
And they should have been longer life, smaller capacity or, or
whatever. But you know, some of the
mistakes I've seen in the market that that's probably part of the
reasoning in the medallion case, You know, they've found a way,
it looks as if they found a way into production, which cuts the
CapEx back that they need to raise.
And you know, by the time they get to it, well, how much do
they need to raise? They need to exercise an option.
There's a, there's a net off for the the environmental
rehabilitation cost. And what they've told the market
is that, you know, it's AI think it's a $50 million option.
So they're not going to have to pay 50.
It'll be reduced by a, a liability amount.
And then they need to pay the CapEx to, to do the bits and
pieces to make that plant work for gold.
So, you know, instead of the original.
And I can't remember what it was, but maybe it was 150
million bucks. It's now, you know, sub 100.
So it's a it's a big reduction, but the other advantage of doing
it that way, well, not everybody can is instead of saying we need
to build all of this from scratch, which means you've got
to raise all that money in one go.
It's not like you can do a raising one year and buy your
crusher in your camp and then come back the next year.
You know, you need once you're committed, you've got to do it
all. In this case, it's like they
they raise the money to to pay for the option, raise the money
to do do a bit of the cap ex raise the money to put yourself
into production of this couple of bite sized chunks there,
which make it eminently more manageable.
And because you're scaling up your market cap each time, you
know, you've got a much bigger rump to to raise money off of.
So I think that's probably part of the success and that that
applies to some extent to some of the others.
Astral is probably the odd one out there and that they don't
seem to have an easier way into production other than than
building their project. But they've very successfully
demonstrated to the market. And you know, it's up to Mark de
Clair. Some call him Chocolates de
Clair. I quite enjoy introducing Mark
to conferences and he's not here to stare at me or send me rude
text messages now. But I'm sure I'll hear about
this when it goes to it. Have you ever get a picture of,
if you Google Alex Perry, the fat fashion icon with
sunglasses, you got to stipulate sunglasses.
Just tell me what it looks like, because when Mark De Clair calls
my phone, that's the picture that comes up.
So Mark Mark has very successfully compared their
project to something like a like what what Capricorn did with
Kalawinda. And basically it's it's not high
grade, but it's large tons, it's stable costs, it's stable
throughput. It's a very bite size meal.
You know, you're buying everything is vanilla in terms
of putting it on the ground with CapEx, you're not taking too
many technology risks or anything like that.
And I think that that story has been well told and persevered
with and you know, as one institution comes bit of
success, another institution come, you know, so that one been
built up a bit more piece at a time there.
And I wouldn't say that there's been a breakthrough other than
Mark convincingly telling that story.
Not everybody can do that because you know there's a,
there's a circumstance, audience, timing, all the rest
of it that comes into that. Today, and like all those two
companies specifically and everyone else, they all grinded
it out in the absolute dog shit time of exploration being hated.
Yeah. And it just make more sense if
that went to an expanded Higginsville mill.
That project have just wrapped up Maximus I think.
Yeah. That went yeah, yeah.
Well, there's been Pulsory acquisition.
I mean, there's been trucks go further than that.
Not even that far to. Take material to the Saint Ives
mill, which. Yeah, well, that's a logical 1
for them, but. If you ever flew over St.
Ives in a helicopter, I'm not saying I'd do that very often,
but I did it once and there was nothing on the romped.
I used to work there so I know what the romped should look
like. So they've.
They've been put in crushed heap ledge through that, you know,
semi recently I believe. Yeah, yeah.
I believe so, I think. The thing on Medallion now, the
one thing you didn't mention is the fact that they can market
the copper now. Yep, because copper was the
taboo for that stock. They're like, how are you going
to deal with the copper? And that was the whole thing.
And now they can put drill results out that say 5% copper
because they've got the processing solution.
So they've got extra, you know, firepower in the perception of
that stock. Well, and 10 years or maybe not
ten years ago, but in the last market where copper was, you
know, hitting choppy levels, TCR, CS and what you'd have to
pay away in a copper concentrate was a much, much higher value in
proportion of the value of the of the ore.
So you know, if you were selling 5% copper or 5% ore going into a
concentrate and going off site, you know, you would still see a
material cost that you pay in that.
There's been so many smelters built, you know, Glencore is
tracking some of the shittest concentrates in the world up the
train line 2 man iser to keep that smelter full.
So there's arsenic going to places where I think probably
need not go, not saying it goes up that train line, you know
couldn't substantiate that. But there is a demand for copper
concentrates now and if they are good quality they are in high
demand for blending. So I would say that that's
something which is also inflated that copper story for them in
that that can enable finance. So what I said the other day was
that have a number of off take interests and some of them are
offering debt terms alongside the the off take contracts.
And if you can do that, then it means you don't need to deal
with the bank. And the more gold in it, the
more they'll take. That's right, yeah.
Another portfolio company that has really bounced and it was a
catalyst Antipa. It's not like 300 ish ish
percent since Greatland acquired the rest of of Haveron and
Telfa. Talk us through you know how you
how you see Antipa in their recent performance well.
We invested in Antipa. I can't remember the exact date,
I'd say it was, it was definitely before Diggers and
dealers because I remember talking to them about it
afterwards. So let's say that was mid 2024
and at that time we were looking at something where I think
they're raising about 6,000,000 bucks.
They already had a reasonable size inventory and where they
were was in the Patterson. And you know, I, I cast my eye
across WA, rest of Australia, the most heavily developed part
of Australia for common infrastructure would which would
be useful to so many people irrespective of where the
tenement boundaries are is probably the yield gun.
And you know, the central area of the Gulf fields around
Kalgoorlie, the Murchison, etcetera.
The Paterson is not heavily developed.
In fact it's quite remote, but it's very close.
Well, Telfer is in the heart of it.
And, and Telfer is a pin up operation.
It's very large, has been a very large gold project.
So we were looking at Antipa thinking these guys have a big
inventory. And if you take a 5 year view,
particularly if the market turns around and turns into a boom,
this is something which should become interesting either the
people that want to build projects or for these guys to be
able to fund it. And at the time we were looking
at it thinking, you know, it could be a stressful financing
as their market cap at the time we entered was about 60.
But you know, give the passenger time and add a boom to it,
market caps can increase. So we sort of took that risk on
our thesis was definitely A2 fold 1 though.
And one thing that we've tried to be a lot more cognizant of
in, in this generation of investing in the last, let's say
five years is you're not just investing in the project and,
and that has to be successful because that's always something
you look for. But if you can have a second
exit point which is just you know, is there a factor which is
close to that could procure a development pathway or an exit
for you from the stock even that that takes all the project risk,
development risk off the table and M&A is one of those.
So we weren't buying Antipa because we thought there's M&A
in this. It was more there's a very
obvious process facility there. It's 20 odd, 22 odd million tons
per annum. It's like 12 mils.
Yeah. Well, it's in one.
I mean you think of a big, a big mill in the yield gun is 3 to 5
million tonnes, right? And so here's one which is 4 to
five times larger than that which you know, great
efficiencies in that all the rest.
But Telfer has had a very long life and found itself with a
very little actual law. In fact, when Newmont sold it,
it had 0 reserves. So that that picture is changing
now with Greatland having got hold of it and investing in all
the rest of it. But we took the view that
whatever happens with Telfer, there's a good chance that the
anti parole there is of great use.
And we clearly, you know, it's hard to escape the obvious
story. We we didn't know it at the
time, but Greatland was sitting there with have you're on.
They were the obvious buyer of the rest of have you're on from
from Newmont. And if anyone bought that, why
the hell wouldn't you want telephone?
So we thought, well, if you do that, how hard is have you're
on? We were speculating a bit, but
it looked like something which the development maybe hadn't
stalled, but it come to the most challenging part of the
development of it. You know, they, they haven't
managed to push that decline in as fast as people thought.
How many tons do you get out of an anagram?
It's not going to fill Telfa. So, you know, something extra is
required in that region other than have your own.
They've done a great job of, of expanding the resources at Telfa
since they've owned it. And I think the thesis still
fits. But, you know, that's not just
my view. There's obviously enough people
in the market who keep buying Antipa who either they share the
thesis that it's a developable project or I would say given,
you know, the apparent ferociousness of buying in the
stock, it's probably more like they also share the M&A view.
So you know, I think that's something which a lot of people
are talking about. But it the thing with M&A is it
it's so difficult to deliver into because it's all
speculation until it happened. And you know, we I know you guys
talk about M&AA lot. The thing I often smile about is
that we all sit outside of an M and a deal and talk about what
the obvious factors must be. When you're on the inside of it,
those obvious factors are sometimes really difficult or,
you know, just no on impossible and you try to deal with them.
But you know, I think so in, in something like this, you look at
it and go, well, there's a mill there, there's a deposit there.
There's a gap. Just go on there.
Go there. Go and do it.
Yeah. But I mean, you know, greatly
needs to list in Australia first.
Yeah, I think that's that's something which they need to do
and. And Tipper needs approvals to
fill that gap in the mine plan, too.
Right. That's right.
Yeah, yeah, yeah. But meanwhile, and Taper got one
of the exploration JV's back from Newmont that already had a
ripping target on it and and off they go.
They're going to be trying to drill that fairly shortly.
They raised money and it was a, it was confusing to me because
they, they were pretty cashed up because they'd sold the
remainder of the JV with Rio back to Rio and that had to
cash. And then they raised money and I
was like, well, didn't see that coming.
Are you as a shareholder comfortable with that raise
because it just gives them a bit more?
Yeah. We participated in that raise
and it was priced at, or they've reconstructed the price price,
but that was priced at $0.20, which seems a long way in the
rearview mirror from 40 odd or the mid 40s where we are at the
moment. The thesis at the time was
they'd been, you know, they've been doing Rd. shows, they're
always doing Rd. shows. And one of them I think was the
first foray overseas. It might not have been the first
foray overseas, but it was they presented to a lot of North
American institutions. And this was in the lead up to
Christmas. So there was this question
around where's gold going? It was starting to feel quite
pleasant, like a lukewarm bath. But you know, we all knew we
were going to the hiatus of Christmas and anything can
happen over that period of time. So that had this interest.
And I think I think what they felt was that in the book, they
were going to get some interest from North American institutions
which were ready to go, ready to pay a good price.
And they would be able to come out to the market and say, look,
we're funded right through we we can actually do everything we
want to do. And if you think about that in
the context of developing a project, it's very defensible to
raise the money to say we don't need to raise any.
But that's that's the second most powerful thing you can say
other than we've just dropped the CapEx is we don't need to
raise any more money for a long time.
The only way to get those shares is to go on market and buy it.
So I think it was a good thing for them to do in that case that
regard. If you think that there is any
MNA coming and I know no better than anybody else does here, but
if that was to occur, you want to give yourself the longest
possible time to, we've got to work through that.
And so having an expanded Kitty there also puts them in a very
strong position to be able to say, look, we're, we're
drilling, we're doing our PFS. You know, if someone's
interested here, then let's talk.
But the, the worst time to enter into an M and a discussion and
I've, I've been a part of this is when you know, you need to
raise money in the next 6 months because once that M&A discussion
starts, it's incredibly difficult to raise money.
And once that Ave. is taken away, it takes away a real
platform of strength. You can be you can be starved
very rapidly. While we're talking about M and
A2 of your portfolio companies merged very recently in Bright
Star and and Alto, was this, was this a, you know, a deal you
were pretty, pretty keen to see happen as a, as a shareholder of
both and kind of encouraged. Definitely blessed it.
Yeah, we were. We were very happy to see that
as an outcome. And the the pure, the biggest
reason for that is that the operating assets which Bright
Star have, I mean Bright Star had nothing in it at that point
which was extremely large, high grade or anything like that.
It was a scatter of smallish things.
And by smallish I mean up to a few 100,000 oz but quite close.
M&A that company. Yeah.
Well, I mean, one, one thing which I would say Alex
recognised very, very well a couple of years ago when he
stepped in to be the MD was he said these might not be
glamorous gold deposits, but they are so close to other
people's process facilities don't need to build 1.
So to get into business, we need only a small level of CapEx.
And that's, I think that's been a very good thing for him it
because he's gone through a few transactions.
I would say that the market is saying, well, you show me that
you can make money now, but you know, he's making money poured
gold the other day. So I suspect that you give it a
couple of quarters of delivery there and the market will start
to listen and we'll start to say, well, let's talk about
growth. All of a sudden the, the growth
story which they now have is that the cash flow they make
from those small assets and this, this, this, this trend of
commercializing small assets has become possible in the gold
market because there's so many big mills around.
There's a lot of capacity to be processing parcels of all.
I mean, I, I know that's a glib remark.
Not every single one has capacity and it can vary in
time. But it wasn't possible 10 years
ago. 10 years ago, if you had a gold deposit, you had to build
your own mill. That was just the way it worked.
And it was almost a disgrace to go to the market and say, no,
we're just going to dig it up and sell it to make a little bit
of money. Now, if you do it, you can
achieve a pretty reasonable valuation off of the back of
doing that, and you can make good cash, particularly if
you're doing it today. Yeah, so.
Then you can risk share like you don't even have to stump up the
CapEx to do it. Like we're drinking stubbies of
of MMS, right? Like, yeah, and and they're one
of The Pioneers. Of that model funny you should
mention it. You guys are usually pretty
quiet about your sponsors, aren't you?
So no, we're he's. Given you the layup mate, have
we done them this way? But it's it.
Is interesting, right? Like, I mean, I mean, you know,
they're one of several who who've been willing to come on
the scene and, and, and really provide an Ave. for cash flow
for these gold juniors by taking like wearing a fair bit of risk
in the process, but sharing the upside, the equity upside.
And in a rising gold market, everyone's very happy with that
situation. Including shareholders and
therein is the is the the point as well.
So all of a sudden you can do these small gold deposits.
The thing is that for anyone who owns a small gold deposit, you
know, if they go to institutional investors and say,
well, we're a $15 million company, we've made $8 million
of cash in the last 12 months, aren't we wonderful?
You should buy us. The institution goes, well,
that's great, but what next? I mean, you've made that money,
you've got nothing left, what are you going to apply it to?
So that's the question with a lot of these companies.
And for us, Bright Star was something we wanted to get
involved with because we saw this commercialization over a,
you know, it was, it was a good million oz that we could see
were possible between the in the Menzies area.
And that's over a period of time that that would generate a
reasonable amount of cash. But at the start, and that was a
smaller investment for us to start with, there wasn't the big
growth asset. So when Alex's approach to us
was to say we'd like to do something with Alto, that's
where the growth project came in.
So, you know, to fund Alto all on its own, there's dilution to
shareholders. You got to take that into
account with whatever return profile you think you're you're
expecting from the asset. And if you put that into a
company which has the ability to fund it without having to raise
money, then all of a sudden that just gets squeezed into the
amount of shares which are on issue.
So that, that was the investment thesis that saw us build our
position when that deal took place.
And I, I still think it was a fantastic deal.
So interestingly, you know, Bright Star has traded fairly
flat since that deal took place. And I think when you buy
something and you issue a lot of shares, there's indigestion.
So a lot of those get turned over style, shareholders,
whatever. Consolidation of shares too, so.
I think so too, yeah. Yeah.
But but you know, they've, they've done that.
I think they've got a lot of that hard work in the market
behind them. They're now concentrating as far
as I can see on develop on delivering that, that first part
of the story. And you know, for them to be
able to work aggressively on a project like that sandstone
project, which Alto had that needed that was living on 2 to
$3,000,000 a year of exploration and spend, which is not enough
to be doing it justice. I think the market won't sit
there and be patient and say we'll reward you for that.
If you're spending between 5:00 and 10:00, that's where you can
start to meaningfully grow resources and do it in a period
of time where the market can see that and go this is getting a
lot bigger. And I mean, that's, you know,
there's, I think there's been about 5-4 to 5 million oz
produced over that sandstone greenstone belt, which Bright
Star don't own the whole lot of, but between them and the
neighbor, they have most of it. That's a hell of a lot of gold
for one greenstone belt. And I mean, the average depth of
drilling is like 70 or 80 meters.
So, you know, you extrapolate that to 200 and what's the
inventory going to look like? You know, you're still well
within open pitable depth and there's some pretty big
footprints in there. So that that is an exploration
and growth story is amazing. So I mean, if you're asking me
and this is not informed by what they've told me, I'd cast my eye
over the maps and, you know, use my own imagination.
They bought something at Sandstone between that and the
Gateway Gold tenure which was dealt in, which is about one,
one and a half million oz. So for that to turn into a two
and a three, I think can happen reasonably rapidly and in the
sense of, you know, 1-2 or three years.
And by the time you've got 3,000,000 oz sitting in that
part of the world, which is ringed by Mills, but no one in
the middle, it's like, well, it's a 3,000,000 oz asset, which
would be very attractive. It's in.
The middle. But it's not very, very good
news. It's pretty much dead, yeah.
Yeah, by by process facility, I mean something that you can put
ore into and then gold comes out the other end.
Well, do you think they're probably and do you think
they're probably getting penalised because they
essentially have to build a mill there?
Like what The the only two options I can think of that have
enough potential scale close enough by will be Kirka Locker
and Walluna. And they're both pretty
trackable. It's trackable, but it's still a
good chunk. So there.
Do you think they know that there's a big, it is a growth
story, yes, but they're going to have to build it.
Well, I think that they're in business elsewhere and their
intention is to apply the cash flow.
They're getting to reestablishing cash flow out of
their own process facility at Laverton, which would mean
they're an owner operator and you know, they they would have a
lot more control over their own destiny than from the Labourton
perspective. Might they just keep giving it
to RAL? Well, they.
Couldn't wouldn't be a lot of because that's a until Genesis
get their, you know, get their own operations up and go under
the to feed, you know, potentially 4 million tonne
through that Mount Morgan's mill.
Like they'll be crime for dirt. Well, I would have thought so
too, but I don't know how rallied feel about me saying
that He's desperate for that dirt.
I don't know if it's quite so simple, but you know, there's
bound to be a playoff between how much it costs to, you know,
have the dirt process there anywhere else or to bring your
own facility along. Now, if there wasn't a an
existing facility at Laverton, the bright star could
rejuvenate. Different decision, you know.
So clearly it gives them that optionality which can be very,
very helpful in discussions. But I suppose if in, I don't
know, let's say it's three years from now, they start saying what
should we do at Sandstone? If you've been operating for
that long, you've built your market capitalization to a
certain level. Yeah, you'll, you'll have to
build a new milling facility, but how will you do that?
Well, I would expect you'd have a much bigger market cap to be
able to raise money off. So it might not be as
dilutionary. You may have the cash flow to,
to fund your equity and your ability to raise debt is going
to be, you'll have far more flexibility.
So I, I don't know if that penalisation would be occurring
now. If I had to say what's what's
holding Bright Star back, it would be there's been selling of
former Alto shareholders and there's probably been a
perception that there's been a couple of deals to pull things
together. Is there any more of that?
And they just need to settle into a rhythm of delivery.
And it looks to me like that's what they're doing.
What about the Menzies stuff like do you think they need to
probably simplify the business a bit and divest because it's,
it's, there's a lot going on and it's probably, it's a bit hard
to actually wrap your head around of, you know, what's,
where's all this shit coming from?
I've introduced Alex at a couple of situations recently where I
think he had 15 minutes and in both situations I was standing
next to him at about the 17 minute mark.
Go mate, are you finished? So he has a big story to tell.
So I mean your point around simplification, you know, if
someone offered to take it off your hands, would you do it?
I, I don't know. I as a shareholder, I'd say,
well, if there was value coming in, you'd, you'd be foolish not
to think about it. But they, they had produced from
Menzies in the last 12 months, which I, I think that probably
shows you that. But for getting the resources
set up in a milling arrangement, they could do that again.
In which case, if you think you can make money from it, then the
impetus to be trying to do something with it might diminish
pretty quickly. So I, I guess, you know, if
people are talking about it, then they'd be weighing up 1
alternative against the other. But I think I mean from from
chatting to those guys and keeping in touch with them, they
seem pretty focused on delivering gold and there's
probably far more kudos in doing that than there would be on
executing more deals unless they were ridiculously priced.
So and. You've got another gold junior
which has probably, yeah, not had a real run like some of the
other portfolio ones. Saturn who yeah to that to
announced today raised 23 million bucks.
You guys tipped in another 4 and you you kind of maintain that 17
1/2 percentage shareholding of the company.
You speak to people and historically there's there's
been a, you know a knock on Saturn that it's 10 million ton
per annum heap leach. So everyone's scared of it
because it's massive size and also like how many 10 million
ton per annum heap bleach is going around that's a lot of
dirt to move yadda yadda, but at these gold prices probably makes
a fair bit of money. Are you not worried about any of
the, the, the, the logistical kind of nerves that, that a lot
of the market has here? No, not so much.
I mean, I think, I think the Western Australian mining
industry is very familiar with bulk operations.
What they're not familiar with is bulk operations in a gold
mine. And that's because in most gold
mines, you need to be extremely selective because your gold,
your gold zone, you know, could be somewhere between half a
meter wide and 10 meters wide, you know, 10 meters in a great
case. And if you leave half a metre of
that behind or put it in with a waste or take too much waste, it
can be a real problem for you in the Saturn case.
I mean, one of the reasons which we really like Saturn and this
is our biggest investment by funds deployed.
So it's something that we've demonstrated a fair bit of
commitment to. And I think by the time you've
invested that much money in it, your futures are somewhat
intertwined. I mean, if we decided tomorrow
that we're sick of Saturn, the ability to sell that for us is
it's a moot point. So you know, we are, we think
very highly of those guys. The reason to be there, the
feeling of longevity is all is all present.
But looking at the project, take your point about heat bleaching,
if that project was in North America, we wouldn't be having
this discussion. We'd be talking about how they
started producing 6 months ago and the resource is still
growing. I think it's a, it's a market
that that isn't as familiar with heat bleaching.
And I get that, you know, that's just a, that's a bridge that
needs to be crossed. But the important thing about
that deposit is inside of a pit design, the strip ratio is about
1 1/2 to 1. So you look at any other gold
mine in WA and how much waste do you have to move to get a tonne
of ore to the wrong? And it's probably the average is
going to be between 5:00 and 10:00.
In this case it's 1 1/2. So you're moving a lot less
waste. So the tonne, dollar per tonne
cost of moving ore of generating ore is just like a fraction.
Plus, you know any other open, most other gold open pits, you
might blast 10 metres of of of material then to mine it,
whether it's oral waste, you take it in 2 1/2 meter flitches,
maybe 5 if you're really being aggressive in order to be
selective. In this case, you know you blast
10 and you'll mine it with a face shovel rather than needing
you use a digger. So the, the efficiency of moving
that material and, and the need to be selective, just being so
much less. I think he's a big protection
because you don't, you just don't face that risk of
accidentally throwing the ore away because you're going to be
in awe for three days, not for half an hour as you are in most
open pits. And then heap leach processing.
I mean, the, the risk you have on heap leach processing is will
the recovery work and will the heaps stand up in a geotech
sense to the height that you need them to in order to
efficiently irrigate them? I think it's 44 odd percent of
gold is produced in the world comes out of heap leachers.
This is this is a technology which is not new.
It's very, very well understood. So I think, you know, we feel
like we've been buying something which is poorly understood in a,
in a market which really gets gold.
So, you know, I'm a bit puzzled as to exactly how that'll come
about. But I know that there are there
are foreign companies that drop in and say hello and they're
like, jeez, mate, you've got something special there.
So if there's that kind of eyes on it, these companies, you
know, aren't operating in the Australian market.
But if they needed an excuse to having the right size asset, you
know this is 120,000 oz per annum for 10 years or more.
Speaking like a 7 1/2% shareholder.
There. What do you say?
Ding, Ding, Ding. Yeah, yeah, Must disclose it,
but. We're gonna have to say a few of
them when we talk about ally stocks, which, yeah, Shorty
chop. Can't believe you haven't
mentioned 1 yet. Yeah, we'll get there.
We'll get there. She did give us her To Do List,
didn't she? So yeah, could you put a good
word in for? Yeah, exactly.
And I mean, I'm, I'm, I'm looking at your portfolio and,
and we're kind of there's, you know, there's a couple of names
I'm not very familiar with, to be honest as well, like Coon,
Coonberry Gold and you know, in addition to them Sunshine
Metals. Run me through what you what you
see there with those names. Well, Cunenbury first we
invested in Cunenbury when it had one project, it's namesake,
which is in northwestern NSW, Cunenbury project.
It's a, it's an area where there's been a very substantial
amount of alluvial gold mining. So there's been shedding of
Nuggets which don't look like they've travelled very far for a
long period of time. It's sort of had a gold rush in
the era of gold rushes, but very remote, very dry, very difficult
to get to, and close enough to Broken Hill that when people
started finding gold, there was also a big silver rush to the
Broken Hill area. So it kind of was found and then
forgotten. I think there's been a lot of
modern prospecting success and there's been a few Hard Rock
intersections and, you know, golden quartz samples picked up.
So there's all this smoke. We invested in that at a
valuation which was incredibly low.
I think it was like an EV of about 1.2 million bucks that the
day we first invested. So we put money in effectively
buying into a shell which had a project in it.
It had a chance. It had fantastic management.
I think very highly of the, of the MD there and also the board
and off they went to explore. That wasn't to be they, they
just didn't get the instant success.
And you know, exploration, sometimes it can cost you
1,000,000 bucks to find something.
It's just you don't know if it's going to be your first million
bucks or yeah, 100th, 1,000,000 bucks.
So in their case, they wisely said, you know, rather than
keeping being aggressive with this, they came across a deal to
deal into some effectively a back door listing of selection
of NSW exploration portfolio. And there were some real
crackers in this. I mean, this was some ex Newmont
guys. They put together some big
targets. They had some JVS with Newmont.
They had a high grade gold situation up close to Armadale
that got vended in and and from there I think I think that
stocks up about 4 1/2 times. So it's been a fantastic
performance off the back of that deal in and the new slow which
can come from that and you know fantastic valuation that had
occurred at as well. So it was not one of those silly
deals where it it happens in an enormous number and then it
trades backwards because everybody realises how greedy it
was. It was exactly the other way
around to that. So Coonabri to us when we invest
in early stage exploration, you can't value it.
You're you're trading on speculation.
You don't know what's going to happen.
You can have all the hopes in the world.
You can have magnificent science.
It can happen on a really nice weather day.
You can be as lucky as you want. But you know, in the end, if it
doesn't produce a discovery that really gets the market going,
then you don't get your price return.
So to do it, you have to feel like you're doing it at a
absolute rock bottom value and you have to be able to see a
transformational outcome to it. So in Canonbury's case, we
reasoned that it, it wouldn't take as much to produce a 10 or
20 times return from, I think we're about $600,000 in there
from that level of investment. And, and so it was something
where we could feel, well, there's, there's a really good
possible return. We can see many, many, many
opportunities for that to occur. And we're doing it at a cheap
level. So there's, there's not a lot
holding back that return if, if they get lucky with the result.
And Sunshine, Sunshine is probably the opposite of that.
Damian Keyes, the managing director, is a guy I've known
since uni. He was a year above me at uni.
Casey wouldn't thank me for saying he started a couple of
years ahead of me and I, I didn't catch up.
It's, you know, he took his time.
So Casey's going on to, I mean, he has been behind some fabulous
project pull togethers. So probably the best one is
Penny W, which was a chemical spectrum got taken over by
Remilius for about 300 million bucks.
And Casey had been involved in the pull apart of the geology
and then putting it back together.
And that's what Casey does. Fantastic with data sets,
fantastic with working with people in that environment.
And he was exploring in North QLD Red River had gone into
administration and there. We just spoke about them that I
on the back of Hillgrove, OH. I haven't, I haven't listened to
that one that yeah, just. Just got up.
Poor, old, poor old River went out of business at just the
wrong moment there. They had a, they had a troubled
operation at Falanga. And by troubled, I mean they'd
run into all kinds of financial problems and, and Falanga had
brought that operating entity to its knees.
So it was put into administration shortly before
the whole of Red River went to the administrators.
So Casey and Sunshine dealt with the administrators of Red River
to purchase this. And what was attractive was the
Thalanga project gets pulled out, you get everything else.
So you take no liabilities, you're not operating.
But there is a hell of a lot of money had been spent in the data
set. And I think, you know, the
replacement value of the data which they acquired in that move
would have been probably 40 or $50 million worth of years and
years and years of soil work, geophysics, drilling.
There was an existing resource at a project called Lyontam.
They've grown that by about 50%. I think it started at about 4
million tonnes. It's now 6,000,000 tonnes.
And it was a mixed metal. So it's AVMS, it's got zinc,
copper, gold. They drilled a few holes.
But the, the, the wonderful thing which Casey did yet again
was pulled the geology of pieces and said where are the high
grade shoots? You know, first we invested in
this as a base metals investment wanting to diversify our
commodity sort of exposure. And I think the second or third
result that he had was about 20 odd metres at 19 grams gold.
And it was like this is supposed to be our base metals exposure.
So they performed strongly off of that.
They repeated it with another hit and this was drilling into
high grade shoot in the deposit. So it didn't, you know, it
didn't reflect what the rest of the deposit look like.
But they've done a wonderful job of fleshing out exactly what
loads of which and, and I don't think that have been
particularly well done. So they now have a resource
which I think has been upgraded in terms of quality.
It's been expanded. But in that same period of time
they've also brought many, many targets forward.
So we bought into that for circa a $10 million EV.
It's more or less been the same each time we've invested and we
put a bit of money in another half $1,000,000 in recently.
And and the thesis was Lion Town is not far from being the scale
that it probably could be thought about to be developed.
No one is thinking outside of probably the heartland of WA
about how you can put your roar into someone else's mill.
And that's a very well developed area, the Charters Towers area.
So there's you know, four or five plants or former plant
sites. There are, there are some
tailings opportunities which would be quite valuable that I
think probably feed into the critical minerals piece in
Queensland. So that doesn't exist in WA, It
does in North Queensland and there's a clean up that goes
along with that. So sunshine has a very dynamic
outlook there. But they they have something
which is very valuable in the ground.
I think it is developable. They're going to add to that in
the next couple of years and you know if you're going to back
anyone to look in the right place, easy to be one of the
very few people that I'd choose to do that.
And he's operating in a data rich environment.
So that one continues to go under the radar of the market.
But everybody has their moment and I think that one, that one
will probably set up really reasonably soon.
Like it? It's our sunshine soon.
Yeah, yeah, it'll have its day in the sun.
We should we should pick your brain Headley about, you know, a
lot of the the gold projects that aren't even in your in your
portfolio, but I'm sure you've you've run your eyes over them
and and have a view. And there's there's no shortage
of, of companies that have a fair endowment that yeah, like
maybe go under the radar or, or or or or maybe you're going to
have their moment or have had their moment in the past.
But Ozgold's Katanning really comes to mind.
Been around a long time. You know, there's, there's
3,000,000 oz resource there. Will it, will it be a, you know,
will it get developed in the midst of this gold cycle?
Do you think? Are you, are you kind of on the
on the sidelines watching? Well, everything that has an
established inventory now has the best chance that it's going
to have, right? Because when the gold market
comes, your ability to raise money comes with it.
I think one of the things, and particularly in WA is there are
a lot of people who look at a project and then go, what's it
near? Who could take it over?
Where's the tension? Is there another mill?
You know that and that in this current market that's a big
feature. Osgold sits out there on its
own. That project was originally
called Boddington South by some of the original management,
which you know, it is South of Boddington, but bloody long way.
So, you know, it's not like you can consider it a, an extension
or even analogous. It's just in the vague region.
You might as well call it fucking Perth South or
something. But you know the originally as
well. I can remember some of the
intersections that came from the first management team after that
company listed and it went from about a $8 million IPO to being
160 mill market cap company. I remember writing due diligence
on it and scratching my head just going, they've got an
incredibly small deposit. Why is this going to such a
value? A lot of border under the bridge
since then, but things that sort of get a run on and then fall
flat on their face, which is what happened many, many years
ago. That rejuvenation is always
challenged because anytime you get a run of luck, there's
always someone style that just goes, oh, I don't trust you
anymore. And you know, your price goes
up, comes straight back down as they sell.
So I don't know if that's still a factor, but it, you know, it
is distal. So it needs to develop itself
all on its own. It needs to find that scale.
And I think that's probably one of the things, which is what the
market would be thinking, do I fund them or do I fund something
where there is that bit of tension?
Now, having said that, they have a register, which is pretty
impressive. You know, Dundee's a big
shareholder there. They're a global gold investor.
They know what they're doing. They've put representatives on
the board. And John Dalwood's been around.
He, he's operated in some very tough parts of the world as
well. So, you know, if you want to
give something a good chance, give it a gold, a good gold
market and give it the people who know what they're doing.
So, you know, if you could pick that up, which I know you can't,
and put it right next to Kalgoorlie, it wouldn't be in
the ground anymore. So I'd say the fact the reason
why it's undeveloped is, is because of where it is, and
that's one of the things that I'll need to overcome it.
Was it was a historic mine, right Like there is there is
like, you know, historic open pits there.
So at some point it was mine, but.
It's Peter Alexander who was Dominion at the time.
I remember bumping into him. It would have been 10 or 12
years ago and I, I happened to mention to him that I've been
looking at and he goes, I remember mining that and it was
probably 30 years ago at that point.
So Dominion Once Upon a time. Is he not the follower that made
the pyjamas different? Peter Alexander.
I asked him that. I asked him that myself once,
and he he was suitably ambiguous.
But no, I don't think the two are connected.
You're right. Or if you're a bloody speaking
because back to Medallion though, you know, pushing the
story around the exact same time.
Do you think Alkane are going to act on them?
They wouldn't have went in there for no reason.
Well, Alkane's invested in a number of companies in an equity
sense. I've been involved in companies
where the name's been mentioned. So you wouldn't be the first
time they bought equity in a company and they haven't taken
one over yet. Callitus, Genesis, historically.
Yeah, Yeah, yeah. Now that doesn't, I mean that
all that is, is a pattern, right?
And patterns can evolve in interesting ways because
sometimes you try something and try something and try something
and then you do it and you succeed at what you were going
out there to do. And I don't know what they're
trying to achieve. I, I would say they're not an
investment company because they are a gold mining company and a,
and a mining company, in which case you can see some of the
reasoning. Now I look at the pattern of the
things which they had done. And Genesis was before RAL, they
were backing something where I think they probably felt they
could import some mining expertise.
Then the deal came together, which created the modern Genesis
and Rally came in with it and what Caddell came at then if
they were value oriented, they probably said, well, you know,
the equation has changed Caledus long way from the heartland of
gold. So I think they'll probably
around the edges going where is the something where we can see
value. We might be able to aid with our
balance sheet. So, you know, maybe if you and
then in Caledus's case, it, it probably tipped the other way
and he knows maybe they looked at it after it after it fell
over. But so medallion, you know, fits
that that that pattern of it's on the edge.
It's something where all came probably felt that they could
add value. And I'm guessing at that.
I don't know those guys, but yeah, probably felt they could
add value. So does the equation evolve from
here? The fact that it looks to have a
milling solution which reduces CapEx of developing it has
changed the share price. But does that change the way
that you look at it as a potential acquirer?
I don't know. It probably makes a few things
easier. So I, I think it's probably too
early to, to conclude which way they might go.
And I don't think there's any evidence to say whether they're
coming or going at the moment. So, you know, we can only
speculate and I love it when people speculate because Ted's
people pay a lot more for something that they don't
understand than what they do. So long may that go on.
Rocks you and me yeah had a pretty pretty hefty raise
recently and Hawks points been really patient and and and
continue to to put capital into it sort of you know their
patients certainly paid off with or abandoned recent history.
Will it? Will it repeat with rocks?
And Capricorn, they, yeah, from, from sitting and sitting and
sitting. They, they've done well with
some projects which have, which have flourished.
Look, I, I don't know. You've got to be careful.
Any investor looking into something, whether it's genius
or luck, it wears off sooner or later.
So you got to be careful following people into
situations. And I think in the the case of
rocks, they do have an established resource base.
There's a hell of a lot of money been put into drilling there.
It is high grade, you know, just compared to anything, it's
highest grade. You guys did a fantastic session
with Rob. I think you called him
Refractory Rob at the time. It's extractory, Rob.
Extractory, Rob. In addition to that, we did a
met episode with Nathan Stewart. He's now joined the board too.
Yeah. Well, I mean, rocks has kind of
changed its tempo recently had it, hasn't it?
And I think sometimes it might not be that a management team is
doing the wrong thing. It's just that they do they
March along the strategy pathway that they've agreed and
sometimes that just doesn't float the boat of the market.
And you know, so I think it's possible to say that with Rocks,
the market was just not in the groove of that.
And by changing the management and in doing so changing the
pathway and they've more or less said, right, let's raise money,
let's start dewatering this thing and we'll go for it.
I think that probably portrays a sense of confidence to say we
think this is going to work. Follow us, you know, and and
you'll you'll find out one way or the other right now.
Gold price obviously turned it it was.
I think that's a lot of. Coincided with the time as well
where all juniors started going. Well, it hasn't been all, but I
think the point is that if you are putting yourself in a
position to show, you know, we've got this, the shape works
for us, we think we're going to make it work, then it yet the
market is more likely to follow. So I think that's how they've
hitched themselves. Yeah, and the incentive package
that just got announced for the MD is heavily focused around
pouring concrete and building something Yep as well.
Hopefully they pour gold as well.
Yeah, magnetic. So lady, lady Julie, they've had
AI think it's lane four or something like that.
Is a is, you know, a new discovery.
Yeah, interesting, interesting lack of of reserve to to date,
but you know, not, no, no lack of kind of revelations of we've
got a data room open. Yeah.
What do you make of the deposit? Well, aggregate numbers all
appear quite interesting. You know, every so often a
project comes along and you sort of think, wow, tons of great
grades, great. Those numbers on costs look like
they're a bit lower than I would have thought.
You know, I haven't gone through their estimate in a great deal
of detail. Whenever, you know, sometimes
you look at a project at a point and Northern Star was a great
example of this going back many years now.
You look at it at any point in time, particularly when they're
raising money and you think, shit, you've really got to
perform to to match this price. If I just go by my estimates,
and it's not that you demand perfection, but you've you've
got to perform quite well. And Northern Star did so, you
know, over the raisins that they did in the way they executed.
And I think probably magnetic is one of the ones that every time
I've looked at it, when there's been an opportunity come along,
I've thought there's other opportunities which which I can
probably find a larger position for the same money.
And for that reason, I see value elsewhere.
Now having said that, what I'm missing clearly is that at a
larger market cap, you can raise more money, which means that you
can progress faster. So, you know, that's where
they've been successful. So my lens doesn't quite work on
that one. I'm looking for the deeper value
and, and the deeper value takes delivery risk out of it to some
extent. But to, to, to adequately remove
delivery risk, you also need to remove funding risk.
And they've removed funding risk better than many of the ones
that I've looked at. So I suppose, you know, there's
a collection of comments there. But one thing that I've sort of
lacked is just an understanding of the detail.
I mean, if I take a Saturn presentation for example, you,
you look at that and any gold E, any gold BD team of a major in
the world is going to go, OK, we understand this one quite
thoroughly. We know where to stop next time
we're in Perth. Other companies, prezzo's, you
look at them and you just think, still don't know what it means.
And some of them have big numbers, but which appeal
probably more to a retail audience.
So Magnetic's one of those ones that I'd probably need to go and
sit with them and go through the sections to feel like I
understand it myself. And when business has been quite
busy, I just haven't had the opportunity to do that.
So I'm afraid I can't really offer the sophisticated view on
that one. What about assets that have been
purchased off the mid caps that have come to the end of their
mid cap life and that are sort of getting rejuvenated?
Well, God, obviously Gorilla Gold's like a self fulfilling
prophecy at the moment that just keeps going up for after they
got Vivian. But Lewin Metals purchasing the
martyr assets from Remelia so that they're being a bit
quieter. It looked like there wasn't much
happening until the deal actually went through.
It's gone through these projects that are on, you know, on mining
leases, permitted mining leases that have a bit of exploration
potential to find some extensions or take some take
some crumbs where which might not have been at the, you know,
appetite of the Remelius. That's what do you think of that
one? Well, I mean those things
they're always interesting because you know, any midcap
which is working a set of assets, if it starts to slip in
terms of scale and what's, what's the sensible scale to
operate those, I don't know. It's probably smaller than the
Remelius threshold. So at that point there's
probably an effort where they go, well, we either drill and
find enough to go on or we go, well, we'll leave a little but a
little bit of meat on the bone for somebody else.
So I think you could probably you know, you can look at those
assets and say, is there a way to make a success of those?
And just because they've been sold by a Remelius, I think can
can often provide a an overview which isn't quite correct really
they. Sold some valuable assets in the
past. No, they they sold Kathleen
Valley, the lion town for 400K or whatever.
Yeah. Is that right?
Yeah. There you go.
I I had AI had a long discussion.
Well, I, my first job as a geologist was a proper geologist
was working at Mount Keith, which is a nickel mine, which is
developed by Western Mining. And every so often on weekends,
you know, we'd grab a couple of four wheel drives and find a
picnic spot in the Bush or something like that.
Kathleen Valley was one of the places.
There's an old shearer's Hut near there, which was a not a
bad place. There was a nice stone fireplace
in there. So in any way that you could go
in and have a fire and have a couple of beers and you just get
your crib out of the out of the mess.
So we would have driven over that Pigma type.
This is cars full of geologists, you know, and there's quite a
few people I think have kicked themselves for that opportunity.
You know, buying it at that point gave you the opportunity
to run with it. That's been an interesting
operation, hasn't it? I mean, you guys have done a lot
of diagnosis of that. I got a mate who is a fantastic
project guy. Like he, he, he, he devours
everything that companies put out.
And we talked about, I reckon we talked about that asset over
dinner once and we were, you know, we were getting quite
feisty about it. And he was like, I can't believe
that they sold it for that. I should have bought it.
And I said to him, well hang on mate, after the conversation
we've just had, would we, if you and I had bought it, we've just
disagreed on, you know, orientations and how easy it's
going to be and how many jumbos you're going to need and how you
process it and all the oil qualities.
And this is always some stuff we know now we would have fallen
over at the first hurdle. We probably would have sold it
to someone else after we'd bought it.
So, you know, you you need to buy it with the vision.
And Remilius is a gold company. They're not a, they're not a
lithium company and. It was, there weren't even drill
holes into that Pegmerton at that point.
It was just Rockship samples. And yeah, so I mean, it was
like. Lithium wasn't really a thing.
Yeah, yeah, it didn't. It didn't hurdle out of the
blocks either. So yeah, yeah.
So no, I mean things like things like Marta, I haven't looked at.
I think the, the, the exploration prospectivity of
those things is interesting. A look at a lot of them which
are here's an asset which comes out of a a largish company plus
or minus a mil. That's often problematic because
you got, you got to pay for the value of the processing facility
which might come with it. Don't think it did in that case,
but there's another one I looked at recently which did.
So you're paying, I don't know, AV of 20 ish to have some sort
of process capacity there. But if it comes with no or where
you got to go and explore, it's worthless.
You know, you have the mill, but you got to keep it in good
working order. So you know, this complexity
that comes with it, this huge option value, anything you find
you might be able to act on, but there's also a threshold
consideration. So just because it's been done
by someone bigger doesn't sterilize it.
But at the same time, that option of being on a mining
lease and everything else can sometimes be a poison chalice in
that, you know, you, you might have higher expenditures.
So the exploration picture needs to hurry and hurried exploration
is always the hardest. It's you need time to sit back
and think about it and consider what you're doing so that you
don't you don't drill in the wrong place just because you're
hurrying. What a bit juniors that are on
their way to production there or pre development at the moment
there's a few of them. Is there any that stand out that
your flag is a bit of a risk of not executing?
Well. Only given you the heebie
jeebies. There's.
Obviously ones you don't I'll. Because I yeah, yeah.
Because that's why we don't hold them.
No, there's, there's plenty that we haven't invested in that I
wouldn't, I wouldn't say we've kind of come up with a negative
value on it, a negative impression.
It might be that we've, we've had our hands full with
something else. So something came in last week
and I was thinking, geez, I'd love to have a better look at
that. But I'm just finishing my paper
on Saturn for the board. And you know, I know that if I
put two things in front of my board, they're just going to
say, mate, one at a time now we'll do none.
So we've got to manage that carefully.
And that's often the reason why we might look something over is
just to remain focused. But I'd say one of the biggest
factors, and this is a roundabout way of answering your
question, one of the biggest risks that many investors who
are peripheral to the gold space would perceive in gold at the
moment is that there's been a long history of, of failed
projects. And it's not that they developed
something which was absolutely shit and wouldn't work.
It's that the financing decisions that they made, the
hedging decisions that they made, the, the production
forecast decisions that they made have it some of it, the
mining of it at some stage have brought them unstuck.
So, you know, was was Caledus a story which should never have
been mine? Well, I understand that that's
producing quite a lot of money now that the balance sheet
issues have been extinguished via an administration process.
Bellevue has been a very successful story in the market
from whatever it was when it bought that asset to its peak
price. Is it going to be a success from
its peak price to wherever it is now and whatever happens next?
Well, the problem is that's another part of the promise
making to the market which has been broken and I think
indelibly marks the sector Western Australian gold project
developments, you know, is there a tainted promise that that
comes with all of them? So I think the more you squeeze
your economics, there's a lot of projects that I look at where
they're trying to be 80 to 100,000 oz per annum and really
what they need to be is 50 to 60.
But there's this feeling that if you're not producing at a
certain rate that institutions won't look at you.
I think that's, I think that's flawed.
You look at what happened with, I mean the history of Vault,
right? Vault was essentially brought
about by bringing two companies together, Doray and Silver Lake.
They were both small asset companies.
As soon as they did, they found themselves above the threshold
of being able to be bought by institutions because they're in
an index game that beautifully doubled their price and they've
dealt through M&A from there as well.
So I think small assets can work.
It's more about the commercialization process and
how you then go on from there. So it's.
One of those things, Maddie's, you know, a reflection I have is
like, you know, nobody has a natural rate it should be mined
at. Yeah.
Well, as your guiding post,
rather than the broker telling you you need a, you need 100,000
oz scenario for me to go and raise the money for you.
Yeah. And you can't easily just get
20% above it, but you can very easily get 20 plus percent below
it by not doing it right. Yeah.
And the problem is that so many people in the market who might
be tempted to buy the shares are wowed by the output that you
think you can generate from it and the numbers that you can put
on a piece of paper and don't understand the difference
between that and what is probably a more natural right.
So look, I can't think of any which are howlers and there
might be a bit of personal danger in it for me if even if I
could think of a great example. But maybe maybe I should say the
most attractive things that I see in pre development gold
juniors at the moment are you've got a reasonable size inventory
to sponsor growth. So you know, there's a, there's
a prize, which if you make those answers more valuable, if
there's a lot of them, then you've got a great leverage
effect. You've got a way into
production, which might not be the huge CapEx route as well as
you know, if you if you grow your market value that that big
CapEx route is available to you as well.
So it being in a situation where permit pathways and stuff aren't
a blockage. So if you're on some sort of a
mining lease, great start. And if you can, if you can come
to the market and say we've found a way to be in business
without having to raise that full amount, that's a great
surprise for the market. But being in a part of the world
where some sort of MNA speculation can be helpful.
I'm not saying want to buy in things that have that
speculation. It's just that if there is
another mill that needs that ore, then there's that tension
which exists and no one can deny it might not come true, but it
helps a lot more people look at it.
And the more people look at it, probably more people are going
to convert into buyers. So it's good for the price.
I've got a few more companies that maybe tick at least a
couple of those boxes. Vault Allejo say Ding Ding Ding.
Yeah. And Remelius for her.
And Remelius. So Bart and Gold they're they
put in a study last year and it was like 1 to one kind of MPV to
CapEx ratio of a gold sword since then.
So there's, you know, real kind of talk, talk in the, in, in the
we. Haven't had a talk for a while,
have we? No, bring it back, but I don't
think might talk great again. Exactly.
I don't think the equities kind of really propelled yet, but
there is a big endowment there SA, what do you think?
Well, they have 2 interesting deposits.
One's not so big, but it's reasonably close to their
process facility. So if and I always get them
mixed up because they are so close in namesake.
And Takula. Takula is within tracking
distance of the old Challenger plant which Dominion built.
So, you know, if you find any answers there, which are, which
are economic, then you've got a way to commercialize them.
So they might be off to be able to generate cash flow.
That I've always found interesting about Barton is that
that's a part of their story which you know, could come to
fruition very quickly. There's not a hell of a lot of
permitting etcetera required. And then Tan Killia, which is
the big one. In fact, I, I did work
experience, I think as a year 11 student in 1995 in the offices
of JB Weir, which was when my father was working at the time.
And the week I was only there for a week, but the week I was
there, a company called Helix its first hole into Tonkilla and
discovered it. So I've always, I've always felt
like I had a personal connection to that deposit just because I
remember the day it was discovered.
And when I'm talking about it, my girlfriend thought I was a
Dick head because no one talked about that at our school anyway.
So I mean, big amount of answers.
It's sat in the ground for a long time.
And you know, it's one of those assets which will really benefit
from a gold price running because all of a sudden the
CapEx that you need to to pre strip is more available.
But I, I think, you know, combining those gold assets in
the same company has been very wise because one could very well
lead to the other, maybe not in terms of a process solution, but
in terms of being able to stay around long enough, generate
some cash flow that might help, but it also builds a bigger rump
of market cap in order to fund yourself.
So I think, you know, if that was my strategy for them and I,
I don't think they're too far off that.
Although, you know, Alex is a clever guy who thinks about
economics in a different way than most other people that I
know than the gold market. So he seems to have avenues to
connections which might be useful for financing, which
might might be different as well.
Yeah. Golden Horse Minerals recent,
recent IPO, but they're, they were like a ATSX company, but
they're in the, we're talking about the Southern Cross kind of
gold field. Now there is a mill nearby.
Do you think they've got a an endowment that warrants
interest? Well, the thing I found
interesting about that is Nick Anderson used to be the CFO of
an unlisted company which had been involved in processing ore
at that mill. So struck me, yeah, struck me
that he and there was a collection of other companies
sort of around that. So you know, the that consortium
wasn't particularly successful in executing on its business
plans, but Nick knew the area quite well.
So that struck me as interesting that he was agglomerating these
assets. They look as if they haven't
been particularly deeply drilled.
And you know, when you list a company you want your first few
holes to be a success. So I'd say they've had a good
think about where's the best place to put them.
But I think. I think they've pulled out some
pretty reasonable thicknesses and grades, so it's on my list
of things to keep an eye on. But at the moment, you know,
you're speculating on Oz inventory accumulation.
If if I'm going to buy 10 things across the market, the
speculative ones where I don't know what they're going to find,
I need to see real cheap. And the ones which I want to get
into, which have answers, I want to be buying those answers cheap
as well. And then he sort of sits in an
unusual place in between because he's not dead cheap, he's just
listed. But at the end of the day, he
needs to find them. So I'm, I'm sort of watching
that for, for how that evolves. If the situation overtakes the
value, then it might it might slip on the list.
I think of a company where the the answers are certainly cheap
because the company trades with a negative AV after you factor
in the cash, but the liquidity is completely absent. 10 of my
gold Oh. It's been so long since I've
looked at that one. Yeah, It seems to have been a
part of the world where it's just been exceptionally
difficult for anyone to commercialize anything that's,
you know, of an ordinary scale you need.
I mean, Newmont has some excellent assets in that part of
the world so that it's a remote place.
I think that adds a lot of expense and difficulty.
Northern Star bought 10% more of that JVI think last year for
like 15,000,000 bucks and yet you know, so 10 of my gold, I
still have 50% of it, $30 million market cap and 30 odd
million cash, yeah. Is Metals X still on the
register for? Them oh they own a little bit,
but most of it's with AIPAC who own I think it's over half I.
Can remember there there was a year when metals X and Northern
Star were maybe it wasn't an all out bidding war, but you know,
one of them had made a proposal and then metals X had made a
proposal and northern star came over the top and seemed to win
out. And I think Peter Cook got asked
about it, the diggers and dealers and I was sitting in the
audience and he said something like we'll just like sunshine be
the disinfectant on that one. So I don't know what he meant
because you know, it's sort of all gone quiet.
But I mean the thing I've always found interesting about it was
you've got two big companies at that time and Peter Cook and and
Bill Beaman at the time. You know, they they understand
gold projects. No mugs.
Northern Star has done so many things in that time other than
making Tanamar success. I can't help thinking that
something has held that back. And I mean, Northern Star bought
bought into Platonic. They subsequently off sold that
and it's, it's taking consolidation of that field for
that to be a success. Under Catalyst, you know,
Northern Star grew from Paulsen's, which no longer fit
their, their portfolio profile. So, you know, Tantami might not
necessarily get the the capital allocation that it needs
perhaps, but I can't help thinking that there's been
another reason. I don't know what it is, but I
think it sounds difficult just on that basis, and that's me.
There's a huge tendency in financial services and brokers
are the worst at this, that if you ask them a question and they
don't know the answer, the answer will be no or the answer
will be it's shit, or it'll be I haven't heard of it.
I'm not bothered. So I could be falling into that
bias tendency of saying, look, I don't know enough about it so
I'm not going to, I'm not going to go out and be too optimistic.
So I could be being quite unfair there.
Word I. Word I I I did say I wouldn't
kiss and tell, didn't I? So one thing I think that's
interesting about Warridar is they've drilled out a reasonable
gold inventory now and they're still going.
It's a very long structure. I mean, they've got about, I
think it's about 2526 kilometres of one structure.
There's a couple of places there where that structure doesn't
look particularly well understood and it's undercover.
They've got a couple of shallow holes that say, hey, you know,
you, you change your interpretation.
You might have missed the mother load.
I don't know. One day we'll know.
But there's there's gold dotted all up and down that.
So it hasn't been closed off. The previous owners of it were
fascinated with oxide ore. So there's been a lot of
unfinished geological business. That's what attracts me is that
it's wide open. Now.
What is also interesting is that they've they've found
significant antimony, which is semi associated with the gold in
the fresh rock position. And at the moment antimony is a
bit of a buzzword. I don't know if that's a good
thing or a bad thing or just a mutual factor for the asset, but
I suppose I look at Waradar as being something that has a very
reasonable. It's probably got the scale,
it's definitely got starter scale gold asset.
And then you've got this optionality from from the
antimony that could give in a moment and you just I don't
think anyone really understands how well that could work.
It might not work at all. But you know, getting an option
for nothing is always interesting.
But of those answers, they've shown that some of the fresh
rock answers are going to need flotation.
So they're to some extent refractory.
Now, if there was no rocks developing, you and me, you'd
say, or that might be a bit tough if you float some answers
into a concentrate there, it sounds like there could be a
process pathway which exists in WA where you could take those
the extra step. This golden Grove, which is just
up the road as well, which you know the base metals mining
there won't last forever, so that there may be a flotation
plant. There are some free milling
answers there as well, and they will I think probably grow a
free milling inventory so. Deflector as well.
That's Yep, that's closer to Geraldton.
There's been times when that was pronounced deceptor, but yeah,
it's got a, it's got a flotation NCIL process facility there.
And I mean you've got a question that could come a time where
that is subscale for Volt. So, you know, perhaps there's a
consolidation in the area that makes sense.
But waving my arms around there, all I'm saying is that on that
one I can see one or two different pathways where in many
companies you only have one and they have 1-2, maybe 3.
So I think it's interesting, I think very highly of Amanda.
She's a colleague of mine on another board in an unlisted
company, which we didn't do any Ding dinging on.
They don't have an inventory at all.
That's just completely speculative exploration.
But Amanda is a a deep thinker, a very hard worker.
So I was excited to go for a look when the opportunity came
up. And Kairos.
In the Pilbara, yes, yes, well, they're an interesting 1.
So I look at them the other day they did the rounds of Melbourne
and I kind of had them in my head as being something which
was kind of in the slightly, it's a difficult basket.
What I realized is that they have gold which is associated
with arsenopyrite and sulfides. And when someone says that to a
geologist, you think or refractory and that, I mean,
you're going to be careful with the R word because it can
stretch from refractory means that the gold is just, you know,
encapsulated in something. And you can break that very
simply just by cracking it. You can break it by oxidizing it
in various ways. You can do that in this case,
the test work that that's been done in previous years, if they
grind it and it's not even super fine, I mean, it's a fineish
grind, but it's not ends of the earth and you're grinding,
you're fine grinding sulfides rather than the whole rock.
So that that that shows a very reasonable pure cyanide recovery
off the back of that. So it made me think this is
worth looking at. The other thing which was
interesting about them is that they sold some tenure to Pilbara
for 20 million bucks. I think 10 of that has been
paid. So they're well funded for now.
They've got about 22,000,000 bucks of liquidity, 10 still to
be delivered, but there's no reason to think it won't.
So you know, if you if you have a reasonable size gold inventory
and they swap some tenements. So it looks like they can follow
their trend onto pilgrade ground and who knows, that might grow
to scale and they look like they're funded to do it.
So it's an interesting one. It's on my list to look at, but
I haven't come to a landing on it yet.
And I don't customarily sort of say, hey, I'm looking at this
one. I'm really excited.
But I look at a lot of things and you know, the excitement can
wear off pretty quickly on a few.
But those were the points which really grabbed my attention with
them and I thought it was well worth spending a bit more time
and. How are you?
What's going to be your best performance stock this year,
Hadley? And we're going to hold it
against you at the end of the year.
Well, last year it was Saturn and there's a there's a fund
manager in Melbourne who he's a journalist.
I don't know if he doesn't sound like the kind of person I'd go
to Christmas parties with, but they have a famous Christmas
party and they have it after Christmas so that they make sure
that everybody goes. Maybe that's just his character.
He's famous, he's giving people cars and all this stuff, like
for someone gives him a tip and if it goes really well for him,
that's how he rewards them at his Christmas party.
So I thought, well, when we have our AGM, we invited Saturn
Bright Star and Platonic, which is an unlisted company, to
present at our AGM just to talk to our shareholders and say what
they're all about. And then we had a dinner
afterwards for the those speakers and the board and a few
of the largest shareholders. So I was thinking I just need
some sort of silly shit to talk about over dinner.
And we had these these medals which were cast many years ago
from some silver which we'd come across.
And they've got a, they've got a lion image on it.
So I was giving them each one as a token to say thank you.
But I wanted to stir one of the MD's up.
So I am Ian Bambra from Saturn. Actually he and I have quite an
interesting personal story that has crisscrossed.
Ian and I were born in the same hospital in the north of
England. I don't, I think there's only
three geologists have ever come out of that.
That's my dad, me and him. And he also likes Land Rovers.
I like Land Rovers. So I made-up this crap and I, I
don't know, I probably went on for about 5 minutes and I said
all this other fund manager who buys people cars.
So for the best return in our portfolio this year, I've bought
them a car and, and it's his favorite sort of car.
And I had this little Hot Wheels Matchbox Land Rover which I gave
him. And we we, Ian and I swaps swap
photos where I put one of my toy Matchbox Land Rovers on a rock
and take a picture to show him where I've been.
So, so Ian won a Land Rover that was that was our best performing
stock last year. I hope that it's sat in this
year. And I couldn't tell you what
it's performance has been since that point.
I think it's done quite well in this gold market.
But satin I think has an awfully long way to run on its value.
But it's going to struggle to compete against Antipa and
Medallion in terms of return to date in a very short period of
time. And I mean, short returns can,
you know, you can't extrapolate that trend too far, but both of
those look like they could have stuck.
So who knows, maybe Antipa won't exist by the time we have our
AGM in 2025 and Medallion, who knows.
I mean, we were speculating about M&A for both of those.
So I'd love to give them a Hot Wheels of their choice.
And yeah, we'll be definitely be inviting a few stories to come
and talk at our AGM as well, just to spice it up and provide
a different event for our shareholders.
I mean, congratulations on, you know, really timing the the
thematic really well. I shouldn't be surprised you did
invent the mining clock. So I can't let you go without
asking you where we are on the the clock, right?
Now I would I have to give full kudos for the creative concept
of the line clock to my father Robin, who used it as an an
analogy when he was working at JB Weir.
So it probably dates back to pre 9.
Let's say pre 97, it'd be maybe mid 90s.
And I think he had observed that in the period of time there,
they'd done, you know, they'd all got involved at, at a part
time in the market without doing small raisings that are hard
work. And then all of a sudden the
metals prices came along and they're doing big raisings.
And then they formed line many of that management team so that
that concept is carried. And from that time, I would say
that was probably fairly subjectively set at that point.
Now we monitor it and and the underlying theory is that
liquidity which is money coming into the market or going away is
what sets the time. The last time we published it,
it was 4:00. Now the boom starts at six.
And I think that we might look back at now and say we were at
six. What we're going to do in our
next quarterly, which will be published in May will be to set
the clock at 5:00. And I think the reasoning around
that is liquidity has definitely increased.
But the signal which we're getting to 6 or going through 6
is that we're starting to see things like IPOs starting to
happen. And as much as things like
greatly and gold are coming to Australia, shit big IPO, but
that you know, that's a one off very unusual story.
And the reason they want to come here is to migrate their
listing. So I think we need to see
exploration IP OS coming to the market and I can see them
developing. I want to see that stick.
So I think, you know, we might look back at now and say boom's
on good chance of that. And if we don't look back at
now, then it could be some other time in 2025.
But I think that's where we are, which is a great time to be
investing. If you invest in pre development
things, you need to be able to follow your money.
So if you miss those opportunities when they have a
distressed raising, it affects your investing experience
incredibly. So you know back to me not being
fully invested that's we will be investing right through to 9
until we start trying to harvest.
Two, it's probably dependent on lithium because there's too many
lithium shells from the 2021 IPOs that are getting used for
gold. So unless lithium comes back,
there's too many shells for IPOs to happen.
Actor ammo, Yeah. I noticed that Core came out
with some announcements recently of a massive gold trend in the
NT site. You don't say you had a big
lithium project and now on the exact same ground you got a big
gold project you said nothing about before.
Oh. They got both.
Bloody great, they. Bought the crusher from Minrez.
90 million bucks. Yeah, pretty interesting Got.
To be careful what you pay sometimes, don't you?
So that's. Not a bad break for you, it's
all. Right, very good headers.
Thanks very much mate. Thank you very much for having
me. Thank you for the.
For you, because if you're going up, I'm going up.
We'll kick up this. Crap my stocks.
They're way too specular. Is that why you never Ding,
Ding, Ding, Yeah. You'll be like oh you're a Dick
head. Jeez, brother.
Thank you so much. Thank you for having me, guys.
It's been fantastic. Right.
Oh, there you go Jay. So you missed that bloody
episode. That was right up your.
Alley, Oh I. Know I now it's I'm sort of
doing a bit of a you I haven't quite I haven't watched it yet
but I. Can't.
Wait to it was I'm sure it was amazing.
So they're probably a bit small cappy for you.
Actually small. Cappy, I love it.
Right, let's RIP through bloody everything on offer at the
moment. We're JRX Conference Brisbane
May 2020 Second, get your bloody tickets exclusive discount by us
and I'm going now. I'm going, I'm going, I'm going
full conference mode this year and that's after Oz IMEM
underground operators next week. And so you can still get tickets
for that with our exclusive card in our thanks to all the
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Sports, TRA Insurance, WA, Water Balls, Quattro, KCA Sort
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