Market Outlook: The podcast discusses the Chinese anti-involution policy, highlighting its potential impact on unprofitable sectors like coal and lithium, and the absence of a demand-side stimulus.
Company Insights: Companies like Perseus Mining and West African Resources are noted for their strong performance on the ASX, with discussions on potential undervaluation compared to peers.
Investment Strategies: The importance of investing in commodities deep in the cost curve is emphasized, with a focus on being patient and using volatility to advantage.
Sector Opportunities: The podcast highlights the rare earth sector, noting recent price increases and the potential for junior companies to gain attention and capital.
Corporate Actions: Discussions include Regis Resources and their potential M&A activities, as well as Vault implementing a buyback, signaling confidence in their equity value.
Policy and Regulation: The challenges of mining in the US due to litigation and regulatory hurdles are discussed, with a focus on the resolution copper project and the broader implications for the industry.
Global Investments: The podcast touches on the strategic positioning of companies like IGO in the lithium market and the implications of joint venture dynamics.
Key Takeaways: The importance of disciplined capital allocation is stressed, with a call for better industry promotion and understanding of the mining sector's critical role in the economy.
Transcript
How did you actually join Nero? >> M actually quite a cool story. Rusty and I like have known each other my whole career. Basically, I was an engineer but basically quickly jumped into corporate finance and was working for a boutique out of Melbourne. >> I remember Rusty saying it was the best presentation you'd ever seen from the worst >> for the worst company. >> The worst company. Yeah. >> Yeah. The quote was something along the lines of, "That is the best, most institutional presentation I've ever seen for a bucket of shit." >> That's a banger. It's a banger. >> JD, another week, another big mining week. There's a lot happening. And this week, the wonderful Daniel Dingo, Araggono. Go. How do you say his last name? >> Arang Go. >> I'd never say his last name. >> Dingo. We've got Dingo. >> Dingo. Go. Yeah. Anyway, just what what it Go tell me how to say your your surname. Uh I love a correction on that one. But the wonderful Dingo who is a true thoughtful genius at uh at the very the very smart Nurero Resource Fund. He um he's titled the CEO. >> I think you're right. >> Uh yeah. >> Yeah. stoked to have him on the show and very excited to unpack with him all the big events from this week because we had a heap going on from anti-involution discussions in China to what's happening in the midcap gold space all the way through to resolution rare earth movements and then going through the the best deals with a bunch of hot takes throughout mate so keen to share this one >> very keen you said big events and that reminded me of a big event in our calendar you know what I'm going to I'm going to call our friend Dom about this big Trev, how are you, mate? >> Very well, Dom. >> Dom, you were keen to hear why people should come down to ADU. >> Come down to ADU. I mean, that's probably the simplest question to answer in the world, lads. I mean, it's the, you know, Africa Down Under is other than the mining in Daraba, which I know you guys have been to in Cape Town, uh, this is the largest African mining event in the world, which is pretty remarkable given that it's all the way over the Indian Ocean here in little old Perth. But um you know 20 years ago when we started this conference that we could have had it in a phone box and now there's well over a thousand people coming to the conference. So look I I think it's a it's it's one of the main events on on the Australian mining calendar these days. >> I'm sorry mate. You've you've got me. I mean >> I haven't even got to the program yet really about the program. I just told you how big it was. I mean, I think your books have talked a lot in in the recent past about um about the African scene and the complications of it. I mean, there's no hiding away that that there's an African discount for a reason. You know, there's there's there's a high level of risk associated with some jurisdictions, but if you look at the cold hard facts, I mean, you see some of the companies that are on on the program uh on the 3rd to 5th of September and and you realize just how well they're performing on the A6 at the moment. You've got Perseus Mining and West African Resources probably the two best performers in the last three years uh amongst the gold miners on the ASX. Both now multi-billion dollar companies and I think both would argue still undervalued in comparison to their peers. Even in the last couple of weeks, we've seen companies like Terraco Gold and Civoir raise 65 million on the market. than even just in the last couple of days a a company like Lindian resources uh with Kunga Kinda um rare earth project in in Malawi a country that doesn't have any mining really as such in a commodity that we all thought had had bust raised more than 90 million uh for that project. So I mean you know these are up and cominging companies a host of others of course that we've got on the program and we look forward to having new blogs there as well. >> That's the the bread and butter of what you guys do regularly now. you find those sort of bombed out or deep in the cost curve commodities that are not getting all that much love. >> Yeah. Yeah. We love hunting in the ugly places >> where nobody else is at times. And um yeah, it's not easy. It takes a bit um takes a bit of belief at times. It takes a lot of luck. Yeah. I think anybody who who denies that is um is probably lying. Um but equally, yeah, there's method to the madness in that. And often it's it is a strict discipline to cost curves. It is a strict discipline to the the cyclicality the cyclical nature of of what we invest in. And being comfortable with that, being comfortable with volatility. Volatility is your friend as long as you can use it to your advantage. So >> you have to be patient. >> You have to be patient and equally volatility creates value opportunities. So um uh you have to be brave enough sometimes or willing enough to make that investment at that valuation because the risk return is there. So then yes, you might have to be patient in how it's realized or or whatnot. And um not always simple, but typically yeah, if you've got a commodity in the cost curve, it's been there for a long time. the equities are implying a commodity price that is reflective of spot or lower and and there's an a real asset base there or an asset base to be derisked. They're wonderful opportunities that tend to be not liked by the market at the time. >> Yeah, I love the style. Hopefully we can uh peel more in into it today, Dingo. We're stoked to have you on for the uh the the weekly rap. We're gonna start with all the big stories in the mining industry, the money miners. to start to get familiar with this style. And yeah, to to start up, we've got China anti-involution. The the big theme that I think is sort of playing out slowly firstly from a sort of cultural perspective in in China. I think um it really sort of started to take shape through the the early 2020s and now in the last couple years from a sort of policy setting and I think in the last couple months in particular this one has really sort of exploded into the the consciousness at least for for resource investors because the ramifications across the full sweep from items that are produced manufactured all the way to the raw materials are are pretty sort of um are pretty eye watering I think. So, how have you guys at at Nero to to start with this one, Dingo, been been thinking about this? Is this a theme you think is is real or a bit of a a flash in the pan? >> Yeah, I think Chinese anti-involution. I think it's a real theme. I think that um we're seeing evidence of it occurring. probably stopped short of necessarily being in the headsp space yet that this is the supply side reform of the mid2010s or whatever which led to a radical repricing of the entire sector necessarily but I think there's good credible evidence of it occurring in in in isolation with a particular focus on sectors that are unprofitable. So, you know, I think we've seen it perhaps in in the coal sector with some of the environmental sort of strictness or regulation that they're they're placing around some of the miners there. I think we're seeing evidence of it in lithium um perhaps in borsite and these types of uh unprofitable commodities if you like equally I'm not sure that the idea of this is to see those commodities like you know priced three four times higher than what they are today in quick formation. I still think there's probably a rationalism there and so I'm constructive, you know, I'm I'm optimistic around each of those sectors in isolation cautiously. Um, but I think at the moment as well, it's not necessarily being coupled with a demand side stimulus that you'd probably like to see. So, how do how do you think about the the demand side there? Do you expect stimulus to to come in in that form? because the the interest rate side of it and all of that, it just operates so differently in in China to the to the way it has historically here in the West at least. >> Yeah, I think it I think it's still a massive opportunity on the policy side for China. I I still think they're holding that sort of gun in the holster, if you like. they can do more to stimulate demand. >> And the real stimulatory unlock will be if they can get the consumer to start pulling out of the savings uh which have been continuing to accumulate in China over the last 5 to 10 years now and commit that into either investment and whether that be in in equity markets which promotes a capital cycle or into capital itself or even into consumption. they've still got that in the arsenal if they need a pull on it. They they at the moment appear to be comfortable with how the stimulus has has sort of supported or provided a safety net to the economy there. Um so I fall very short of being being um bearish on China even though I think there's a little bit of soggginess in the data at the moment. We've had a ton of ton of conversations on this theme this this week JD like you know various various fund managers or commodity guys or the likes and h how how how this you know anti-involution policy shift plays out. There's so much money to be made if you are um if you can kind of read the tea leaves uh you know accurately here and it's it's kind it's it's it's kind of a little bit ironic and perplexing as well because at the exact same time as the rest of the world has come to the realization that we should be um we should be more like China. We should have we should have more government control and strategic priorities and more socialism. Uh China's doing the opposite and saying no we should be more profitable. our enterprises should be um yeah uh yeah we should have like less less less less price wars and more more profitability in the enterprise to to to have you know better health of the of the private business dynamism which is >> incredible the irony is is so rich I actually remember listening to a podcast maybe three four five years ago and they were talking about um it was a resource fund manager talking about China stimulus and and getting long behind it and I think the same could be said by much more experienced people that there's for a long time been a hope that this China stimulus sort of comes in and you know from the from the very first signs of the property market slowing down through 2020 2021 people sort of hoped but they've really let that kind of cool out so it's it's fascinating to see where it goes and they've got lots of levers like for one savings rates are much higher because they don't have the type of welfare system that we kind of have in the west so there's lots of um ways in which they could implement that to pull Back more to to resources though, dingo lithium is the big one that's captured the the imagination because it's run up like 30 40% in in a%. >> Yeah, it's run up a long way in a in a very short time, but you guys love to to hunt around in in the fringes and stuff. You mentioned BSite there. Are there more medals or other sort of um esoteric ways that you've thought about playing this theme at all? I don't think it's changed our investment thesis or philosophies or approaches too much to be honest. I think we have had fundamentally at a really structural level have certainly had a view that China is kind of safety netting the economy and the bazooka is not coming. However, they maintain enough levers that if it got sufficiently uh dire, if it got systemic, then yes, like they can go back to the old playbook. They can go back to property and and and being more outright in in stimulating that to promote the wealth effect, which could then bring the consumer back. bring it back to the to the question with that as our baseline and that's been our baseline now for for several years anti-involution is kind of a helpful uh extension of that that policy process that hasn't necessarily changed how we invest so you know lithium was a really interesting place to do a little bit of hunting when you're deep in the cost curve and I reckon that's been the difficult thing in lithium so it's been difficult to find attractive valuation even within that context text. So you've been able to find it in in the fringes in some of the developers and some of the best sort of new assets coming to market in the next cycle cuz one thing is for sure it is cyclical. it will recover. Structurally that industry is very complicated, much more complicated than when I used to work in it. And there is latent capacity and we haven't necessarily seen the level of physical product or or or investment come out of the market that would have make it structurally more attractive. Do you know what I mean? Where you could really get behind I think a 60% repric in the commodity and say maybe we're just finding a new a new level here. >> Yeah. Yeah. Totally agree. I think the the valuations on the the bigger end of town, you always kind of wanted to get them, you know, a little a little cheaper, a little cheaper, like sort of Pilra and even Lion Town sort of sort of comes to mind, but all of a sudden they've they've sort of roared away from us once more. >> And you know, like in this commodity downturn quite um unusually, I wouldn't say investment really stopped. Pilra expanded. Minres have latent capacity. IGO green bushes expanded. Africa kept growing. Argentina is now just getting those brines into a place where they're going to start coming into the market in larger volumes. So despite the price signal not being there, investment still was. >> Yeah. >> And that is, you know, that will have a consequence, right? whether it's just uh it caps prices out at at a lower level or we still need to work through a bit of that uh capacity before we get to a more sustained balance. >> Totally. Let's talk about Regis, guys. Trev, this is this is right in in your wheelhouse, but Reges have been uh rumored to be hunting, looking around, doing a deal. I think I think they've been named to be in every single data room that's existed in the in the last couple years. Yeah, they they've found themselves in the news again and the wording has been kind of interesting. >> Yeah. Well, they rebutted the street talk article. Street talk article basically said that they're um they're doing their work to pick up the other 70% of Tropicana. Um there's been rumors swirling about Anglo Goldy's you know future in Australia. Sunrise Dam is rumored to be on the chopping block. Regis also pole position there too mate. If you read all the Regis rumors, Regis is actually the most off. If you look at the even just like the um the focus focus chart today, they're the the gold miners. I think they're they're 4% this morning, which for all the goldies, they that just stood out like a sore thumb. >> So on on the back of the the rumors earlier, they came out with the full year results today as well, about 38 million bucks out in the dividend. And then yeah, costs are sort of very much now in the high 2000s going forward. >> So they so they come out with this response to the speculation. and they say um we're you know we're not in not in advance discussions. Do you read into that dingo I think they're in discussions just with every intention of them becoming advanced. Do you think do you think there's a deal to be done with Anglo Gold? Do do you think re you know what what is read just going to buy? They're going to buy something they buy. How do they get the deal done? >> In some regards I feel a little bit sorry for Reed just because they feel like they're just the kid in the playground getting picked on. But every >> they've got a big pile of cash. It's not all >> they do. every journalist who wants to who can throw something at them. >> It's a slow news day. I just >> now I think you know but again where there's smoke there's fire and um and perhaps it's reflective of um you know where valuations on a lot of these Australian gold miners are right and um and their portfolio probably looks like it needs something else or or or um you know it's repriced to a certain level that that that their paper has value and so what are the things you would look at, the things that are for sale obviously, and then the things you already own. So, I'd be absolutely shocked if they weren't in a discussion. For me, more broadly, if I step it back to is it interesting for us, well, at this point in the cycle, people paying up for assets is exactly what we don't want to be invested in. You know, I don't think that that's good capital allocation policy. And maybe it is better to distribute more of that cash out in a dividend, right? And and this is what I think the sector often gets wrong. There is a you know I think Zeppy said the other day, you know, M&A is just kind of a matter of timing if you like. Like it's when you can do a deal necessarily as opposed to is it the best part? So, and I can I sympathize with that in some regards like you need buyers and sellers to agree those bid ass spreads need to meet but the best guys or or the best capital investment that we see in the space is done it is done counterally. you find a way um or you find a way to find the cheap assets that can be unlocked and that that's the challenge Regis has got I think and to their credit they they you know they not to date we haven't seen they haven't announced anything on on the the very public asset sales that have been out there >> discipline had discipline >> yeah and they they probably didn't have a license to do M&A for quite a while just because of the way the market reacted to the acquisition of the initial 30% of Trop. >> Yeah, exactly. Right. >> An interesting part of that deal and that was I think early 2021 that came out um because they've got 30% of Trop now, they actually have a a preemptive right over the other 70%. So in the same way there were these kind of favorable uh dynamics for for Greatland Gold, you know, getting hold of of um of Teler and other part of Havron at a at a reasonable enough price because of the preemptive right they had. Regis has kind of got the same and because of the exact procyclical you know thing you've talked about no no gold miner really wants to do procyclical M&A and if you if if Anglo gold makes a decision that they are going to leave Australia in their entirety the whole know Australian gold portfolio is for sale well who who is going to who's going to throw in a bid for for trop knowing that Regis has a preemptive and is going to pay is would happily pay overs it actually gives them a kind of a favorable know sales dynamic to participate in and maybe buy at a reasonable price just because the preemptive is there and the apprehension of the peers to to pay overs. >> Definitely the original 30% acquisition came with a lot of >> criticism and and what they paid for it and um >> it's ironic that we're back there. >> Yeah. >> Years later on the other 70% but yes like in doing that deal they now have probably a good strategic position on the other 70%. And you know, if they've got time to be patient, >> and you you probably can be >> I'm not intimately intimately in the detail around either the asset or or or their strategy or anything like that. It always helps to have that last ride of because then you get to you can be disciplined. >> You can you get the final look. So you you made the comment when you when you started there, Dingo, about looking at the valuations across the like let's focus in on the midcap goldies to to start and this will tie in with our next story about Vault doing doing a buyback. But are are you sort of seeing value in that you know call it one to to 5 billion space with with the goldies? like the gold price has run massively. Their earnings have shot up. Most of them have appreciated pretty healthily, but there's there's still debate out there about sort of are they being priced appropriately. Where do you kind of fall in on on that debate? >> I think yeah, I think there's a bit of a spectrum out there across valuations. I think overall the sector feels pretty reasonably priced to be honest and and it's repriced pretty well. Um, you know, what's your your overall view on where the commodity goes? I think would probably dictate that in the shorter term. >> You believe spot gold price is the new gold price, then my god, they're criminally undervalued. >> Well, exactly right. Yeah. Um, if you run that out in perpetuity, >> yeah, >> you can you can mount the argument. Yeah, I think names like Vault um to be fair, they they did look cheap relative to the sector and there was a a fundamental argument to to run there probably as well. you know, fascinating to see what they they did yesterday in the market >> and the market loved it as well. Like they jumped up 11 12% finally putting in that sort of capital management >> Yeah. >> piece into the into play. >> I mean it was a bit of a um it was a very interesting day. They had three announcements. One an earnings beat. Uh you know there's a part of the market that loves that in isolation. Uh a CEO stepping away and at the same time putting in a buyback. So, you know, I think if I'm if I'm a CEO stepping away, what a what a beautiful day to do it when I've just beat earnings. I'm putting a buyback in place. >> I think you're right. But you have to sort of think that's like a a 300 odd million, you know, total sum of what they're sort of guiding they will spend buying back stock over over the next 12 months. That's that's a pretty healthy dent in the cash pile that they have if they end up fully deploying that and buying all the shares back. Yeah, I mean, look, it's a good it's a good signal, I think, on on how they view the value of their equity if they're willing to commit that much money to buying it back. >> I find it disappointing that they come to this realization now where they had every opportunity >> to um to cancel the shares that Silver Lake owned in Red Five at the time of the deal. Remember, they own I think it was like a 10% stake. They didn't. They monetized it, which is, you know, effectively like Capra's effect. So, but now they're doing a buy back like and what's changed between now and then? Well, the hedgebook is now more out of the money. The capex profile is maybe building rather, you know, like I I just I'm yeah I I you know commend them if they've if they wanted to explore a deal and now that deal doesn't look possible and so they've had to reconfigure their capital allocation. But I I don't understand why they they didn't come to a a similar decision at the time of the the deal with with Red Five. Yeah, look, I think hindsight vision is 2020, so I'm I'm somewhat cautious. >> Yeah. >> In in these types of backwards looking analysis, but you know, look, could they have foreseen this? And so therefore, did they, you know, could they have just canceled the shares back then at a much lower price? Could they been buying back shares a lot earlier? Um, possibly. You know, so there's, you can mount an argument. Equally, the gold price has significantly rerated in the last two years. They feel like they've been uh you know working through a process of getting the capital stack clear to the market. Uh King of the Hills has been through several downgrades >> and um yeah and so maybe they maybe they needed to work through that process to get to a place of comfort in in being able to allocate the capital the way that they now have in the stack. I mean that would be the optimistic way of of looking at it. >> Vault makes me think of Mount Manga makes me think of mines in the gold fields. Makes me think of the one organization I trust to turn big rocks in the gold fields into little rocks because they've been doing it forever superbly. Axis Mineral Services. >> Absolutely phenomenal. We know that they turn big rocks into little rocks. We know that they've got this enhanced backing from from Robex now to embark on on bigger things in more broad locations. But we haven't talked about the quality of their people before JD because they've got some of the the the most dynamic people who are so solutionoriented to the client through out that business. >> 100% mate. Jason Oor these this team has heaps of experience. You mentioned the the takeover. They got the engineering capability behind them, the financial backing. I think all of that is the uh the the suite or the keys to the success that they're going to have in pushing themselves outside the gold fields with all these goldies that we spoke about. We know they've worked on pretty much every project in that area and pushing the hor horizons out to the Pilra to the southwest and beyond. Mate solutions. What does making what does a solution look like when you're when you're turning big rocks into little rocks? Well, mate, stuff goes wrong all the time. You you're breaking parts. You think things are getting jammed in all these different places. Equipment goes down. But with someone like Axis operating kit, they know what they're doing to make sure that you're always turning big rocks into little rocks in a predictable way and they come up with unique solutions to make it all happen. >> 100% mate. Whether it's a bit of civil work, air strips, mobile crushing solutions, they're bread and butter. They'll look after you. >> Quality people, Axis Mineral Services. >> Go Axis to do grade control guys. >> Let's do it mate. This is uh you got to give a a letter grade A to F of a major corporate move or policy or or whatever that we've um come across this week. Commodity trend. Explain your reasoning debate. You know, we're um we're all for it. >> Punchy views. >> Punchy views. Yeah. >> All right. Let's start with uh Peabody terminating their deal with Anglo. So, we we actually spoke about this one last week. Trav, kick us off, mate. What do you what do you give this one? It's not just it's not just that they've terminated like Anglo in response to saying they're gonna you know sue them sue them for yeah damages as a result of it they disagree with the um with the ability to terminate it given um they disagree on whether or not what's going on there is a material adverse event mate I actually think like if I think about it from from from anybody's perspective I'm going to actually give them um give them a you know a B here I if if they couldn't if they didn't think value was there anymore even though their stock has rebounded like like good on them for for actually not having so much deal commitment. There's a lot of momentum in a deal. There's so much momentum to just get a deal done and for them they came to market you know all of a sudden the the asset did change and also the response to the deal in the first place like for Peabody was like no one was expecting this. They hadn't guided to market that they were going to be in and around the hoop here. the price was probably higher than the market thought, you know, you had to pay for for for on a multiple basis for call assets as well at the time and their stock tanked because there was a funding concern. So, they probably got a bunch of shareholder feedback and um if they've actually, you know, like been able to pull themselves out of the the deal momentum and and and you know, reconfigure on that basis, then you know, I'll give them a B. um on Anglo like I think it's also a give them a C just because there's um there I think they'll find an outcome here. It'll sell for less but they'll get an outcome here. They'll sell the assets. >> Yeah, I think I think you're right. Dingo got a rating for this one, mate. >> Really interesting. So, initially I'd give Peabody like an E. I think that transaction was history almost history repeating itself. >> Yeah. And that was it was crazy to think >> that it might occur again, right? Like the last time >> Peabody made a major >> transaction like that was at the top of the market. They end up going into chapter 11 bankruptcy, right? It was the deal. It was poor deal discipline that played a major role there. And then here we are again several years later at the top of the coal market playing a top price um like a multiple of their market cap almost or certainly once the the shares derated what they had to fund which just seemed uh radically illogical to me and the market obviously uh agreed with that. Now, it's almost like, you know, you failed your exam and your your professor or whatever really likes you, so it gives you a second chance at it in a way. And the way that they've responded here by pulling the levers at their disposal um to try and walk away from the deal be because of the the risk that it poses, I think is sensible. Like it it it's good to see them going down with a fight. Um I don't have a view on the grounds at which they've got here and and there's still a risk at what that liability might look like. They've pulled the you know uh the MAC clause, the infamously um you know uncertain clause that that you could you get to basically interpret in your in your own way. U you'd have to defer to lawyers as to how you fight this one out. But yeah, I I think there's still a little bit of risk associated with that, but it's good to see them pulling that lever, particularly if it's less dilutive or less costly than actually having to complete at that price. >> Totally. Yeah, I I I think you're you're spot on. So, this deal got announced like November 2024 and straight away like the the share price starts plummeting. So the the share price had pretty much h haveved by the time there's the fire end of March early April at at Morbar and this would have been the the thing that like Peabody were praying for. This gave them the out and they were they were begging for begging and praying I reckon every single night for for an out on this deal >> and I reckon >> I reckon there's so much like I do think there's a lot of push back but man >> like >> the world is full of empire builders empire building management teams especially US listed companies because the bigger your company the more assets you own the more you pay yourself and um and it scales insane. I just think like I think my default assumption is that management teams want to build empires and even though it would have been bad for shareholders, it could have been better for management and so like I feel like there's so much commitment to go through with it. >> Agreed. Agreed. But within six months they'd realized this wasn't the right move and they were praying for an out and like praying for a second go at that at that move and they got it and who knows what the the the liability ends up being. But >> like I I can't I cannot give them a positive rating at all. you know, it's got to be a D or an E for the discipline going into the initial transaction. Like that that that was >> very poor. And you know, like you said earlier, Dingo, like hindsight's 2020, but it proved to be very very poor timing. >> To to Trab's point, this type of perverse capital allocation from executives is really poor. Do you know what I mean? And at a point in time, they made a decision either they hadn't consulted shareholders or they just had a radically different view to the reality of of how this would be perceived and they kind of went with it anyway and that's the difficult bit if you're looking at Peabody now is like you know can you and could it could it be a good investment and >> it would have been if it went into chapter 11 again and you could buy it out of chapter 11 >> it would have been fantastic they wanted to do it with so much debt as well so it was sort of like ridden with risk the whole way through >> yeah and that the the best guys I think that have uh long-term success in this industry like there's a lot of guys that do this industry and I'm talking about now it's um anyone whether you're where you're running a company or you're a fund manager or whatever there's a lot of guys that do this industry and there's only so many guys that I think do it well and there's a big big difference and doing it well is about being a disciplined capital allocator >> you know totally that is where you will get >> you will get reward in in the long run and there are guys that trade on the ASX with huge premiums because of of you know that characteristic. >> Speaking of disciplined capital allocation, mate, the next thing to give a um great control to you see this one this stock Kaye resources KLR >> very disciplined capital allocation whoever was buying this stock on market clearly just wanted to I mean 94% was controlled by the top 20 shareholders. It's very interesting, curious register and um uh clearly your liquid micro cap, but soared an astronomical intraday percentage. I've never seen anything like it before. Um >> what was the number like 8,600% or something? >> I was watching it in real time when somebody clued me on to it just for 10 minutes. It was trading up 6,000%. >> That's crazy. >> You put it on Iris and I watched it trade in 15 minutes to 9,000%. So was a great buy there at 6,000% up. >> Good. if you can get it. Only $2 million worth of shares traded hands the whole day. Is that right? >> Yeah. The the whole day and then so it it broke a high of over three bucks. Dropped by yesterday afternoon when I checked in on it to 19 cents and this morning up another healthy 350%. So went into a pause in trading because the ASX put in a pause at like 82 cents. I don't know how to to to rate this one. Not not a big fan of the the pump and dump. I'll give that one >> Yeah. Uh, probably an F, but uh, A for entertainment, like eye-catching sort of stuff. What do you guys reckon? >> Yeah, I think like markets will be like funny games will happen on markets to the extent they're allowed to happen. So, I just give ASX an F for the Yeah, it's very hard to it's very hard to say much more than that. It there's a very curious register. There's clearly some very suspicious things going on there of absolutely no insight. Yeah, let's change tac and go to America for a second. So, resolution copper was in the news again this week and there was actually a few different things all kind of coalesing on on the same day. So, on the day that the heads of both BHB and Rio went to the White House, got a photo with with Mr. Trump, you had another um uh appeal lodged by a group of environmentalists as well as um Native American groups. Now, this had come a couple months after what was supposedly the the final approvals needed for this project that's been in the works for well over kind of 20 years now. So, maybe I'll go first and um give a give a a rating and explanation. I I think this one's a D in my mind and how I sort of thought about it is like the ability to build mines in in the US because like mines always come with with trade-offs as we all know and there will be you know land disturbance because of this mine sort of block cave kilometer and a half below the ground but it's a trade-off and if they're going to be serious about having this copper come from the states then there's no sort of perfectly desolate part of America where there's going to be copper there for them to kind of take. So you're going to have to pick and choose and it's going to have to come from somewhere otherwise it's going to come from elsewhere in the world or prices will go up and and it will sort of adjust with that pricing sort of mechanism. So the the way in which the US is just so litigious these days and even after a final approval is given for a mine it still gets bogged down is kind of mind-blowing but it's kind of been that way for the best part of 50 years and that's why I think capital will keep going to to other jurisdictions where you can actually get kind of things done. I'm not sure if you guys think about this one in a kind of different light but yeah I I don't think any of us are massively surprised on on this front. probably not surprised. Um been a very controversial asset this one over the journey. It's been through a long a long journey. I would um take a different route just to start here. And I would say I'm going to give the US probably a B+ here on where they're trying to take policy because I think investment often what I reckon the market misses here is that commodities are long lead right they're long lead investment they require vision they require the ability to think long term and arguably that's why China has pulled the west pants down and spanked it so hard in the last 10 20 is just taking a step back back to that last point. You need two things therefore to invest. You need a price signal or or a view on a price signal and you need a policy setting that you can you can get behind because you need to make investment and you're not going to see the reward from that investment um or the detraction from that investment until a point in the future. Right? So those two things need to marry up and the US I think are trying to get this policy setting much more stable much more clear at least like here is the pathway if you go down this path and you tick all the right boxes you will get permitted and I mean it's partly existential to what they want to do right they need these localized supply chains if they are really serious about having local manufacturing about reinvigorating the refining part of the supply chain if they are serious about reducing China's leverage over them which is you know hugely concentrated in metals processing and you've seen it at the tip of the spear in rare earths but it's so much bigger than that which I think most people don't understand so I give the US sort of a B+ in in the way that they're trying to in very quick time get sharper and better at at getting these processes going. In terms of the judicial nature of the system in the US, uh I've got no issue with the process in in some ways that it's there as a check. The extent to which it's exercised in the US just feels excessive and yeah and can get things bogged down. um a and in an asset like this and then if I even go another angle I'll give the sector a E in the way that it promotes itself right the way that it is generating ground swell or or going back to grassroots and educating people on the significance and importance of these of this industry to their livelihoods to, you know, all the things that they consume to to growth. Um, they're so scared of coming out from behind the veil, right? And for the last 20, 30 years, they've stayed behind there. They haven't wanted to rock the boat, you know, and I think it's done them a disservice. I think a lot of people the easiest place for people to go and pick on, you know, from an ideological point of view is mining because they've been told and taught it's bad. But it's that is a fundamental misunderstanding that it is fundamental. If it wasn't grown, if it wasn't like the food and grains and wood, timber that we grow, it was mined, you know, absent recycling, which there's just no way that recycling can ever support the level of consumption that we have on on materials. It was mined. >> So, how can you love a farmer and hate a minor? It's illogical, right? And the overall footprint on the like on a on a on a area basis versus mining is a fraction. But you never hear BHP or Rio Tinto talking about that. You never hear them trying to promote this sort of education within school systems or or communities. And instead we end up in these very complicated places where ideology drives the outcome. Um you know this is a copper mine that we're talking about here that is a kilometer underground right. Yes the ground disturbance there will be some but it will be tiny in terms of area. And as far as I've I've understood and and and again I'm no expert on this asset in particular. it's not really where we hunt is that you know the indigenous lands that are recognized uh the closest one is 20 mi or something from where this will have a disturbance. So we're not they're not very good at presenting or marketing those facts to the community and and generating support. And this is much bigger than just an asset. This is about reshaping how people think about this industry and coming out from behind the veil. not being so scared of of people criticizing and asking and and having the conversation. So, in that regard, I think these guys have been their own worst enemy over a 20-year period. The next one I'm going to talk about is the NDPR price. So, this nearly hit US 90 bucks this week, which is a huge 50% plus rally, very similar to to the lithium price since about late June. So, as as Tom Olir at um Aluka called it, this this might be the the inklings of a non-China or a bifocated price. The the reason we've seen this kick up is actually a confluence of a a heap of factors. So, you've got this peak production season from a from a manufacturing sense in China occurring right now. So, that that gives a bit of a demand boost. Then you've got pretty s strong home appliance numbers coming out of of China and and globally in in pockets as well which boost that demand. Hence more magnet production is is taking place. And then on the supply side, you've got a a supply contraction very similar to the the license sort of debate that we spoke about with with YJ and and last week in the lithium world. The Chinese are taking a a stricter sort of view on environmental licenses and of course they're huge producers of rare earths as well as processes. So this adds to a bit of a a self-fulfilling thing with big cargo holders of of rare earth of rare earths in China saying, "Hey, maybe won't sell. We'll hold on a little bit longer." Prices run up. You're pulling more supply out. And then traders have jumped on board and pushed this up. So you've had a a kind of beautiful confluence and a runup of a price from you know really in the doldrums for a pretty long period around 50 bucks which was not economic for for anyone. So all of a sudden there's a lot of love and a lot of the names which I'm sure you're very familiar with dingo have you know they've run up sort of 5x from the beginning when all this MP materials announcement started taking place. So, it's a it's a hard one to kind of rate, but if I take the perspective of the junior, you know, battlers in the on the ASX in the rare earth space, I'd love to give them an A because they're finally getting a bit more attention on them. The the importance of what they're doing is kind of being highlighted and hopefully along the way a few projects get a bit more capital they need and the the sort of cream rises to the to the top there. >> Yeah, for the sector, I'll give this one an A as well. I think you know like it it's great to see that um that the theory works across all commodities you know like this rare earth has been in the cost curve for a while and and the rare earth's cost curve is very hard to decipher with any real um accuracy I I would say but it it is certainly felt like it's been there it's been a the incentive price hasn't been there and there's a very big geopolitical overlay on this one like this is right at the tip of that spear and and China love to put the foot on the throat. Um, and I think they still maintain a fair level of leverage there. So, but equally it's good to see the commodity price responding in such a way to meet these funny supply demand dynamics. I think um, which then enable the sector to to raise the capital to advance the assets. That doesn't nec my opinion doesn't mean that I think all these assets are good assets and that they're all going to get there. Uh I I I think you have to be selective in this space to to protect your downside, right? I think a few of these assets will get built. They need to be at the right end of the cost curve. Um but we don't need 100 rare earth assets. Well said. Well said. I I think I got one more for for grade control unless we want to chuck in a few more. This one was plucked out of the Endeavor Minings conference call. It was actually a few weeks ago, but it sort of come on to our radar just just recently. >> You can hear it straight from the horse's mouth. I don't know if it was the CFO or the CEO. >> One's just on um on the hedge. Uh you make the point that it's been quite financially painful to you. Um although I understand the reasons why you put it in. Fair to assume that as we go into 26 um your comment that you'll be unhedged means that we won't be expected to see any hedging go through the accounts in the into the into the next year. Anybody who proposes a hedging program for 2026 will have to deliver the proposal along with their resignation slip. >> Excellent. >> I'll give the comment an A just for the for the um yeah making a joke. It was pretty funny. I like the character in a conference call. They're usually pretty dull. Um yeah, like just thought I think I think the same the CEO also made a comment in the same call used the word bum fight. There's going to be a bum fight just you know employe implore all of that kind of stuff to just add a bit of character in the conference calls on on hedging itself you know like of course you want to be unhedged in uh in these good times. I do think it's it's you can you can easily see and interpret how we have procyclical capital allocation in the sector. It's like people in in the times where gold price is really high, everyone everyone wants to be fully on hedged and then it's like when the times times are low then everyone's putting hedging in place because they've been they've got that you know short-term bias of of history in their head and also it's what all the investors are talking to them about right so I just think um more long-term thinking and um long longterm kind of thinking about this sort of stuff in a counteryclical way like you invest every day Dingo like would would be welcome in the capital allocation front. >> Yeah, no arguments on that front. I mean uh and we don't always get it right but uh it's certainly a framework of thinking that we work within. >> I love conviction. I love you know I give that an A. >> He's uh he's he's telling the entire world clearly what he's telling his employer I think but structurally gold looks pretty reasonable. Uh you know the best hedge that they could have is to focus on costs and that's probably doesn't get enough focus in the gold world. best hedge you can have here with a really healthy commodity price whether it whether it trades at this level or or around 3,000 or or or up uh is to get your cost down. >> Yeah. >> You maximize those margins and um and have that discipline at the top of the commodity. Is this a top at a at a healthy commodity price? >> You can if that's an interesting point too because you can hedge your diesel like those are those are options to lock in your cost for a long duration. >> Let's let's try sweet deal s deal. There's been a few deals this week. Um, yeah, some some interesting different kind of deals. Again, the cap raises are are prolific. Uh, you must just be Yeah. getting getting crossed on the regular for a cap raise or, you know, the likes at the moment. Dingo. >> Been busy for a couple of months. Yeah. >> Yeah. Yeah. So, let let's start there. I mean, the the ones that kind of come to mind this week. Uh, I mean, just big in the rare earth space like Lindian and um and Arafura. You know, there was $180 million together between the two there. just kind of massive massive on the cap raise front. Did you participate in uh in either of them sweet deal? >> I think overall sweet. Uh it's good to see capital being injected back into the sector to to advance the assets and and of of decent quantum. >> Yeah. >> Um participate in Lindian. >> Yeah. >> Yeah. Happy to to you know ring the bell on that one if you like. And >> got a pathway to Yeah. I mean it's it's f it's getting >> it's a fantastic asset right I >> to the to the point I think we made just before very happy to be asset selective here >> very happy to to take a a sort of stock pickers view of different things and it's low capital intensity it's low cost um it's in a you know it's not in the simplest of jurisdictions uh but this runway should see it fully funded and um you know they've got the relationship an agreement with Aluca. So, commercial pathway to production. Yeah, there's a lot to like about this one. >> Yeah. Yeah. You didn't say it, but I my my views on Nolan's are very public, so I'll say then in the cold space, we we are magnetic uh came to mind. Don't know if there are any other ones on your on your radar that came up this week that were were worthy of your of your participation, but >> I think they were the two big ones. Yeah. Again, I think both of them are sweet deals. Both of them will enable those companies to go and advance their assets further and and they have very credible places to to commit the capital. >> Beautiful. Then on the on the strangely royalty front, Regal's royalty fund. So they they you know they they are raising money to acquire this royalty over Malibar's Maxwell Underground. So it was Cole Royalty New South Wales $94 million. >> So that's pretty interesting, right? So 1.25% life of mine royalty. Just another demonstration here that money is going to go into New South Wales assets and continue to to look away from Queensland coal assets because we're in a pretty tough environment. And I think sort of um the the White Haven team really emphasized this this week, but in a tough environment and you're still only five bucks away from the royalty mark hitting incrementally 40% on your earnings means capital is going to be starved from from that space until there's a a shifting of the um of the rules. This is this is a massive issue, right? This I think we sort of semi touched on it when we were talking about BHP biotinto resolution. This short-termism of policy for which our political system seems to support is so damaging to industry and it's so damaging to capital and the thing is that you don't see it straight away. So, and the political cycle isn't long enough for them to bear the consequences of it either. And so, you you you have to have that long-term vision. You have to understand that the you're having long-term implications by these policy settings. I think, you know, a key takeaway from BHP's earnings this week and and BHP is not necessarily a place where we hunt either was what they weren't saying. you know it was where are they allocating their marginal dollar going forward it wasn't into Australia right and nowhere is this more this idea that the so if the commodity price signal is there the policy setting clearly isn't and this is so evident in the oil and gas sector who have been saying this and acting or behaving with their feet leaving and capital not coming in or the last 10 years and it's now just starting to come to materials and it completely is it's a completely disrespectful to the fact that over the last 20 years the majority of our GDP growth here in Australia has come from the material sector right it impacts everybody whether you work in services on the east coast or whether you work in a mine in the Pilra it impacts you and this is the bit that the politicians I don't think have they either don't care for or they or they don't have an understanding of and you know we've just had this policy uh this productivity roundt this week and to me it's frightening what what's coming out of that it's not surprising that BHP to me are committing capital offshore you know and and ironically enough into Argentina than they are into South Australia copper >> and mining barely had a seat at the table at the at productivity >> barely had a seat in the table and and more more commentary let's increase taxes more let's increase royalties more >> despite the fact in Queensland quite starkly they have railroaded the metallurgical coal industry I mean they were some of the lowest cost highest grade highest quality assets globally going into you know primarily going into steel production for metallurgical co and yes there is some thermal up there who those assets at this price point now are uneconomic and nobody's investing in them and that's going to have a radical impact on Queensland and you know again in if you want more evidence of this V you know and Sam Barage talks to this a lot you guys spoke about this last week Victorian gas >> what you're seeing now in terms of the cost of living pressures, the the price of of your utilities, the price of the gas, the uneconomic nature of industry. There is a function and a direct impact of policy that was put in place five or six years ago. And you're only just re like seeing the consequences of that now. And it's damaging, right? It takes a long time to fix. And you know, it takes a lot longer than a three-year political cycle to fix. And so it is going to require people to be more aware of these things to understand what it is that you're the consequences of what what's occurring. >> I think to tie in what you said earlier as well, Dingo, it's the the advertising of what the industry does for the country. It's not present in the minds of the people the value ad to the country that um that these companies bring from operations that are on the other side of the country and that advertising needs to be more present to to highlight the the positivity of of what the industry does. >> Yeah. Like where in this productivity round table has anybody spoken about cost about economic growth about an understanding that you know if we stay on energy for a second fundamentally economic growth is energy converted. So you have we have invested all of this capital and seen all of this capital not come right because of a policy setting that is just sending the price higher and higher and higher and for some reason we think we're going to get productivity out of that. It's the exact opposite at a very very fundamental level. Economic growth is just energy converted. We have to be competitive on a global scale with the inputs that we're putting into our industry, whether they're service- based or whether they're primary industry. I think we we've done ourselves no favors with this like uh marketing or like framing or siloing out of what we what we classify as critical minerals from the rest. And I just think it's um that gets such a a hugely unwarranted political focus compared to like especially relative to what like Australia's GDP composition is from the mining sector. Every mineral is critical. That's why we mine it. We mine it because we need it. We don't mine it for fun. It's absurd that, you know, if if if we just like reframed >> mining as critical, all of the minerals as critical, >> and it I just think that that you get like better focus on what matters because I know all cost matters a lot. Coal mining cost matters a lot. >> Yeah, totally. And I'm so sympathetic to that the person the general person on the street is feeling the financial repression that has been here for a while, right? They they are feeling it. They don't quite I don't think everybody fully grasps it and understands it but they can feel I'm so sympathetic to that and but where we land I think politically is we try and just we keep just kept bandating things right or if we change this policy over here hopefully that will work or if we give you some subsidy over there or we change this singular thing in the tax system none of that stuff is is going to fundamentally work. What about the idea of growing the pie, right? We're so fixated on the pie is fixed whether it's the economy or or investment or whatever. What about the old adage that I think we had we we did very well in this country which is let's grow the pie, right? And how do we be economic and how do we be competitive? And as we grow that pie, how does our our well-being as a community grow with it? And we've just moved so far away from that in the rhetoric. And it because it's hard on the street, it's hard for people to get away from the real short- termism of it. And that's where our politics, you know, that's where really ambitious people who who who are strong leaders, I think, could be very powerful. Unfortunately, it's not what I think we've got >> at the moment. >> Yeah. I mean, we've done such a great job in this in this country for so many years. Just hopefully we can kick back some of the own goals and and um keep going in a in a positive direction. To to round out with one more sweet and sour deal, there was talk about Tiani potentially proposing to take over IGO stake in Quinana. And there's a few sort of policy tie-ins in this one as well because it ties in with that whole downstream narrative which our government was very big on and still, you know, not quite as loud, but there's things like the tax credits that are supposedly going to kick in in in a few years time. Now, IGGO wrote down this investment to to nothing a short while ago. The last quarter alone it operated I think about 35% of name plate capacity and they still lost $29 million in the quarter. So it throws up a whole heap of questions about you know would FURB even approve any any deal like this. But there was a a very interesting catch which I only saw right at the end from Frank H who's the CEO of Tiani saying hey yep we would be interested in buying your stake in Quinana. were very keen to keep going and keep putting in money and there would be a catch that you would have to sort of sell your stake in green bushes if you were wanting to to sell your steak in quana to us. So yeah, I love the balls from Frank there. He knows what he's sort of playing with. And the dynamic in that uh that JV, as with most JVS, is is kind of fraught or at least starts out friendly enough and then ends up being fraught. I >> I love the commentary that came out of Tiani. I I think it's so loaded. >> Yeah. >> Um you know, on one hand, it's it's so almost funny. It's hard to say it's not to say you've been ramping up this plant for 5 years or still committed to it. it's still nowhere near even half of its capacity. Um, so you know, looking deeper like why why are they doing that? And I think maybe that last comment that you made there, maybe that's the rub, maybe it's like, yeah, we wouldn't mind squeezing out of green bushes and how do we do that, you know, and whether that that's going to work, I probably not, right? That's not what I'm saying. And I'm not expressing an opinion on IGO here. I know why I agree with them. I would want out of that downstream processing as well. >> Yeah. Doesn't doesn't it just really highlight the the limitations of a of a of a joint venture agreement where um Yeah. where like when you buy into a joint venture and you don't have control like effectively >> and that's a complicated run, right? That's a JV on a JV. >> Yeah. Yeah. Yeah. Big time. Big time. It's um yeah, you managed to buy a stake in the lowest cost lithium mine in the world, but it came with its it came with its um attachments and those attachments were a joint venture that is it is incredibly ownorous and yeah, you don't have the ability to cail you know the capital that is going towards like it's literally just a money hole. >> Yeah, exactly. real like very logically >> like yeah I think iggo like we are wasting the value of one of the best resources in the world by just plugging it into this downstream processing facility that is lossmaking that is very rational you know that that's entirely rational where they're coming from >> absolutely last but not least fellas any any hidden gems any any nuggets any podcasts any movies any concerts or anything sticking out in your mind, something you want to shine a shine a light on. >> Uh, I can't stop. Well, I'll let you go first, JD. >> All right, I I'll kick off. I went down to Found, which is the uh the brewery in a in a spot that's seen a few breweries go through that in in the middle of Subie there. And they've um good little spot, good pizza and stuff, but they've got this wicked new beer called Zest West. And I've I've punched a good few of them lately. So, go down to your local and support them because that was a that was a ripper. How about you fellas? Uh yeah, I've probably misinterpreted this this this segment. Um but I just I'm still pumped up about um so JD did this big historical like episode on on on Forscu and as a result of that a couple of the people who were right there at the beginning sort of reached out. We got coffee with them yesterday and um I'm just buzzing. It was it was you know two hours with with people who've lived through this absolutely formidable thing you know like create creating a true major from from nothing and you like yeah I was just I was buzzing all day yesterday and and last night from um from from that combo was just wicked. >> Yeah. Nice. Uh I might just carry on in that theme because it just reminded me of a conversation I had last night. But yeah and to and to be positive about what this sector can create, you know, and and the opportunity that it can have for multiple people. Um you know, New World Resources taken over recently by Cana and you know, just speaking to a few guys there, you know, there's a guy who who is now he he is effectively going to buy a house for every single one of his kids, right? And he is just an everyday guy. I I believe he was a landscaper or something like that, right? He runs a very honest business. He lives a very honest life. He's made an investment there and it's paid off in spades. He's now and there's several guys forc reminds me because there's several people on that register that have, you know, at the like the most incredible stories you've ever heard. And that is so fantastic to hear, you know, like guys having a win like that. This just truly life-changing. And that is yeah if we can we all play a role in this in this sector. If we can keep promoting and growing these assets and and delivering value and what it means to the people that are involved can be just enormous, you know, and yeah, equally in New World guys that that you know are on drill rigs, guys that that pick up rocks for a living. Um you know, they've all had a win there. And I just think that that those stories are they're just so good. They're so good to reflect on. It's you know it's there has to be something more to what we do and and I love that aspect. Perhaps more to the theme of what you of the segment uh something that caught my eye this week on the uh on the arts front which is you know not necessarily something my expertise is uh is Quinton Tarantino is is coming back but not with the 10th movie that I think all the fans are waiting for. He's coming out with a stage play next year. So >> really, if >> you're interested in a bit of blood, gore, and you know, uh, quirky dialogue, that appears to be where he's directing his attention. So yeah, that that that perked up my uh interest this week. >> That's awesome. Have to catch that one. >> Before you go, mate. >> Okay. >> Anything anything in the portfolio that's been changing lately you want to talk about? We uh we had a good chat on the phone the other day, and I I know I know you're thinking of a few things, but are there anything you want to kind of air out, you know, in relation to the things you're interested in, right? Oh, I love that. Um, yeah, again, really passionate about the next suite of assets and, you know, when markets are hard, you know, hunting around in these things can be a very friendless thing to do. But I think it's some of them now are just starting to just starting to come out and and and be seen and and um, you know, I think Black Canyon's right at the top of that list. So, this is a a manganese discovery in in Western Australia. Um, it it the drill program there that they've undertaken in incredibly quick time. It's been 12 months uh and and probably $3 million worth of investment, I think, is unveiling a a true bulk commodity project. You know, it's going sort of 30% manganesees. We haven't seen this since Woody Woody. It's it's 80 kilometers from Woody Woody. Uh and equally as a as a bit of a kicker, I also think they've got some exciting um iron or discoveries there. So, you know, that that's really front of mind. Um and under 50 mil market cap, there's nothing nothing ambitious about that at this point in time. So, great to see that investment into exploration is still leading to discovery. >> Discoveries are back. >> Yeah. >> It's great. >> It's awesome. >> Yeah. And um that's what it's all about. Um and then yeah, on the on the rare earth fronts, I've probably got to give a shout out to to Virus in in Brazil. Yeah. Ding ding ding. >> Uh you know that has has been a tough journey, but they've done good work. That is a equality asset on the economic front. >> So which I think is pretty important. And they've just gone ahead now and got the sponsorship really of the Brazilian capital market. And that is uh yeah that's truly fundamentally changing but sort of life-changing for that project and company. I think I think it will allow it to mature and grow uh grow up in in many ways. So >> latest change is substantial there I think came from Brazilian fund. So you can kind of tell the local yeah the the the local capital allocators are this is this is the the clay project that they're they're backing into production. >> Yeah. I think it's significant that that's where you're seeing the investment. So, um, that's a great sign to me. I love seeing that level of sponsorship on the ground from sophisticated capital allocators. It brings a high level of validation to uh to the project. And, you know, to get an asset from discovery through to production, it takes a lot of people, takes plenty of capital, and it and it takes a lot of things to go right. >> Yeah. Barbs. St. Barbs. >> Do have you have you do you own it yet or you still waiting to >> Yeah. No, we own St. Barbara. >> Own St. Barbs. Yeah. >> I think like >> deep value proposition. >> Deep value. >> Deep value. So in terms of the potential like portfolio of gold growth that is advanced and well understood, latent infrastructure. Um it's it's I'm not sure there's any better exposure out there. lights up green on the on the value screen every every time I ever looked at it. >> It has for a little while now. >> That's why I always love hashing out the the buy thesis for it and like Yeah, it's cuz it's >> Yeah, it's got its warts and and everything has its warts for sure. >> Um but there's something to be said for you know in a world where I think we've discussed today like permitting is not easy in any jurisdiction. if you have latent infrastructure, if you have sunk capital, if you can, if the policy setting turns for you, um well, and look in PNG, they've just got their well, it looks like they'll get that mining license extension. It's it's been recommended to the mining minister that he he approve such. Um, you know, the platform there is pretty significant. So, they got a few things they they still need to work through, but ultimately with a with a long-term big picture sort of view there, looks pretty deep value. >> Fantastic. It's great to great to have you join us and um >> mateoo, thanks for having me, boys. >> Cheers. >> Big thanks to Dingo. Big thanks to our partners who make it all happen, mate. our awesome partners focus the platform brought forward by market sand ground support ADU get your tickets to the conference September 3rd till September 5th and Axis mineral services now remember I'm an idiot JD is an idiot if you thought any of this was anything other than entertainment you're an idiot and you need to read out a disclaimer
Buybacks, Cost Curves & Dingo’s Picks
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How did you actually join Nero? >> M actually quite a cool story. Rusty and I like have known each other my whole career. Basically, I was an engineer but basically quickly jumped into corporate finance and was working for a boutique out of Melbourne. >> I remember Rusty saying it was the best presentation you'd ever seen from the worst >> for the worst company. >> The worst company. Yeah. >> Yeah. The quote was something along the lines of, "That is the best, most institutional presentation I've ever seen for a bucket of shit." >> That's a banger. It's a banger. >> JD, another week, another big mining week. There's a lot happening. And this week, the wonderful Daniel Dingo, Araggono. Go. How do you say his last name? >> Arang Go. >> I'd never say his last name. >> Dingo. We've got Dingo. >> Dingo. Go. Yeah. Anyway, just what what it Go tell me how to say your your surname. Uh I love a correction on that one. But the wonderful Dingo who is a true thoughtful genius at uh at the very the very smart Nurero Resource Fund. He um he's titled the CEO. >> I think you're right. >> Uh yeah. >> Yeah. stoked to have him on the show and very excited to unpack with him all the big events from this week because we had a heap going on from anti-involution discussions in China to what's happening in the midcap gold space all the way through to resolution rare earth movements and then going through the the best deals with a bunch of hot takes throughout mate so keen to share this one >> very keen you said big events and that reminded me of a big event in our calendar you know what I'm going to I'm going to call our friend Dom about this big Trev, how are you, mate? >> Very well, Dom. >> Dom, you were keen to hear why people should come down to ADU. >> Come down to ADU. I mean, that's probably the simplest question to answer in the world, lads. I mean, it's the, you know, Africa Down Under is other than the mining in Daraba, which I know you guys have been to in Cape Town, uh, this is the largest African mining event in the world, which is pretty remarkable given that it's all the way over the Indian Ocean here in little old Perth. But um you know 20 years ago when we started this conference that we could have had it in a phone box and now there's well over a thousand people coming to the conference. So look I I think it's a it's it's one of the main events on on the Australian mining calendar these days. >> I'm sorry mate. You've you've got me. I mean >> I haven't even got to the program yet really about the program. I just told you how big it was. I mean, I think your books have talked a lot in in the recent past about um about the African scene and the complications of it. I mean, there's no hiding away that that there's an African discount for a reason. You know, there's there's there's a high level of risk associated with some jurisdictions, but if you look at the cold hard facts, I mean, you see some of the companies that are on on the program uh on the 3rd to 5th of September and and you realize just how well they're performing on the A6 at the moment. You've got Perseus Mining and West African Resources probably the two best performers in the last three years uh amongst the gold miners on the ASX. Both now multi-billion dollar companies and I think both would argue still undervalued in comparison to their peers. Even in the last couple of weeks, we've seen companies like Terraco Gold and Civoir raise 65 million on the market. than even just in the last couple of days a a company like Lindian resources uh with Kunga Kinda um rare earth project in in Malawi a country that doesn't have any mining really as such in a commodity that we all thought had had bust raised more than 90 million uh for that project. So I mean you know these are up and cominging companies a host of others of course that we've got on the program and we look forward to having new blogs there as well. >> That's the the bread and butter of what you guys do regularly now. you find those sort of bombed out or deep in the cost curve commodities that are not getting all that much love. >> Yeah. Yeah. We love hunting in the ugly places >> where nobody else is at times. And um yeah, it's not easy. It takes a bit um takes a bit of belief at times. It takes a lot of luck. Yeah. I think anybody who who denies that is um is probably lying. Um but equally, yeah, there's method to the madness in that. And often it's it is a strict discipline to cost curves. It is a strict discipline to the the cyclicality the cyclical nature of of what we invest in. And being comfortable with that, being comfortable with volatility. Volatility is your friend as long as you can use it to your advantage. So >> you have to be patient. >> You have to be patient and equally volatility creates value opportunities. So um uh you have to be brave enough sometimes or willing enough to make that investment at that valuation because the risk return is there. So then yes, you might have to be patient in how it's realized or or whatnot. And um not always simple, but typically yeah, if you've got a commodity in the cost curve, it's been there for a long time. the equities are implying a commodity price that is reflective of spot or lower and and there's an a real asset base there or an asset base to be derisked. They're wonderful opportunities that tend to be not liked by the market at the time. >> Yeah, I love the style. Hopefully we can uh peel more in into it today, Dingo. We're stoked to have you on for the uh the the weekly rap. We're gonna start with all the big stories in the mining industry, the money miners. to start to get familiar with this style. And yeah, to to start up, we've got China anti-involution. The the big theme that I think is sort of playing out slowly firstly from a sort of cultural perspective in in China. I think um it really sort of started to take shape through the the early 2020s and now in the last couple years from a sort of policy setting and I think in the last couple months in particular this one has really sort of exploded into the the consciousness at least for for resource investors because the ramifications across the full sweep from items that are produced manufactured all the way to the raw materials are are pretty sort of um are pretty eye watering I think. So, how have you guys at at Nero to to start with this one, Dingo, been been thinking about this? Is this a theme you think is is real or a bit of a a flash in the pan? >> Yeah, I think Chinese anti-involution. I think it's a real theme. I think that um we're seeing evidence of it occurring. probably stopped short of necessarily being in the headsp space yet that this is the supply side reform of the mid2010s or whatever which led to a radical repricing of the entire sector necessarily but I think there's good credible evidence of it occurring in in in isolation with a particular focus on sectors that are unprofitable. So, you know, I think we've seen it perhaps in in the coal sector with some of the environmental sort of strictness or regulation that they're they're placing around some of the miners there. I think we're seeing evidence of it in lithium um perhaps in borsite and these types of uh unprofitable commodities if you like equally I'm not sure that the idea of this is to see those commodities like you know priced three four times higher than what they are today in quick formation. I still think there's probably a rationalism there and so I'm constructive, you know, I'm I'm optimistic around each of those sectors in isolation cautiously. Um, but I think at the moment as well, it's not necessarily being coupled with a demand side stimulus that you'd probably like to see. So, how do how do you think about the the demand side there? Do you expect stimulus to to come in in that form? because the the interest rate side of it and all of that, it just operates so differently in in China to the to the way it has historically here in the West at least. >> Yeah, I think it I think it's still a massive opportunity on the policy side for China. I I still think they're holding that sort of gun in the holster, if you like. they can do more to stimulate demand. >> And the real stimulatory unlock will be if they can get the consumer to start pulling out of the savings uh which have been continuing to accumulate in China over the last 5 to 10 years now and commit that into either investment and whether that be in in equity markets which promotes a capital cycle or into capital itself or even into consumption. they've still got that in the arsenal if they need a pull on it. They they at the moment appear to be comfortable with how the stimulus has has sort of supported or provided a safety net to the economy there. Um so I fall very short of being being um bearish on China even though I think there's a little bit of soggginess in the data at the moment. We've had a ton of ton of conversations on this theme this this week JD like you know various various fund managers or commodity guys or the likes and h how how how this you know anti-involution policy shift plays out. There's so much money to be made if you are um if you can kind of read the tea leaves uh you know accurately here and it's it's kind it's it's it's kind of a little bit ironic and perplexing as well because at the exact same time as the rest of the world has come to the realization that we should be um we should be more like China. We should have we should have more government control and strategic priorities and more socialism. Uh China's doing the opposite and saying no we should be more profitable. our enterprises should be um yeah uh yeah we should have like less less less less price wars and more more profitability in the enterprise to to to have you know better health of the of the private business dynamism which is >> incredible the irony is is so rich I actually remember listening to a podcast maybe three four five years ago and they were talking about um it was a resource fund manager talking about China stimulus and and getting long behind it and I think the same could be said by much more experienced people that there's for a long time been a hope that this China stimulus sort of comes in and you know from the from the very first signs of the property market slowing down through 2020 2021 people sort of hoped but they've really let that kind of cool out so it's it's fascinating to see where it goes and they've got lots of levers like for one savings rates are much higher because they don't have the type of welfare system that we kind of have in the west so there's lots of um ways in which they could implement that to pull Back more to to resources though, dingo lithium is the big one that's captured the the imagination because it's run up like 30 40% in in a%. >> Yeah, it's run up a long way in a in a very short time, but you guys love to to hunt around in in the fringes and stuff. You mentioned BSite there. Are there more medals or other sort of um esoteric ways that you've thought about playing this theme at all? I don't think it's changed our investment thesis or philosophies or approaches too much to be honest. I think we have had fundamentally at a really structural level have certainly had a view that China is kind of safety netting the economy and the bazooka is not coming. However, they maintain enough levers that if it got sufficiently uh dire, if it got systemic, then yes, like they can go back to the old playbook. They can go back to property and and and being more outright in in stimulating that to promote the wealth effect, which could then bring the consumer back. bring it back to the to the question with that as our baseline and that's been our baseline now for for several years anti-involution is kind of a helpful uh extension of that that policy process that hasn't necessarily changed how we invest so you know lithium was a really interesting place to do a little bit of hunting when you're deep in the cost curve and I reckon that's been the difficult thing in lithium so it's been difficult to find attractive valuation even within that context text. So you've been able to find it in in the fringes in some of the developers and some of the best sort of new assets coming to market in the next cycle cuz one thing is for sure it is cyclical. it will recover. Structurally that industry is very complicated, much more complicated than when I used to work in it. And there is latent capacity and we haven't necessarily seen the level of physical product or or or investment come out of the market that would have make it structurally more attractive. Do you know what I mean? Where you could really get behind I think a 60% repric in the commodity and say maybe we're just finding a new a new level here. >> Yeah. Yeah. Totally agree. I think the the valuations on the the bigger end of town, you always kind of wanted to get them, you know, a little a little cheaper, a little cheaper, like sort of Pilra and even Lion Town sort of sort of comes to mind, but all of a sudden they've they've sort of roared away from us once more. >> And you know, like in this commodity downturn quite um unusually, I wouldn't say investment really stopped. Pilra expanded. Minres have latent capacity. IGO green bushes expanded. Africa kept growing. Argentina is now just getting those brines into a place where they're going to start coming into the market in larger volumes. So despite the price signal not being there, investment still was. >> Yeah. >> And that is, you know, that will have a consequence, right? whether it's just uh it caps prices out at at a lower level or we still need to work through a bit of that uh capacity before we get to a more sustained balance. >> Totally. Let's talk about Regis, guys. Trev, this is this is right in in your wheelhouse, but Reges have been uh rumored to be hunting, looking around, doing a deal. I think I think they've been named to be in every single data room that's existed in the in the last couple years. Yeah, they they've found themselves in the news again and the wording has been kind of interesting. >> Yeah. Well, they rebutted the street talk article. Street talk article basically said that they're um they're doing their work to pick up the other 70% of Tropicana. Um there's been rumors swirling about Anglo Goldy's you know future in Australia. Sunrise Dam is rumored to be on the chopping block. Regis also pole position there too mate. If you read all the Regis rumors, Regis is actually the most off. If you look at the even just like the um the focus focus chart today, they're the the gold miners. I think they're they're 4% this morning, which for all the goldies, they that just stood out like a sore thumb. >> So on on the back of the the rumors earlier, they came out with the full year results today as well, about 38 million bucks out in the dividend. And then yeah, costs are sort of very much now in the high 2000s going forward. >> So they so they come out with this response to the speculation. and they say um we're you know we're not in not in advance discussions. Do you read into that dingo I think they're in discussions just with every intention of them becoming advanced. Do you think do you think there's a deal to be done with Anglo Gold? Do do you think re you know what what is read just going to buy? They're going to buy something they buy. How do they get the deal done? >> In some regards I feel a little bit sorry for Reed just because they feel like they're just the kid in the playground getting picked on. But every >> they've got a big pile of cash. It's not all >> they do. every journalist who wants to who can throw something at them. >> It's a slow news day. I just >> now I think you know but again where there's smoke there's fire and um and perhaps it's reflective of um you know where valuations on a lot of these Australian gold miners are right and um and their portfolio probably looks like it needs something else or or or um you know it's repriced to a certain level that that that their paper has value and so what are the things you would look at, the things that are for sale obviously, and then the things you already own. So, I'd be absolutely shocked if they weren't in a discussion. For me, more broadly, if I step it back to is it interesting for us, well, at this point in the cycle, people paying up for assets is exactly what we don't want to be invested in. You know, I don't think that that's good capital allocation policy. And maybe it is better to distribute more of that cash out in a dividend, right? And and this is what I think the sector often gets wrong. There is a you know I think Zeppy said the other day, you know, M&A is just kind of a matter of timing if you like. Like it's when you can do a deal necessarily as opposed to is it the best part? So, and I can I sympathize with that in some regards like you need buyers and sellers to agree those bid ass spreads need to meet but the best guys or or the best capital investment that we see in the space is done it is done counterally. you find a way um or you find a way to find the cheap assets that can be unlocked and that that's the challenge Regis has got I think and to their credit they they you know they not to date we haven't seen they haven't announced anything on on the the very public asset sales that have been out there >> discipline had discipline >> yeah and they they probably didn't have a license to do M&A for quite a while just because of the way the market reacted to the acquisition of the initial 30% of Trop. >> Yeah, exactly. Right. >> An interesting part of that deal and that was I think early 2021 that came out um because they've got 30% of Trop now, they actually have a a preemptive right over the other 70%. So in the same way there were these kind of favorable uh dynamics for for Greatland Gold, you know, getting hold of of um of Teler and other part of Havron at a at a reasonable enough price because of the preemptive right they had. Regis has kind of got the same and because of the exact procyclical you know thing you've talked about no no gold miner really wants to do procyclical M&A and if you if if Anglo gold makes a decision that they are going to leave Australia in their entirety the whole know Australian gold portfolio is for sale well who who is going to who's going to throw in a bid for for trop knowing that Regis has a preemptive and is going to pay is would happily pay overs it actually gives them a kind of a favorable know sales dynamic to participate in and maybe buy at a reasonable price just because the preemptive is there and the apprehension of the peers to to pay overs. >> Definitely the original 30% acquisition came with a lot of >> criticism and and what they paid for it and um >> it's ironic that we're back there. >> Yeah. >> Years later on the other 70% but yes like in doing that deal they now have probably a good strategic position on the other 70%. And you know, if they've got time to be patient, >> and you you probably can be >> I'm not intimately intimately in the detail around either the asset or or or their strategy or anything like that. It always helps to have that last ride of because then you get to you can be disciplined. >> You can you get the final look. So you you made the comment when you when you started there, Dingo, about looking at the valuations across the like let's focus in on the midcap goldies to to start and this will tie in with our next story about Vault doing doing a buyback. But are are you sort of seeing value in that you know call it one to to 5 billion space with with the goldies? like the gold price has run massively. Their earnings have shot up. Most of them have appreciated pretty healthily, but there's there's still debate out there about sort of are they being priced appropriately. Where do you kind of fall in on on that debate? >> I think yeah, I think there's a bit of a spectrum out there across valuations. I think overall the sector feels pretty reasonably priced to be honest and and it's repriced pretty well. Um, you know, what's your your overall view on where the commodity goes? I think would probably dictate that in the shorter term. >> You believe spot gold price is the new gold price, then my god, they're criminally undervalued. >> Well, exactly right. Yeah. Um, if you run that out in perpetuity, >> yeah, >> you can you can mount the argument. Yeah, I think names like Vault um to be fair, they they did look cheap relative to the sector and there was a a fundamental argument to to run there probably as well. you know, fascinating to see what they they did yesterday in the market >> and the market loved it as well. Like they jumped up 11 12% finally putting in that sort of capital management >> Yeah. >> piece into the into play. >> I mean it was a bit of a um it was a very interesting day. They had three announcements. One an earnings beat. Uh you know there's a part of the market that loves that in isolation. Uh a CEO stepping away and at the same time putting in a buyback. So, you know, I think if I'm if I'm a CEO stepping away, what a what a beautiful day to do it when I've just beat earnings. I'm putting a buyback in place. >> I think you're right. But you have to sort of think that's like a a 300 odd million, you know, total sum of what they're sort of guiding they will spend buying back stock over over the next 12 months. That's that's a pretty healthy dent in the cash pile that they have if they end up fully deploying that and buying all the shares back. Yeah, I mean, look, it's a good it's a good signal, I think, on on how they view the value of their equity if they're willing to commit that much money to buying it back. >> I find it disappointing that they come to this realization now where they had every opportunity >> to um to cancel the shares that Silver Lake owned in Red Five at the time of the deal. Remember, they own I think it was like a 10% stake. They didn't. They monetized it, which is, you know, effectively like Capra's effect. So, but now they're doing a buy back like and what's changed between now and then? Well, the hedgebook is now more out of the money. The capex profile is maybe building rather, you know, like I I just I'm yeah I I you know commend them if they've if they wanted to explore a deal and now that deal doesn't look possible and so they've had to reconfigure their capital allocation. But I I don't understand why they they didn't come to a a similar decision at the time of the the deal with with Red Five. Yeah, look, I think hindsight vision is 2020, so I'm I'm somewhat cautious. >> Yeah. >> In in these types of backwards looking analysis, but you know, look, could they have foreseen this? And so therefore, did they, you know, could they have just canceled the shares back then at a much lower price? Could they been buying back shares a lot earlier? Um, possibly. You know, so there's, you can mount an argument. Equally, the gold price has significantly rerated in the last two years. They feel like they've been uh you know working through a process of getting the capital stack clear to the market. Uh King of the Hills has been through several downgrades >> and um yeah and so maybe they maybe they needed to work through that process to get to a place of comfort in in being able to allocate the capital the way that they now have in the stack. I mean that would be the optimistic way of of looking at it. >> Vault makes me think of Mount Manga makes me think of mines in the gold fields. Makes me think of the one organization I trust to turn big rocks in the gold fields into little rocks because they've been doing it forever superbly. Axis Mineral Services. >> Absolutely phenomenal. We know that they turn big rocks into little rocks. We know that they've got this enhanced backing from from Robex now to embark on on bigger things in more broad locations. But we haven't talked about the quality of their people before JD because they've got some of the the the most dynamic people who are so solutionoriented to the client through out that business. >> 100% mate. Jason Oor these this team has heaps of experience. You mentioned the the takeover. They got the engineering capability behind them, the financial backing. I think all of that is the uh the the suite or the keys to the success that they're going to have in pushing themselves outside the gold fields with all these goldies that we spoke about. We know they've worked on pretty much every project in that area and pushing the hor horizons out to the Pilra to the southwest and beyond. Mate solutions. What does making what does a solution look like when you're when you're turning big rocks into little rocks? Well, mate, stuff goes wrong all the time. You you're breaking parts. You think things are getting jammed in all these different places. Equipment goes down. But with someone like Axis operating kit, they know what they're doing to make sure that you're always turning big rocks into little rocks in a predictable way and they come up with unique solutions to make it all happen. >> 100% mate. Whether it's a bit of civil work, air strips, mobile crushing solutions, they're bread and butter. They'll look after you. >> Quality people, Axis Mineral Services. >> Go Axis to do grade control guys. >> Let's do it mate. This is uh you got to give a a letter grade A to F of a major corporate move or policy or or whatever that we've um come across this week. Commodity trend. Explain your reasoning debate. You know, we're um we're all for it. >> Punchy views. >> Punchy views. Yeah. >> All right. Let's start with uh Peabody terminating their deal with Anglo. So, we we actually spoke about this one last week. Trav, kick us off, mate. What do you what do you give this one? It's not just it's not just that they've terminated like Anglo in response to saying they're gonna you know sue them sue them for yeah damages as a result of it they disagree with the um with the ability to terminate it given um they disagree on whether or not what's going on there is a material adverse event mate I actually think like if I think about it from from from anybody's perspective I'm going to actually give them um give them a you know a B here I if if they couldn't if they didn't think value was there anymore even though their stock has rebounded like like good on them for for actually not having so much deal commitment. There's a lot of momentum in a deal. There's so much momentum to just get a deal done and for them they came to market you know all of a sudden the the asset did change and also the response to the deal in the first place like for Peabody was like no one was expecting this. They hadn't guided to market that they were going to be in and around the hoop here. the price was probably higher than the market thought, you know, you had to pay for for for on a multiple basis for call assets as well at the time and their stock tanked because there was a funding concern. So, they probably got a bunch of shareholder feedback and um if they've actually, you know, like been able to pull themselves out of the the deal momentum and and and you know, reconfigure on that basis, then you know, I'll give them a B. um on Anglo like I think it's also a give them a C just because there's um there I think they'll find an outcome here. It'll sell for less but they'll get an outcome here. They'll sell the assets. >> Yeah, I think I think you're right. Dingo got a rating for this one, mate. >> Really interesting. So, initially I'd give Peabody like an E. I think that transaction was history almost history repeating itself. >> Yeah. And that was it was crazy to think >> that it might occur again, right? Like the last time >> Peabody made a major >> transaction like that was at the top of the market. They end up going into chapter 11 bankruptcy, right? It was the deal. It was poor deal discipline that played a major role there. And then here we are again several years later at the top of the coal market playing a top price um like a multiple of their market cap almost or certainly once the the shares derated what they had to fund which just seemed uh radically illogical to me and the market obviously uh agreed with that. Now, it's almost like, you know, you failed your exam and your your professor or whatever really likes you, so it gives you a second chance at it in a way. And the way that they've responded here by pulling the levers at their disposal um to try and walk away from the deal be because of the the risk that it poses, I think is sensible. Like it it it's good to see them going down with a fight. Um I don't have a view on the grounds at which they've got here and and there's still a risk at what that liability might look like. They've pulled the you know uh the MAC clause, the infamously um you know uncertain clause that that you could you get to basically interpret in your in your own way. U you'd have to defer to lawyers as to how you fight this one out. But yeah, I I think there's still a little bit of risk associated with that, but it's good to see them pulling that lever, particularly if it's less dilutive or less costly than actually having to complete at that price. >> Totally. Yeah, I I I think you're you're spot on. So, this deal got announced like November 2024 and straight away like the the share price starts plummeting. So the the share price had pretty much h haveved by the time there's the fire end of March early April at at Morbar and this would have been the the thing that like Peabody were praying for. This gave them the out and they were they were begging for begging and praying I reckon every single night for for an out on this deal >> and I reckon >> I reckon there's so much like I do think there's a lot of push back but man >> like >> the world is full of empire builders empire building management teams especially US listed companies because the bigger your company the more assets you own the more you pay yourself and um and it scales insane. I just think like I think my default assumption is that management teams want to build empires and even though it would have been bad for shareholders, it could have been better for management and so like I feel like there's so much commitment to go through with it. >> Agreed. Agreed. But within six months they'd realized this wasn't the right move and they were praying for an out and like praying for a second go at that at that move and they got it and who knows what the the the liability ends up being. But >> like I I can't I cannot give them a positive rating at all. you know, it's got to be a D or an E for the discipline going into the initial transaction. Like that that that was >> very poor. And you know, like you said earlier, Dingo, like hindsight's 2020, but it proved to be very very poor timing. >> To to Trab's point, this type of perverse capital allocation from executives is really poor. Do you know what I mean? And at a point in time, they made a decision either they hadn't consulted shareholders or they just had a radically different view to the reality of of how this would be perceived and they kind of went with it anyway and that's the difficult bit if you're looking at Peabody now is like you know can you and could it could it be a good investment and >> it would have been if it went into chapter 11 again and you could buy it out of chapter 11 >> it would have been fantastic they wanted to do it with so much debt as well so it was sort of like ridden with risk the whole way through >> yeah and that the the best guys I think that have uh long-term success in this industry like there's a lot of guys that do this industry and I'm talking about now it's um anyone whether you're where you're running a company or you're a fund manager or whatever there's a lot of guys that do this industry and there's only so many guys that I think do it well and there's a big big difference and doing it well is about being a disciplined capital allocator >> you know totally that is where you will get >> you will get reward in in the long run and there are guys that trade on the ASX with huge premiums because of of you know that characteristic. >> Speaking of disciplined capital allocation, mate, the next thing to give a um great control to you see this one this stock Kaye resources KLR >> very disciplined capital allocation whoever was buying this stock on market clearly just wanted to I mean 94% was controlled by the top 20 shareholders. It's very interesting, curious register and um uh clearly your liquid micro cap, but soared an astronomical intraday percentage. I've never seen anything like it before. Um >> what was the number like 8,600% or something? >> I was watching it in real time when somebody clued me on to it just for 10 minutes. It was trading up 6,000%. >> That's crazy. >> You put it on Iris and I watched it trade in 15 minutes to 9,000%. So was a great buy there at 6,000% up. >> Good. if you can get it. Only $2 million worth of shares traded hands the whole day. Is that right? >> Yeah. The the whole day and then so it it broke a high of over three bucks. Dropped by yesterday afternoon when I checked in on it to 19 cents and this morning up another healthy 350%. So went into a pause in trading because the ASX put in a pause at like 82 cents. I don't know how to to to rate this one. Not not a big fan of the the pump and dump. I'll give that one >> Yeah. Uh, probably an F, but uh, A for entertainment, like eye-catching sort of stuff. What do you guys reckon? >> Yeah, I think like markets will be like funny games will happen on markets to the extent they're allowed to happen. So, I just give ASX an F for the Yeah, it's very hard to it's very hard to say much more than that. It there's a very curious register. There's clearly some very suspicious things going on there of absolutely no insight. Yeah, let's change tac and go to America for a second. So, resolution copper was in the news again this week and there was actually a few different things all kind of coalesing on on the same day. So, on the day that the heads of both BHB and Rio went to the White House, got a photo with with Mr. Trump, you had another um uh appeal lodged by a group of environmentalists as well as um Native American groups. Now, this had come a couple months after what was supposedly the the final approvals needed for this project that's been in the works for well over kind of 20 years now. So, maybe I'll go first and um give a give a a rating and explanation. I I think this one's a D in my mind and how I sort of thought about it is like the ability to build mines in in the US because like mines always come with with trade-offs as we all know and there will be you know land disturbance because of this mine sort of block cave kilometer and a half below the ground but it's a trade-off and if they're going to be serious about having this copper come from the states then there's no sort of perfectly desolate part of America where there's going to be copper there for them to kind of take. So you're going to have to pick and choose and it's going to have to come from somewhere otherwise it's going to come from elsewhere in the world or prices will go up and and it will sort of adjust with that pricing sort of mechanism. So the the way in which the US is just so litigious these days and even after a final approval is given for a mine it still gets bogged down is kind of mind-blowing but it's kind of been that way for the best part of 50 years and that's why I think capital will keep going to to other jurisdictions where you can actually get kind of things done. I'm not sure if you guys think about this one in a kind of different light but yeah I I don't think any of us are massively surprised on on this front. probably not surprised. Um been a very controversial asset this one over the journey. It's been through a long a long journey. I would um take a different route just to start here. And I would say I'm going to give the US probably a B+ here on where they're trying to take policy because I think investment often what I reckon the market misses here is that commodities are long lead right they're long lead investment they require vision they require the ability to think long term and arguably that's why China has pulled the west pants down and spanked it so hard in the last 10 20 is just taking a step back back to that last point. You need two things therefore to invest. You need a price signal or or a view on a price signal and you need a policy setting that you can you can get behind because you need to make investment and you're not going to see the reward from that investment um or the detraction from that investment until a point in the future. Right? So those two things need to marry up and the US I think are trying to get this policy setting much more stable much more clear at least like here is the pathway if you go down this path and you tick all the right boxes you will get permitted and I mean it's partly existential to what they want to do right they need these localized supply chains if they are really serious about having local manufacturing about reinvigorating the refining part of the supply chain if they are serious about reducing China's leverage over them which is you know hugely concentrated in metals processing and you've seen it at the tip of the spear in rare earths but it's so much bigger than that which I think most people don't understand so I give the US sort of a B+ in in the way that they're trying to in very quick time get sharper and better at at getting these processes going. In terms of the judicial nature of the system in the US, uh I've got no issue with the process in in some ways that it's there as a check. The extent to which it's exercised in the US just feels excessive and yeah and can get things bogged down. um a and in an asset like this and then if I even go another angle I'll give the sector a E in the way that it promotes itself right the way that it is generating ground swell or or going back to grassroots and educating people on the significance and importance of these of this industry to their livelihoods to, you know, all the things that they consume to to growth. Um, they're so scared of coming out from behind the veil, right? And for the last 20, 30 years, they've stayed behind there. They haven't wanted to rock the boat, you know, and I think it's done them a disservice. I think a lot of people the easiest place for people to go and pick on, you know, from an ideological point of view is mining because they've been told and taught it's bad. But it's that is a fundamental misunderstanding that it is fundamental. If it wasn't grown, if it wasn't like the food and grains and wood, timber that we grow, it was mined, you know, absent recycling, which there's just no way that recycling can ever support the level of consumption that we have on on materials. It was mined. >> So, how can you love a farmer and hate a minor? It's illogical, right? And the overall footprint on the like on a on a on a area basis versus mining is a fraction. But you never hear BHP or Rio Tinto talking about that. You never hear them trying to promote this sort of education within school systems or or communities. And instead we end up in these very complicated places where ideology drives the outcome. Um you know this is a copper mine that we're talking about here that is a kilometer underground right. Yes the ground disturbance there will be some but it will be tiny in terms of area. And as far as I've I've understood and and and again I'm no expert on this asset in particular. it's not really where we hunt is that you know the indigenous lands that are recognized uh the closest one is 20 mi or something from where this will have a disturbance. So we're not they're not very good at presenting or marketing those facts to the community and and generating support. And this is much bigger than just an asset. This is about reshaping how people think about this industry and coming out from behind the veil. not being so scared of of people criticizing and asking and and having the conversation. So, in that regard, I think these guys have been their own worst enemy over a 20-year period. The next one I'm going to talk about is the NDPR price. So, this nearly hit US 90 bucks this week, which is a huge 50% plus rally, very similar to to the lithium price since about late June. So, as as Tom Olir at um Aluka called it, this this might be the the inklings of a non-China or a bifocated price. The the reason we've seen this kick up is actually a confluence of a a heap of factors. So, you've got this peak production season from a from a manufacturing sense in China occurring right now. So, that that gives a bit of a demand boost. Then you've got pretty s strong home appliance numbers coming out of of China and and globally in in pockets as well which boost that demand. Hence more magnet production is is taking place. And then on the supply side, you've got a a supply contraction very similar to the the license sort of debate that we spoke about with with YJ and and last week in the lithium world. The Chinese are taking a a stricter sort of view on environmental licenses and of course they're huge producers of rare earths as well as processes. So this adds to a bit of a a self-fulfilling thing with big cargo holders of of rare earth of rare earths in China saying, "Hey, maybe won't sell. We'll hold on a little bit longer." Prices run up. You're pulling more supply out. And then traders have jumped on board and pushed this up. So you've had a a kind of beautiful confluence and a runup of a price from you know really in the doldrums for a pretty long period around 50 bucks which was not economic for for anyone. So all of a sudden there's a lot of love and a lot of the names which I'm sure you're very familiar with dingo have you know they've run up sort of 5x from the beginning when all this MP materials announcement started taking place. So, it's a it's a hard one to kind of rate, but if I take the perspective of the junior, you know, battlers in the on the ASX in the rare earth space, I'd love to give them an A because they're finally getting a bit more attention on them. The the importance of what they're doing is kind of being highlighted and hopefully along the way a few projects get a bit more capital they need and the the sort of cream rises to the to the top there. >> Yeah, for the sector, I'll give this one an A as well. I think you know like it it's great to see that um that the theory works across all commodities you know like this rare earth has been in the cost curve for a while and and the rare earth's cost curve is very hard to decipher with any real um accuracy I I would say but it it is certainly felt like it's been there it's been a the incentive price hasn't been there and there's a very big geopolitical overlay on this one like this is right at the tip of that spear and and China love to put the foot on the throat. Um, and I think they still maintain a fair level of leverage there. So, but equally it's good to see the commodity price responding in such a way to meet these funny supply demand dynamics. I think um, which then enable the sector to to raise the capital to advance the assets. That doesn't nec my opinion doesn't mean that I think all these assets are good assets and that they're all going to get there. Uh I I I think you have to be selective in this space to to protect your downside, right? I think a few of these assets will get built. They need to be at the right end of the cost curve. Um but we don't need 100 rare earth assets. Well said. Well said. I I think I got one more for for grade control unless we want to chuck in a few more. This one was plucked out of the Endeavor Minings conference call. It was actually a few weeks ago, but it sort of come on to our radar just just recently. >> You can hear it straight from the horse's mouth. I don't know if it was the CFO or the CEO. >> One's just on um on the hedge. Uh you make the point that it's been quite financially painful to you. Um although I understand the reasons why you put it in. Fair to assume that as we go into 26 um your comment that you'll be unhedged means that we won't be expected to see any hedging go through the accounts in the into the into the next year. Anybody who proposes a hedging program for 2026 will have to deliver the proposal along with their resignation slip. >> Excellent. >> I'll give the comment an A just for the for the um yeah making a joke. It was pretty funny. I like the character in a conference call. They're usually pretty dull. Um yeah, like just thought I think I think the same the CEO also made a comment in the same call used the word bum fight. There's going to be a bum fight just you know employe implore all of that kind of stuff to just add a bit of character in the conference calls on on hedging itself you know like of course you want to be unhedged in uh in these good times. I do think it's it's you can you can easily see and interpret how we have procyclical capital allocation in the sector. It's like people in in the times where gold price is really high, everyone everyone wants to be fully on hedged and then it's like when the times times are low then everyone's putting hedging in place because they've been they've got that you know short-term bias of of history in their head and also it's what all the investors are talking to them about right so I just think um more long-term thinking and um long longterm kind of thinking about this sort of stuff in a counteryclical way like you invest every day Dingo like would would be welcome in the capital allocation front. >> Yeah, no arguments on that front. I mean uh and we don't always get it right but uh it's certainly a framework of thinking that we work within. >> I love conviction. I love you know I give that an A. >> He's uh he's he's telling the entire world clearly what he's telling his employer I think but structurally gold looks pretty reasonable. Uh you know the best hedge that they could have is to focus on costs and that's probably doesn't get enough focus in the gold world. best hedge you can have here with a really healthy commodity price whether it whether it trades at this level or or around 3,000 or or or up uh is to get your cost down. >> Yeah. >> You maximize those margins and um and have that discipline at the top of the commodity. Is this a top at a at a healthy commodity price? >> You can if that's an interesting point too because you can hedge your diesel like those are those are options to lock in your cost for a long duration. >> Let's let's try sweet deal s deal. There's been a few deals this week. Um, yeah, some some interesting different kind of deals. Again, the cap raises are are prolific. Uh, you must just be Yeah. getting getting crossed on the regular for a cap raise or, you know, the likes at the moment. Dingo. >> Been busy for a couple of months. Yeah. >> Yeah. Yeah. So, let let's start there. I mean, the the ones that kind of come to mind this week. Uh, I mean, just big in the rare earth space like Lindian and um and Arafura. You know, there was $180 million together between the two there. just kind of massive massive on the cap raise front. Did you participate in uh in either of them sweet deal? >> I think overall sweet. Uh it's good to see capital being injected back into the sector to to advance the assets and and of of decent quantum. >> Yeah. >> Um participate in Lindian. >> Yeah. >> Yeah. Happy to to you know ring the bell on that one if you like. And >> got a pathway to Yeah. I mean it's it's f it's getting >> it's a fantastic asset right I >> to the to the point I think we made just before very happy to be asset selective here >> very happy to to take a a sort of stock pickers view of different things and it's low capital intensity it's low cost um it's in a you know it's not in the simplest of jurisdictions uh but this runway should see it fully funded and um you know they've got the relationship an agreement with Aluca. So, commercial pathway to production. Yeah, there's a lot to like about this one. >> Yeah. Yeah. You didn't say it, but I my my views on Nolan's are very public, so I'll say then in the cold space, we we are magnetic uh came to mind. Don't know if there are any other ones on your on your radar that came up this week that were were worthy of your of your participation, but >> I think they were the two big ones. Yeah. Again, I think both of them are sweet deals. Both of them will enable those companies to go and advance their assets further and and they have very credible places to to commit the capital. >> Beautiful. Then on the on the strangely royalty front, Regal's royalty fund. So they they you know they they are raising money to acquire this royalty over Malibar's Maxwell Underground. So it was Cole Royalty New South Wales $94 million. >> So that's pretty interesting, right? So 1.25% life of mine royalty. Just another demonstration here that money is going to go into New South Wales assets and continue to to look away from Queensland coal assets because we're in a pretty tough environment. And I think sort of um the the White Haven team really emphasized this this week, but in a tough environment and you're still only five bucks away from the royalty mark hitting incrementally 40% on your earnings means capital is going to be starved from from that space until there's a a shifting of the um of the rules. This is this is a massive issue, right? This I think we sort of semi touched on it when we were talking about BHP biotinto resolution. This short-termism of policy for which our political system seems to support is so damaging to industry and it's so damaging to capital and the thing is that you don't see it straight away. So, and the political cycle isn't long enough for them to bear the consequences of it either. And so, you you you have to have that long-term vision. You have to understand that the you're having long-term implications by these policy settings. I think, you know, a key takeaway from BHP's earnings this week and and BHP is not necessarily a place where we hunt either was what they weren't saying. you know it was where are they allocating their marginal dollar going forward it wasn't into Australia right and nowhere is this more this idea that the so if the commodity price signal is there the policy setting clearly isn't and this is so evident in the oil and gas sector who have been saying this and acting or behaving with their feet leaving and capital not coming in or the last 10 years and it's now just starting to come to materials and it completely is it's a completely disrespectful to the fact that over the last 20 years the majority of our GDP growth here in Australia has come from the material sector right it impacts everybody whether you work in services on the east coast or whether you work in a mine in the Pilra it impacts you and this is the bit that the politicians I don't think have they either don't care for or they or they don't have an understanding of and you know we've just had this policy uh this productivity roundt this week and to me it's frightening what what's coming out of that it's not surprising that BHP to me are committing capital offshore you know and and ironically enough into Argentina than they are into South Australia copper >> and mining barely had a seat at the table at the at productivity >> barely had a seat in the table and and more more commentary let's increase taxes more let's increase royalties more >> despite the fact in Queensland quite starkly they have railroaded the metallurgical coal industry I mean they were some of the lowest cost highest grade highest quality assets globally going into you know primarily going into steel production for metallurgical co and yes there is some thermal up there who those assets at this price point now are uneconomic and nobody's investing in them and that's going to have a radical impact on Queensland and you know again in if you want more evidence of this V you know and Sam Barage talks to this a lot you guys spoke about this last week Victorian gas >> what you're seeing now in terms of the cost of living pressures, the the price of of your utilities, the price of the gas, the uneconomic nature of industry. There is a function and a direct impact of policy that was put in place five or six years ago. And you're only just re like seeing the consequences of that now. And it's damaging, right? It takes a long time to fix. And you know, it takes a lot longer than a three-year political cycle to fix. And so it is going to require people to be more aware of these things to understand what it is that you're the consequences of what what's occurring. >> I think to tie in what you said earlier as well, Dingo, it's the the advertising of what the industry does for the country. It's not present in the minds of the people the value ad to the country that um that these companies bring from operations that are on the other side of the country and that advertising needs to be more present to to highlight the the positivity of of what the industry does. >> Yeah. Like where in this productivity round table has anybody spoken about cost about economic growth about an understanding that you know if we stay on energy for a second fundamentally economic growth is energy converted. So you have we have invested all of this capital and seen all of this capital not come right because of a policy setting that is just sending the price higher and higher and higher and for some reason we think we're going to get productivity out of that. It's the exact opposite at a very very fundamental level. Economic growth is just energy converted. We have to be competitive on a global scale with the inputs that we're putting into our industry, whether they're service- based or whether they're primary industry. I think we we've done ourselves no favors with this like uh marketing or like framing or siloing out of what we what we classify as critical minerals from the rest. And I just think it's um that gets such a a hugely unwarranted political focus compared to like especially relative to what like Australia's GDP composition is from the mining sector. Every mineral is critical. That's why we mine it. We mine it because we need it. We don't mine it for fun. It's absurd that, you know, if if if we just like reframed >> mining as critical, all of the minerals as critical, >> and it I just think that that you get like better focus on what matters because I know all cost matters a lot. Coal mining cost matters a lot. >> Yeah, totally. And I'm so sympathetic to that the person the general person on the street is feeling the financial repression that has been here for a while, right? They they are feeling it. They don't quite I don't think everybody fully grasps it and understands it but they can feel I'm so sympathetic to that and but where we land I think politically is we try and just we keep just kept bandating things right or if we change this policy over here hopefully that will work or if we give you some subsidy over there or we change this singular thing in the tax system none of that stuff is is going to fundamentally work. What about the idea of growing the pie, right? We're so fixated on the pie is fixed whether it's the economy or or investment or whatever. What about the old adage that I think we had we we did very well in this country which is let's grow the pie, right? And how do we be economic and how do we be competitive? And as we grow that pie, how does our our well-being as a community grow with it? And we've just moved so far away from that in the rhetoric. And it because it's hard on the street, it's hard for people to get away from the real short- termism of it. And that's where our politics, you know, that's where really ambitious people who who who are strong leaders, I think, could be very powerful. Unfortunately, it's not what I think we've got >> at the moment. >> Yeah. I mean, we've done such a great job in this in this country for so many years. Just hopefully we can kick back some of the own goals and and um keep going in a in a positive direction. To to round out with one more sweet and sour deal, there was talk about Tiani potentially proposing to take over IGO stake in Quinana. And there's a few sort of policy tie-ins in this one as well because it ties in with that whole downstream narrative which our government was very big on and still, you know, not quite as loud, but there's things like the tax credits that are supposedly going to kick in in in a few years time. Now, IGGO wrote down this investment to to nothing a short while ago. The last quarter alone it operated I think about 35% of name plate capacity and they still lost $29 million in the quarter. So it throws up a whole heap of questions about you know would FURB even approve any any deal like this. But there was a a very interesting catch which I only saw right at the end from Frank H who's the CEO of Tiani saying hey yep we would be interested in buying your stake in Quinana. were very keen to keep going and keep putting in money and there would be a catch that you would have to sort of sell your stake in green bushes if you were wanting to to sell your steak in quana to us. So yeah, I love the balls from Frank there. He knows what he's sort of playing with. And the dynamic in that uh that JV, as with most JVS, is is kind of fraught or at least starts out friendly enough and then ends up being fraught. I >> I love the commentary that came out of Tiani. I I think it's so loaded. >> Yeah. >> Um you know, on one hand, it's it's so almost funny. It's hard to say it's not to say you've been ramping up this plant for 5 years or still committed to it. it's still nowhere near even half of its capacity. Um, so you know, looking deeper like why why are they doing that? And I think maybe that last comment that you made there, maybe that's the rub, maybe it's like, yeah, we wouldn't mind squeezing out of green bushes and how do we do that, you know, and whether that that's going to work, I probably not, right? That's not what I'm saying. And I'm not expressing an opinion on IGO here. I know why I agree with them. I would want out of that downstream processing as well. >> Yeah. Doesn't doesn't it just really highlight the the limitations of a of a of a joint venture agreement where um Yeah. where like when you buy into a joint venture and you don't have control like effectively >> and that's a complicated run, right? That's a JV on a JV. >> Yeah. Yeah. Yeah. Big time. Big time. It's um yeah, you managed to buy a stake in the lowest cost lithium mine in the world, but it came with its it came with its um attachments and those attachments were a joint venture that is it is incredibly ownorous and yeah, you don't have the ability to cail you know the capital that is going towards like it's literally just a money hole. >> Yeah, exactly. real like very logically >> like yeah I think iggo like we are wasting the value of one of the best resources in the world by just plugging it into this downstream processing facility that is lossmaking that is very rational you know that that's entirely rational where they're coming from >> absolutely last but not least fellas any any hidden gems any any nuggets any podcasts any movies any concerts or anything sticking out in your mind, something you want to shine a shine a light on. >> Uh, I can't stop. Well, I'll let you go first, JD. >> All right, I I'll kick off. I went down to Found, which is the uh the brewery in a in a spot that's seen a few breweries go through that in in the middle of Subie there. And they've um good little spot, good pizza and stuff, but they've got this wicked new beer called Zest West. And I've I've punched a good few of them lately. So, go down to your local and support them because that was a that was a ripper. How about you fellas? Uh yeah, I've probably misinterpreted this this this segment. Um but I just I'm still pumped up about um so JD did this big historical like episode on on on Forscu and as a result of that a couple of the people who were right there at the beginning sort of reached out. We got coffee with them yesterday and um I'm just buzzing. It was it was you know two hours with with people who've lived through this absolutely formidable thing you know like create creating a true major from from nothing and you like yeah I was just I was buzzing all day yesterday and and last night from um from from that combo was just wicked. >> Yeah. Nice. Uh I might just carry on in that theme because it just reminded me of a conversation I had last night. But yeah and to and to be positive about what this sector can create, you know, and and the opportunity that it can have for multiple people. Um you know, New World Resources taken over recently by Cana and you know, just speaking to a few guys there, you know, there's a guy who who is now he he is effectively going to buy a house for every single one of his kids, right? And he is just an everyday guy. I I believe he was a landscaper or something like that, right? He runs a very honest business. He lives a very honest life. He's made an investment there and it's paid off in spades. He's now and there's several guys forc reminds me because there's several people on that register that have, you know, at the like the most incredible stories you've ever heard. And that is so fantastic to hear, you know, like guys having a win like that. This just truly life-changing. And that is yeah if we can we all play a role in this in this sector. If we can keep promoting and growing these assets and and delivering value and what it means to the people that are involved can be just enormous, you know, and yeah, equally in New World guys that that you know are on drill rigs, guys that that pick up rocks for a living. Um you know, they've all had a win there. And I just think that that those stories are they're just so good. They're so good to reflect on. It's you know it's there has to be something more to what we do and and I love that aspect. Perhaps more to the theme of what you of the segment uh something that caught my eye this week on the uh on the arts front which is you know not necessarily something my expertise is uh is Quinton Tarantino is is coming back but not with the 10th movie that I think all the fans are waiting for. He's coming out with a stage play next year. So >> really, if >> you're interested in a bit of blood, gore, and you know, uh, quirky dialogue, that appears to be where he's directing his attention. So yeah, that that that perked up my uh interest this week. >> That's awesome. Have to catch that one. >> Before you go, mate. >> Okay. >> Anything anything in the portfolio that's been changing lately you want to talk about? We uh we had a good chat on the phone the other day, and I I know I know you're thinking of a few things, but are there anything you want to kind of air out, you know, in relation to the things you're interested in, right? Oh, I love that. Um, yeah, again, really passionate about the next suite of assets and, you know, when markets are hard, you know, hunting around in these things can be a very friendless thing to do. But I think it's some of them now are just starting to just starting to come out and and and be seen and and um, you know, I think Black Canyon's right at the top of that list. So, this is a a manganese discovery in in Western Australia. Um, it it the drill program there that they've undertaken in incredibly quick time. It's been 12 months uh and and probably $3 million worth of investment, I think, is unveiling a a true bulk commodity project. You know, it's going sort of 30% manganesees. We haven't seen this since Woody Woody. It's it's 80 kilometers from Woody Woody. Uh and equally as a as a bit of a kicker, I also think they've got some exciting um iron or discoveries there. So, you know, that that's really front of mind. Um and under 50 mil market cap, there's nothing nothing ambitious about that at this point in time. So, great to see that investment into exploration is still leading to discovery. >> Discoveries are back. >> Yeah. >> It's great. >> It's awesome. >> Yeah. And um that's what it's all about. Um and then yeah, on the on the rare earth fronts, I've probably got to give a shout out to to Virus in in Brazil. Yeah. Ding ding ding. >> Uh you know that has has been a tough journey, but they've done good work. That is a equality asset on the economic front. >> So which I think is pretty important. And they've just gone ahead now and got the sponsorship really of the Brazilian capital market. And that is uh yeah that's truly fundamentally changing but sort of life-changing for that project and company. I think I think it will allow it to mature and grow uh grow up in in many ways. So >> latest change is substantial there I think came from Brazilian fund. So you can kind of tell the local yeah the the the local capital allocators are this is this is the the clay project that they're they're backing into production. >> Yeah. I think it's significant that that's where you're seeing the investment. So, um, that's a great sign to me. I love seeing that level of sponsorship on the ground from sophisticated capital allocators. It brings a high level of validation to uh to the project. And, you know, to get an asset from discovery through to production, it takes a lot of people, takes plenty of capital, and it and it takes a lot of things to go right. >> Yeah. Barbs. St. Barbs. >> Do have you have you do you own it yet or you still waiting to >> Yeah. No, we own St. Barbara. >> Own St. Barbs. Yeah. >> I think like >> deep value proposition. >> Deep value. >> Deep value. So in terms of the potential like portfolio of gold growth that is advanced and well understood, latent infrastructure. Um it's it's I'm not sure there's any better exposure out there. lights up green on the on the value screen every every time I ever looked at it. >> It has for a little while now. >> That's why I always love hashing out the the buy thesis for it and like Yeah, it's cuz it's >> Yeah, it's got its warts and and everything has its warts for sure. >> Um but there's something to be said for you know in a world where I think we've discussed today like permitting is not easy in any jurisdiction. if you have latent infrastructure, if you have sunk capital, if you can, if the policy setting turns for you, um well, and look in PNG, they've just got their well, it looks like they'll get that mining license extension. It's it's been recommended to the mining minister that he he approve such. Um, you know, the platform there is pretty significant. So, they got a few things they they still need to work through, but ultimately with a with a long-term big picture sort of view there, looks pretty deep value. >> Fantastic. It's great to great to have you join us and um >> mateoo, thanks for having me, boys. >> Cheers. >> Big thanks to Dingo. Big thanks to our partners who make it all happen, mate. our awesome partners focus the platform brought forward by market sand ground support ADU get your tickets to the conference September 3rd till September 5th and Axis mineral services now remember I'm an idiot JD is an idiot if you thought any of this was anything other than entertainment you're an idiot and you need to read out a disclaimer