Why Management Matters more than Project (Will Thomson)
Summary
Real Assets Rotation: Guest sees the rotation out of software as early innings for real assets, expecting more capital to shift over time into materials, energy, and infrastructure.
Gold Miners: Cautious on precious metals equities due to stretched valuations, but maintains Equinox Gold (EQX) as the sole gold position with focus on operational execution and mispricing vs. long-term gold assumptions.
Copper Upside: Bullish copper outlook supported by Lundin Mining (LUN) and the Vicuña district plan, highlighting long-life, large-scale assets, strong teams, and robust financing optionality.
Tin Tightness: Positive long-term on tin despite recent price heat; Alphamin (AFM) offers strong FCF and dividend yield with potential re-rating as DRC risk perceptions gradually improve.
Financing & Streaming: Streaming deals are increasingly prominent (e.g., record silver stream at Antamina), though the guest views some streams as expensive and not essential for best-in-class projects.
DRC Mining Risk: Perception of DRC mining risk is slowly shifting after high-profile deals, but public market acceptance remains early; selective exposure via quality operators is preferred.
Oil & Gas Rebound: Sees attractive opportunities in oil & gas given negative sentiment; cites Harbour Energy (HBR) as a capable consolidator despite UK windfall taxes.
Distressed Assets & Wind: Likes distressed, existing-infrastructure plays such as Larvotto (LRV) at Hillgrove and remains selective on MP Materials (MP) given processing complexity; identifies niches in wind energy where value can be created despite sector headwinds.
Transcript
A good management team and a bad project might still make it. A bad project and a bad management team will never make it. And a bad management team and a great project probably ends up a shitty company. JD, we are joined today by Will Thompson of Massive Capital. Will, it's been a massive year for Massive Capital and um we're delighted that you uh you can you can join us to talk about your high conviction, you know, bets in the material space. you've been a a character on our on our show in the past and you've always intrigued us because you're you're certainly a unique thinker and you um and you think very deeply about about the the the positions you choose. I had the privilege of of reading through your um your Q4 letter which I think I think was dated the 16th of January when when you wrote it. Now that's not all that long ago but it really does feel like you know the world has has moved dramatically since you even writing that. Um I I wanted to ask you a specific question there because you wrote that investors were clinging to US mega cap tech and AI capex with a a quiet refusal to rotate into other assets. Um even as real assets outperformed sitting here now will um starting to see that genuine rotation out of those growth names and into the sort of real assets that you own. >> It's a really good question. Um it's certainly there's certainly there's certainly a rotation it looks like and obviously this is a little high level for me and not my area of expertise but there definitely seems like a rotation uh out of certain types of software names right now I I think that one's hard to argue with it seems like um whether people are rotating into the types of things I own energy material ustrials, industrials and infrastructure I think is still an open question. I don't think that uh there doesn't look like there's a huge rotation into those things u right now alongside that rotation out of software. Um I think we'd see that more in the the stock movement just because the flows would be so big relative to the size of the the resource sectors, if you will. Um, from a market cap perspective, um, there definitely has been obviously some rotation over the last, let's call it, 18 months into more real assets. Uh, I would be surprised if we weren't really just getting started, though, and that rotation is early innings. I I think there's a lot of room for more rotation. And as far as rotating out of the mega cap tech stocks, your Nvidias, Teslas, Microsofts, things of that nature, yeah, I'm sure maybe we're we're seeing a little bit of that on the margin. Uh, but we don't doesn't quite feel like a large rotation out of those things at the moment. Maybe just on the margin. I could be wrong though. Um so uh it's it's pretty hard to see that uh happening at the moment in my opinion. Have >> have you sort of felt it with with inbounds and inbound interests? I mean on on the front of your website you invest in basic materials, energy and and industrial businesses and we're we're very firmly in in the echo chamber of that being the the place to be. But it does feel like that is been the whole conversation for a few months ago. real assets like the the um the letter you write is called the real asset handbook, you know, so it it feels pretty primely placed. >> I we've seen an uptick in inbound. There's no question about that. But it hasn't been it hasn't been like a stampede to the door. Now, that could have more to do with me and my fund than it does the real asset space. So I'm not I'm not sure. Uh we have if we go back to the tech side of things, we have seen an uptick in inbound out of California uh and from tech people and specifically asset managers who have uh allocations from tech investors who are now looking to place that someplace else. though that's interesting but anecdotal and still quite a small you know uh small group if you will. Uh so yeah, I think we're starting to see it. It's a conversation I've been having for a long time. Uh it's a conversation that I think is picking up and politics globally are driving some of that. you guys down in Australia. Gosh, I don't sit down his name. >> Craigle something. >> Yeah. >> All of a sudden, like out of nowhere, Substack, >> Twitter like blew up with articles >> a little little uh disjointed about or or something because I feel like I wrote them a couple years ago and but but he did a fantastic job writing them up again. uh and did a has done a great job sort of uh promoting them and and uh other people like Robert Freedelland and and those guys have have picked up on some of his articles. So there's no question that there's more enthusiasm. Uh the question is whether that enthusiasm is still just sort of the three of us and your podcast listeners uh banging the drum louder um or if people are are actually you know starting to pay attention. I do, you know, you go to a cocktail party these days, at least here in the United States, and inevitably if I say I invest in mining firms, uh, somebody begins to tell me all about this newfound thing they've heard of called rare earth metals. Um, so, you know, there is some movement. Uh, I I think it's pretty immature at this point, though, but we'll see. That's a fascinating anecdote that the the tech people are are some of the ones that you're you're having the inbounds from and you know as well you're getting the standard pitches of of rare earth projects in in Greenland or or Ukraine I bet as well. >> If you >> I I have not had any uh uh pitches to build build rare earth mines in Greenland yet. But um I did I did have a guy who uh pitched me on a a DRC mining project. So uh right after from I guess negotiated a peace deal if you will. >> BRC is not not unfamiliar to you. Well, you're happy investing there. >> Yeah, I have no problem with that. I was not happy with this character, though he was talking about. Um, so >> that's great. Um, if before we jump into the DRC, I I do want to look across the the basket that you kind of invest in. will there was another kind of difference with what Trav mentioned reflecting on just one month ago when you wrote the um the letter the commodity price movements you know specifically on the metals that you look at and we we all look at have been dramatic you know especially the the precious metals it's been been really pronounced so I'm kind of curious to hear you know at a high level where you see the value across the basic materials the energy and the industrial type businesses at the minute >> yeah uh So, I see no value or very little value in precious metals. Um, and I can go into that. That's probably I don't know if that is contrarian or not. >> I think it is. Yeah, I think it is. >> I think we should go into Yeah. >> Okay. Um, so gold has moved so quick and so fast. And I'll just focus on gold. Silver. Look, I I for better or worse, uh, when I first started my fund, I was like, I don't really have time or energy for multiple precious metals, so I'm just going to stick with gold and kind of ignored the silver market for no specific reason other than I just picked gold instead. Um, so I'll I'll sort of focus on gold, but I I think the story with silver the story with silver is probably different because of its industrial uses, though. doesn't necessarily apply, but gold, you know, look, um, you've got a lot of behavior, a lot of political risk, a lot of uh psychology built into the price of gold right now. Um, it's got, you know, the the price of gold has got nothing to do with the cost of producing gold. Um, no one is coming around pitching me gold projects that require $2,000 gold, let alone, you know, $5,000 gold, right? Uh, the challenge is from my perspective that everything in the gold space has baked in a pretty healthy gold price at this point. The equity prices all baked in a pretty healthy gold price. Uh, and so, um, you know, a lot of things that I would have looked at a couple years ago and would have been 150, $250 million companies are now, you know, pre-production gold miners who don't have a definitive feasibility study and are billiondoll companies. Um, it's just hard. I find this market to be really challenging to find value in. everything is running uh ahead of schedule, if you will. We're trading at, you know, whatever point 8 of NAV when we don't even really have a good idea of what the development plan looks like or, you know, something. And so I just find right now uh to be a tough environment to buy a gold miner in unless you think gold price is going to $8,000 an ounce or something. Um, and at least for me, I try not to to make that kind of bet. And I think trying to forecast where gold prices is going from here is quite challenging. And the people who talk about say eight $10,000 per ounce gold, um, you know, they're talking big global macro stories about, you know, central banks and interest rates and, you know, ddollarization and things like that. um driving it to that price. Uh and that those things may certainly occur. Uh but it's very hard to put a timeline on those things. And so buying an expensive gold miner whose pre-production prefeasibility study, you know, at at at full prices is is a challenge for me. Uh I would also say that, you know, the gold prices move so quick. what is a good gold price to use for say a 10, 15, 20 year project. Um, I'm having a lot of trouble figuring out what the actual gold price I should use is. Now, I use a diversity of gold prices in my valuations. U, but even there, I'm having trouble figuring out what the diversity is. I mean, tell me what gold miner, what gold mining management team wouldn't be perfectly happy if gold collapsed to 3500? Do you know any gold miners who wouldn't still mint money? Um, so it's kind of challenging to figure out, you know, so so with that sort of said, you're you're assuming that more of these macro variables, more of this psych psychological variables, behavioral uh political risk variables, those are going to continue to be there and maintain the price of gold up high. And you know that probably is the case but you know h how high is really high above the sort of it's called industry cost of production. Um, gold doesn't need to tie back to the cost of production the same way an industrial metal does. But that does create a bit of an anchor that you can only pile so much uh behavioral or political risk variables on top um before you get a bit, you know, the the the price stack, if you will, gets a bit wobbly. Um, so I think gold's really challenging here. I don't see a lot of value in gold. >> Suppose you're you're wrong. Well, not wrong, but suppose suppose the people who are who are long gold are are proven correct for the macro reasons that are basement trade, all of these things continuing. Do you do you still feel comfortable with your portfolio allocation in other in other you know material sectors that you'll you know you'll you you'll still perform well albeit having minimal gold portfolio allocation right now. And I know I know is it Equinox is your sold position now? Yeah, at this point Equinox is our sold gold position. Um, so, so first of all, my commentary was not, just to be clear and make sure you know, all your listeners understand, was not a critique per se of that argument. Like, to be perfectly frank, I have no opinion on that argument. You know, like $10,000 gold per ounce gold argument. It's a big macro historical argument. I I don't really have any opinion, but they could very well be right. Um, and if they are right and they have a whole portfolio of junior gold liners, they'll mint money. Um I'm perfectly satisfied with uh you know I came into last year with you know let's call it 12 to 15% of the portfolio in G mining and Equinox. I've had well over a 100% rallies uh from my entry price in both. I think G mining got to a 300% return. Equinox is looking at a at least a 200 plus percent return. So, I have nothing to complain about. And uh I've got a little ways to go here on Equinox, which I think is still trading below its value at $3,600 gold. So, um I have no no qualms with lacking additional exposure to gold. I still look at gold miners. Uh, you know, investment banks in Toronto and Australia still bring guys, you know, through me digitally, if you will, for Zoom meetings. Um, and if there's an opportunity, I'll take it. I just haven't found the opportunity. Don't >> everything's priced to uh operational executional perfection. And as we all know, that is should not be the base case for a mining firm. long that should be like the the bear out or the bull outlier case, let alone just the bull case. >> I'd love to um to maybe go a little bit deeper on Equinox while we're here because this Equinox is a really interesting stock and and yeah, you've got you've got great leverage, great growth, and um and maybe a an still a market mispricing or underestimating that in the in in the valuation. Why why is the market, you know, potentially not not not recognizing the achievement or or pricing in the potential return of a 1.1 million house producer at this point in the cycle? >> I think that the So, I've been in Equinox since 2018 or 19, I don't remember which. It was probably the end of 2018. Um, so I've been through a lot of the company's operational growth and what I would say is it's been uh highly effective and extremely messy. Um at the same time uh and it has also been highly opportunistic and the market appears and the market's credit I thought last year would be the year where they focused on operations and didn't engage in a merger very quickly I was proven wrong last year you know so so every year I think a lot of people have come into it thinking okay this is the year they focus on execution as opposed to building and you know you can execute building well and I personally think they have executed building well but building is still messy and it's still complicated uh and so there's complication in the story there's merging of all these different companies uh each company you know came with some companies came with hedges uh other companies came with you know political risk um you know so it was a merger of a lot of different variables and it was never a very clean story in not being a clean story. I think it has underperformed in addition to the fact that you know from an operational p perspective they haven't always uh been at the top of their game in my opinion. The the potential of the assets and the management team to get there has always been there but they've been so busy in my opinion that they haven't pulled it all together. Now, my hope, my expectation is that with Darren Hall in there and a focus on operations, which sort of is supposedly his bread and butter and what he intends to focus on. Uh my my hope is that we start to see especially this year some of that that potential that's been built over the last decade uh flow through the financial state. Um, so that would be why I I suspect the market continues to underappreciate it. It's it's too messy and too complicated. >> A good friend of ours, he um he listens to many many earnings calls and uh he made the comment to JD and I recently that Darren Hall is his new favorite mining executive. >> Oh yeah, why that? >> I just think, you know, his um his demeanor and and yeah, way he way he handles himself on the calls. >> Well, I did an interview with him on YouTube somewhere. uh some zero interview with him a couple of months ago and and he did a he did a great job. Um and he's very he's very focused on uh telling the operational story and the the the changes that they're making uh and telling that story in a way that that I thought at least most investors should understand. So he's he's done a good job communicating. I I think >> you also did an interview if we move commodities um to to copper. You did an interview with with the Londines as well from memory and you you did a two-part write up and since then the the story has evolved more with just a kind of jaw-dropping kind of numbers to to what they've released and and the financing kind of coming together and and the the stages that we can now visualize everything in. How are you how are you seeing London mining at this moment? It's it's a little expensive. Uh I I own it. It's it's uh 10% of our portfolio. Um just it's a big position. Um I would say I I think it's a run a little ahead of itself. Uh but at the same time, uh as you know, we sort of got the Vuna, what they call it, the Vakuna integrated technical study. I guess it was just last was it last week? >> Yep. >> Gosh. Yeah. I was sick with the flu all last week. So, it felt like a really long week. Um, uh, we just got it last week and, you know, it is, uh, a pretty spectacular project. It does have $18 billion capex cost. Um, but, you know, a 70-year life of mine, it's one of the world's, you know, critical copper mines. know while it and and it is one of the world's critical copper mines with a team uh that can get it done and with financing uh or and the ability to get it financed. I think we have a lot of copper projects, not a lot that are as good as Vakuna. Vakuna is unique. There are a lot of potentially really interesting copper projects out there that don't have that team and don't have the financing uh lined up. um or or one or the other. Uh they are the rare example of one that's got project team and financing capability. So while it it has run and I I do think it's a little ahead of itself in terms of the price, uh I think it's really hard to argue that it isn't the company to own in the copper space for the next, you know, 5 to 10 years. I I um I think one one of the developments in that financing space in you know it's it's a kind of a recent development is just the the hugely accreative deals that can be done right now from the streaming perspective and and you know VUNI is not an exception to this because there will be tremendous byproduct credits from the future production of that that asset but you know simultaneously with the release of of that study we saw BHP's record stream on on on the silver of of Antina for for a for a staggering nearly 5 billion US. Um I think like even though capex upfront capex might might be a chunky number, you look at these streams and you think these the development of these can can be done in innovative ways with this this kind of cost of capital arbitrage that um that that is that is really beneficial to the miners. >> Yeah, I still think streaming is pretty expensive. I haven't looked into the details of that BHP stream yet. I was pretty shocked with the just the headline number. Um I don't think I'd was it the biggest stream >> biggest stream ever and and the the and it was the the the upfront proceeds that BHP got from it went were north of the consensus nav of their share of that asset in the first place and of course they you know retaining all the all the copper but um >> yeah I'll have to look into that more because that's pretty that's a pretty punchy situation. I I I I don't think the Londons need to do anything like that to finance VA. I think they can figure this out >> without um without any of that. Um but I I think you're right. There's definitely opportunity. Not every asset though is going to have same, you know, precious metal byproduct credits and things like that. Like I think you know there are some assets in the United States uh in Arizona um Nevada and those type of places copper assets that just mostly copper right um some of them would be harder to finance. I do think you're right. You know, environment appears to be trending towards more favorable, but at the same time, I will say I still see when when I I get approached by banks for private placements to help finance juniors, I still see mostly a full warrant per share with a lot of the stuff I look at. Um and until you know until everyone's doing it at the market you know with no warrants and stuff like that um the financing environment has you know way a ways to go until it's as as sort of positive as it could be. >> We see we see a bit less of that though. You know every every now and then we see one that comes comes across our desk and we you know have to spit our food out and and and see the egregious terms that that are getting paid. But it's not as bad as it was a few years ago, right? >> Capital is way more forthcoming right now. Yeah. >> No, it it definitely Yes, it's definitely better. There's no doubt about that. Um I just I it's still I mean like the rotation story, I still think it's early innings. Uh everything is you know timelines are so long. um volume pickups from some of these incremental projects don't you know I mean even vuna uh vakuna is not big enough you know we need a couple of vakunas every year or something um right so so the financing for a replacement of what we've got is there the question is whether the financing to continue to grow what we've got is there and I think you're right We're now at the point where everyone seems to be capable of financing to the degree that we can replace and stand still in the volume of production across a whole series of commodities. Um but to actually grow them, I think is a different story. Well, you just on on Monday and I mean your two-part write up was it was um it was really informative and you know at the crux of it you wrote that the the history of mining corporate strategy few companies have executed a more comprehensive and successful transformation. Um walk us through why that 2020 to 2024 period was a a a true capital allocation masterclass in your words. >> Yeah. Um well so my understanding of the kuna uh is that and and Jacqueline Dean told me this at some point was doing some interview with him or something. Um you know I think they first started drilling the thing in the like the late 80s early 90s. Okay. So the family if you will has been sitting on this in one way shape or form for a long time. Uh, and they had to they had to prove it out to the point where they really got a lot of confidence in what they had. And I pinpoint that at some time in the the, you know, late 2010s, early 2020s, if you will. Um, so 2018, 19, something, you know, like that. Um, and then they had to sit back and and sort of figure out how are we going to build this? And I don't think you would have necessarily looked at London Mining in 2019 or 2020 and said, "Yeah, sure, they'll figure out some way to cover this $7 billion capex associated with buildings, but what they've done uh is they have at least again in my opinion based on on my inference conversations with them etc. sometime in that time period, they said, "We've got to build this. Um, this is going to be, you know, this is going to be a name brand London family asset like uh for delorte has become for gold. Uh, this is going to make our next, you know, whatever multiple billions. um how do we put ourselves in the strongest position possible uh to not only build this asset but leverage everything you know that comes with building it and so that is you know collecting and acquiring assets that uh were around it caseronis and andas and well in Brazil but um uh building the the water treatment facilities etc. Um, so everything was geared towards putting them in the best position possible 5 years, six years down the road to be able to execute on an $18 billion multi-year build process. Um, it was about generating cash, it was about putting the balance sheet in shape, it was about streamlining the assets to allow for focus. uh everything was a puzzle piece that helped put the company where it is today and as a sort of a midtier capable of playing with the big boys like BHP and Riot Tinto as an equal uh and as a partner and I don't think that a lot of firms uh in that mid-tier space could have made those moves to put themselves where they are. Um, I don't think all of it was a plan ahead of time. You know, they took opportunities as they were presented with them. Um, but, you know, they they've done great work with those opportunities to put themselves in this position. It's tremendous that long-term thinking and even overnight Lunar Royalties the um the deal they've done on uh to to stream silver at at Proto Delorte where the shareholders London Gold will get the shares which will then be distributed to shareholders. It's and you know both both both stock prices up. Lunar royalties now has two tremendous you know royalty or stream assets and on the flip side London gold shareholders are going to get the benefit through in species share distribution. It's um such such >> well they're continuing to build a a tighter you know one of the things I think and I've never talked with them about this but one of the things that that I've always struggled with is uh they've always as a family done so well building assets and developing projects and advancing them. Uh but it was always in these siloed entities. Uh a little different with London Mining but still more siloed entities than anything else. Um but they're figuring out ways now I think to try and pull it all together. Uh and one of the things I do think is particularly important to think about um is that the assets in in Chile and Argentina that they've pulled together for copper, you know, they've pulled together complimentary assets, assets that in theory uh and create uh some economies of scale and create synergies. Usually in mining when they start trot now you know we're going to merge because they're synergies that's usually nonsense right a mine stands alone on its two its own two feet every everything that one mine needs another mine needs so unless they're like you know uh barracks barrack and newmont's you know Nevada gold unless the assets are all right there um there are no synergies uh they've managed to to thoughtfully construct some some potential synergy Um, so everything they're doing I I think is uh is all quite integrated in a way that maybe the previous generation of Londines didn't think about it. Um, that's just a a guess on my part. This all ties in well with a a kind of bigger point that I wanted to talk about because you've got a paper in the works that you you shared with us about how betting on a mining company might not necessarily be the the best approach when you could just bet on the the commodity itself and these sorts of things. And part of that thinking you talk about, you know, you're investing in a mining company, you need to pick the the right management. You're investing in a company that, you know, in your words needs to kind of stand on its own two feet in a way. And it's almost cliche that we're talking about London Mining because they're like the canonical example of like the the management team that everyone can can get behind and the guys are fantastic and they've done it and they got the track record and these sorts of things. But I am kind of curious to to hear your thinking on vetting mining teams, how you think about like management versus the commodity. I know you've you've pushed macro to the side when you really elevate the the idea of management team needs to lead the company. Well, I think that um and and as I sort of suggested in that paper and hopefully it'll come out this week um you know if you if you you run a mining company against a factor model and you deliberately choose which factors you're picking. So in the case of the paper that I wrote was uh currencies risk-free rate, global equities, local equities and the commodity. Um what and the commodity has two flavors. It has a a direct price flavor factor and then also a a factor that's more about the sensitivity to the rate of change in the commodity. Um but when you when you you strip everything else out, what you find is that very rarely uh does a for example a copper miner then very rarely does copper explain much more than about 30% of the the price action uh in the stock market. Um it's uh it's not just a a difficult bet to say that I'm betting on copper, I'm buying a copper miner. Um it's it's in many regards a factually inaccurate statement and only at at very rare moments uh does it actually deliver a majority return derived from the commodity itself. Most of the time the return is driven by uh global equity exposure uh and local equity exposure and then FX role and then the rest of it is is company specific variables. Uh I think that the management team is the most important variable followed by the project. uh the project a good a a good management team and a bad project might still make it. Um a bad project and a bad management team will never make it. Um and a bad management team and a great project probably ends up a shitty company. Um so I think a ma the management team is is the the first question you got to start with and then you also have to start with sort of asking a question about where in the life cycle uh the company is and whether that management team is capable of handling the risks associated with that stage in in company's life cycle. So Equinox we'll go back to it is a good example. Um, you know, Greg, the former CEO, I was quite impressed with his ability to assemble pieces. Uh, you know, they made several mergers, several acquisitions. Um, he assembled the pieces to create Equinox, a company capable of producing about a million ounces of gold a year in less than a decade. That was a very, very uh, impressive assembly assemblage of pieces. Greg didn't really seem that great at operating minds. Now he doesn't need to be. Someone's got to assemble stuff and someone's got to operate it. Darren Darren Hall, the the the current CEO, he seems like more of an operator. I have to see, right? He's going to have to prove it out. Um but, you know, getting the right management team at the right life, the right point in the company's life cycle is really important. I think that applies across the board for any business. Well, oil and natural gas companies are the same. Industrial companies are the same. Um, you know, a company that building a giant, you know, chemical refinery or something, that's the same thing as building a giant mine, right? You need a team that can build stuff. Um, now they may not be the same team that can uh, you know, produce, you know, get the most out of of uh the name plate capacity out of out of whatever asset they build. Uh so I think about that variable sort of first and foremost and quite frequently that's just a function of uh you know what they've done in the past and then conversations and a assessment of of them as people. Um I also think that you know another variable there is is is different people's sort of capital allocation sort of thought process. uh some people want to allocate capital countercycl uh other management teams want to you know engage in M&A some management teams are good at so I'm invested in a company called Harbor Energy which is a oil and natural gas producer in the UK now I think that's another example of a management team who has managed to assemble assets around the globe to be perfectly frank uh quite effectively uh they've been stung by a UK excess profits tax, you know, whatever you want to call it. That that is nasty as can be. Um, and frankly is a tax that more likely to put people out of business than it is to uh bring money into the government. But as a management team capable of assembling assets via M&A, they've done a spectacular job. Um, so you know, understanding management teams is largely, in my opinion, about understanding the challenges that they're going to be faced with over the next couple of years and trying to lift them out and then basically figure out if that management team not only maybe has dealt with those problems in the past and can deal with them in the future, uh, but is likely to be able to deal with them, um, you know, having never experienced some of them. So >> I want to I want to pivot to a a company that um that I think I think you own which is Lavado ASX punters will be very familiar with this one and um you know we we've followed it on the edges and um the antimony trade has been wicked to watch although we haven't participated in it but the but lavad's had its own interesting journey where towards the back end of last year um I think it was US antimony corp were was buying hang stock on market pretty aggressively and and and then came out with an all script bid and post that um you know both both shares in in them and Lovato sold off. Love defended the bid and now Lovato's trading back towards an all-time high price. Tell me about when you you know when you picked up a position what your thesis was and um what the likelihood of a of another bid here is Will. >> So another bid That's an interesting question. I'm not really sure if I have an answer to whether there's another bid. Um, I don't I don't see any reason why US antim uh antimony antimony, excuse me. Um, I don't see any reason why they would bid again. I don't know what happened to the they owned 10% uh or or acquired as much as 10%. Um, I don't know what they're doing with it. I probably should pay closer attention and dig into it a little bit. I'm not exactly sure. Um, I don't think bidding for them makes a lot of sense. Uh, and they don't appear interested in selling given the additional exploration potential, etc. I'm not sure they could get what they think it's worth. Um, what attracted me initially to it though, uh, was some of that capital allocation decision. So the Hillgrove mine which they they bought was bought out of bankruptcy. Uh, and what I think is interesting or an interesting thread to pull on here for for mining investors or natural resource investors more generally, I've seen it in other places, uh, is right now uh, to look at companies or opportunities where you have past producers or where you have infrastructure that already exists that has fallen into some state of disrepair and can be purchased cheaply. Uh, Magnum Mining, which is also in my portfolio, is is not exactly the same story, but is kind of similar. They bought assets that in the current environment make a whole lot of sense, but for various reasons were not of interest to other people. Larvato bought you know the Hillgroveve asset out of bankruptcy during a period and went into bankruptcy not because there isn't uh antimony there not because there isn't gold there not because uh metallurgy is complicated or anything like that but because the previous owner ran into a uh you know prices wiped them out. Um that could repeat itself. Uh but it does appear that we've set some new floors for gold um and antimony and things of that nature uh that should allow them to operate more profitably. You also you know the what you can afford when you buy something for pennies on the dollar and bankruptcy uh in terms of commodity priced movement is dramatically different when you you know build whole things from scratch. Uh so I think and there are some other opportunities like that you know with with companies in Canada uh where you see people buying you know old mills and stuff of that nature uh and you know I was looking at something recently and and I'm not going to share the name because because I'm still looking at it. Um but but I I I think they bought a a proper processing facility for six cents on the dollar. um you know what you can get away with when you buy assets with permits and existing infrastructure that sure still needs investment but you know it it doesn't doesn't need a half a billion dollars worth of investment and needs a hundred million um you can get away with a lot a lot more your optionality you know explodes dramatically um and so you know that's what I saw with Larvat >> we we should do an episode on on these types of plays there's there's so Many MP materials in a way has similarities. Champion iron as well. Anyone who caught that 2015 2016 bare market when everyone that had debt kind of bombed out. I reckon there's a fantastic episode in there. I'd love to contrast it with there there are some assets which they're they're distressed assets and they get a rebirth but they have a constant you know they kind of always become distressed and then there are ones that that have these remarkable kind of turnarounds and and and I'd love to peel into how to pick the difference between the two and of course the commodity cycle is a huge determinant of that and some assets have these um peculiarities from an operational or metallurgical perspective that just make them perpetually challenging. I do think that that what you point out right there, the metallurgical complication or or processing complication. Um I think simple is is better with these uh but I I think that across the board. So like I have a lot of trouble with rare earth copics, rare earth miners and I mean some of them just want to mine the rare earth. They don't want the metal fine. That's a little different. Um but complication associated with the processing and stuff like that that that scares me off. Uh so you know something like like Hillgrove is fairly straightforward. Uh their problem was never process it. So um MP materials that's a processing challenge. Um I I wish them the best of luck. I I will admit that I I think they've accomplished a lot more than I thought they would initially accomplish when they first, you know, that management team first went in. Uh but you know they've got a long way to go. So >> being being cozy with the current administration has its perks though. So can it can work for them. >> It Yes, it does. It does. Um so and and they were uh bought on to to uh to cozy up as they did. >> Well, there's there's a whole heap of um commodities I I still kind of want to go go through. Um why don't we jump into tin next and and just get your kind of thoughts. you've you've done a write up on on Alpha Men. Tin has kind of like every other metal become sexy and there's a lot of tie in with um what your initial paper was to do. You in in a previous life have um you know priced political risk and these sorts of things which was a part of the paper you did on on Alphamin. How are you seeing the um the tin market more broadly? And then specifically with with Alphamin, do you think there's still a a mispriced opportunity? >> So on the TIN side of things, I think TIN has run pretty hot and hard and is is due for a pullback. That's a bit of like sort of short-term market commentary, but it it seems to me I think I saw I think I saw uh the volume of tin traded on the Shanghai exchange recently was like a what do we we do 400,000 tons a year of tin and I think they traded a million tons a day. >> Yeah. And so my my read on that is that with tin sitting here yelling me it looks like 46 today I think it hit it as high as 58,000 a ton maybe or 56,000 a ton. Um there's a lot of churn going on there in Shanghai maybe that's that's juicing that a little bit. uh you've got a the the paper market or something wagging the physical tail of the dog or something, however you want to phrase it. Uh so so I would be surprised if tin hung out here for too long. Um but you know, you still have the situation where I don't know what the next tin mine to come online is. I guess maybe it's the the Cornish tin in in the UK, maybe. But that thing always seems like it's coming online next year. So, I don't know. Um, and you still have uh Myanmar is not really in operation, sort of in operation. Maybe every once in a while they produce some tin now. And then you have Indonesia who call sort of trimmed uh back on on tin mining a little bit via various different rules that impacted artisal miners. uh and you have like three to 4% annualized growth on tin demand uh as everyone needs to solder literally everything because everything has a chip in it now. Um and you have you know supply or demand uh supply growth that that trails that quite dramatically. You know maybe you've got two to 3% annualized supply growth versus 3 to 4% demand growth. Um, so while I do think tin prices have run ahead of themselves on, you know, some churn in in say China and perhaps in the LME, uh, the outlook for tin is still quite favorable. Um, and it's still this itty bitty teeny little market. Uh, and the other story I think is really interesting right now with with critical metals in particular, and I don't know if the story is the same in someplace like Australia as it is in the United States. It could be different. I think the story is the same in Europe. Um, but when we talk about critical metals, everyone wants to talk about rare earths. And rare earth metals are sort of like the the metal with the best press agent. Uh, tin, antimony, graphite, um, I don't know, the list goes on. They they have no press agent. Uh and so if you look at at the critical metals that the governments around the world have just not gotten around to yet, basically what it comes down to, uh tin is going to be pretty high up on that list, I think. Um though I I think the backdrop remains favorable from a macro perspective. Digging deeper, our position in TIN's alphamin, we've long been shareholders. Um, you know, I I think they're going to do I don't know. I mean, they can do free cash flow of $200 million this year on a market cap of I don't know like one and a half billion. It's probably not even one and a half billion US. Um, it's got to be the last thing. Uh, 1.7 billion Canadian. Okay. So, there'll be 200 million in in uh free cash flow, give or take. Uh, dividend yield is going to be 10%. You know, they have no fixed dividend policy. Um, the dividend probably could be much higher than that. They could probably afford a much higher dividend than that. Uh, so I think there's still opportunity. It's becoming or approaching more of a yield play than it is a capital appreciation play. Uh, we made our first purchase at 40 cents several years ago and have been long-term holders. Um, so we're sitting on quite a bit of capital appreciation. Uh, but you know, do 250 is not unreasonable. What has to change for it to achieve that is a just a subtle shift in the perception of Africa um and the DRC as a as a risk. Now whether that occurs or not, I don't know. If that doesn't occur, which I I don't really think it will, you know, it probably tops out at a buck 50, buck 75, um, and and has a rip roaring dividend yield. >> I think that's already happening. Well, I think the um yeah, it's like a the the US Orion um you know,ou to acquire the the the stake in in Glen Coror's DRC assets, even though it was non-binding and even though there's some ambiguity about whether that actually does materialize to a to a real deal or not, >> like the the valuation was was was well north of what what people thought that those assets are worth. And um and I know not all parts of the DRC are the same, but but I think that's part of this broader, you know, broader uh international, you know, convergence that that that the DRC assets, the DRC minerals are incredibly important to to to future growth globally and they're geostrategically incredibly important to the US and the US is making massive inroads in in having influence in that region. Can can I add to that point as well, Trav? Because the the the assets in which there's been a deal over, they they are paying a royalty to to Dan Geler, who sold the assets, who's been sanctioned by the US for a decade plus for for what for what he did and how he got his hands on the assets and these sorts of things. And they're coming in and they're they're buying essentially these assets. That that is a a a new kind of paradigm that we're in. No, I mean I I think you're right. It absolutely is a new paradigm. Whether that paradigm sticks with change in administrations, um I think that's an open question. Uh and whether that percolates down into the stock market and people's approach to these assets as publicly traded assets as opposed to say Orion those assets would be private and cash flowing and or I mean eventually cash flowing thinking about what the situation is currently um you know I think that's still an open question I mean I still bring my portfolio if you will and sit down in front of people uh you know professional allocators if you will you know people who should know better uh than to just dismiss a place uh out of hand because um they they hear it might be risky uh and and people look at my portfolio and they see a couple of African assets uh and they just roll their eyes and they're like, "Oh boy, not for us. We don't want it touch." Um no, I I think you're right. I think there is a shifting of the tide, but again it it's it's so I think um it it's got to be incredibly early because what's actually got to happen uh in order uh for money to really flow and and and interest to really be there I think is still a fairly dramatic shift from here. like um like JD, I'd love to talk with you about some of the other commodities you've got exposure to, but I think we'll we'll wrap it up here as we kind of approach the hour and we'll I wanted to to circle back to the the letter you you wrote 16th of January and you um you you close that letter by saying mining opportunities are are not with the same breadth or asymmetry um and that you're seeing better riskreward in in wind defense and niche chemicals. I mean you say the moment is approaching when a rebalancing away from mining century portfolio will be warranted. That that is not music to the ears of um of the the mining only investors that that we kind of speak to. But but but in a in the context of an industry with with capital cycles, it's an interesting observation that um there will be a time where where where where our industry is not is is is is on a on a different part of that cycle than the the asymmetric opportunity that we we saw. >> Yeah. I I would just want to be a little careful about that comment in that uh it does uh an important variable in that is of course where we started with our mining allocation. And so our portfolio which is supposed to be energy materials and industrials uh and infrastructure industrial and infrastructure with rough sort of like 33% guard rails around it you know we were up at 50% in mining and at one point last year our portfolio reached 75% in mining. Uh so you know we have a portfolio that needs to be rebalanced um away um just just based on the fact that that uh I've got some sort of institutional criteria it's not hard and fast I'm quite flexible but um I can't quite run 75% in mining at all times but I would also say you know much like the gold story right you know I don't think copper's there for example but you know a couple years ago I thought it was easy to buy gold. Um maybe e might be a bit dramatic, but but it was it was it was more straightforward to buy gold miners. Uh copper, I still think copper here at 580 uh I don't even think this is truly the incentive price to build new copper mines that we need to see, right? I I I think it's more like 650 or $7. That is the price that'll really get people building copper. There's still plenty of room to run there. In my opinion, um, you know, it's not about getting out of mining firms. It's about us rebalancing our portfolio into more opportunities where we see uh two, three, 400% returns. And we still see those in mining. And that's what we swing our bat for is those types of planes. We're just not seeing as many of them as we were in other places. And we're seeing more of them, you know, energy, by way of example, oil and natural gas. I mean, golly, people really hate oil, but uh I think it's about as disliked as I mean, not quite as disliked as it was a couple of weeks ago or a couple of months ago, but but boy, coming into the end of 2025, uh 2025, beginning of this year, boy, oil was about as disliked as it could get. Um, you know, I try to go, you know, where the uh skate where the puck is going or something, right? And and so, uh, I think you see a lot of profits made on gold, a lot of profits made on copper. Some of these things are going to need to be recycled into other things. Um, and some of your guys down in Australia, they invest in mining only and they'll recycle them into miners. Um, I've got a slightly broader remitt. uh and so I can take advantage of other opportunities I see elsewhere. Again, not a claim that this cycle is over um but maybe a claim that there'll be more volatility than people appreciate. I think if you looked at the let me get the dates slightly wrong, but if you said the last super cycle went from like I don't know I think I usually started in 1998 or something and run it through 2015 um and you look at something like the Bloomberg commodities metal sub index uh there were tons of 10 and 20% draw downs during that period. uh it was all you know going up and to the right but there was a lot of volatility uh and so you know I I fully expect I don't think you know super cycles are comparable and I'm not saying we're in a super cycle or anything like that um but you know big upward moves there's a process and and they go through wings and and I do think you know we're at a swing here and uh or we're potentially at a swing price here, you know, for gold. Um, I thought we were really going to deal it a couple weeks ago and and everyone turned around and bought it. Um, but so there'll be more opportunities. I I just I'm seeing mostly in energy, but also in some weird industrial places where there are a lot of great opportunities. Uh, and and then, you know, as you you said sort of quietly, uh, I had said something about wind. Um, you know, nobody hates wind right now more than well, everyone. Um but there are some companies that and figure out ways to make money in wind. Uh and so you know that's a good opportunity. Uh especially again it's it goes back to that you know can buy a mine processing facility for 6 cents on the dollar. Um I'm always looking to buy everything for 6 cents on the dollar. >> Got no idea. You just these offure >> these offshore wind projects where the the transmission to the the grid is enormous. You just chuck a data center offshore now and happy days. You had a center offshore. Yeah. Well, the United States, they're going to need to start building them someplace because nobody wants them next to them anymore. >> We have real problems here in the United States. Everyone everyone's complaining about the latest data center built in their neighborhood. >> Offshore data centers floating on the water and it's got the cooling looked after as well. >> Exactly. Exactly. >> Solving all the problems. Well, I think there is there's a there is an offshore oil an old offshore oil rig in the North Sea somewhere. Offshore UK, not terribly deep, relatively shallow. Um, but however they constructed it, there was some sort of like concrete pillar based approach, right? And uh whoever owns it now has in fact uh put a data center through the middle of that concrete column that holds it up. And so the ocean around it does act like uh a cooler, if you will. Um so that idea is not as ridiculous as you think it is. Um or or you know, maybe you didn't think I know. >> Sci-fi becoming reality. I'm starting a company tomorrow and uh I'll raise a billion dollars off the back of this idea and deliver nothing. >> Yeah. Well, um you could pitch it to Elon Musk and say, "Well, this is the first step to >> uh the astronauts in the United States at NASA, you know, they practice, >> they practice in a swimming pool. >> Um he wants to build space." The pitch should be, well, let's let's trial it by building it underwater. Um, you know, Dota got to give you the money if you didn't touch the thing. >> Got to dream big. Will >> we'll put a 50 times multiple on it unlike our our usual five times in our space. And off to the races. >> Thank you so much, Will. It's been an absolute pleasure to speak about um the the the universe that that we love with you and I appreciate you making the time. >> Yeah. Well, um always happy to do it. Love listening to show. Uh, it's the only mining podcast. The only mining podcast I think I listen to. There are a couple of You guys have a couple of competitors, but but nobody really can. You know, it's a good show. >> Much appreciated, Will. I think we got through about a quarter of the questions we had jotted down, so we'll have an abundance of stuff to chat through next time. There we go, Trev. Massive thank you to our awesome partners, Sandic Ground, Support, Focused, Platform by Market Tech, IntLinks, and Exceed Capital. >> 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 our disclaimer.
Why Management Matters more than Project (Will Thomson)
Summary
Transcript
A good management team and a bad project might still make it. A bad project and a bad management team will never make it. And a bad management team and a great project probably ends up a shitty company. JD, we are joined today by Will Thompson of Massive Capital. Will, it's been a massive year for Massive Capital and um we're delighted that you uh you can you can join us to talk about your high conviction, you know, bets in the material space. you've been a a character on our on our show in the past and you've always intrigued us because you're you're certainly a unique thinker and you um and you think very deeply about about the the the positions you choose. I had the privilege of of reading through your um your Q4 letter which I think I think was dated the 16th of January when when you wrote it. Now that's not all that long ago but it really does feel like you know the world has has moved dramatically since you even writing that. Um I I wanted to ask you a specific question there because you wrote that investors were clinging to US mega cap tech and AI capex with a a quiet refusal to rotate into other assets. Um even as real assets outperformed sitting here now will um starting to see that genuine rotation out of those growth names and into the sort of real assets that you own. >> It's a really good question. Um it's certainly there's certainly there's certainly a rotation it looks like and obviously this is a little high level for me and not my area of expertise but there definitely seems like a rotation uh out of certain types of software names right now I I think that one's hard to argue with it seems like um whether people are rotating into the types of things I own energy material ustrials, industrials and infrastructure I think is still an open question. I don't think that uh there doesn't look like there's a huge rotation into those things u right now alongside that rotation out of software. Um I think we'd see that more in the the stock movement just because the flows would be so big relative to the size of the the resource sectors, if you will. Um, from a market cap perspective, um, there definitely has been obviously some rotation over the last, let's call it, 18 months into more real assets. Uh, I would be surprised if we weren't really just getting started, though, and that rotation is early innings. I I think there's a lot of room for more rotation. And as far as rotating out of the mega cap tech stocks, your Nvidias, Teslas, Microsofts, things of that nature, yeah, I'm sure maybe we're we're seeing a little bit of that on the margin. Uh, but we don't doesn't quite feel like a large rotation out of those things at the moment. Maybe just on the margin. I could be wrong though. Um so uh it's it's pretty hard to see that uh happening at the moment in my opinion. Have >> have you sort of felt it with with inbounds and inbound interests? I mean on on the front of your website you invest in basic materials, energy and and industrial businesses and we're we're very firmly in in the echo chamber of that being the the place to be. But it does feel like that is been the whole conversation for a few months ago. real assets like the the um the letter you write is called the real asset handbook, you know, so it it feels pretty primely placed. >> I we've seen an uptick in inbound. There's no question about that. But it hasn't been it hasn't been like a stampede to the door. Now, that could have more to do with me and my fund than it does the real asset space. So I'm not I'm not sure. Uh we have if we go back to the tech side of things, we have seen an uptick in inbound out of California uh and from tech people and specifically asset managers who have uh allocations from tech investors who are now looking to place that someplace else. though that's interesting but anecdotal and still quite a small you know uh small group if you will. Uh so yeah, I think we're starting to see it. It's a conversation I've been having for a long time. Uh it's a conversation that I think is picking up and politics globally are driving some of that. you guys down in Australia. Gosh, I don't sit down his name. >> Craigle something. >> Yeah. >> All of a sudden, like out of nowhere, Substack, >> Twitter like blew up with articles >> a little little uh disjointed about or or something because I feel like I wrote them a couple years ago and but but he did a fantastic job writing them up again. uh and did a has done a great job sort of uh promoting them and and uh other people like Robert Freedelland and and those guys have have picked up on some of his articles. So there's no question that there's more enthusiasm. Uh the question is whether that enthusiasm is still just sort of the three of us and your podcast listeners uh banging the drum louder um or if people are are actually you know starting to pay attention. I do, you know, you go to a cocktail party these days, at least here in the United States, and inevitably if I say I invest in mining firms, uh, somebody begins to tell me all about this newfound thing they've heard of called rare earth metals. Um, so, you know, there is some movement. Uh, I I think it's pretty immature at this point, though, but we'll see. That's a fascinating anecdote that the the tech people are are some of the ones that you're you're having the inbounds from and you know as well you're getting the standard pitches of of rare earth projects in in Greenland or or Ukraine I bet as well. >> If you >> I I have not had any uh uh pitches to build build rare earth mines in Greenland yet. But um I did I did have a guy who uh pitched me on a a DRC mining project. So uh right after from I guess negotiated a peace deal if you will. >> BRC is not not unfamiliar to you. Well, you're happy investing there. >> Yeah, I have no problem with that. I was not happy with this character, though he was talking about. Um, so >> that's great. Um, if before we jump into the DRC, I I do want to look across the the basket that you kind of invest in. will there was another kind of difference with what Trav mentioned reflecting on just one month ago when you wrote the um the letter the commodity price movements you know specifically on the metals that you look at and we we all look at have been dramatic you know especially the the precious metals it's been been really pronounced so I'm kind of curious to hear you know at a high level where you see the value across the basic materials the energy and the industrial type businesses at the minute >> yeah uh So, I see no value or very little value in precious metals. Um, and I can go into that. That's probably I don't know if that is contrarian or not. >> I think it is. Yeah, I think it is. >> I think we should go into Yeah. >> Okay. Um, so gold has moved so quick and so fast. And I'll just focus on gold. Silver. Look, I I for better or worse, uh, when I first started my fund, I was like, I don't really have time or energy for multiple precious metals, so I'm just going to stick with gold and kind of ignored the silver market for no specific reason other than I just picked gold instead. Um, so I'll I'll sort of focus on gold, but I I think the story with silver the story with silver is probably different because of its industrial uses, though. doesn't necessarily apply, but gold, you know, look, um, you've got a lot of behavior, a lot of political risk, a lot of uh psychology built into the price of gold right now. Um, it's got, you know, the the price of gold has got nothing to do with the cost of producing gold. Um, no one is coming around pitching me gold projects that require $2,000 gold, let alone, you know, $5,000 gold, right? Uh, the challenge is from my perspective that everything in the gold space has baked in a pretty healthy gold price at this point. The equity prices all baked in a pretty healthy gold price. Uh, and so, um, you know, a lot of things that I would have looked at a couple years ago and would have been 150, $250 million companies are now, you know, pre-production gold miners who don't have a definitive feasibility study and are billiondoll companies. Um, it's just hard. I find this market to be really challenging to find value in. everything is running uh ahead of schedule, if you will. We're trading at, you know, whatever point 8 of NAV when we don't even really have a good idea of what the development plan looks like or, you know, something. And so I just find right now uh to be a tough environment to buy a gold miner in unless you think gold price is going to $8,000 an ounce or something. Um, and at least for me, I try not to to make that kind of bet. And I think trying to forecast where gold prices is going from here is quite challenging. And the people who talk about say eight $10,000 per ounce gold, um, you know, they're talking big global macro stories about, you know, central banks and interest rates and, you know, ddollarization and things like that. um driving it to that price. Uh and that those things may certainly occur. Uh but it's very hard to put a timeline on those things. And so buying an expensive gold miner whose pre-production prefeasibility study, you know, at at at full prices is is a challenge for me. Uh I would also say that, you know, the gold prices move so quick. what is a good gold price to use for say a 10, 15, 20 year project. Um, I'm having a lot of trouble figuring out what the actual gold price I should use is. Now, I use a diversity of gold prices in my valuations. U, but even there, I'm having trouble figuring out what the diversity is. I mean, tell me what gold miner, what gold mining management team wouldn't be perfectly happy if gold collapsed to 3500? Do you know any gold miners who wouldn't still mint money? Um, so it's kind of challenging to figure out, you know, so so with that sort of said, you're you're assuming that more of these macro variables, more of this psych psychological variables, behavioral uh political risk variables, those are going to continue to be there and maintain the price of gold up high. And you know that probably is the case but you know h how high is really high above the sort of it's called industry cost of production. Um, gold doesn't need to tie back to the cost of production the same way an industrial metal does. But that does create a bit of an anchor that you can only pile so much uh behavioral or political risk variables on top um before you get a bit, you know, the the the price stack, if you will, gets a bit wobbly. Um, so I think gold's really challenging here. I don't see a lot of value in gold. >> Suppose you're you're wrong. Well, not wrong, but suppose suppose the people who are who are long gold are are proven correct for the macro reasons that are basement trade, all of these things continuing. Do you do you still feel comfortable with your portfolio allocation in other in other you know material sectors that you'll you know you'll you you'll still perform well albeit having minimal gold portfolio allocation right now. And I know I know is it Equinox is your sold position now? Yeah, at this point Equinox is our sold gold position. Um, so, so first of all, my commentary was not, just to be clear and make sure you know, all your listeners understand, was not a critique per se of that argument. Like, to be perfectly frank, I have no opinion on that argument. You know, like $10,000 gold per ounce gold argument. It's a big macro historical argument. I I don't really have any opinion, but they could very well be right. Um, and if they are right and they have a whole portfolio of junior gold liners, they'll mint money. Um I'm perfectly satisfied with uh you know I came into last year with you know let's call it 12 to 15% of the portfolio in G mining and Equinox. I've had well over a 100% rallies uh from my entry price in both. I think G mining got to a 300% return. Equinox is looking at a at least a 200 plus percent return. So, I have nothing to complain about. And uh I've got a little ways to go here on Equinox, which I think is still trading below its value at $3,600 gold. So, um I have no no qualms with lacking additional exposure to gold. I still look at gold miners. Uh, you know, investment banks in Toronto and Australia still bring guys, you know, through me digitally, if you will, for Zoom meetings. Um, and if there's an opportunity, I'll take it. I just haven't found the opportunity. Don't >> everything's priced to uh operational executional perfection. And as we all know, that is should not be the base case for a mining firm. long that should be like the the bear out or the bull outlier case, let alone just the bull case. >> I'd love to um to maybe go a little bit deeper on Equinox while we're here because this Equinox is a really interesting stock and and yeah, you've got you've got great leverage, great growth, and um and maybe a an still a market mispricing or underestimating that in the in in the valuation. Why why is the market, you know, potentially not not not recognizing the achievement or or pricing in the potential return of a 1.1 million house producer at this point in the cycle? >> I think that the So, I've been in Equinox since 2018 or 19, I don't remember which. It was probably the end of 2018. Um, so I've been through a lot of the company's operational growth and what I would say is it's been uh highly effective and extremely messy. Um at the same time uh and it has also been highly opportunistic and the market appears and the market's credit I thought last year would be the year where they focused on operations and didn't engage in a merger very quickly I was proven wrong last year you know so so every year I think a lot of people have come into it thinking okay this is the year they focus on execution as opposed to building and you know you can execute building well and I personally think they have executed building well but building is still messy and it's still complicated uh and so there's complication in the story there's merging of all these different companies uh each company you know came with some companies came with hedges uh other companies came with you know political risk um you know so it was a merger of a lot of different variables and it was never a very clean story in not being a clean story. I think it has underperformed in addition to the fact that you know from an operational p perspective they haven't always uh been at the top of their game in my opinion. The the potential of the assets and the management team to get there has always been there but they've been so busy in my opinion that they haven't pulled it all together. Now, my hope, my expectation is that with Darren Hall in there and a focus on operations, which sort of is supposedly his bread and butter and what he intends to focus on. Uh my my hope is that we start to see especially this year some of that that potential that's been built over the last decade uh flow through the financial state. Um, so that would be why I I suspect the market continues to underappreciate it. It's it's too messy and too complicated. >> A good friend of ours, he um he listens to many many earnings calls and uh he made the comment to JD and I recently that Darren Hall is his new favorite mining executive. >> Oh yeah, why that? >> I just think, you know, his um his demeanor and and yeah, way he way he handles himself on the calls. >> Well, I did an interview with him on YouTube somewhere. uh some zero interview with him a couple of months ago and and he did a he did a great job. Um and he's very he's very focused on uh telling the operational story and the the the changes that they're making uh and telling that story in a way that that I thought at least most investors should understand. So he's he's done a good job communicating. I I think >> you also did an interview if we move commodities um to to copper. You did an interview with with the Londines as well from memory and you you did a two-part write up and since then the the story has evolved more with just a kind of jaw-dropping kind of numbers to to what they've released and and the financing kind of coming together and and the the stages that we can now visualize everything in. How are you how are you seeing London mining at this moment? It's it's a little expensive. Uh I I own it. It's it's uh 10% of our portfolio. Um just it's a big position. Um I would say I I think it's a run a little ahead of itself. Uh but at the same time, uh as you know, we sort of got the Vuna, what they call it, the Vakuna integrated technical study. I guess it was just last was it last week? >> Yep. >> Gosh. Yeah. I was sick with the flu all last week. So, it felt like a really long week. Um, uh, we just got it last week and, you know, it is, uh, a pretty spectacular project. It does have $18 billion capex cost. Um, but, you know, a 70-year life of mine, it's one of the world's, you know, critical copper mines. know while it and and it is one of the world's critical copper mines with a team uh that can get it done and with financing uh or and the ability to get it financed. I think we have a lot of copper projects, not a lot that are as good as Vakuna. Vakuna is unique. There are a lot of potentially really interesting copper projects out there that don't have that team and don't have the financing uh lined up. um or or one or the other. Uh they are the rare example of one that's got project team and financing capability. So while it it has run and I I do think it's a little ahead of itself in terms of the price, uh I think it's really hard to argue that it isn't the company to own in the copper space for the next, you know, 5 to 10 years. I I um I think one one of the developments in that financing space in you know it's it's a kind of a recent development is just the the hugely accreative deals that can be done right now from the streaming perspective and and you know VUNI is not an exception to this because there will be tremendous byproduct credits from the future production of that that asset but you know simultaneously with the release of of that study we saw BHP's record stream on on on the silver of of Antina for for a for a staggering nearly 5 billion US. Um I think like even though capex upfront capex might might be a chunky number, you look at these streams and you think these the development of these can can be done in innovative ways with this this kind of cost of capital arbitrage that um that that is that is really beneficial to the miners. >> Yeah, I still think streaming is pretty expensive. I haven't looked into the details of that BHP stream yet. I was pretty shocked with the just the headline number. Um I don't think I'd was it the biggest stream >> biggest stream ever and and the the and it was the the the upfront proceeds that BHP got from it went were north of the consensus nav of their share of that asset in the first place and of course they you know retaining all the all the copper but um >> yeah I'll have to look into that more because that's pretty that's a pretty punchy situation. I I I I don't think the Londons need to do anything like that to finance VA. I think they can figure this out >> without um without any of that. Um but I I think you're right. There's definitely opportunity. Not every asset though is going to have same, you know, precious metal byproduct credits and things like that. Like I think you know there are some assets in the United States uh in Arizona um Nevada and those type of places copper assets that just mostly copper right um some of them would be harder to finance. I do think you're right. You know, environment appears to be trending towards more favorable, but at the same time, I will say I still see when when I I get approached by banks for private placements to help finance juniors, I still see mostly a full warrant per share with a lot of the stuff I look at. Um and until you know until everyone's doing it at the market you know with no warrants and stuff like that um the financing environment has you know way a ways to go until it's as as sort of positive as it could be. >> We see we see a bit less of that though. You know every every now and then we see one that comes comes across our desk and we you know have to spit our food out and and and see the egregious terms that that are getting paid. But it's not as bad as it was a few years ago, right? >> Capital is way more forthcoming right now. Yeah. >> No, it it definitely Yes, it's definitely better. There's no doubt about that. Um I just I it's still I mean like the rotation story, I still think it's early innings. Uh everything is you know timelines are so long. um volume pickups from some of these incremental projects don't you know I mean even vuna uh vakuna is not big enough you know we need a couple of vakunas every year or something um right so so the financing for a replacement of what we've got is there the question is whether the financing to continue to grow what we've got is there and I think you're right We're now at the point where everyone seems to be capable of financing to the degree that we can replace and stand still in the volume of production across a whole series of commodities. Um but to actually grow them, I think is a different story. Well, you just on on Monday and I mean your two-part write up was it was um it was really informative and you know at the crux of it you wrote that the the history of mining corporate strategy few companies have executed a more comprehensive and successful transformation. Um walk us through why that 2020 to 2024 period was a a a true capital allocation masterclass in your words. >> Yeah. Um well so my understanding of the kuna uh is that and and Jacqueline Dean told me this at some point was doing some interview with him or something. Um you know I think they first started drilling the thing in the like the late 80s early 90s. Okay. So the family if you will has been sitting on this in one way shape or form for a long time. Uh, and they had to they had to prove it out to the point where they really got a lot of confidence in what they had. And I pinpoint that at some time in the the, you know, late 2010s, early 2020s, if you will. Um, so 2018, 19, something, you know, like that. Um, and then they had to sit back and and sort of figure out how are we going to build this? And I don't think you would have necessarily looked at London Mining in 2019 or 2020 and said, "Yeah, sure, they'll figure out some way to cover this $7 billion capex associated with buildings, but what they've done uh is they have at least again in my opinion based on on my inference conversations with them etc. sometime in that time period, they said, "We've got to build this. Um, this is going to be, you know, this is going to be a name brand London family asset like uh for delorte has become for gold. Uh, this is going to make our next, you know, whatever multiple billions. um how do we put ourselves in the strongest position possible uh to not only build this asset but leverage everything you know that comes with building it and so that is you know collecting and acquiring assets that uh were around it caseronis and andas and well in Brazil but um uh building the the water treatment facilities etc. Um, so everything was geared towards putting them in the best position possible 5 years, six years down the road to be able to execute on an $18 billion multi-year build process. Um, it was about generating cash, it was about putting the balance sheet in shape, it was about streamlining the assets to allow for focus. uh everything was a puzzle piece that helped put the company where it is today and as a sort of a midtier capable of playing with the big boys like BHP and Riot Tinto as an equal uh and as a partner and I don't think that a lot of firms uh in that mid-tier space could have made those moves to put themselves where they are. Um, I don't think all of it was a plan ahead of time. You know, they took opportunities as they were presented with them. Um, but, you know, they they've done great work with those opportunities to put themselves in this position. It's tremendous that long-term thinking and even overnight Lunar Royalties the um the deal they've done on uh to to stream silver at at Proto Delorte where the shareholders London Gold will get the shares which will then be distributed to shareholders. It's and you know both both both stock prices up. Lunar royalties now has two tremendous you know royalty or stream assets and on the flip side London gold shareholders are going to get the benefit through in species share distribution. It's um such such >> well they're continuing to build a a tighter you know one of the things I think and I've never talked with them about this but one of the things that that I've always struggled with is uh they've always as a family done so well building assets and developing projects and advancing them. Uh but it was always in these siloed entities. Uh a little different with London Mining but still more siloed entities than anything else. Um but they're figuring out ways now I think to try and pull it all together. Uh and one of the things I do think is particularly important to think about um is that the assets in in Chile and Argentina that they've pulled together for copper, you know, they've pulled together complimentary assets, assets that in theory uh and create uh some economies of scale and create synergies. Usually in mining when they start trot now you know we're going to merge because they're synergies that's usually nonsense right a mine stands alone on its two its own two feet every everything that one mine needs another mine needs so unless they're like you know uh barracks barrack and newmont's you know Nevada gold unless the assets are all right there um there are no synergies uh they've managed to to thoughtfully construct some some potential synergy Um, so everything they're doing I I think is uh is all quite integrated in a way that maybe the previous generation of Londines didn't think about it. Um, that's just a a guess on my part. This all ties in well with a a kind of bigger point that I wanted to talk about because you've got a paper in the works that you you shared with us about how betting on a mining company might not necessarily be the the best approach when you could just bet on the the commodity itself and these sorts of things. And part of that thinking you talk about, you know, you're investing in a mining company, you need to pick the the right management. You're investing in a company that, you know, in your words needs to kind of stand on its own two feet in a way. And it's almost cliche that we're talking about London Mining because they're like the canonical example of like the the management team that everyone can can get behind and the guys are fantastic and they've done it and they got the track record and these sorts of things. But I am kind of curious to to hear your thinking on vetting mining teams, how you think about like management versus the commodity. I know you've you've pushed macro to the side when you really elevate the the idea of management team needs to lead the company. Well, I think that um and and as I sort of suggested in that paper and hopefully it'll come out this week um you know if you if you you run a mining company against a factor model and you deliberately choose which factors you're picking. So in the case of the paper that I wrote was uh currencies risk-free rate, global equities, local equities and the commodity. Um what and the commodity has two flavors. It has a a direct price flavor factor and then also a a factor that's more about the sensitivity to the rate of change in the commodity. Um but when you when you you strip everything else out, what you find is that very rarely uh does a for example a copper miner then very rarely does copper explain much more than about 30% of the the price action uh in the stock market. Um it's uh it's not just a a difficult bet to say that I'm betting on copper, I'm buying a copper miner. Um it's it's in many regards a factually inaccurate statement and only at at very rare moments uh does it actually deliver a majority return derived from the commodity itself. Most of the time the return is driven by uh global equity exposure uh and local equity exposure and then FX role and then the rest of it is is company specific variables. Uh I think that the management team is the most important variable followed by the project. uh the project a good a a good management team and a bad project might still make it. Um a bad project and a bad management team will never make it. Um and a bad management team and a great project probably ends up a shitty company. Um so I think a ma the management team is is the the first question you got to start with and then you also have to start with sort of asking a question about where in the life cycle uh the company is and whether that management team is capable of handling the risks associated with that stage in in company's life cycle. So Equinox we'll go back to it is a good example. Um, you know, Greg, the former CEO, I was quite impressed with his ability to assemble pieces. Uh, you know, they made several mergers, several acquisitions. Um, he assembled the pieces to create Equinox, a company capable of producing about a million ounces of gold a year in less than a decade. That was a very, very uh, impressive assembly assemblage of pieces. Greg didn't really seem that great at operating minds. Now he doesn't need to be. Someone's got to assemble stuff and someone's got to operate it. Darren Darren Hall, the the the current CEO, he seems like more of an operator. I have to see, right? He's going to have to prove it out. Um but, you know, getting the right management team at the right life, the right point in the company's life cycle is really important. I think that applies across the board for any business. Well, oil and natural gas companies are the same. Industrial companies are the same. Um, you know, a company that building a giant, you know, chemical refinery or something, that's the same thing as building a giant mine, right? You need a team that can build stuff. Um, now they may not be the same team that can uh, you know, produce, you know, get the most out of of uh the name plate capacity out of out of whatever asset they build. Uh so I think about that variable sort of first and foremost and quite frequently that's just a function of uh you know what they've done in the past and then conversations and a assessment of of them as people. Um I also think that you know another variable there is is is different people's sort of capital allocation sort of thought process. uh some people want to allocate capital countercycl uh other management teams want to you know engage in M&A some management teams are good at so I'm invested in a company called Harbor Energy which is a oil and natural gas producer in the UK now I think that's another example of a management team who has managed to assemble assets around the globe to be perfectly frank uh quite effectively uh they've been stung by a UK excess profits tax, you know, whatever you want to call it. That that is nasty as can be. Um, and frankly is a tax that more likely to put people out of business than it is to uh bring money into the government. But as a management team capable of assembling assets via M&A, they've done a spectacular job. Um, so you know, understanding management teams is largely, in my opinion, about understanding the challenges that they're going to be faced with over the next couple of years and trying to lift them out and then basically figure out if that management team not only maybe has dealt with those problems in the past and can deal with them in the future, uh, but is likely to be able to deal with them, um, you know, having never experienced some of them. So >> I want to I want to pivot to a a company that um that I think I think you own which is Lavado ASX punters will be very familiar with this one and um you know we we've followed it on the edges and um the antimony trade has been wicked to watch although we haven't participated in it but the but lavad's had its own interesting journey where towards the back end of last year um I think it was US antimony corp were was buying hang stock on market pretty aggressively and and and then came out with an all script bid and post that um you know both both shares in in them and Lovato sold off. Love defended the bid and now Lovato's trading back towards an all-time high price. Tell me about when you you know when you picked up a position what your thesis was and um what the likelihood of a of another bid here is Will. >> So another bid That's an interesting question. I'm not really sure if I have an answer to whether there's another bid. Um, I don't I don't see any reason why US antim uh antimony antimony, excuse me. Um, I don't see any reason why they would bid again. I don't know what happened to the they owned 10% uh or or acquired as much as 10%. Um, I don't know what they're doing with it. I probably should pay closer attention and dig into it a little bit. I'm not exactly sure. Um, I don't think bidding for them makes a lot of sense. Uh, and they don't appear interested in selling given the additional exploration potential, etc. I'm not sure they could get what they think it's worth. Um, what attracted me initially to it though, uh, was some of that capital allocation decision. So the Hillgrove mine which they they bought was bought out of bankruptcy. Uh, and what I think is interesting or an interesting thread to pull on here for for mining investors or natural resource investors more generally, I've seen it in other places, uh, is right now uh, to look at companies or opportunities where you have past producers or where you have infrastructure that already exists that has fallen into some state of disrepair and can be purchased cheaply. Uh, Magnum Mining, which is also in my portfolio, is is not exactly the same story, but is kind of similar. They bought assets that in the current environment make a whole lot of sense, but for various reasons were not of interest to other people. Larvato bought you know the Hillgroveve asset out of bankruptcy during a period and went into bankruptcy not because there isn't uh antimony there not because there isn't gold there not because uh metallurgy is complicated or anything like that but because the previous owner ran into a uh you know prices wiped them out. Um that could repeat itself. Uh but it does appear that we've set some new floors for gold um and antimony and things of that nature uh that should allow them to operate more profitably. You also you know the what you can afford when you buy something for pennies on the dollar and bankruptcy uh in terms of commodity priced movement is dramatically different when you you know build whole things from scratch. Uh so I think and there are some other opportunities like that you know with with companies in Canada uh where you see people buying you know old mills and stuff of that nature uh and you know I was looking at something recently and and I'm not going to share the name because because I'm still looking at it. Um but but I I I think they bought a a proper processing facility for six cents on the dollar. um you know what you can get away with when you buy assets with permits and existing infrastructure that sure still needs investment but you know it it doesn't doesn't need a half a billion dollars worth of investment and needs a hundred million um you can get away with a lot a lot more your optionality you know explodes dramatically um and so you know that's what I saw with Larvat >> we we should do an episode on on these types of plays there's there's so Many MP materials in a way has similarities. Champion iron as well. Anyone who caught that 2015 2016 bare market when everyone that had debt kind of bombed out. I reckon there's a fantastic episode in there. I'd love to contrast it with there there are some assets which they're they're distressed assets and they get a rebirth but they have a constant you know they kind of always become distressed and then there are ones that that have these remarkable kind of turnarounds and and and I'd love to peel into how to pick the difference between the two and of course the commodity cycle is a huge determinant of that and some assets have these um peculiarities from an operational or metallurgical perspective that just make them perpetually challenging. I do think that that what you point out right there, the metallurgical complication or or processing complication. Um I think simple is is better with these uh but I I think that across the board. So like I have a lot of trouble with rare earth copics, rare earth miners and I mean some of them just want to mine the rare earth. They don't want the metal fine. That's a little different. Um but complication associated with the processing and stuff like that that that scares me off. Uh so you know something like like Hillgrove is fairly straightforward. Uh their problem was never process it. So um MP materials that's a processing challenge. Um I I wish them the best of luck. I I will admit that I I think they've accomplished a lot more than I thought they would initially accomplish when they first, you know, that management team first went in. Uh but you know they've got a long way to go. So >> being being cozy with the current administration has its perks though. So can it can work for them. >> It Yes, it does. It does. Um so and and they were uh bought on to to uh to cozy up as they did. >> Well, there's there's a whole heap of um commodities I I still kind of want to go go through. Um why don't we jump into tin next and and just get your kind of thoughts. you've you've done a write up on on Alpha Men. Tin has kind of like every other metal become sexy and there's a lot of tie in with um what your initial paper was to do. You in in a previous life have um you know priced political risk and these sorts of things which was a part of the paper you did on on Alphamin. How are you seeing the um the tin market more broadly? And then specifically with with Alphamin, do you think there's still a a mispriced opportunity? >> So on the TIN side of things, I think TIN has run pretty hot and hard and is is due for a pullback. That's a bit of like sort of short-term market commentary, but it it seems to me I think I saw I think I saw uh the volume of tin traded on the Shanghai exchange recently was like a what do we we do 400,000 tons a year of tin and I think they traded a million tons a day. >> Yeah. And so my my read on that is that with tin sitting here yelling me it looks like 46 today I think it hit it as high as 58,000 a ton maybe or 56,000 a ton. Um there's a lot of churn going on there in Shanghai maybe that's that's juicing that a little bit. uh you've got a the the paper market or something wagging the physical tail of the dog or something, however you want to phrase it. Uh so so I would be surprised if tin hung out here for too long. Um but you know, you still have the situation where I don't know what the next tin mine to come online is. I guess maybe it's the the Cornish tin in in the UK, maybe. But that thing always seems like it's coming online next year. So, I don't know. Um, and you still have uh Myanmar is not really in operation, sort of in operation. Maybe every once in a while they produce some tin now. And then you have Indonesia who call sort of trimmed uh back on on tin mining a little bit via various different rules that impacted artisal miners. uh and you have like three to 4% annualized growth on tin demand uh as everyone needs to solder literally everything because everything has a chip in it now. Um and you have you know supply or demand uh supply growth that that trails that quite dramatically. You know maybe you've got two to 3% annualized supply growth versus 3 to 4% demand growth. Um, so while I do think tin prices have run ahead of themselves on, you know, some churn in in say China and perhaps in the LME, uh, the outlook for tin is still quite favorable. Um, and it's still this itty bitty teeny little market. Uh, and the other story I think is really interesting right now with with critical metals in particular, and I don't know if the story is the same in someplace like Australia as it is in the United States. It could be different. I think the story is the same in Europe. Um, but when we talk about critical metals, everyone wants to talk about rare earths. And rare earth metals are sort of like the the metal with the best press agent. Uh, tin, antimony, graphite, um, I don't know, the list goes on. They they have no press agent. Uh and so if you look at at the critical metals that the governments around the world have just not gotten around to yet, basically what it comes down to, uh tin is going to be pretty high up on that list, I think. Um though I I think the backdrop remains favorable from a macro perspective. Digging deeper, our position in TIN's alphamin, we've long been shareholders. Um, you know, I I think they're going to do I don't know. I mean, they can do free cash flow of $200 million this year on a market cap of I don't know like one and a half billion. It's probably not even one and a half billion US. Um, it's got to be the last thing. Uh, 1.7 billion Canadian. Okay. So, there'll be 200 million in in uh free cash flow, give or take. Uh, dividend yield is going to be 10%. You know, they have no fixed dividend policy. Um, the dividend probably could be much higher than that. They could probably afford a much higher dividend than that. Uh, so I think there's still opportunity. It's becoming or approaching more of a yield play than it is a capital appreciation play. Uh, we made our first purchase at 40 cents several years ago and have been long-term holders. Um, so we're sitting on quite a bit of capital appreciation. Uh, but you know, do 250 is not unreasonable. What has to change for it to achieve that is a just a subtle shift in the perception of Africa um and the DRC as a as a risk. Now whether that occurs or not, I don't know. If that doesn't occur, which I I don't really think it will, you know, it probably tops out at a buck 50, buck 75, um, and and has a rip roaring dividend yield. >> I think that's already happening. Well, I think the um yeah, it's like a the the US Orion um you know,ou to acquire the the the stake in in Glen Coror's DRC assets, even though it was non-binding and even though there's some ambiguity about whether that actually does materialize to a to a real deal or not, >> like the the valuation was was was well north of what what people thought that those assets are worth. And um and I know not all parts of the DRC are the same, but but I think that's part of this broader, you know, broader uh international, you know, convergence that that that the DRC assets, the DRC minerals are incredibly important to to to future growth globally and they're geostrategically incredibly important to the US and the US is making massive inroads in in having influence in that region. Can can I add to that point as well, Trav? Because the the the assets in which there's been a deal over, they they are paying a royalty to to Dan Geler, who sold the assets, who's been sanctioned by the US for a decade plus for for what for what he did and how he got his hands on the assets and these sorts of things. And they're coming in and they're they're buying essentially these assets. That that is a a a new kind of paradigm that we're in. No, I mean I I think you're right. It absolutely is a new paradigm. Whether that paradigm sticks with change in administrations, um I think that's an open question. Uh and whether that percolates down into the stock market and people's approach to these assets as publicly traded assets as opposed to say Orion those assets would be private and cash flowing and or I mean eventually cash flowing thinking about what the situation is currently um you know I think that's still an open question I mean I still bring my portfolio if you will and sit down in front of people uh you know professional allocators if you will you know people who should know better uh than to just dismiss a place uh out of hand because um they they hear it might be risky uh and and people look at my portfolio and they see a couple of African assets uh and they just roll their eyes and they're like, "Oh boy, not for us. We don't want it touch." Um no, I I think you're right. I think there is a shifting of the tide, but again it it's it's so I think um it it's got to be incredibly early because what's actually got to happen uh in order uh for money to really flow and and and interest to really be there I think is still a fairly dramatic shift from here. like um like JD, I'd love to talk with you about some of the other commodities you've got exposure to, but I think we'll we'll wrap it up here as we kind of approach the hour and we'll I wanted to to circle back to the the letter you you wrote 16th of January and you um you you close that letter by saying mining opportunities are are not with the same breadth or asymmetry um and that you're seeing better riskreward in in wind defense and niche chemicals. I mean you say the moment is approaching when a rebalancing away from mining century portfolio will be warranted. That that is not music to the ears of um of the the mining only investors that that we kind of speak to. But but but in a in the context of an industry with with capital cycles, it's an interesting observation that um there will be a time where where where where our industry is not is is is is on a on a different part of that cycle than the the asymmetric opportunity that we we saw. >> Yeah. I I would just want to be a little careful about that comment in that uh it does uh an important variable in that is of course where we started with our mining allocation. And so our portfolio which is supposed to be energy materials and industrials uh and infrastructure industrial and infrastructure with rough sort of like 33% guard rails around it you know we were up at 50% in mining and at one point last year our portfolio reached 75% in mining. Uh so you know we have a portfolio that needs to be rebalanced um away um just just based on the fact that that uh I've got some sort of institutional criteria it's not hard and fast I'm quite flexible but um I can't quite run 75% in mining at all times but I would also say you know much like the gold story right you know I don't think copper's there for example but you know a couple years ago I thought it was easy to buy gold. Um maybe e might be a bit dramatic, but but it was it was it was more straightforward to buy gold miners. Uh copper, I still think copper here at 580 uh I don't even think this is truly the incentive price to build new copper mines that we need to see, right? I I I think it's more like 650 or $7. That is the price that'll really get people building copper. There's still plenty of room to run there. In my opinion, um, you know, it's not about getting out of mining firms. It's about us rebalancing our portfolio into more opportunities where we see uh two, three, 400% returns. And we still see those in mining. And that's what we swing our bat for is those types of planes. We're just not seeing as many of them as we were in other places. And we're seeing more of them, you know, energy, by way of example, oil and natural gas. I mean, golly, people really hate oil, but uh I think it's about as disliked as I mean, not quite as disliked as it was a couple of weeks ago or a couple of months ago, but but boy, coming into the end of 2025, uh 2025, beginning of this year, boy, oil was about as disliked as it could get. Um, you know, I try to go, you know, where the uh skate where the puck is going or something, right? And and so, uh, I think you see a lot of profits made on gold, a lot of profits made on copper. Some of these things are going to need to be recycled into other things. Um, and some of your guys down in Australia, they invest in mining only and they'll recycle them into miners. Um, I've got a slightly broader remitt. uh and so I can take advantage of other opportunities I see elsewhere. Again, not a claim that this cycle is over um but maybe a claim that there'll be more volatility than people appreciate. I think if you looked at the let me get the dates slightly wrong, but if you said the last super cycle went from like I don't know I think I usually started in 1998 or something and run it through 2015 um and you look at something like the Bloomberg commodities metal sub index uh there were tons of 10 and 20% draw downs during that period. uh it was all you know going up and to the right but there was a lot of volatility uh and so you know I I fully expect I don't think you know super cycles are comparable and I'm not saying we're in a super cycle or anything like that um but you know big upward moves there's a process and and they go through wings and and I do think you know we're at a swing here and uh or we're potentially at a swing price here, you know, for gold. Um, I thought we were really going to deal it a couple weeks ago and and everyone turned around and bought it. Um, but so there'll be more opportunities. I I just I'm seeing mostly in energy, but also in some weird industrial places where there are a lot of great opportunities. Uh, and and then, you know, as you you said sort of quietly, uh, I had said something about wind. Um, you know, nobody hates wind right now more than well, everyone. Um but there are some companies that and figure out ways to make money in wind. Uh and so you know that's a good opportunity. Uh especially again it's it goes back to that you know can buy a mine processing facility for 6 cents on the dollar. Um I'm always looking to buy everything for 6 cents on the dollar. >> Got no idea. You just these offure >> these offshore wind projects where the the transmission to the the grid is enormous. You just chuck a data center offshore now and happy days. You had a center offshore. Yeah. Well, the United States, they're going to need to start building them someplace because nobody wants them next to them anymore. >> We have real problems here in the United States. Everyone everyone's complaining about the latest data center built in their neighborhood. >> Offshore data centers floating on the water and it's got the cooling looked after as well. >> Exactly. Exactly. >> Solving all the problems. Well, I think there is there's a there is an offshore oil an old offshore oil rig in the North Sea somewhere. Offshore UK, not terribly deep, relatively shallow. Um, but however they constructed it, there was some sort of like concrete pillar based approach, right? And uh whoever owns it now has in fact uh put a data center through the middle of that concrete column that holds it up. And so the ocean around it does act like uh a cooler, if you will. Um so that idea is not as ridiculous as you think it is. Um or or you know, maybe you didn't think I know. >> Sci-fi becoming reality. I'm starting a company tomorrow and uh I'll raise a billion dollars off the back of this idea and deliver nothing. >> Yeah. Well, um you could pitch it to Elon Musk and say, "Well, this is the first step to >> uh the astronauts in the United States at NASA, you know, they practice, >> they practice in a swimming pool. >> Um he wants to build space." The pitch should be, well, let's let's trial it by building it underwater. Um, you know, Dota got to give you the money if you didn't touch the thing. >> Got to dream big. Will >> we'll put a 50 times multiple on it unlike our our usual five times in our space. And off to the races. >> Thank you so much, Will. It's been an absolute pleasure to speak about um the the the universe that that we love with you and I appreciate you making the time. >> Yeah. Well, um always happy to do it. Love listening to show. Uh, it's the only mining podcast. The only mining podcast I think I listen to. There are a couple of You guys have a couple of competitors, but but nobody really can. You know, it's a good show. >> Much appreciated, Will. I think we got through about a quarter of the questions we had jotted down, so we'll have an abundance of stuff to chat through next time. There we go, Trev. Massive thank you to our awesome partners, Sandic Ground, Support, Focused, Platform by Market Tech, IntLinks, and Exceed Capital. >> 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 our disclaimer.