Gold Soars & China Corners BHP (Jeff Quartermaine)

Summary

• Gold Market Dynamics: Jeff Quartermaine discusses the significant rise in gold prices and the strategic decisions companies face, such as leveraging elevated prices or exploring new mineral resources.
• Perseus Mining Journey: Perseus Mining's market cap growth from $100 million to $7 billion highlights successful value creation through strategic acquisitions and project development.
• China and BHP: The podcast explores China's strategic moves in the mining sector, including its influence on BHP and the broader implications for global commodity markets.
• Investment Strategies: Jeff emphasizes the importance of long-term thinking, risk management, and maintaining core values in investment decisions, particularly in volatile markets.
• African Mining Landscape: Discussion on the evolving dynamics in Africa, including geopolitical challenges and the potential for significant investment opportunities despite perceived risks.
• Industry Leadership Changes: The podcast covers recent leadership changes at major gold companies like Barrick and Newmont, speculating on strategic shifts and market impacts.
• Strategic Resource Management: The conversation touches on the importance of strategic resource management and the potential for government involvement in critical mineral reserves.
• Market Opportunities: The podcast highlights the current investor interest in mining companies, with numerous capital raises indicating strong market confidence in the sector's future.

Transcript

You know, the only way you can justify some of the prices that are being asked at the moment is either you have a firm belief that the gold price is going to be stronger for longer or that there's some very, very material upside in the mineral resource. Jeff Cordmain, the gold price has just hit a new all-time high. You have just resigned after a 15ear spell, 12 years at the helm of of Perseus. uh a very volatile first year when the company's market cap dipped down to hundred million dollars after the last true bull market we saw in in the commodity. How are you taking it all on board now? >> Well, it's a pretty amazing time, isn't it really? I mean, these prices are a lot higher than I think any of us really expected we'd see, but um yeah, make the sun shines, I guess. >> From a hundred million market cap to 7 billion dollars now. tremendous value creation story for for the people that have been shareholders along the way. A huge congratulations from from us on um on phenomenal phenomenal innings and um we're delighted to have you join us for our weekly rap talking about the big stories of the week. We're going to lean into your expertise, Jeff, and uh you know gold is gold is going to be a big part of that. And my god, we've had some big uh big gold news amongst the majors today. Well, this week with the with the departures of of Bristo and the the planned departure of uh of also Tom Palmer, both Barrick and Newmont the like. My god, China. We've got to talk about China, mate. >> We do. We do. This news with BHB and and China is like sort of head scratching just looking at the screen shouting wow like a number of times. It's remarkable stuff. Y and the uh the big news in the the market doesn't stop there, does it? >> No, mate. Well, uh, our usual sections, grade control, a bunch of stories, and also also sweet SA. So, Jeff Cordain, thank you for accepting our kind invitation. Uh, you didn't need to come join us, but you you did, and we're delighted to have you here. I think like we're kind of just really curious to to to understand like reflecting on Perseus, your journey there, like how do you how do you how do you feel about the place or the the the place that that Perseus is within the gold market right now? Well, it's a it's an interesting question that I mean, we we've obviously come a long way over the over the years and um had an extraordinary journey in in getting to where we are now. And the question is, well, where do you go to from here? And um you know I I firmly of the belief that we've created a platform from which we could leverage tremendously and we could make a take another quantum leap but it is going to take a good deal of effort to do that and it's going to take a bit of time and you know from my perspective it was a question of well um you know do you stay for the next phase of the journey or do you pass the nextg and I think you know it's really important to get a new set of eyes on things and to bring a new level of energy and commitment and the like and that's basically what we've done, but god it's been a good journey along the way and we've really enjoyed every moment of it. >> Yeah. You you had previously worked in Australia as well as Papa Newu Guinea and and Philippines. So, you wanted something a bit easier and and you went out to West Africa around 2010 to take on the the CFO role in what was a a boom time in the market. So, you had three years as CFO. I'd love just to hear the the parallels between that era and where we are today. Yeah, it is very similar in in many respects. I mean, I you know, it's quite an interesting situation. I came over to join Perseus on the basis that look come over and raise some money and we'll build this project and get taken over and you know, the rest is history sort of thing. And and it didn't turn out at all like that. But what what did happen was as you you said earlier, there was a significant correction in the market around what 213 214 sort of thing. And you know that's there there are real parallels with where we are today. I mean you know some of the prices that are being paid for stocks at the moment seem to me to be pretty inflated and um you know perhaps there'll be a bit of buyers regret when the dust settles on that particular you know scenario and that's exactly what happened to us at Perseus. We you know at one point I think in 2010 if I remember correctly uh we went into the ASX 100 I think we had a market cap of 1.6 6 billion and we hadn't even turned to sort of dirt at that particular point in time and it seemed wow this is pretty pretty up there. Well, you know the guys that bought those shares a few of them certainly suffered buyers remorse and then spent the next four or five years reminding me about that every time they had an opportunity. that that the the common thread with with the you know Percy's value creation story was acquiring undeveloped projects for pretty minimal kind of upfront cost in your tenure and then executing delivering them you know plus the on curve free rate of uh bringing them into into production. You can't buy things cheap anymore. How did you contend with just the valuation landscape you know in the last last year of your your tenure? uh it's it is it is very difficult. I mean you know the only way you can justify some of the prices that are being asked at the moment is either you have a a firm belief that the gold price is going to be stronger for longer or that there's some very very material upside in the mineral resource and um you know some of those things could be true. I mean certainly I think we bought um Orp a couple of years ago and got the Nan Saga project and I think you know that in retrospect that will be seen as a as a fantastic acquisition because not only have we um you know put it into development now and have a very good chance of benefiting from elevated gold prices but I think our exploration team has done a firstass job as well in terms of um perhaps um you know delineating getting resources that weren't previously recognized. So on that particular one, I think we we looked like we we had good chance of winning both ways. >> And and how do you think about the the sort of trend to cut your minds at at a higher sort of gold price assumption and all these sorts of things and expand production, lower margin, >> banking off the the higher gold price? I mean, it's a trend we see all across the industry. How do you sort of >> Yeah, that's a really that's a really interesting one and it's one that we've wrestled with as well. um you know there is a case to be made around um production and consistency of production. So in our case we were thinking um you know the mayor sand project that we bought was due to come on stream around now but for one reason or another we weren't able to do that. So looking at well how do you fill the gap till neon saga comes on and there is the temptation to elevate your cut off grade oh your um drop your cut off grade and elevate your gold price and and reduce the margin at the same time. Now, you know, provided you um put some hedging of one sort into another to to guarantee your margin, that's not a bad strategy. Um but, you know, would you want to rely on it forever? I would not necessarily think so because I think this is exactly what went wrong in the last cycle where people did precisely this and got caught when the gold price turned. So the problem is is that when you do that um you know for instance if you're going to do another cut back or something like that it's significant capital investment and time if you get through that period of time before the market collapses then you'll be hero but if the market turns while you're halfway through then look out. So it is a matter of fine judgment um and it's one that I think is exercising the mind of a lot of a lot of executives in in the business. We we were chatting before we started recording and it's kind of implicit in what you've just said right now. The the relationship that you as a management team have with the investors in your business is is paramount and it's also ever changing. You know, when the in the good times they're pushing you to do more, do deals, expand production, these things, and then maybe they're on your back for those decisions in the downtime. So, how how do you balance that dynamic with your internal management team just within yourself in in maintaining your your sort of resilience and and sticking true to the outlooks that you have about the industry? >> Yeah, it's it's a really important point. I mean, you have to know what you're about, you know, and understand what your core values are, what's important, and and not not be persuaded by the by the cheer squad, as it were, because you you know what you're going to hear, and you know, you form a judgment, and you'll be judged by it. You know the thing is that history may may look at look at my tenure and people may say god he missed some opportunities he should have bought well you know blah blah blah but on the other hand it may be different nobody knows today right so but you do definitely have to balance those things up and one of the things is that you know we as a company at Perseus take well took very seriously the mission to generate benefits for all of our stakeholders in fair proportions and being in Africa that's not just narrative that's real you really we do have to look after our hosts. Now the thing is this that um you know if you go chasing capital gain for your shareholders at the expense of cash and everything else then you're going to be hardressed to deliver those benefits to the other stakeholders. So making sure you've got everything you know a reasonable proportion and uh you know is an important thing and then once again that comes down to judgment and it's the decision of the you know the management and board as to as to where you fall. I've got got the privilege of speaking with a lot of different um yeah like like executives on management teams of of various uh mining companies and I got two observations about you Jeff which um are kind of like front of mind ways in which you're you're different from the crowd. One one is you truly think like long term. You don't get caught up in the um the trends of the day. you have a a reluctance to yeah to lift gold price assumptions or a reluctance to to I mean I mean you've always been kind of pro- hedging in some capacity even in in the good times you've got a thoughtfulness about protecting the downside as opposed to getting kind of you know swept up in the consensus norms of the time and the other one is you've got an appetite to talk about the hardships the tough tough times be it you know professional personal or whatever at at a company I think that builds trust um how do you think about those those two differentiators And do you see the same? >> Uh well yeah I mean look you know I'm interested in in generating returns for shareholders and and and the other stakeholders. So that drives that that bottom um you know that's the bottom line of the thing. But I think the other thing you know that you just touched on there is important too. Uh it it never ceases to amaze me how some folk will turn up when times are good but when they're bad they'll go missing in action. And you know what does that say to a shareholder? Now I I think one of the things that I can say is that you know during that period of 213 145 you know I never checked facing the music as it were and we would we did have a few challenging period but I think when you do that people do tend to I guess um you know listen to what you're saying and and and and maybe come to understand the strategy a little bit more more more clearly. you described that that period and you you comment on it there like a couple years or three four years but during it it must feel like a lifetime when you when you're living through that and when you described it to us earlier it was you know going to the Denver gold forum or wherever you might have been and and you just come out the back end of a washing machine how was it living through those call it 2013 to to 2017 times where people or maybe 2016ish where people just weren't that interested in in goldies. Yeah, know it was tough but it it also gave us an opportunity to think about things as well and you know one of the things that I did come up or decide very early on the piece and that was being a single mind single country exposure was a really dangerous way to live your life because you didn't need to have a whole lot go wrong to take you out backwards and that was where our strategy of becoming a multi-mind multi-jurisdictional operator came from and so we we went pretty hard at trying to find other operations opport opportunities etc etc and I mean we took over Amara mining um which was a British company that had the Yayori project and and I can tell you had some monumental discussions with the um you know the senior leaders of that company about do we develop Cingi first or Yayori and they definitely wanted Yayori and I definitely wanted Singi on the basis that you know we knew nothing about operating in Kat Devir and I didn't want to have a very big bet our first bet I wanted to put a modest sum of money such that if it went completely pear-shaped, it wouldn't kill the company, but it would give us the experience to operate at a new jurisdiction and the confidence to then be able to make a significant investment in the next project. And that's exactly how it worked out. And in fact, you know, we were, you know, as a singer turned out to be a great investment and in fact the cash flow from there paid the development of Aori. So the rest, as I say, is history. you you've got a real philosophy to to building companies and I love and I think sort of through the time we've done this podcast Rev and I have learned a lot of these philosophies say of a Jake Klein Bill Beam and they've they've all got a bit of a checklist in in how a gold miner should be run and and you've clearly got your rules around sort of risk around hedging that we touched on. I'd love just to to fill that out a bit more. what what are the kind of other staples that you think in in uh running running a mining business or developing a mining business that are that kind of must haves when it's you know comes to assets jurisdictions risk approach and these sorts of things M&A >> yeah look I mean I think the thing is that the working in the African continent I mean it is a volatile you know there's a political cycle etc etc that does change but one of the core values or beliefs that we have had and have lived by very strongly is we do what we say we're going to do. If we can't do it, we don't say we can do it. But once we commit to it, then we will move heaven and earth to deliver on that outcome. And I think that goes down to, you know, drives right through the business. And I mean, some people would criticize my management style and saying, "Oh, you know, you're micromanager." And all this sort of thing, but it's not a case of micromanagement. It's about knowing what the heck's going on and then being able to work with your guys who know even more to to steer it in the right direction. And that's that's what we've done. We've got the little things right along the way. And just reflecting on all this, I think in you know, it's quite interesting because, you know, you can make the big hits and hope for the home run or you can hit a lot of, you know, one base kind of things and and it's quite remarkable that some of the smallest things that you can do can generate the biggest benefits. And >> example, >> well, I'll give you an example. I mean somewhere along the way there um well when we first started Etiican for instance we had this belief that you know you needed to have a general manager who had experience working in Ghana an expatriate and we we did do that for a number of times and then an opportunity came up for us to appoint a a Ghanaian chap as the general manager and and I did that and I can tell you there was a lot of people who were saying gez you know are you sure about this but what it did do was it sent a very clear message to the entire team that we trusted these guys, you know, we we had faith in their ability to lead the business and they took that on. The the management team took that on and have developed in spades. And you know, the the operating cost, the all- insight cost at EDICAN last year was about the same as it was back in 2012, notwithstanding the gold price and and it had become in my mind one of the better um you know, gold mines in the world. And that came off the back of putting trust and faith in in our local management team to you know to align their values with the values of the company and and to deliver. That's what's happened. >> That's uh that's a really really interesting thing to reflect on the when when you when you a lot a lot of a lot of our like listeners audience they they're buying gold stocks. They they might buy gold stocks for like the short term or they might buy them and and and sort of think oh I know this is a great longterm kind of thing. How do how does how does someone kind of evaluate the crop of management? How do you how do you how do you come to to grasps with um yeah the the management team of the stock that you're investing in is a good capital allocator. >> Yeah, that's a good question, isn't it? I mean um there's a lot of interesting folk out there have to say and um and there's a lot of people who are good at good at you know talking the talk as opposed to walking it. I don't know is the short answer. I mean look the thing is that um you know from an investor's perspective their game is to buy buy low and sell high and I respect that and um you know you try to try to work with that but at the same time I mean taking you know super risks that might blow the business up isn't too smart either just quietly. I' I'd love to I'd love to talk a bit about Yeah. Per Perseus, the the environment of of African gold producers and um and and how you how you evaluate everything now that you're on the outside. understand you still got a consulting job for Perseus, but but um but last time we spoke we we we we did talk a fair bit about about the fact that you know Perseus has this stake in in predictive which subsequently another stake came along to um Lundine and Zajin and um and I've got no doubt in the time that's followed that there's there's certainly an appetite for for Montage to be this this new kind of uh emerging a African gold producer which is backed by by both both EGN and the Londines and at one point Percy's had shares in Montage which sold at a much lower share price than today. Got you've got all of those dynamics happening. At the same time kind of got some African gold producers being in a rush to get out of Africa or diversify out of Africa. Um like maybe more on the South African side of things with likes of Panaffrican and Harmony doing everything they can to put their money into Australia. M >> um >> where do you where do you see like how do you just evaluate the the landscape of incumbents and incoming gold producers? >> Yeah, look I don't think about them too much to be perfectly frank but what I would say is this is that you know the African continent is a very dynamic place and it is changing very rapidly and I think if you don't recognize that and alter your business model to suit then you will come unstuck. So what I'm saying is that what was acceptable practice say maybe 15 20 years ago probably isn't going to cut it today where there's a growing youthful population that need to be employed and fed and all the rest of it and you've got governments looking for revenue etc etc. So working with the governments to be able to um ensure that they get the benefits that they want and you get what you want at the same time that is a serious challenge and and it varies from place to place. now um you know uh people wanting to get off the continent. Well, I mean I can understand why some people would be be saying that but you know from our experience at least um I don't think you know I'm I'm really quite the one one takeaway from this experience has been that I'm mystified at at this African discount that applies and I I think it's it's the height of well perhaps lazy thinking or ignorance. I'm not sure. the fact that people think that because they saw a headline on CNN about somewhere that it applies everywhere. I mean, it absolutely doesn't. And I mean, our operations are testament to that. You can operate very well on the African continent. Um, and you could also act perform very poorly just as you can in Australia or South America or or Asia. It's really up to you as to how you go about it. And I mean, you know, we've had a had a pretty reasonable run. Now, not everything runs according to plan. That's for sure. You know, the script changes from time to time and I think it's how you react to those changes that is super important. But no, it's been been an interesting journey and I think it's a great place to invest far be it from living. I'd be looking for further exposure if I was staying in the role. >> Can can the likes of a of a of a Perseus or other other western miners compete on a cost of capital basis with to make the acquisitions that are that are necessary to have you know sustained production? Oh, look. I mean, that's that's the topic of the day, isn't it? You know, with, you know, being in direct competition with a lot of Chinese companies whose cost of capital is very different to what what we're dealing with. And of course, you know, there's been some fairly large prices paid in the past. And I guess you guys would have noticed talking about the big events of the week, the the listing of Zin in Hong Kong, that's going to have a a real impact on on things going forward, I expect. Um, it's it's quite a funny thing. You talking to a few of the other companies, everyone seems to think that they're going to, you know, sell out to Zin. Well, I don't think Zian's that silly. They'll be quite selective in how they actually apply their capital. If you you sort of mentioned the the script or thrown out the script before, if you look back through the last 10 years at the the deals that might have been or the potential deals or the potential paths you could have taken, are there any not not so much regrets, but are there any, you know, big kind of stories there to to be told in in other directions the Persia story might have gone? >> Oh, well, I mean, not not so much from from deals that we missed out on on getting. There were a few things where we we were were pursuing and we weren't successful but we were quite comfortable with coming second in the sense that we didn't overpay but I guess you know in in the context of of that Zin listing they did come and have a look at us back in 20145 and um had they bought in 20145 they would have paid a significantly lower sum of money than might be required if they wanted to come knocking today not that they are of course but no you know they maybe that was a missed opportunity for them I don't know. >> Do you do you think that Perseus's outlook today is one where they the company either grows or or you know they have to they have to grow like they have to buy something or be be bought themselves? >> Oh, I don't I don't think so. Look, the the strategy going forward is going to be evolve over the, you know, I know the team's going to be having a strategic planning session later this year to assess, you know, are we on the right track or do we need to adjust to and Craig, the new CEO, will will lead the way on that. I'm sure he's got his own views as to what is, you know, is going to create success and all the rest of it. But no, look, I think um, you know, we we've we've got a path. We don't have to do anything immediately. We put out a a forecast the other day which showed our 5-year production profile and the thing that got missed by the market I think when we put that out is that that 5-year profile was based on J compliant proven probable reserves not resources you know not that category that a lot of people use imagined resource or whatever this was on hardcore reserves and and that's for the next 5 years. So it means that there is a bit of time there to make the right calls as to what the next steps would be and whether it's a case of incremental add-ons through M&A or whether it's um add-ons through through uh organic growth exploration success or whether it's some sort of transformational deal to quadruple the size of the business. I mean all of those things are on the table and it's a question of you know the judgment of the of the management team and and um the board going forward. >> What about yourself Jeff? you I think you called yourself the accidental minor a little while ago, but you carved out quite a career starting as an engineer. What's what's in store? >> Well, um I'm not too sure to be honest. I'm going to have a little bit of a break and try and get a bit of health health back to to me. But um in fact, I actually cleaned my bike yesterday. So, I'm heading in the right direction getting out out on the road on the weekend, I think. >> Get all the advice from JD. >> Yeah, I know. Look, I mean, I I've still got plenty of gas in the tank, and I'd like to stay involved in the business in one way or another, and I'm sure there'll be, you know, opportunities to do that. I'm looking forward to it. >> I Yeah, we're we're uh where we wish you the best of luck with whatever your new endeavors are. I'm sure you'll be successful in it. Um, and while we've got you, we've got to ask you about Bareric and Newmont, uh, the two two gold majors who, uh, have also had leadership changes announced in the in the last week. Bristo was was sort of flagged as potentially coming in the future like in in a few years time and then suddenly Jonathan Thirsten um has has uh, yeah, brought that to a fruition much earlier and he's kind of departed effective immediately. And then and then you've got Tom Palmer from Newmont on the exact same day announced departure by the end of the year. >> Going to jump straight into conspiracy corner. >> Was it a coincidence? >> I don't know about that. Actually, I did I did get a few calls and emails that night about, you know, people speculating what it's all about. Maybe it's a good time to sell shares. I don't know. But um I know look I mean there's all sorts of theories around and and I've got absolutely no idea what the facts are but you could well imagine that you know looking at that North American market that you know they may feel it's time to produce a mega mega North American exposure and and maybe cast off the other assets and maybe they'll end up within. There's a conspiracy theory for you. I don't know. But, you know, like look, who knows? Who knows what they're thinking? I mean, um, you know, from the outside, it it makes for for good material to have a yarn about, but who knows? >> Bristo was uh yeah, the kind of mining leader who who who carved out his reputation from developing in in Africa. Um, part of the the the the reported Russian Alpha's departure is is the the the mishandling as it's been um reported of of the situation in in Mali. Um, do you have any views on this? >> Yeah, I don't I don't think that's if that's what's being reported, then that's not accurate reporting. I mean, look, I've got nothing but admiration for Mark. In fact, as far as I'm concerned, he was inspirational to me in terms of, you know, how to actually go about doing business. So you won't get a bad word out of me uh about Mark. But um no, look, I think the the the situation in in Marley, there's a little bit more to the story than perhaps is being considered in the market or, you know, in the media. And um you know, I think for for um you know, for Mark, it was a bit personal, you know, around around how some of those things came about. and you know with the with the benefit of hindsight he might say oh maybe we should have done things slightly differently but you know hindsight's a great thing and it so um but no look I think he said he's been an inspiration to the industry and and he really he's really shown the way about what real social license to operate means the way that he's invested both himself and his companies uh you know in in making sure that host countries and host communities seriously benefited from having mining done in their presence. >> So, so mining stopped at at Lulu in in January, then the state took control in June. The the lease is up for renewal in in Feb of 26. Do do you see from where they are now, there's there's a way back to to recover that situation? >> Uh, look, I I don't know enough about it. I mean, there always is a way back. There has to be a way back and um you know it's probably going to cost some money but I think you know the the team is a very good team of operators and they can I dare say they can be more successful in terms of producing gold than can a team put together by the Malayan government. Not that I know the people involved particularly but um no look it's it's one of those things. It's an interesting one isn't it? And then of course rolling across the border into Bikina Faso you know my friend Richard from West Africa and he's had had a you know a few challenges there as well. So look all of these things can be solved. It's just a question of I think um sitting down and having um you know sensible conversations with all parties. the the the part of the the equation for for for Barrack in the background although it's I don't think reported in in the media but it is widely understood in the investment community is that Elliot the activist hedge fund may may have built a bit of a stake there may have may plans or envisages a a breakup play to realize value barrack was was underperforming over the duration of the preceding five years um now in kind of rapid succession we see numbers on four mile be pulled out of the back pocket like where what a phenomenal asset where was like what how was that just yeah >> uh there and uh and then and also the departure of of of Bristo even um even with formal disclosed so the the breakup play as it's discussed goes something like Nevada gold mines separate then you have um developing world gold production then you have developing world copper growth >> three three potential kind of breakup options >> when you say Um, when you say Zin could could buy the developing world gold production, I presume you're talking about and leave the copper growth elsewhere. >> Oh, look, I I was I was being somewhat facicious about that. But, um, no, no, it's just that, you know, keep talking about Zion. It sounds like I've got a thing about it. >> No, no, no. I'll bring it up. I've got a thing about it. No, but they did they did raise a few billion dollars there the other day, I gather, when they when they, you know, listed in Hong Kong and and probably will be looking to, you know, upgrade the quality of the asset portfolio and and some of those African assets that are in the barrack stable are pretty darn good. >> Yeah. >> So, you know, >> Trav's on the payroll at Zian, so there's a bit >> I'm not, but I'm like, my god, you have to just look at the talk. I mean I know it's unfair to compare them with western miners but my god the capital allocation has been le like yeah leaps and bounds above the western miners. >> If if we look at another sort of corner of the the world so obviously you've got experience in in Southeast Asia in in Africa but in the in the Middle East Rico Dick that that was one of the other criticisms of um of Bareric promoting this as their their growth project. It wasn't within the uh the risk appetite of a number of large investors. How do you kind of think about that? Yeah, look, I'm very very um sympathetic to that situation. I must say we've got an asset in Sudan. What Perseus did and you know from a geological perspective that asset is arguably one of the best assets in our portfolio by a long shot. It's just that geopolitically it's very challenging to develop in that particular environment at the present time and I dare say the same could be said of of Barrack's project as well. But look, you know, all of these things have their day and sometimes you need to take a bit of a risk to realize the benefit. Who knows that that property might turn into, you know, crown in the jewel of somebody along the way. I mean, there certainly the the mineral resource by all accounts is pretty spectacular as indeed is the mineral resource on our mayor sand project in Sudan. But um look, you know, there's a reason why some of these projects haven't been developed sooner than they are now. It's not because of the quality of the asset, it's because of the location of the asset. And and that's the thing that you need to judge. And as I was saying, Africa is dynamic. It is does change uh you know, almost on a cyclical basis. And I dare say, you know, places like Middle East, Pakistan, they're in a similar similar vein. >> Absolutely. We've we've heard that from sort of all all parts over and it's just a a remarkable part of the world that hopefully one day we can all sort of go and go and visit and have assets that are fruitfully mined because it's yeah it's it's astounding the the quality. >> Yeah. Now one of the things that is really quite challenging and this is something that we noticed like we we're very comfortable working in the African setting. In the Arabic setting, the cultural aspects are quite different and how you actually can adjust to that and factor that into your thinking is something that I don't know that everybody can get really comfortable in that environment. It is distinctly different and you know that was something that we were coming to grips with in the Sudanese situation because Sudan is where the Arab world meets the African world and you've got a pretty pretty fair mix. But it is certainly different and it's something that as I say it's not it's not for everybody. But if you could ever manage to work comfortably in that um then the riches are there that's for sure. I mean there's been a few notable successes over time. I mean um and and a few failures as well I might add. But um yeah, >> the the big one of the biggest rerates you can get in our industry is when you deliver one of these geological phenomenal projects in a part of the world that people thought was too challenging or difficult to deliver at a certain point in time. You only have to look as far as London Gold in Ecuador, you know, even um even Ivanho with with Kimoa like just just look at the the accretion that comes from, you know, up to the point where the actual body is delineated to when it's producing. It's it's phenomenal. >> I know. Absolutely. I mean, even in my own experience with gold, >> I mean, we argued for three years about whether the volcano on LA here was extinct or dormant. I mean, that was that was uh you know, one of the things. I mean, that was a pretty wild new frontier in those days. >> So, yeah, there there's plenty of examples out there. >> I'm I'm so eager to see where where Mayor Sans goes. I mean, you you look across the border into Egypt as well, Sudan, both former British colonies, both Muslim nations, and the recent deal with with Anglo gold going there to to buy a big gold mine in in Egypt, you know, geologically, they're very close to to one another and even sort of culturally they're they're not too far apart from one another. So, yeah, one to keep an eye on, I think, for the for the future. Oh, >> I think so. I mean, you know, we we were making very good strides actually on the project and we're drilling out the body and preparing for a development similar to what we're doing with, you know, with um with Nan Saga right now. And had the had the war not broken out, then we would have been, you know, getting into development very shortly thereafter. Um we really like the project and had a really terrific team of people there, I must say, who fortunately we've actually taken them down to Tanzania and they're doing a fantastic job down there. But um it's it's an exciting part of the world, but it's not for everybody. And that's the same thing we mentioning um you know uh barracks exercise. It's not for everybody. >> Yeah. >> But for those who stay the journey, I think the rewards are there. >> Yeah. Absolutely. I think we should move this conversation to China, another part of the world, and and BHB. So China, I'll give a bit of context for for people that haven't followed this one, have put a temporary ban on purchasing BHB or so. This was off the back of putting a bit of a pause on Jimbar blend fines which we saw maybe two three weeks ago and just just sort of seeing these headlines roll through seeing the messages kind of come through like shocking just like unbelievable kind of stuff because it always seemed as if was the one thing that the Chinese couldn't touch. We obviously had our our trade dispute with wine, beef, barley throughout co on the back of wanting an inquiry into what happened in in 2020 and that hurt a lot of businesses here in Australia. But it was always seemed as if couldn't be touched and lo and behold in 2022 you see the the formation of the China mineral resources group. So this is to represent all the steel mills there more or less and to kind of consolidate the buying to consolidate power to the Chinese steel mills that are the biggest buyers of this ore from the likes of Rio, BHB, Valet and the like. And it it leaves us in a a fascinating position in this point in time because we've got Simandu coming online later this year. You've got steel meals being unprofitable for the longest time now. They're they're in a world of pain as well. You have markets across the world just flooded with abundance of of steel product. And you have Australia as a as a country thinking, hey what's going to happen to 20% of our exports? 20% comes from from iron or so. So I think as a nation we have to kind of think about it as well. But I'll jump over to you guys before I talk too much about it. What what was the sort of first reactions Trev you had? >> Remarkable, wasn't it? Yeah. Yeah. TR I mean truly remarkable the the point you make there on on you know iron ore always kind of being uh yeah sacred from from any escalated like trade trade dynamics with China I think that's I think that's changing like I think that that's that's an immediate um observation here would obviously you know the growth and emergence and effect that CMRG is having is a really notable part of this like what a what a wonderful equation it's been for the iron or producers for such a long time who who are exporting their commodity to various different steel mills in China who are all kind of competing with each other. And what does CMRG effectively trying to do? Well, yeah, consolidate that. You got a lot more pricing power when you consolidate the buying to just one one buyer. I'm sure if you were selling your gold to just one, you know, one one bullion, they'd set the price rather than it be this like very liquid thing, Jeff. And um and as a result of of that dynamic now that you've got Sim and do coming online, I think I think a read through is trying like China's pretty confident and comfortable that Simon do is going to going to be delivered and and that that all is going to come on on time or or in in in abundance and it gives them more flexibility to to put the pressure on the likes of BHP at a in a time when when that might have been unfathomable before. They can do it. They're comfortable with supply. the their confidence in Mandu is gonna is gonna deliver. And and I think the fact that this news came out immediately immediately after um Elbow and uh and and Donald Trump sort of you know um having having a chat but and immediately before Simmon do it like I don't think that's a coincidence. I think there's there's a a pretty clear message being sent here. It's also on the eve by the way of like like Zin's nearly the biggest mining company in the world. In fact, who's it going to overtake eventually? It's going to overtake BHP, right? >> Yeah. No, this is interesting though, isn't it? I mean, people, you know, say, "Let the market do the talking." Well, this is the market doing the talking. Um, you know, that they've the Chinese have moved away from a, you know, a major supplier. They've got an alternative and they're letting it the talk happen. But it is interesting actually when I first sort of read this, it reminded me very much of my early career where I was involved in the coal industry and we used to sell all our coal to Japan and the Japanese buyers, you know, used to work in concert and I, you know, just observing what used to happen in those days. There was there was a ceiling and there was a flaw. you know, if the if the price that you were getting from the Japanese went up, the unions hit you on the other side, bottom side for for labor and and and vice versa. You know, if the unions weren't beating you, then the the market was coming down and we traded in a band pretty much where you weren't going to make super profits, but you know, because the market was saying this is what you can have and you were price takers almost in under that scenario and you had to cut your cloth to suit. >> Yeah. And to tie that in with this, this dynamic really started in earnest in in late 2009 when Marius clubbers broke the fixed price. So I mean very similar dynamic in the the big steel meals and the iron ore players would meet once a year around the the Japanese new year and they'd set the price for for global and everyone would be priced plus or minus depending on their their all qualities. And then >> Marius Kloppers came in and said no more of that. We want uh we want spot. We want free floating pricing. And to to tie it to the comment you just made about let the market kind of work it out. That's what always the the Aussie government said. They said we're not getting involved. Let's just stand back. Let the market work it out. >> And now Elbow's stepping in saying, "Hey, let's work it out, guys. Come on." >> Well, you think you don't Yeah, I'll leave that one alone. I think >> it's Yeah, I I find this so fascinating. I don't think you have to be a big conspiracy theorist to to think this isn't a coincidence when Trump and Alania are meeting and we'll talk more about their discussions as well because that's kind of China's playbook. It has been for for a long time now. They just let you know, you know, who's the who's the boss, who's the real buyer of these kind of commodities. And with this one here, I suspect it it'll blow over in in a week or so. But it's the the signal that's been sent that is astounding and one for us to all take on board as we as we do see Simand do come online come online later this year and we monitor that one. Obviously, that's a lot of Chinese ownership in that asset, so it's not lost on them >> to blow over. But who makes the concession, right? BHP's tight lipped. They're not they're not responding to media inquiries about this. So, yeah, I like if if BHP is the one that makes the concession to continue this arrangement, it shows it tells you a lot about where the real power lies in that relationship. Yeah, I think there would have be a a bit of give on the BHB part than a nice sort of shake hands and and save face for everyone and and kind of get on with it. But it does make you sort of think about the the future of the majors, the future of the the big iron or producers and where they kind of look because we've spoken about this a number of times there. There is no metals market as as big and lucrative as the iron ore market. Copper is just not of the same sort of scale and it's hard to to build that dominance and build that kind of foothold in it. We saw the Chinese kick up when when Anglo and BHB were were doing the dance because of the power that would give BHB in in the copper market. So where do these guys go? I mean the the returns aren't going to come from from potach like they like they've done so for for iron ore. So >> here's a here's a hypothetical I'll give you mate. What happens like what happens if China invades Taiwan in two three years time? Where's BHP is all going to go? Not to China. >> Let's hope we don't have to have to answer the question, but >> not going there, folks. >> I just think investors should think through these scenarios like like you know, yeah, the these are not like these are not conspiracy theorist scenarios that could happen. There's a probability associated with these these things and there's second order, third order implications of of um of of these dynamics. Yeah, don't want to play into that one too much, but I think commodities would do tremendously well out of an unfortunate situation like that. So, let's hope we don't have to see that one. Let's jump into grade control, guys. Let's start giving some some rating. So, for those that haven't followed this one, we're going to talk about the big company moves, the big corporate actions, and the big government moves in the mining market. So, we'll kick things off with Alcoa and their decision to permanently close Quanana. So, this had sort of been seen coming for for a little while now, but it's now made permanent from previous care and maintenance, and it's going to see another 220 jobs go from the south of Perth here. And there's a lot of interesting ramifications to come off the back of this one. When we had our conversation with aluminium hour, I think about that conversation quite a bit, Trev. We were reflecting on how the borkside aluminina aluminium markets look in 5, 10, 20 years time. And one of the things we spoke about was Indonesia and the emergence of Indonesia because they are going to continue to take market share in a sense and that is going to be at a higher emissions cost. It's going to be at a higher cost across the board and that is a um a direct result of the environmental policies, the permitting policies and the cost of energy here in in Perth. So that's something we've got to kind of grapple with as a nation and we've we've spoken about it a bunch for our KOA. It's a pretty economic decision. This this wasn't a profitable operation and it's going to cost them a billion oddie dollars to close this thing over over six years time. I think they sort of broke it down. But it's a um you know when I think about rating this type of thing for them it's a B an A type of thing. like it's an unfortunate but obvious kind of decision that they have to make and it's going to going to cost jobs here in Australia. But I think the the broader decision for for the government here in Australia is a big one and I know we've spoken about it quite a bit recently but it's a it's another sort of strike against the future made in Australia campaign and it set off a bit of a hot rod between Susan Lei the opposition minister here and the Maline King the resources minister but um yeah do you guys think about it differently? Do you have a different kind of perspective on on where this one goes? >> I don't Yeah, I think it's just used to be like I don't think there was anywhere where Kanan was was going to not be on care and maintenance anymore. Um, bounce effectively. Yeah. Okay, cool. Permanent shutdown. Mothballing. We we we sort of knew that already. But, uh, I I think we lack like a an an aluminina champion that has the the local importance that that is that is warranted. And what do I like what do I mean by that? Like we live in Perth. Like how often do you even think about Wley or you know or or Elco's two other refineries that they've got down south if you're driving down there like they're kind of absent from from your mind a lot of the time. Um I I'm a big advocate for South 32 spinning off its aluminina ops and um and if you can if you can merge them with with uh with Alcoa's you know like uh WA ops then all of a sudden you've got ASX listed national champion get behind it they'll have gra you know better capability to have um government support like that the thing should trade at a much higher multiple than South 32 was just based off alcohol's multiple happy days. >> It's an interesting one, isn't it? I mean, from the outside, you don't know the inner workings, but you'd have to say that um there must be a very compelling reason for them to cut that off. And it may be as you know, a technology issue or something of that nature. But I mean, if they're not making money, then it's a good decision. But it does beg the question, doesn't it, about Australia's capacity to produce anything? And and so really understanding why is it that it isn't economic, you know, is it a function of regular overregulation? Is it a function of labor costs? What is it? Uh, you know, is this, you know, one of many industrial complexes that's going to shut over a period of time? And then where does that leave us? Um, you know, our capacity to produce stuff here is pretty modest as it stands now. And I'd be pretty concerned if I was the government about about that happening. But you know there's obviously this is not a decision that came overnight as you said and I dare say this has been crawled over from every angle by both the company itself and and the regulators who I'm sure have been tapped to keep things going given the employment aspect of it as well. So it's a it's an interesting situation and um probably one of the you know part of an evolving story I would say. >> Yeah. And I think it's the the kind of perfect segue for our next topic which is Albanesey talking about the the mineral reserve and um our kind of geopolitical relationships with the likes of Britain and and the US. So, I'll give a bit of context again on on this one, but the the timing of this this article and this news coming out just kind of made me laugh a bit because in preparation for Abene's meeting with Trump, you've got him emphasizing the the value ad of our minerals and our mineral reserve, strategic mineral reserve, which hasn't yet been put together. And then he's also talking about the uh the role that that's going to play in international markets in stopping the manipulation by stateowned enterprises. And this has literally come hot off the heels of quananda shutting as well as China banning BHB products. So you can't really make this this kind of stuff up. >> Wasn't he wasn't he when he Yeah. like value ad not just dig and export and he and he and he cited our renewable um energy as a as a as a great source to be competitive in that landscape as well. >> It it felt a bit detached from from reality I think to to kind of put it lightly. But again, I I don't think it's a coincidence with the the actions that we've seen from from China. But there was a few more really interesting tidbits coming out the back of this. So they are in talks with Britain to put together about $7 billion in funding for mineral projects in Australia. So if that could come over the line, that would be huge for for Australia because that's more money than our own governments put towards projects here. and the French were very keen to to do the same reportedly. But their government's falling apart, so they couldn't send a delegation over. But if we could get these sorts of things over the line, then you know, it's not Australian taxpayer money. All of a sudden, the dynamic is very different. And they were talking about actually selling shares in this strategic reserve to countries like Britain, to countries like France, and that would bring money in the door. So that's a very different dynamic to what we've been seeing with regards to this strategic critical mineral reserve which >> it's an interesting conversation isn't it? It's a great one to have at a at a theoretical level. What does it actually mean in terms of who's going to dig this stuff up and and and put it to market? I mean it's very hypothetical I would have said. I mean is Elbow going to go out and you know mark out a a lease to to well actually do some exploration? I don't think so. uh or any of of any of his people. But you know the what is interesting I think is the is the influence of geopolitics on the whole resources uh industry. And you're seeing it in a lot of places. I mean Trump talking to Ukraine about having access to criminal uh to um to mineral resources critical min minerals in return for arming them. And I mean, we had a had an interesting conversation with somebody recently, a country that is arming all sorts of people in Africa about how their intention was to start getting payback by taking mineral properties or being given mineral properties. Now, you know, they were wondering what they were going to do with them when they got them. But I think there is a a general there's a great appears to be an involvement of, you know, governments in this whole conversation. But it is a high level conversation and how you know if UK was to put $8 billion into Australia for instance how does that what does that actually mean? Do they go and buy shares in local companies? Do they go and build a management team to do the work? I don't know. It's interesting thought. >> It is indeed. Then you got you got Kim Beasley here arguing that um that the security risks of overdependence on China for critical minerals are so extreme that Australia should tip a bucket of money into the sector and not worry about profits. other people's money, >> other people pre precisely. I'm so glad you um you see it that way, Jeff, because yeah, like prop proper proper capital allocation, you you think about the implications and the consequences of poor of poor allocate like and and governments have a have a habit of uh whenever there's a problem on the table, there's a mantra of we must do something. There's a problem. We must do something. But what governments typically don't estimate very well is the unintended consequences of doing something or or even the measurable the intended unintended consequences. What's the cost? If the government buys at guaranteed prices um of of some of these strategic metals or the likes, then you know what what what about crowding out of private capital or what about introducing um misallocation because you know you've got you've got the an effective subsidy machine that is now subject to to lobbying to to maintain whatever profitability is there for a short term just to build a stockpile. I mean um yeah, I think the the costs are always very poorly thought through when you've got a a pressing problem that you need to act on. Sometimes doing nothing is the right thing to do. >> That's the real real big concern the polit politicization if that's the the right word of these things and we saw a a bit of an inkling for this when just last year uh politics in CRA were starting to influence the future fund and and how we invest that which should be for for the people of Australia and giving them you know areas where in which they should or pockets of the market where they should be putting that capital to work. All of a sudden that sort of just leaves a bad taste in in the mouth. >> Give it a dare by the way. Great control. One of the interesting things is you know in the context of our earlier conversation about Africa. See if this happens in Africa people call it resource nationalization. It's a bad thing. You know you have to apply a discount to to the likes of Perseus. Here we are doing precisely the same thing. This is resource nationalization. You know at a more respectable level. >> Isn't it? You're 100% right. And yet Trump can come out and announce that yeah, the US government now owns 5% of lithium Americas and the stock shoots up. Like it's it's um >> different strokes for different folks. >> Investors are paying attention though, that's for sure. >> Yes. Yeah. Yeah. Like the critical minerals industry is having its moment. Like it's a it's a sexy topic in Washington. It's uh not fumble the the footy while it's in our hands in front of goals. >> Should we talk about Grassburg? Indeed, big big impacts on copper markets from what's going on at uh Freeport's Grassburg mine in Indonesia right now. So on the on the 8th of September, we there was this massive mud rush, a slurry event, struck uh the Grassburg block cave underground operation. It flooded access routes and and it trapped workers. The um the event reportedly involved 800,000 metric tons of wet material sweeping through multiple levels. Two workers have unfortunately lost their lives. Five are still missing. um a tragic event to the workers. Freeport declared force majour on contracted copper and gold deliveries from from the affected mine. Operations in the district are suspended. Damage is is being assessed and rescue efforts are still uh continuing to to try and find the five missing workers. The implications are are serious, especially when you when you look at the the impact of the copper market as well. Well, like Grassburg alone accounts for 4% of global copper supply. 70% of the mines previously forecast copper production all the way out to 2029 was supposed to be coming from from the block cave report. They're suggesting that it could be 2027 before mining rates return. Where this leaves that the market is is um you know it's intuitively pretty pretty simple. It becomes much tighter much faster and prices have already already kicked up on the news. I think the equities are are showing it maybe more than the metal itself at this stage but that'll that'll come. Pure play copper names are are up you know between 20 and 30%. Sandfire's up 20 capstone 22. Uh enter for castaster 31%. Even 29 metals is up 30% this month despite a 25% sell off yesterday. Free port on the other hand um down 13%. My take is I struggle to grade this like I don't know what to to grade it but I think it's a story worth talking about. Um, but I I al just think like, you know, investors are going to be concerned like there's there's there's a few different things here, but from the investment perspective, investors are going to be trying to make sense of how to how to how to um make money from a a copper supply tightness that that is here. I think you just got to look at the the gold sector for for how these things can play out. you get margin expansion in the producers and money flows the producers rerate first and then it's then it's the developers and then it's then it's the the juniors. Um I think I think that's just the way capital flows through the industry and the value hunting right now can be can be done if you're if you're looking in the advanced developer space before the generalist capital flows downstream. No, >> it's interesting because I mean it's tragic event for sure. Absolutely. Uh never want to have that happen and people that have lost their lives. Of course, it's been it is obviously bad bad news situation. But if this was the only copper project that was reducing output or shutting down, it would be one thing, but it's not. There's quite a number of others. So, I think there is a pretty severe impact on, you know, future supply. And of course, we know that unlike gold, I mean, copper is supply demand, isn't it? And um you know I think you're right, your thesis is right is that supply is going to have to come from somewhere along the way and maybe that will attract investment into the smaller size of the business. But um yeah, I mean it's going to be a real challenge for them to get that going. I visited the Carmon mine in the Philippines quite some years ago not long after that had a very similar incident and you know the task of rehabilitating a mind that's had that occur to it is you know is not to be underestimated. >> How do you read a statement that says to come back online in 2027? Well, it says to resume like they are going to yeah try and reintroduce some some more the next year but 2027 before they there's any chance of normal normal rates resuming. >> Yeah. I mean presumably they're that's not the sole source of production as you know elsewhere on the thing. So it might be a percentage of their production is down but um I'm not I'm not close enough to be able to say that. >> Yeah. I guess what I'm getting at is let I I'm not quite sure and I'm not an engineer, but I'm not quite sure how they would have any confidence in saying a week or so after that by 2027 this is going to be fully sorted out. It's a it seems like a very um sort of you know kind of wobbly kind of number to just put out there. I mean it's a a block cave is a a very complex method of mining and they're very rare out there. There's not many specialists in these things and this is in a part of the world that gets you know they they measure rain by the meters not by the the mills. So it'srect it's a tough situation. >> Yeah. No very much so. I mean as I say the common mine that in in Philippines was not dissimilar. I mean you know the mine went off the bottom of a of a pit was like a bathtub >> filled up full of water and then boom down the hole. And um yeah it's pretty pretty severe. and bringing them back. I mean, you're right. Within seven days, it'd be a big call to say that, but I guess you've got to say something. So, >> yeah, the the there's a few examples of of Yeah, like where whether events have have occurred to a caving operation of some sort and and resuming any form of operations is is is really challenging. I mean, yeah, even in even in Tasmania, we've got what's the one that uh I forget its name now. Mount Lyle. Yeah. Anyway, that that thing's never coming back. Uh yeah, >> got a few other challenges as well. >> Yeah, 100% 100%. Um Jeff, we we uh the next story we want to talk about in Great Control is we gold's scoping study. It's uh this this one came out this week in your in your wheelhouse. It's a gold developer, one of those gold developers with a rich valuation in uh in in in Africa, but it's a it's a stoning project. >> Yes. Well, I can only say limited things about this. No, I do know the people who are involved in the in the project and and having had some conversations, they tell me it's pretty good, but um you know, quite how good it is remains to be seen. I mean, it's in Namibia, I believe. And, um, you know, as a jurisdiction that's looks quite attractive. Um, I think there's a another deposit not too far away that was part of the Casino package, which if you could ever put those two things together, you'd have a worldass operation there, I suspect. But no, good luck to the WE team. I mean I think um you know they will have done their work and you know how it stands up to scrutiny in the fullness of time know the market will judge but looks all right. >> It does it does look all right. A bit over half a billion market cap now. And the MPV that came out was US about 650. So the >> that was using a gold price that's yeah >> 2,600 US gold price assumption. So yeah the the numbers are interesting. and the and the other project you you referenced um yeah that that eventually got bought as well there. So be very very curious to see how they continue to develop this one. Obviously it's only a scoping study at this point in time but the the company has nearly tripled in in the last 12 months give or take. So I think they're they're on to a good thing over there and yeah it's one we've been kind of following for for quite some time now. >> What are you great at? >> Ah I'd give them I'd give them an A. I think when you just I mean the numbers are one thing, but from the the journey that they've been on and the way they're kind of methodically executing in a a very positive backdrop, you know, environment, it's it's hard to give anything other than that. >> Yeah, agree. A 177,000 ounce average production for the first five years. Um, if you if you plug in like Spot Gold, which hopefully what they get if they go into production, you know, sooner rather than later, then then you're you're you're paying back uh the I mean the capex is bigger, right? It's like it's it's not small. It's US 358 million on the the scoping study numbers now. Less if you had synergies with nearby operation, I'm sure, but um but but uh if you chuck in spot even with that capex, your payback's a year. So yeah, it can be a pretty >> Yeah. Well, look, you know, that it may well be right actually. And I hope to goodness it is because the last thing in the world that the industry in Africa needs is another, you know, misstatement of of value, per se. I mean, the guys who are behind this project know how to promote projects. Um, you know, and um don't have to look too much further than predictive because there's some, you know, bit of common blood there. So, you know, it's one of these things could be really, really interesting. Um, I'd be a little more circumspect than to give it an A at this particular point, but um, >> interesting. >> Watch this space, folks. I'd say >> very, very interesting, Jeff. Yeah, curious about that. I Yeah, I um I I I think there's Yeah, good good promoters. But how do you I mean, when when Joseph Aragi like joined as exec chair, like I mean, he does have does have he's backable. I mean, he he absolutely did a fabulous job. God's sentiment is yeah went from $20 million market cap to >> yeah producing 500,000 ounces per year and eventually being covered up by by Anglo. So so there is there's a lot of um there's a lot of merit to just to backing people who have delivered in the past. So that's why when you when you have your next thing you just got to let us know and no I mean Joseph's that you know did a fabulous job. There's no question about it and he's he's you know a smart guy. So, uh, but and and from what I've heard, you know, the actual project is pretty solid as well. It's a question of, you know, how realistic are, you know, are the assumptions that underpin it and >> Sure. Sure. >> all the rest of it. And that's what, you know, we'll find out in due course. >> For sure. Yeah. Yeah. >> We sure will. Let's move on to sweet and sour deal. Trav, kick us off, mate. MMG's US $500 million zero coupon convertible note. >> How cool is this? Uh, yes. So, MMG, they they um they launched this Yeah. $500 million US zero coupon convert due 2030. They're zero coupon meaning there's no periodic interest. The the instrument is issued at a at a at a discount and redeems at face value. So um if not converted at maturity that is so that conversions at a 40% premium and these these if these notes do end up converting it would represent 3.7% uh of the enlarged total issued uh share capital. might take sweet deal. Awesome. Zero coupon doesn't mean it's zero cost. Of course, the the instrument has um equity upside plus like like comes with credit downside. And MMG, they they said that this was 12 times overs subscribed. I'm not surprised. Like it's a it's a really cool instrument and a very cool way for generalists and credit funds to to to play that copper thematic. Um like yeah, and for MMG, I also love the instrument too. Uh sure, if things go sour, it is it is debt. you do have to repay it, but zero coupon to 2030 and then it's pretty modest delution to the upside. Like yeah, I think I think it it's the kind of instrument that that would super speak to a large pool of capital allocators who typically have credit kind of risk. And what a phenomenal way to get equity upside by by playing a familiar kind of instrument. >> Sweet deal on my part for sure. Just sort of echo what you've kind of said and yeah, the the abundance of capital. I mean, we're going to talk about the capital raises, but there is no shortage of capital, especially for these these copper players out there right now. >> Yeah. Know, it's an interesting one, isn't it? Zero coupon is hugely attractive to me, I've got to say. But, um, the the thing that that would cause me to pause and reflect a little is that convertability piece and what impact that does have on the on your your share price going forward. Does it create a cap on the thing or not? You know, if the if the couple price was to take off, it may well, you know, because what you do attract, of course, is the various hedge funds and people will short it and long it and god knows whatever else. And you do get that element of it, but you know, setting that aside, yes, it sounds like a fabulous deal actually. >> Next one up is Zen Gold International's IPO. Now, Trav, you said 12 times overs subscribed, I think you said. >> Yes. Zin called this one 240 times overs subscribed which I had to wrap my head around. >> How much money did they write? >> They raised us 3.2 billion. >> Yeah. >> And they only sold call it a um a dozen% roughly. So the head co of Zun is still by far the the parent company majority owner of Zjun gold international which has IPOed on the Hong Kong stock exchange. On its first day it launched up 68%. So that is a phenomenal first day bounce and that limited bit of float that I just mentioned certainly helps the the the rush up given there's not too many shares that people can run out and grab. This company is now capped at Aussie $60 billion. That is just the gold international part of it. So, >> wow. >> Like, talk about getting an IPO, right? Like we we spoke about the Medca one last week >> last week and I mean that is very small beer compared to this type of thing. >> How much is it up since IPOing the um Zim one? >> Uh well, the first day was 68% and I think it was a few percent the day after. So, it's a not not a bad return. And I mean, maybe they priced that thing wrong, but um the yeah, sweet deal is only words kind of come into my mouth and it just shows the the demand for for gold, but more kind of specifically that the demand in in China for for these types of plays. There's a lot of interesting takeaways, I think. >> Why do the Hong Kong listing? What's the what's the the merit there? >> Uh like is it headco? Where's that listed? >> It's on it's in mainland China. >> It's mainland China. So this is this is this is this is IPO on the Hong Kong listing. So what type of investor is it? >> Hong Kong's China still. >> Yeah. So >> yeah, I know. But but but it's um it attracts a lot of >> international broad spectrum of capital does it like >> Yeah, they're more willing to to come to the Hong Kong stock exchange. That's for sure. I mean, how do how do you take it on board? >> Yeah. No, it's an interesting deal for sure. And I I mean I think it's going to have some very far-reaching implications for the gold sector given that Zujin and and a lot of the Chinese companies aren't very acquisitive at the moment. Um and um you know that's going to flow through. One of the things of course is that um a lot of the Chinese companies don't like to compete against Chinese companies for assets and so they'll be looking at Zin and seeing its capacity and probably trying to cut their own version of deals as well which may lead to some other transactions down the track which um you know could be quite interesting for the for the entire sector. Do you do you think it like it just explain that to me a little bit more like what implications does that have on on the tip the typical yeah gold mining company in >> well if if a you know talked before about cost of capital for some of these companies it's considerably lower the the premiums that are attracted on the on the uh Hong Kong market etc etc you know buying some of the other say other African assets that are carrying an African discount they would be rerated very rapidly on the China on the Hong Kong stock exchange. So it means they can afford to pay elevated prices and I think that is what you're sort of seeing in some measures already on the continent. So I I suspect that the Zin listing is going to be a trigger for quite a bit more conversation in this area. This is a target. But I still have some shares. >> Very nice, wouldn't it? >> Watch this space >> indeed. >> To round out on sweet and sour deal, there was a plethora of of capital raisings from NextGen raising near on $800 million down, >> you know, through to I mean, I'll rattle a few off here. Hillgrove doing 28 million, Toro, 34, Saturn upsized to 45. James B 25 uh NGX that was 100 upscaled to 75 something like that. Um yeah Canadian markets, Australian markets, big companies, small companies, copper, rare earths, uh you know gold obviously there is an abundance of capital you know most of these are getting upscaled as well. So there is a lot of investor demand to to say the least right now for for these projects out there and from from the company's kind of perspective kind of got to take the money while it while it's being offered to you especially on the back of a strong share price performance for near on every company I've mentioned there has performed well so the uh the dilution is is less so than they would have thought three four months ago and if we look at it firstly at an aggregate kind of level what is this um investor demand make you kind of feel Jeff? Yeah. Well, it's um it means that the clock's ticking, isn't it? In terms of where where we are on the cycle, but you know, it's great. I mean, I guess some of those smaller companies have struggled to raise capital uh you know, in the last, say, five or six years. So, it's almost like it's about time. Some of it's filtering down to to the smaller end of town. Well, and as you say, they have some of them have had, you know, price appreciation, but not all. And um no, it's it's interesting times. >> I've I've got an interesting question to ask you. So, so the massive one in the mix there, NextG raising near on $800 million. That's world's best undeveloped uranium project by a mile. In fact, they've probably got the two world's best undeveloped uranium projects um with the Discovery PCA. However, uh it's going to be a vehicle with a boatload of cash and they they can't spend all that cash fast enough. How did you feel when you were on the the acquisition side when you would see a a junior or a developer that had a lot of cash in there? Did it deter you from M&A because you don't want to pay a premium on on cash? >> Oh, well that that certainly comes into into play, of course, you know, doing that, but having a lot of cash not a bad thing if you if you you pick it up and you do something more sensible with that cash. So >> that might be a challenge for nextg. Yeah, it'll be interesting because if they are sitting there with a heavy balance sheet like that, I mean the shareholders will be dumping the table lazy balance sheet. We want this back. So yeah, you just go in the cycle, I think. And um capital management will be a key part of their business, I suspect. >> Wonder if it's time to buy a company like Index or a drilling company or or those sorts of things with a lot of money going to go into the into the ground. >> Well, I think that that's, you know, that's not a bad thought, is it? Or all the mining services. I mean um like a podiums of the world and people like that doing engineering. I mean um you know it's all very well raising this money but you got to do something with it. There's a lot of people who can help you on that. >> Sure. There'd be a lot of happy stock brokers as well. >> There's always happy stock brokers. >> Uh 100%. Yeah. I I didn't have u too many thoughts on most of those cap raises other than like my god there's a lot of them and the the markets are open. They're absolutely open. I don't even I don't even think you could raise money for nickel right now. Like that's how absurd the the market. >> Let's get carried away. >> Easy. Easy. >> It's it's um it's a special time. I think it's it's sometimes hard to to fathom just how like, you know, how special these sorts of markets are, but they don't come around all that often. And >> it well it lasts, I'd say. >> Absolutely. Last one, guys. Hidden gems. >> Yeah. >> Trev, you know the drill, mate. What's in your mind? >> I got one for you. Uh, Alpha from Twitter. Big fan. I think um I think massively underrated. I think like very small subset of people that invest in the sector uh care for Twitter or have a Twitter account now. And I understand the hesitation of like there's a lot of noise now. Doesn't mean there's not a lot of signal, too. And um yeah, like last night I was awake. It was like a 10A well sorry 10 p.m. maybe 10:30 p.m. and um and the Canadians are going off their rocker about this new discovery that it's prospect ticker PPP.V Now I hadn't hadn't heard of it. The thing gapped up 180% already and they're they're just comparing it to you know the best discovery hole since FO or a big comparison to make and by the end of the day the stock closed up 280%. So, um, that's just one example. I'm not blacking it out. But I do think like there's a there's a there's a lot of value that can be had when you have the the right, uh, signal and and a Twitter feed, which effectively like democratizes access to information. And there can be geo alpha there or it can be turnaround alpha or it can be um, yeah, commodity like crunch alpha. All of that kind of stuff often like proliferates and is shared by by smart accounts on Twitter. >> I like it. Jeff, if you're not familiar with these ones, we unpack just something that's kind of stuck out to us over the past week or or maybe even a bit longer. It can be anything from a movie recommendation to a restaurant to a uh a gadget or app that you're liking like like Twitter. Anything in your mind? >> Well, no. I mean, well, I mean, what you were just talking about that it's foreign language to me entirely, so on the wrong page. But no, actually, the gem that's come my way in the last few days is is completely different to what you're talking about. And that is that you know coming to the end of my time at at Perseus has given me the opportunity to talk to a lot of people and and both employees and others and you know what's really blown me away is the fact is the large number of really good people that there are out there involved in our industry. I mean, you know, we talk about the promoters and, you know, there's a few characters out there, that's for sure. But I can honestly say that there's a lot of really, really, really good people who are heavily engaged in the industry and that gives me a lot of hope for the future. >> I love it. Yeah, really, really good, Jeff. Um, I've got one or two. I think I think I'll chuck in. Um, we had just like a long weekend here. actually went went away out to to dwelling up around there for a couple nights and it was kind of remarkable just driving like barely an hour out of Perth and how two nights away felt like a long kind of time and and walking in the hills there of Perth is just kind of stunning. So that was yeah that that was really awesome and um add to that like I love uh reading about Aussie kind of business kind of success stories along the way. So I picked up a book on Kerry Stokes while I was down there and that is just a like a hell of a a hell of a story to to come from where he kind of came and you know still doing these kind of things. So I think there's there's so much to be learned from um those kind of stories and and reading about Perth in in the 50s and 60s. It's like a like like the narrows is just being built at that point in time. The the Perth airport has just been built that year when when he kind of arrives here. remarkable to think about the transformation of our of our kind of city to to where it is today. So that's one in my mind. >> Fantastic. Jeff, any um any words of anything on your mind that you want to leave our audience with before we clock off? >> Uh not not not specifically. I mean other than you know what I just said. I mean you know it's it's been it's a fabulous industry to be involved. We're very lucky to be involved and I've had a bunch of really good years and um you know the future's it's it's evolving. it's dynamic and you know I think the next couple of years is going to be really worth watching. >> Really appreciate you coming on joining us on on the show and uh yeah everything you you did through through your time at Perseus and and in the industry has been awesome to follow. So thanks Jeeoff learned from um yeah from disciplined capital allocators over the course. So thank thank you so much Jeff. >> Thank you and appreciate the opportunity. >> There we go mate. Another fantastic bit of insight. It's all made possible thanks to our fantastic partners Sanvic Ground support focus the platform by market. Check it out now and get your tickets to IMAK October 21 to October 23. Investors go free. >> We'll see you at IMAKU. >> Now remember, I'm an idiot. JD is an idiot. 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