Gold Surge: Gold prices have surged, with some stocks seeing gains over 15% in a few days, driven by rising long-term yields and inflation concerns.
Interest Rates and Inflation: Long-term government bond yields are ticking up globally, with the US nearing 5%, as inflation ebbs but remains a concern in pockets worldwide.
Mining Sector Optimism: The mining industry is experiencing optimism, particularly in gold and other commodities, with companies like Romelius, Northern Star, and Genesis seeing success.
US vs. Australia Permitting: South 32's CEO highlighted the efficiency of the US permitting process compared to Australia's, emphasizing the need for clearer timelines and accountability in Australia.
Corporate Debt Strategy: BHP's recent $1.5 billion bond offering at 5.75% for 30 years reflects strategic borrowing in a low-interest environment, highlighting the company's confidence in long-term inflation expectations.
Investment Opportunities: The podcast discussed opportunities in small-scale mining projects in Africa and potential M&A targets, with a focus on companies like Orion and West Wits Mining.
Market Dynamics: The changing ownership of mining projects can significantly impact royalty valuations, as seen with Elemental Altus Royalties' acquisition of a portfolio centered on Genesis' Leverton project.
Transcript
Gold is flying this week. You're seeing long-term rates, like yields all tick up. If you look at equity markets, it's one of those sort of funny times, right, where where bad news is interpreted positively because you think you're going to get a rate cut out of the back of it. All righty. All righty. Let's Let's do this, mate. We've got a bunch to talk about. As always, the mining industry is kicking off, eh? >> It's another week. Mining markets keep moving, mate. And um yeah, you and I never never got a shortage of things to talk about in this industry. That's the wonderful part of it being so fragmented and diverse. There's always news flow, but especially on a week like this week, mate, there's um things are happening. There's a bit there's a bit of optimism out there. There's a bit of love for for certain types of commodities, certain stocks. >> I think the goldies might like this one. The people the people in the gold space might get a bit of enjoyment about the uh the intro and just the week that's been. Hey, >> it's been a m gold's back. It's flying. Um, as as someone messaged us, it never went anywhere. >> It's never It never left. It never left. What else have we got, mate? We've got a few things on the on the roster today. We went to ADU, so we're just going to uh talk about what sort of stuck out because >> as valuations get richer in some parts of the world, they look a bit more appealing in in other parts. And then, >> yeah, going to talk about um SAT 32 and Graeme Kerr's comments. I was going to talk about BHB's financing which I think when compared to other things happening around the industry is is actually a bit interesting. >> Yep. >> Also got tech and Coraba Blanca too. Their um their expansion there has continued to to sort of run through troubles and a couple more bits and pieces. Hey, >> it's a weekly rap mate. We're going to cover lots of stuff in a with a bit of breadth and hopefully be a bit dicey in the process. Um, no friends joining us this time, but uh, yeah. Yeah, we uh, look forward to continuing to bring bring you some diversity of opinion on on our weekly raps going ahead. >> Let's do it, mate. Gold is flying this week, and anyone who holds one or maybe more gold stocks in their portfolio will have seen this because some of the moves have been, you know, 15% plus to the upside in in the space of just a few days. So to put it kind of in into context of what we're seeing around the world, you're seeing long-term rates like yields for the the 10 and up to 30-year uh government bonds from the US to Japan to France to the UK to Germany all tick up. You know, in the US they're sort of touching 5%. In um in UK they're hitting a a 27year high, I think I saw. So inflation has ebbed its way down although it's sort of perking up in in sort of pockets bits and piece in bits and pieces around the world. Of course every country is a bit different and I think we're a bit more protected here in Australia than we than other parts of the world might be say the US where the uh the government debt issue is a bit more pronounced. But if you look at equity markets, it's one of those sort of funny times, right, where where bad news is interpreted positively because you think you're going to get a rate cut out of the bad back of it. I.e. jobs data that sort of makes you think that the Fed is going to cut their rates, sees stocks go up, which is always a bit kind of first to think about, isn't it, >> mate? Mate, it is. Um it's been funny the trend of like uh I I suppose there's like two things happening at the same time which you don't always see and that is like yeah like gold gold soaring and like there's still a lot of like um interest in in the uh the the tech end of the spectrum at the same time. Both those things happening together I find intriguing. I like um I I'm enjoying the the resurgence in the gold names mate. It gives me gives me a bit of um uh what's the right word? I don't know. It just makes me happy. >> Well, to to to put it in a bit more context for what we're seeing in Australia, you're seeing the probability of a rate cut in November, price down a little bit to to 90%. In the US, it's at 100%. So, they are more or less 100%. They're pretty firm on thinking the next rate cut is coming in a couple weeks time. >> Absurd though. >> Yeah. And surely absurd. Like >> we're at the point where this is this is good for governments, right, though? Because they want to eat into that debt that they've got. And there's a lot of pressure coming from the governments on on central banks around the world. >> I uh yeah, mate, I I find it I feel like no one gives a damn about inflation until it's glaring you in the eyes. And we everyone knows how um manipulated all of our various like inflation measures are. Like real people feel the pinch of paying more for things and yet CPI is non-existent. So um I just think if we we see we we can see the green shoots in commodity prices all of that flows through supply chain. Inflation is going to be back in no time and as always like you know what is consensus from a policy perspective flips and it flips fast. The biggest determinant of inflation is inflation expectations themselves. So the moment people start to expect inflation it starts showing in the numbers. There's that like reflexivity to to the equation. Um yeah, it won't take long and the world can look like very very different from inflation perspective and then and then it'll be the only thing that we can talk about and then all of a sudden what does the case look like for real assets? You know, looks pretty compelling. >> Totally. And that's what the the gold market is sniffing at right now as well as the other sort of commodities out there. So gold hit up on 3,600 US. And you can see in the the focus chart here, we've got the likes of Romelius, Northern Star, Genesis, Capricorn, uh, Pantoro, and Alcane all having sort of varying degrees of of success. And we spoke about this earlier in the week in our interview with with Greg Orel where the the changing perception of consensus gold forecast is is moving under our feet. And I think that's what's really kind of driving things despite like gold flows, gold ETF flows still being fairly negligible, especially in the face of like big tech and other things that you mentioned earlier. You're seeing this sort of thinking of where gold's going to be in one and two years time changing under our feet and even even the brokers are sort of starting to to move their price tags and move the the upside on on their decks. And then you see it down the sort of curve. You see it in in places like silver and other sort of assets that have run really hard. If we zoom out a bit, looking at the last quarter, looking at the last half year, things like the PGM sort of complex and all these sort of real assets, they're they're starting to to kind of move. And we'll talk about a bit a bit more later on in the context of like BHB and and their financing and and the interest these sorts of companies are getting. But I think the um the the prized asset that is a mining company with great management that can fight away inflation over the longer term is looking as appealing as it ever has. And I I understand the echo chamber that that we live in here and being a mining podcast living in in Perth sort of talking about it, but I think you're sort of seeing that reflected in in the prices of all these things recently. >> Yeah. Yeah. I mean record record, you know, records in terms of the ability to capture um margin from a lot of these like gold miners. And that's why that's why they're showing the the crazy well the remarkable share price movements they have. Inflation is the thing to keep an eye on, right? Because if you have costs creep up, then can they hold on to the um can they hold on to those those margins? There's a bit baked into their their their current share prices. But if you have a a positive outlook on where the gold market is and where it's heading and if you have a positive outlook on the ability to control costs in that outlook then you know then you can have a very different view at the same time. >> Yeah. That that management component that premium is is in a number of cases that we'll speak about today sort of is it's sort of worth its weight in gold I find. >> Yeah. And I mean like the management can only do so much, right? Like if if if state like in if you have inflation or you have um wage inflation in particular and all of a sudden everyone's swapping jobs because they're they're getting offered 20 25% more 50% more a sign on bonus to go join the PR then everyone's costs go up all at the same time and you erode your margin pretty damn quickly. So what was a very like profitable error can disappear super quickly if you have just a tight labor market in particular or high energy costs or you know a variety of other um input costs that might be substantial like reagent costs the likes. So like yeah inflation is the thing that kind of kills margins and it can happen inflation can certainly move faster than the gold price when it gets um when it gets going. So that's just a thing to keep an eye on. >> Totally. Totally. And the the wage inflation never seems to move quite as quick mate. Uh yeah, it doesn't move down. Like wages are sticky. They can move upwards super quick, but yeah, like you're not going to have someone agree to be paid less. You know what I mean? Doesn't move the other way. >> Totally. >> But I do love that. Um >> yeah, that that image of all the charts you brought up on the the focus platform, focus by market, mate. That's I'm actually using focus quite a bit. I really like that platform. That's um that's a that's a really quality it's a quality platform that uh I'm getting a lot out of. Super clean, easy to use. you get heaps of like value from the various like different like scans you can you can do on there. Um >> the learning curve isn't massive like it is with a a heap of these things either. >> It's super simple to to to get like a pretty institutional grade product at a at a retail price. So check out check out focus by market if you haven't yet in the show notes. There's um I think you get a 10day free trial if you uh click the link in the show notes. >> Get on it mate. Let's uh let's talk about ADU. So African under we went yesterday and we had a bunch of interesting conversations. So, we thought it might be just worthwhile reflecting on the types of conversations we had, what we saw, and what kind of stuck out. So, what's top of your list, man? >> Well, first first and foremost, like uh big big congrats to to Per for putting that that event on. That was I was this the first time I've ever been to Africa Down Under, but I thought it was a very tidy event. Like, I thought it was a really really quality really quality conference, you know, like a quality targeted audience. Um yeah, super super professional, super like super interested, super engaged. Like I Yeah, I just thought it was it's a wicked event. That targeted component I think is the the interesting bit about it, right? There's there's, you know, the the bit the bits in common that you have there and what you're hunting out for you can sort of see in very quickly session and have a lot of conversations which is pretty cool. >> Yeah. Yeah. Um and I thought just like just thinking of the themes um one of the themes that I come away from at at the end of the week is did you notice there's a real abundance of these um these smallcale near-term producers that like capital markets have largely forgotten about? Maybe they've been around for quite a while but they've just never like they've been asleep or dormant or at least from people's like eyeballs and interest levels because they're in a part of the world that's too spicy and of a scale that is not relevant until now. Right. Um anyway, I just I noticed a bunch of them either in my direct vision or in my periphery this week. And um >> you're like, "Hang on, they're actually going to be producing in Yes. in that amount of time." >> Exactly. Exactly. And you know, take like I'll I'll list off a couple here. >> Yeah. Let's run through them. >> Um so Orion, right? Like every every um man and their dog is interested in small cap copper, right? Like there's no shortage of interest in small cap copper, but when's the last time you heard anyone talk about Orion? It's a really long time ago, right? like it's just been Yeah, >> it's been a little while. So, South African copper for for people unfamiliar. >> South African copper there. I mean, I think I think on the register you see the likes of of uh Tempo, Deli. Um it's got like an interesting register there. They they say that Priuses will be producing concentrate by Christmas 2026. Um and that that like they've got, you know, two projects. That's their first focus which they say they're going to build up to 22 22,000 tons of of copper in a in a bit of a phased approach and only like in a market cap of only $80 million. So I was completely asleep to the fact that they're an air temp producer. Had no idea. >> Yeah. Like >> because they had a few sort of moving parts as well. The exploration angle I think is what had captured other people's attention there and then you forget they've got a few sort of different bits and pieces to it. Right. Another one that's been um yeah just dormant in my mind for years is Westwitz mining. They they show 70,000 ounce per of gold production from uh Koala Shells from only US 44 million in in funding. Um that's because they've got this toll processing arrangement with Saban Stillwater. Um and they're targeting first pour in the first half of next year. That's um that's approaching pretty fast and again like was asleep to the fact that this thing will be producing gold soon. It's the first new gold mine in South Africa in about a decade, I think. >> Would you call it new? Is it new? >> I'm not sure if that was them calling it or someone else, but um >> yeah, I mean it's it's coming online in in a very short period of time. And >> yeah, I think I think like the capital markets have been like very apprehensive about South South Africa for a long time as well. Um I think you and I have like a different view on on the risk there. I do think the risk is like >> not something you can ignore, but I don't I don't think it's like >> I don't think it's proportionate to what the real risk is. I suppose capital markets apprehension to to to touch things in South Africa. >> Yeah, it's interesting because we went there earlier in the year and and our perspective kind of changed a bit and obviously we we haven't operated or anything like that but just having a lot of conversations with people at mines and these sorts of things and just the kind of feeling you got around there is that you can kind of get things done. >> I Yeah. Yep. Yep. Everything's contextual and everything has price. Um there's this other other company Ariana Mining and so it's an AIM listed gold producer. It's coming to the ASX. So like another one of those you know foreign listed companies looking to migrate or make their way with the dual listing to you know capitalize on the higher premiums we've got over here. Um anyway this is how kind of subscale I'm talking about. So they've got this 23.5% interest in uh in these in a couple of gold mines which collectively produce 25,000 ounces in in 2025. So that's that's 6,000 ounces of attributable production. Like that is so so small. But they've got a development project in Zimbabwe which I think they're more excited about. I all that to say is like this this kind of small subscale stuff wouldn't have you wouldn't have seen an IPO for that on the ASX like a couple years ago. Like this is um a lot of this small scale stuff in in a spicy jurisdiction or a place like like South Africa or Zimbabwe or whatever. It's the you know these are the sort of projects and companies which um you know you tend to just like forget about or you're you're sleeping on it and then all of a sudden there's like 5% of the cycle they're interesting or relevant and we're either in that 5% or we're about to be in that 5% because you know these these are these are the kinds of things which you know you don't want to be in 95% of the time and then 5% of the time they're super sexy and um yeah like I I I can't figure out where we are in that sexy period of time but we're we're We're we're pretty close to it or we're in it. >> That's that's the super important detail about everything we're talking about here, right? These are not things you you buy and hold and put put in the portfolio. Like you have to you have to be switched on to these things cuz they work for a very finite period of time. >> Subscale stuff. Like the whole thing with mining is you don't like you accept whatever price you get for something. You're not a price setter, right? So you the way you have a competitive durable advantage is through scale because scale gives you economies of scale. And so whenever you're talking about small scale production, you're fighting an uphill battle from the get-go because you don't have economies of scale on your on your side. And unfortunately like those companies we just talked about even though they they you know got something interesting approaching production yada yada. Um it's it's also they also haven't had jurisdiction on their side either for the last period of time. So, >> you just hope they've got a bit of grade on their side that can manage the the cost component of that. >> And don't get me wrong, I think there's like there's plenty of opportunity and money to be made when you time like being in those companies, right? You just can't fall in love with them, you know, like when you're um when you're when when when when things kind of turn >> 100%. Any others that stuck out? >> Um well, I've got another theme for you. Um >> enlighten me. This was this was another theme that I noticed and that's I like I just um there's there's absolutely a bunch of quality underdeveloped projects in in Africa that are M&A targets and the the M&A bidding pool is is you know is wider for geopolitical reasons than it than it is elsewhere a lot of the time not all the time but a a lot of the time um in the gold space like I think you know Taco and Predictive are the standouts there like I wouldn't be surprised to to see both of them acquired in the next 12 months they're yeah super super super decent deposits Yeah. Yeah. I I think you're 100% right. And the attention that some of these other names, you know, Many Peaks is another one that we've spoken about in the past, like they are getting attention like the the results keep coming out and and things get get marginally better and better, but they're being rewarded for that. >> Many pieces up 360% this year um on the on the on the focus charts by market. Check it out. >> There you go. Um and I yeah I suppose even in that category like you can look at where the the Londines and the Chinese were were allocating to with their um you know investments earlier in the year and for that reason you can group ORM and African gold into into that category uh as well. Both of those are up more than 100% this year. So um I I think I think you can throw Tobani in the mix as well. Like if you can stomach Marley like there's a um a pretty robust like production outlook from from from that company. And now that they've got um like a a different funding pathway like it's I think it's I think it's kind of interesting now as well. >> Yeah. Thinking about Marley for a moment there. It is interesting to look at the likes of Resolute who have obviously had a pretty tumultuous past year and the gold price has improved dramatically since what happened happened. But they're nearly at those those levels they were at before they they h haveved which is kind of interesting to to think about when there was kind of total despair amongst shareholders out there. >> Relevant to Marley. So Robex they they make a little bit of cash flow from um some gold mining in Marley but the big story for them is the development of Kinero which is you know well and truly pretty advanced. Um they're expecting first paw shortly. So this is a, you know, an exciting new mine in um in Guinea, you know, great kind of oxide feed to to um yeah, hopefully have some expedited repayment of of their project finance facility. I saw they kind of rejigged a couple things with SPR, but I'm pretty constructive on Robex. Um I like I I think I think that's that's it's a backable team. It's a backable story. It's um going through the right part of the Lison curve and if the geop politics doesn't you know get too rocky then like it's it's there for them you know. Yeah. >> You put your house on it mate. >> I would not put I know a I do know a bloke who puts his house on it. Shout out you >> know who you are. >> Yeah. Mad dog. But I uh absolutely >> I don't have those big bowls mate. Um >> no. Awesome. Great. >> Uh and away from gold. I've got a couple more for you. >> Okay. Uh I do think there's like there's still some decent projects in other commodities that may find corporate interest in the future too. And and at least in in in uh commodities other than gold. Um sometimes like the issue with with uh M&A activity for undeveloped projects in gold right now is the corporates haven't yet changed their gold price decks, right? So if you if they're running their long-term gold price, they can't justify paying above the the share market prices for any of these underdeveloped projects. So until you get like the FOMO from the corporates like it's you just struggle to see the um the the M&A outcome. But in the in other commodities like maybe the commodity is more out of favor. It's it's a lot easier to have a an assumption from a corporate who has a a long-term price higher than the current price and and hence you can do a deal pretty easy as long as a bit spreads it and that's that's the that's the tricky thing. I look at Atlantic Lithium therea project it it's one of the standout undeveloped lithium projects right um we know it has corporate appeal like I remember late 2023 when made two offers both at the same price was 33 p for the company so Atlantic now trades at 9 p that's 20 cents Australian um I I think in the riot lithium market that asset has legs I'm just not brave enough myself to uh to get exposure to that one and you know there's a there's a there's a bit to play out as well from um from the permitting perspective but but it's a it's a very worthy asset in the right lithium market. There's no doubt like that's that's a quality asset. And in the uranium space uranium is so tricky, man. Like I'm I'm not um I'm what's the right word? I feel like in the uranium, like when you're picking uranium equities, you're the the the question you're trying to answer a lot of the time is like which one of the lot is the least bad because there's there's they've all got warts. Everything's got warts on it and >> especially the restarts. >> Restarts have they they have obvious warts on them and sometimes the warts are kind of easy to pluck out. That's why the development projects are sometimes kind of you can have blue sky because no one knows what the warts are yet sometimes with a with a development project. Um but Aura Energy kind of comes to mind there. They they've got the uh the undeveloped tus project in Moritania. We love Moritania. Yeah. Talking about Moritania a bit. >> Yeah. If you can get comfortable with Moritania, I actually think it's a tidy enough project. It's got, you know, long enough production life, tidy study numbers. Um I, you know, to me it looks like a team that would will transact on it. Like I feel like that's that's one that could be primed for M&A activity in the future as well. The final one I thought was worthy of us doing a bit of work on in the future, and we we haven't done the work we need to on this one yet, mate. Is um Southern Palladium. So, they've got the uh >> Ding ding ding. >> Do you own it? Do we buy some? >> Yeah. >> I didn't know that. >> Just small. Just small. >> Oh, that's so funny. Oh, jeez. Anyway, I didn't realize. >> Uh we got to we got to do more work on it now. We've got some skin in the game. But um I mean that's on the the eastern limb of the Bushfeld complex surrounded by the big international producers. $70 million market cap. >> Like the project to me looks like it stacks up in a in a in a in a bad PGM market. If they can advance things at the exact same time as that market gets healthier. Um both those things are uncertain by the way and like I think they'd benefit. So a sort of staged approach they're looking at there as well as you know exploring the opportunity of of using someone else's um processing >> capability which comes with challenges as well. So everything's in context of a a weak PGM market. Yeah. >> And a you know kind of unbecoming market capitalization of of the business. But it's it's it's an interesting one to look at if you can stomach all the above plus sort of South Africa risk. >> Yeah. Yeah. Did you have any other reflections other than >> No, I think you sort of captured it really well. I was just sort of amazed in in the space of a few hours and you know this isn't like a plug at all, but like the amount of conversations we we had in in the space of a few hours there was was very kind of cool. We were able to sort of float through and get a get a feel for lots of different parts. You know, you can't paint West Africa with the same brush as South Africa as pockets in in East Africa there. So there's a lot to kind of get across, but I feel we were able to kind of do so having a bunch of conversations, which was super helpful for for our sort of education. >> Totally, mate. Totally. >> Grade control, mate. >> Grade control. >> Remind me remind me about this segment, J. So we give a a letter like your your old high school mark a tof on a corporate move, a bit of government policy, a commodity trend, anything that sort of happened in the world of metals and mining in the past week. So we've got three or four topics to talk through today and we're going to start this one with tech struggles at Bradlanca which is in the north of Chile there. So that's their big flagship copper asset. They made the big move to sell the El Valley assets uh about a year and a half ago now. So high quality Metco projects that they owned in a sort of circaction. So obviously Metco peeled off a fair bit since then. So, they might be smiling about that, but there's still a lot of uh uh critics out there analyzing their decision to focus on the battery metals complex, especially in light of the fact that they've had a lot of troubles mining in the um battery metals, specifically in the copper space. So, they have assets all through the Americas. They are one of Canada's biggest mining names, you know, kind of thanks to a lot of the takeouts that have happened over the past few decades in that space. So for those not familiar here in Australia, they kept at kind of between 15 and 20 billion depending on how they're trading dollars. And what they've done recently this week is they've they've paused all major expansion capital across all their assets so that they can focus on fixing QB. So >> this is their flagship asset. >> Abs. Absolutely. So they in I want to say 2018 pressed go on QB2. That was the expansion project that was meant to be done 2021. that struggled no thanks to to co but that took them many years longer as well as$4 billion dollars more to complete. Now this was to to really lift it up a notch and we're talking at this point in time kind of mid 200,000 tons of copper production perom. So earlier this year they downgraded that by 40,000 tons for this year and 26 guidance is in in serious kind of doubt on on the back of these challenges. Specifically they've had issues with with tailings there as well as kind of infrastructure problems. So they got this operational review underway now but that sort of slow sand drainage challenge that they're having up there in the Andes. this asset is at 4 and a half thousand meters above sea level has you know ultimately kneecapped production and it's given them no shortages of issues. So what they wanted to do was mechanically raise that that down wall there so that you can have more tailings go at the back end of the plant and produce more copper. And it's kind of interesting when you think about tech because they had for for the longest time a track record as just phenomenal mindbuilders. that was their MMO. They built mines year after year after year and they did it really well. But that has sort of seen a bit of um a bit of it sort of armor chinkedked at in the past um decade or so with with challenges like what we're seeing here. So QB and QB2 certainly doesn't fall into the the assets that they've executed marvelously on. And if you're going to be a a copper focused producer in the Americas, you've got to be able to execute this, you know, understanding that it's it's super sort of hard to do. But as a result of all these challenges, their their COO retired in quotation marks has has sort of moved on because somebody evidently had to take the the brunt and walk the plank for for what we've kind of seen today. >> What do you what do you give them from a grade perspective, mate? Ah, I mean it's it's hard to give them anything other than like a a D right for this one because again understanding that mining is hard and these things are very common these these types of challenges. So you don't want to be overly critical but in the face of what they've tried to do and in the context of having spent you know $4 billion more than they previously had guided to the market already on this. There's got to be a point in time when when enough's enough and you got to kind of pull through and and make good on it, especially in the context of the dual share class structure that they have there. That's protected them for a long time. And tech would have been taken out 20 odd years ago if they didn't have that share structure. So they're in a sort of unique position, but there's a sunset on that. That that following what the deal with Elk Valley is going to ride out and it's going to be gone by 2029. But I think there's a lot of questions in the market now. Does that have to go sooner so that you can have a bit more of a orderly kind of market where the CEO and the management team pay pays a bit more of a a price where the major owners of the company have their kind of rightful say in operations. >> I I reckon tech disappears in the fullness of time. Um >> maybe once that share class structure is cleaned up. >> Exactly. So who so so tech owns 60% of of QB. >> That's right. Sumitomo owns 30% and Cadelo owns 10. >> Gotcha. Gotcha. I um Yeah, I'll give him there's there's two things he highlights to me like and I'll give him a D as well. One one is um I think I think people like for whatever reason standalone copper companies command a a higher multiple than the diversified miners. I think it's a a short-sighted kind of market reality. And I also think something like like this the these these are the times where it becomes kind of clear that there was and is a symbiotic relationship that can be had between large scale coal portfolio and your copper especially in a period where your your coal can be a cash cow. I mean I understand it hasn't been very cash generative for for Glenor so far given where markets are but in theory you know that's a tier one asset. it should be printing out cash throughout the cycle and in the fullness of time would have provided plenty of cash flows for them for for tech to um to allocate towards like you know the very capital intensive production growth that they want to be having in the South American copper portfolio. The second thing it highlights to me is um I suppose the premium that you should like that that we should undoubtedly allocate to the types of mining companies who have like teams and and track record of in-house delivery of capital projects like like you know on time on budget in tricky parts of the world like and and and that's that's why I I always I always think like first quantum is just such an an impressive company for for the reason for the reputation that they have in in actually like delivering in-house kind of project execution. in tricky parts of the world in innovative ways. They're very mindful of not wasting cost. They're very conscious of adding value. Sometimes they choose jurisdictions that are a bit, you know, spicier and there's political dynamics. But but yeah, I do think like a company like First Quantum is um is worthy of the execution premium that that you know, you're not going to get a a shocking surprise like you might get out of tech here. >> Yeah, absolutely, mate. Well, well said. First Quantum is a company that that uh deserves a lot of credit for for what they've done over the past sort of 15 or 20 years in building that company. Mate, >> while we're talking about the internationals, uh next next point is so Anglo-American, they launched an accelerated book build to sell their remaining 19.9% stake in Vera. This previously was Amplat. They spun it out. It's its own thing. It's called Vera Platinum now. Um so that amounted to 52 million shares valued at about 2.4 4 billion US and it will complete their exit from the platinum business. What do you what do you rate this one, mate? >> Uh you can you can slice this one up a couple different ways, mate. I'll I'll give them a a C plus. Like the the saving grace is that they held on to 20%. You know, selling that the whole thing would have been difficult. Obviously, it was his own listed business and brand change and everything. But three months later and they're getting a bit of an uplift, a few hundred million dollars, which is uh helpful in the um in the scheme of things for Anglo. You could easily sort of paint a a more negative rush on this one, but you know, the the fact of the matter is that they made the decision a year ago to split up everything and and go down the route that they've gone down and they're kind of living by that now. What do you think? >> Um I can see as well. I think I think like I know a lot of buyside people who have been interested in exposure in the the the platinum trade and they're like they they were actually waiting for this event knowing that you know Anglo shares are going to come to market. So I it gets me more interested in the in the PGM kind of um uh trade in some respects because this is the last kind of liquidity event there. Now all of a sudden if people want exposure to it, they're going to have to buy on market as opposed to wait for you know a big stake of something to come to the market. Um, so yeah, I find that interesting, but but you never you never want to be selling or divesting something when that, you know, commodity is in the doldrums and their hand was kind of forced here thanks to to to BHP and how they had to react to that. But, um, you never want to be selling something in a bare market. You want always want to be selling something in a bull market. Um, unfortunately PGM market is not in a book market right now. So, you know, they're doing what they have to do. I think it's also kind of just like reflecting a little bit again on I mean the coal devestment is has obviously become more complex since things with PE have heightened up. They're no closer to divesting to beers either. I mean the the government of Botswana the other day was uh like actually made some public comments that we should be the ones to take it over like they were really like you know just riing up the the public commentary in relation to everything that's going on with the beers at the moment. Um now that I I don't believe that the government of Botswana is going to take over to beers. I think it's kind of farfetched given the whole financial position of the government there. But the fact there's no trade sale of that yet and there's no there's no rumored actual kind of like buyer of that and there's clearly a bid ask spread on know there's huge stock piles or inventory on the on the books which are valued at diamond prices which don't seem like reasonable at all. um the hand like Anglo's hands are kind of forced to IPO that one, right? So what's going to happen if when when Anglo IPOs to be like what does that thing trade for in public markets? That's like you wouldn't know would I wouldn't buy shares in beers. Like I know there's brand value, but like that only counts for so much. Like um yeah, I don't know. I'm a bit I'm a I'm a bit trepidacious about how they go doing some of the the harder things ahead of them like um parting ways with the beers. I uh yeah, I struggle to see a buyer for for that one. >> Yeah, I I think you're spot on. Anglo is like a a fascinating company with such a rich history, but you know in 2025 the the value of the company like Debeers and and so on is is a bit harder to sort of conjure up. So we'll see what they do on on that front and we'll see what the company looks like in in three years and how they reflect on spinning off PGMs and and other assets. >> Yeah, mate. Um, the next one, Graeme Kerr, who's uh, yeah, the CEO of South 32, made some punchy comments about the attractiveness of investing in America versus Australia pretty pretty publicly this week. >> Yeah. Do you want to grade it, mate? What's >> uh, well, let's say what he said first and then we'll grade it. So, he goes he said the American process is clear. They have defined timelines and they hold everyone accountable. Um he said the US they they they have both the federal and state level permitting Zahar who coordinates the process and allows things to run in parallel. The total amount of work you need to do is the same just holding people to account on deadlines and making sure you have enough resources um and can parallel process the permits. Everyone talks about the US being challenging for permitting. For us it's been a dream compared to Australia. Pretty interesting. Um what do I grade it? I grade I grade it an A for saying it. um like he's if you look at what what he actually suggests Australia change he says um Mr. Kerr wants greater clarity and clear approval requirements and timelines as a starting point. He wants qualified experts rather than outsourcing of decisions to independent panels involved in assessments uh and adequate resources for government agencies to meet timelines. Like I don't think those are unreasonable expectations to have. And I and I think if you don't have those things, it's pretty hard to have international capital attracted to investing in a domestic mining industry. Um the interesting thing about Graeme Curry is he's he's on the way out, right? he's got like like a bit more than 12 months left at South 32 and when you're one foot out of the door you kind of just say things a bit more freely like who cares you know it's like and he's and he's like South 32 for a very long time um have have had a litany of issues in relation to their their domestic permitting dynamics uh particularly related to War Z I aluminina >> yeah well I mean good on him for for speaking up and actually sharing his thoughts there were super interesting comments to to call it sort of chalk and cheese obviously it's a bit anecdotal like I'm I'm not sure every company would exactly echo or reflect what what he has said there. So it is interesting. The way I kind of think about rating this one is um rating the US itself. And I I'll give him a B because I think it is really promising what they've done. But I think the the sort of A mark comes once a mine actually gets through because we still see lots of appeals and these sorts of things. But it also goes to show like a lot of people wouldn't have said super positive things about developing a mine in the US for the past 20 or 30 years. So things can kind of change for the the more constructive and that doesn't mean you sort of skimp through anything. But like Ker said the work is the same in Australia or the US. It's just taken seven years in one spot and four years in another spot. So if you can have more accountability in these sorts of things and actually make a a defined decision then that's the ideal kind of outcome for for both parties and you're not wasting people's time. So it's you know from a government perspective you're not static. You you can run things more efficiently. you you can go to first principles and understand what do we need who are the right people to make these decisions and go from there >> to I gave him an A for the comments but it's a D for thinking Hamosa is the best use of capital maybe an F um even if time's better up mate surely surely the project economics matter more >> call it contrarian mate >> very contrarian >> all right sweet and sour deal >> sweet and sour deal time okay so what do we do here we rattle through some big deals of the week and Is it a sweet deal or a Saudi? It's kind of It's kind of implied by the name, isn't it? >> Start us up, mate. Lotus raised 70 bucks earlier this week. What are your thoughts? >> Um, I don't love I don't love this one. Uh, I you know my views on restart uranium projects. I don't know. >> I think I've heard them in the past. >> Yeah. >> I'm sensing a sour deal. >> Yeah. Yeah. I mean, the flip side of a s like it's a sweet deal if you're the company that raised it, but like Yeah. I don't know. I find it hard to get excited when when that's the rationale for it being a sweet deal. So, I'm a sour deal. >> Yeah, I I would uh lean on on your side of thinking there as well. We ran through the troubles that Kaylea had some time ago. I think it was the beginning of the year when we spoke about these things and there are a lot of things. So, the um the work that the company has to do is clear as day in front of them and they've got no shortage of capital to unlock those things. So, wish them all the best on on that sort of route. Elemental Elus royalties mate. They did a really interesting uh number of deals sort of clumped together. Call it 80 million Aussie 50 odd million US. Um centered to that is Genesis Leverton project sweet or a deal. >> Yeah. So they've acquired this royalty portfolio. the cornerstone like royalty of of that portfolio and the large value contributor is a 2% gross revenue royalty over a bunch of the resource at at Leverton which um which Genesis just acquired from focus. I uh I find this so interesting, right? Like we elemental. So this is the royalty company that recently welcomed Tether as the major shareholder when the Muncher sold out. That episode I got so much flack for by the way. People were not happy about about um about my views in that one. But anyway, they're my views. I'm happy to share them. Um but yeah, a couple couple comments like like Elemental, they're not they're not a they're a small royalty company. Like their market cap's only 500 million bucks. This isn't a this isn't a Franco or anything like that, you know. This is a a very small kind of royalty company. This is a big this is a big uh big ticket kind of royalty deal. And for Elemental to to to do this, I think it signals that they have Tether's support in being inquisitive like buying more gold royalties and and often times being inquisitive as a royalty company like to write big checks means you you kind of got to have a very constructive view on on the valuation. And sometimes you pay overs in the process, but if you've got the support of Tether, happy to see you writing big checks and we'll provide the funding support as you endeavor to do that. Like I I feel like that's um that makes the whole royalty industry very interesting. Like prices might continue to get bit up to pretty high high values there. It's not a bad time to be in the royalty business if you own a bunch of royalties. The other thing it points out to me, just think of like the huge catalyst or the value catalyst that is a change of ownership of a of a mining project. Like look, what what would have this that royalty sold for when it was owned by um Focus just a year ago? Like not very much. There's no line of sight to production. All of a sudden, Genesis owner, they're talking about producing from from here in in due course. You can be pretty confident that Genesis is going to do what they say they're going to do. So all of like I don't think he would have gotten 20% of the the sale price if this sold a year ago. I think I genuinely think the value of this royalty like does more than 5x just because you've now got a a new operator there. And I just find that a a really interesting dynamic with with royalties. And I remember remember Spencer talking about this as well. Like if you can identify royalties that might benefit from a a change of control with a new like operator in a region or something like that then that's a big a big value catalyst for royalties. All up, I kind of rate it in an A. Like I um yeah, just I find it super exciting. >> Yeah, I'm I'm totally with you. It never ceases to amaze me the the value creation and the value unlock in this industry that can be brought to the table with a party that can kind of get things done in a sense whether it kind of be the cost of capital and we spoke about um the Hud Bay deal or the the genesis in this angle that are just going to move the project forward. it things just go from zero to one. It's kind of amazing. So, this is absolutely a a sweet deal. And I say that bearing in mind what you said earlier about the the Tether kind of backing. If that is the case, which we're getting an inkling of, then that's kind of remarkable in in a cost of capital kind of business that you're in in royalties, it's a a super super interesting proposition where it's not just the Franco and the Wheatens of the World which are the only ones which have a supreme competitive advantage. So, That's such a good point. >> It's fascinating. >> Yeah. Yeah. >> On that kind of theme, BHB, they announced a UN a US1.5 billion dollar bond offering split over a 500 million and a billion dollar over varying kind of long-term maturities. So, billion was done at 30-year maturity, paying 5.75%. Really interesting sort of stuff to speak about in the context of of gold, of inflation, of what government bonds are doing. So, what do you rate this one, mate? >> I reckon it's wicked. Um, yeah. So, what do you say? This week, the US 30-year yield on government bonds went to 5%. BHP is borrowing 30 years at 5.75%. That's not much of a a corporate risk premium, right? That's that's I think that's awesome. >> Exactly what I wrote, mate. >> That's the obvious takeaway. I think it's I think it's really cool. Um, and like like mate, sign me up if I could borrow for 30 years at 5.75%. Like, >> yeah, >> I'm doing it. Um, yeah, I I genuinely I would do it. I feel like it's it's I feel like the world is asleep to the fact that inflation can look very very different and interest rates can be very very different in a in a in a relatively short period of time. Like history seen this a lot. So when you can when you can borrow at a fixed rate for such a long duration like that. What what a what a what a tremendous ability to do like these sorts of um loans or you know you think of it a bond. It can literally turn from a liability on your balance sheet to an asset because the ability to borrow at such a like a you know low quotation mark interest rate for that duration can look very different if the world suddenly you know moves to one of um an a high inflation expectation >> like regime. And to be super super clear in this example, obviously you've spelled it out, but you're talking from BHB's perspective borrowing for 30 years at 5.75%. Because sometimes we sort of flip over, you know, the perspective we take when we when we rate these things. But if you were to sit in the other shoe, would you be giving them money at 5.75% over 30 years? >> No, no, no, no. >> Exactly. That's that's what makes it really interesting. >> Yeah. Yeah. Well, that and that's just the that's thanks to distorted markets. Like that's that's you know QE for you. You have you have an indiscriminate bidder of bonds you know bidding bidding bonds to adnauseium. Like what is QE? QE is the indiscriminate buying of government bonds. So that the the yield curve is is irrationally low. Like you have low interest rate for a very long tenant. That's that's part of QE. Um take advantage of that if you're a corporate and you have the ability to borrow out for a long tenure. I reckon um I reckon it'll be a very fruitful decision for BHB in the long run. I do think there's something else to be said for BHB's appetite for for the debt too. I did notice in their earnings um like they they've actually changed what their target net debt range is now. So you go back a year, their target net debt range was uh it was 5 to 15 billion US and they've now lifted that to between 10 and 20 billion US. So they've got more appetite for more net debt. their their net target net debt range has lifted. You know what what's that signaling? Well, they're they're comfortable with more debt. They have more uses for that capital. Those uses are not iron ore very much. Those uses are copper growth and and their potach expansion with with Jansen. I think BHP has tremendously resilient earnings through the cycle given the phenomenal nature of the the Pilgra operations, right? And they're when they brought out the capital allocation framework in 2018, they've got runs on the board with that now. you know, the the the market really trusts, well, gives them gives them leeway. Um, I I think I think I think adding a bit more modest debt is totally okay and and they're the sort of company that can withstand it. Not every company can. As long as the crazy days don't come back with with big debt fuel acquisitions, like you know, we're a long way from that. So, >> yeah, most companies can't sort of caveat, but BHB low cost curve assets. >> If we could borrow for 30 years at 5.75%, would you do it? Yes. >> Yeah. >> Yeah. >> Yeah. Every day of the week. >> You take that? >> Yeah. >> Totally. Do >> you guys want to give us a bond? >> Let's see what we can make happen, mate. >> Okay, mate. Hidden hidden gems. So, have you got you got something of value to uh to share with the audience? >> I think I do, mate. I got a couple to to share here. First of all, these are a bit left field, so for for people that don't know what we're talking about, just something that stands out to us. Doesn't have to be related to mining at all, but something in in our kind of lives. So, first of all, speechify, mate. Feature is wicked for anyone that that battles or just loves listening as opposed to just reading heaps. Get on it. Cost like a couple hundred bucks a year. And this is like this is where AI is doing really good things because it it gets better by the week. And it's it's really cool to have used for a number of years. >> You read more than anyone I know, but you don't actually read. You just you have you have the computer read it to you. >> Just just can't read. Yeah. And um another one is a specific podcast episode. So, the Acquired podcast did one on Standard Oil, which I've listened to a couple times. Standard Oil is an incredible business in the in the the whole history of capitalism. So, that's an episode that is I think it's a two-parter. It's absolutely a two-parter that's well worth listening to despite it being pretty long. So, for those that love a podcast, there's one. How about you, mate? What have you got? Um yeah, I think on the on the topic of pumping the tires of an of an app or a product like um if if the money mers if you've never downloaded an app called Quarter before, it's so worthwhile. Quarter is um it's just like a it's a free easy to use simple UI way to listen to earnings calls and um and and and transcripts. Well, it's like you're listening to the earnings call. It's recorded. You can go back in time. You can search. I think there's so much to be learned from just listening to earnings calls of companies like and don't just stick with the companies you're interested in investing in. Go to the market leaders of that commodity and you'll get very valuable insights on like the things impacting that whole kind of you know supply chain commodity related thing just by listening to the the analyst calls. You can usually skip the start go straight to the Q&A you'll learn heaps. >> Yeah, super well said mate. Awesome. Well, a massive thank you to our partners. Focus the platform brought to you by market tech Sanvic ground support and get your tickets to IMAK going to be in October Sydney 21st to 23rd. >> Hudoo. >> Hudoo. Now remember, I'm an idiot. JD is an idiot. If you thought any of this was anything other than entertainment, you're an idiot and you need to read out a disclaimer.
Gold Takes Off, Rates Bite & Miners Rip
Summary
Transcript
Gold is flying this week. You're seeing long-term rates, like yields all tick up. If you look at equity markets, it's one of those sort of funny times, right, where where bad news is interpreted positively because you think you're going to get a rate cut out of the back of it. All righty. All righty. Let's Let's do this, mate. We've got a bunch to talk about. As always, the mining industry is kicking off, eh? >> It's another week. Mining markets keep moving, mate. And um yeah, you and I never never got a shortage of things to talk about in this industry. That's the wonderful part of it being so fragmented and diverse. There's always news flow, but especially on a week like this week, mate, there's um things are happening. There's a bit there's a bit of optimism out there. There's a bit of love for for certain types of commodities, certain stocks. >> I think the goldies might like this one. The people the people in the gold space might get a bit of enjoyment about the uh the intro and just the week that's been. Hey, >> it's been a m gold's back. It's flying. Um, as as someone messaged us, it never went anywhere. >> It's never It never left. It never left. What else have we got, mate? We've got a few things on the on the roster today. We went to ADU, so we're just going to uh talk about what sort of stuck out because >> as valuations get richer in some parts of the world, they look a bit more appealing in in other parts. And then, >> yeah, going to talk about um SAT 32 and Graeme Kerr's comments. I was going to talk about BHB's financing which I think when compared to other things happening around the industry is is actually a bit interesting. >> Yep. >> Also got tech and Coraba Blanca too. Their um their expansion there has continued to to sort of run through troubles and a couple more bits and pieces. Hey, >> it's a weekly rap mate. We're going to cover lots of stuff in a with a bit of breadth and hopefully be a bit dicey in the process. Um, no friends joining us this time, but uh, yeah. Yeah, we uh, look forward to continuing to bring bring you some diversity of opinion on on our weekly raps going ahead. >> Let's do it, mate. Gold is flying this week, and anyone who holds one or maybe more gold stocks in their portfolio will have seen this because some of the moves have been, you know, 15% plus to the upside in in the space of just a few days. So to put it kind of in into context of what we're seeing around the world, you're seeing long-term rates like yields for the the 10 and up to 30-year uh government bonds from the US to Japan to France to the UK to Germany all tick up. You know, in the US they're sort of touching 5%. In um in UK they're hitting a a 27year high, I think I saw. So inflation has ebbed its way down although it's sort of perking up in in sort of pockets bits and piece in bits and pieces around the world. Of course every country is a bit different and I think we're a bit more protected here in Australia than we than other parts of the world might be say the US where the uh the government debt issue is a bit more pronounced. But if you look at equity markets, it's one of those sort of funny times, right, where where bad news is interpreted positively because you think you're going to get a rate cut out of the bad back of it. I.e. jobs data that sort of makes you think that the Fed is going to cut their rates, sees stocks go up, which is always a bit kind of first to think about, isn't it, >> mate? Mate, it is. Um it's been funny the trend of like uh I I suppose there's like two things happening at the same time which you don't always see and that is like yeah like gold gold soaring and like there's still a lot of like um interest in in the uh the the tech end of the spectrum at the same time. Both those things happening together I find intriguing. I like um I I'm enjoying the the resurgence in the gold names mate. It gives me gives me a bit of um uh what's the right word? I don't know. It just makes me happy. >> Well, to to to put it in a bit more context for what we're seeing in Australia, you're seeing the probability of a rate cut in November, price down a little bit to to 90%. In the US, it's at 100%. So, they are more or less 100%. They're pretty firm on thinking the next rate cut is coming in a couple weeks time. >> Absurd though. >> Yeah. And surely absurd. Like >> we're at the point where this is this is good for governments, right, though? Because they want to eat into that debt that they've got. And there's a lot of pressure coming from the governments on on central banks around the world. >> I uh yeah, mate, I I find it I feel like no one gives a damn about inflation until it's glaring you in the eyes. And we everyone knows how um manipulated all of our various like inflation measures are. Like real people feel the pinch of paying more for things and yet CPI is non-existent. So um I just think if we we see we we can see the green shoots in commodity prices all of that flows through supply chain. Inflation is going to be back in no time and as always like you know what is consensus from a policy perspective flips and it flips fast. The biggest determinant of inflation is inflation expectations themselves. So the moment people start to expect inflation it starts showing in the numbers. There's that like reflexivity to to the equation. Um yeah, it won't take long and the world can look like very very different from inflation perspective and then and then it'll be the only thing that we can talk about and then all of a sudden what does the case look like for real assets? You know, looks pretty compelling. >> Totally. And that's what the the gold market is sniffing at right now as well as the other sort of commodities out there. So gold hit up on 3,600 US. And you can see in the the focus chart here, we've got the likes of Romelius, Northern Star, Genesis, Capricorn, uh, Pantoro, and Alcane all having sort of varying degrees of of success. And we spoke about this earlier in the week in our interview with with Greg Orel where the the changing perception of consensus gold forecast is is moving under our feet. And I think that's what's really kind of driving things despite like gold flows, gold ETF flows still being fairly negligible, especially in the face of like big tech and other things that you mentioned earlier. You're seeing this sort of thinking of where gold's going to be in one and two years time changing under our feet and even even the brokers are sort of starting to to move their price tags and move the the upside on on their decks. And then you see it down the sort of curve. You see it in in places like silver and other sort of assets that have run really hard. If we zoom out a bit, looking at the last quarter, looking at the last half year, things like the PGM sort of complex and all these sort of real assets, they're they're starting to to kind of move. And we'll talk about a bit a bit more later on in the context of like BHB and and their financing and and the interest these sorts of companies are getting. But I think the um the the prized asset that is a mining company with great management that can fight away inflation over the longer term is looking as appealing as it ever has. And I I understand the echo chamber that that we live in here and being a mining podcast living in in Perth sort of talking about it, but I think you're sort of seeing that reflected in in the prices of all these things recently. >> Yeah. Yeah. I mean record record, you know, records in terms of the ability to capture um margin from a lot of these like gold miners. And that's why that's why they're showing the the crazy well the remarkable share price movements they have. Inflation is the thing to keep an eye on, right? Because if you have costs creep up, then can they hold on to the um can they hold on to those those margins? There's a bit baked into their their their current share prices. But if you have a a positive outlook on where the gold market is and where it's heading and if you have a positive outlook on the ability to control costs in that outlook then you know then you can have a very different view at the same time. >> Yeah. That that management component that premium is is in a number of cases that we'll speak about today sort of is it's sort of worth its weight in gold I find. >> Yeah. And I mean like the management can only do so much, right? Like if if if state like in if you have inflation or you have um wage inflation in particular and all of a sudden everyone's swapping jobs because they're they're getting offered 20 25% more 50% more a sign on bonus to go join the PR then everyone's costs go up all at the same time and you erode your margin pretty damn quickly. So what was a very like profitable error can disappear super quickly if you have just a tight labor market in particular or high energy costs or you know a variety of other um input costs that might be substantial like reagent costs the likes. So like yeah inflation is the thing that kind of kills margins and it can happen inflation can certainly move faster than the gold price when it gets um when it gets going. So that's just a thing to keep an eye on. >> Totally. Totally. And the the wage inflation never seems to move quite as quick mate. Uh yeah, it doesn't move down. Like wages are sticky. They can move upwards super quick, but yeah, like you're not going to have someone agree to be paid less. You know what I mean? Doesn't move the other way. >> Totally. >> But I do love that. Um >> yeah, that that image of all the charts you brought up on the the focus platform, focus by market, mate. That's I'm actually using focus quite a bit. I really like that platform. That's um that's a that's a really quality it's a quality platform that uh I'm getting a lot out of. Super clean, easy to use. you get heaps of like value from the various like different like scans you can you can do on there. Um >> the learning curve isn't massive like it is with a a heap of these things either. >> It's super simple to to to get like a pretty institutional grade product at a at a retail price. So check out check out focus by market if you haven't yet in the show notes. There's um I think you get a 10day free trial if you uh click the link in the show notes. >> Get on it mate. Let's uh let's talk about ADU. So African under we went yesterday and we had a bunch of interesting conversations. So, we thought it might be just worthwhile reflecting on the types of conversations we had, what we saw, and what kind of stuck out. So, what's top of your list, man? >> Well, first first and foremost, like uh big big congrats to to Per for putting that that event on. That was I was this the first time I've ever been to Africa Down Under, but I thought it was a very tidy event. Like, I thought it was a really really quality really quality conference, you know, like a quality targeted audience. Um yeah, super super professional, super like super interested, super engaged. Like I Yeah, I just thought it was it's a wicked event. That targeted component I think is the the interesting bit about it, right? There's there's, you know, the the bit the bits in common that you have there and what you're hunting out for you can sort of see in very quickly session and have a lot of conversations which is pretty cool. >> Yeah. Yeah. Um and I thought just like just thinking of the themes um one of the themes that I come away from at at the end of the week is did you notice there's a real abundance of these um these smallcale near-term producers that like capital markets have largely forgotten about? Maybe they've been around for quite a while but they've just never like they've been asleep or dormant or at least from people's like eyeballs and interest levels because they're in a part of the world that's too spicy and of a scale that is not relevant until now. Right. Um anyway, I just I noticed a bunch of them either in my direct vision or in my periphery this week. And um >> you're like, "Hang on, they're actually going to be producing in Yes. in that amount of time." >> Exactly. Exactly. And you know, take like I'll I'll list off a couple here. >> Yeah. Let's run through them. >> Um so Orion, right? Like every every um man and their dog is interested in small cap copper, right? Like there's no shortage of interest in small cap copper, but when's the last time you heard anyone talk about Orion? It's a really long time ago, right? like it's just been Yeah, >> it's been a little while. So, South African copper for for people unfamiliar. >> South African copper there. I mean, I think I think on the register you see the likes of of uh Tempo, Deli. Um it's got like an interesting register there. They they say that Priuses will be producing concentrate by Christmas 2026. Um and that that like they've got, you know, two projects. That's their first focus which they say they're going to build up to 22 22,000 tons of of copper in a in a bit of a phased approach and only like in a market cap of only $80 million. So I was completely asleep to the fact that they're an air temp producer. Had no idea. >> Yeah. Like >> because they had a few sort of moving parts as well. The exploration angle I think is what had captured other people's attention there and then you forget they've got a few sort of different bits and pieces to it. Right. Another one that's been um yeah just dormant in my mind for years is Westwitz mining. They they show 70,000 ounce per of gold production from uh Koala Shells from only US 44 million in in funding. Um that's because they've got this toll processing arrangement with Saban Stillwater. Um and they're targeting first pour in the first half of next year. That's um that's approaching pretty fast and again like was asleep to the fact that this thing will be producing gold soon. It's the first new gold mine in South Africa in about a decade, I think. >> Would you call it new? Is it new? >> I'm not sure if that was them calling it or someone else, but um >> yeah, I mean it's it's coming online in in a very short period of time. And >> yeah, I think I think like the capital markets have been like very apprehensive about South South Africa for a long time as well. Um I think you and I have like a different view on on the risk there. I do think the risk is like >> not something you can ignore, but I don't I don't think it's like >> I don't think it's proportionate to what the real risk is. I suppose capital markets apprehension to to to touch things in South Africa. >> Yeah, it's interesting because we went there earlier in the year and and our perspective kind of changed a bit and obviously we we haven't operated or anything like that but just having a lot of conversations with people at mines and these sorts of things and just the kind of feeling you got around there is that you can kind of get things done. >> I Yeah. Yep. Yep. Everything's contextual and everything has price. Um there's this other other company Ariana Mining and so it's an AIM listed gold producer. It's coming to the ASX. So like another one of those you know foreign listed companies looking to migrate or make their way with the dual listing to you know capitalize on the higher premiums we've got over here. Um anyway this is how kind of subscale I'm talking about. So they've got this 23.5% interest in uh in these in a couple of gold mines which collectively produce 25,000 ounces in in 2025. So that's that's 6,000 ounces of attributable production. Like that is so so small. But they've got a development project in Zimbabwe which I think they're more excited about. I all that to say is like this this kind of small subscale stuff wouldn't have you wouldn't have seen an IPO for that on the ASX like a couple years ago. Like this is um a lot of this small scale stuff in in a spicy jurisdiction or a place like like South Africa or Zimbabwe or whatever. It's the you know these are the sort of projects and companies which um you know you tend to just like forget about or you're you're sleeping on it and then all of a sudden there's like 5% of the cycle they're interesting or relevant and we're either in that 5% or we're about to be in that 5% because you know these these are these are the kinds of things which you know you don't want to be in 95% of the time and then 5% of the time they're super sexy and um yeah like I I I can't figure out where we are in that sexy period of time but we're we're We're we're pretty close to it or we're in it. >> That's that's the super important detail about everything we're talking about here, right? These are not things you you buy and hold and put put in the portfolio. Like you have to you have to be switched on to these things cuz they work for a very finite period of time. >> Subscale stuff. Like the whole thing with mining is you don't like you accept whatever price you get for something. You're not a price setter, right? So you the way you have a competitive durable advantage is through scale because scale gives you economies of scale. And so whenever you're talking about small scale production, you're fighting an uphill battle from the get-go because you don't have economies of scale on your on your side. And unfortunately like those companies we just talked about even though they they you know got something interesting approaching production yada yada. Um it's it's also they also haven't had jurisdiction on their side either for the last period of time. So, >> you just hope they've got a bit of grade on their side that can manage the the cost component of that. >> And don't get me wrong, I think there's like there's plenty of opportunity and money to be made when you time like being in those companies, right? You just can't fall in love with them, you know, like when you're um when you're when when when when things kind of turn >> 100%. Any others that stuck out? >> Um well, I've got another theme for you. Um >> enlighten me. This was this was another theme that I noticed and that's I like I just um there's there's absolutely a bunch of quality underdeveloped projects in in Africa that are M&A targets and the the M&A bidding pool is is you know is wider for geopolitical reasons than it than it is elsewhere a lot of the time not all the time but a a lot of the time um in the gold space like I think you know Taco and Predictive are the standouts there like I wouldn't be surprised to to see both of them acquired in the next 12 months they're yeah super super super decent deposits Yeah. Yeah. I I think you're 100% right. And the attention that some of these other names, you know, Many Peaks is another one that we've spoken about in the past, like they are getting attention like the the results keep coming out and and things get get marginally better and better, but they're being rewarded for that. >> Many pieces up 360% this year um on the on the on the focus charts by market. Check it out. >> There you go. Um and I yeah I suppose even in that category like you can look at where the the Londines and the Chinese were were allocating to with their um you know investments earlier in the year and for that reason you can group ORM and African gold into into that category uh as well. Both of those are up more than 100% this year. So um I I think I think you can throw Tobani in the mix as well. Like if you can stomach Marley like there's a um a pretty robust like production outlook from from from that company. And now that they've got um like a a different funding pathway like it's I think it's I think it's kind of interesting now as well. >> Yeah. Thinking about Marley for a moment there. It is interesting to look at the likes of Resolute who have obviously had a pretty tumultuous past year and the gold price has improved dramatically since what happened happened. But they're nearly at those those levels they were at before they they h haveved which is kind of interesting to to think about when there was kind of total despair amongst shareholders out there. >> Relevant to Marley. So Robex they they make a little bit of cash flow from um some gold mining in Marley but the big story for them is the development of Kinero which is you know well and truly pretty advanced. Um they're expecting first paw shortly. So this is a, you know, an exciting new mine in um in Guinea, you know, great kind of oxide feed to to um yeah, hopefully have some expedited repayment of of their project finance facility. I saw they kind of rejigged a couple things with SPR, but I'm pretty constructive on Robex. Um I like I I think I think that's that's it's a backable team. It's a backable story. It's um going through the right part of the Lison curve and if the geop politics doesn't you know get too rocky then like it's it's there for them you know. Yeah. >> You put your house on it mate. >> I would not put I know a I do know a bloke who puts his house on it. Shout out you >> know who you are. >> Yeah. Mad dog. But I uh absolutely >> I don't have those big bowls mate. Um >> no. Awesome. Great. >> Uh and away from gold. I've got a couple more for you. >> Okay. Uh I do think there's like there's still some decent projects in other commodities that may find corporate interest in the future too. And and at least in in in uh commodities other than gold. Um sometimes like the issue with with uh M&A activity for undeveloped projects in gold right now is the corporates haven't yet changed their gold price decks, right? So if you if they're running their long-term gold price, they can't justify paying above the the share market prices for any of these underdeveloped projects. So until you get like the FOMO from the corporates like it's you just struggle to see the um the the M&A outcome. But in the in other commodities like maybe the commodity is more out of favor. It's it's a lot easier to have a an assumption from a corporate who has a a long-term price higher than the current price and and hence you can do a deal pretty easy as long as a bit spreads it and that's that's the that's the tricky thing. I look at Atlantic Lithium therea project it it's one of the standout undeveloped lithium projects right um we know it has corporate appeal like I remember late 2023 when made two offers both at the same price was 33 p for the company so Atlantic now trades at 9 p that's 20 cents Australian um I I think in the riot lithium market that asset has legs I'm just not brave enough myself to uh to get exposure to that one and you know there's a there's a there's a bit to play out as well from um from the permitting perspective but but it's a it's a very worthy asset in the right lithium market. There's no doubt like that's that's a quality asset. And in the uranium space uranium is so tricky, man. Like I'm I'm not um I'm what's the right word? I feel like in the uranium, like when you're picking uranium equities, you're the the the question you're trying to answer a lot of the time is like which one of the lot is the least bad because there's there's they've all got warts. Everything's got warts on it and >> especially the restarts. >> Restarts have they they have obvious warts on them and sometimes the warts are kind of easy to pluck out. That's why the development projects are sometimes kind of you can have blue sky because no one knows what the warts are yet sometimes with a with a development project. Um but Aura Energy kind of comes to mind there. They they've got the uh the undeveloped tus project in Moritania. We love Moritania. Yeah. Talking about Moritania a bit. >> Yeah. If you can get comfortable with Moritania, I actually think it's a tidy enough project. It's got, you know, long enough production life, tidy study numbers. Um I, you know, to me it looks like a team that would will transact on it. Like I feel like that's that's one that could be primed for M&A activity in the future as well. The final one I thought was worthy of us doing a bit of work on in the future, and we we haven't done the work we need to on this one yet, mate. Is um Southern Palladium. So, they've got the uh >> Ding ding ding. >> Do you own it? Do we buy some? >> Yeah. >> I didn't know that. >> Just small. Just small. >> Oh, that's so funny. Oh, jeez. Anyway, I didn't realize. >> Uh we got to we got to do more work on it now. We've got some skin in the game. But um I mean that's on the the eastern limb of the Bushfeld complex surrounded by the big international producers. $70 million market cap. >> Like the project to me looks like it stacks up in a in a in a in a bad PGM market. If they can advance things at the exact same time as that market gets healthier. Um both those things are uncertain by the way and like I think they'd benefit. So a sort of staged approach they're looking at there as well as you know exploring the opportunity of of using someone else's um processing >> capability which comes with challenges as well. So everything's in context of a a weak PGM market. Yeah. >> And a you know kind of unbecoming market capitalization of of the business. But it's it's it's an interesting one to look at if you can stomach all the above plus sort of South Africa risk. >> Yeah. Yeah. Did you have any other reflections other than >> No, I think you sort of captured it really well. I was just sort of amazed in in the space of a few hours and you know this isn't like a plug at all, but like the amount of conversations we we had in in the space of a few hours there was was very kind of cool. We were able to sort of float through and get a get a feel for lots of different parts. You know, you can't paint West Africa with the same brush as South Africa as pockets in in East Africa there. So there's a lot to kind of get across, but I feel we were able to kind of do so having a bunch of conversations, which was super helpful for for our sort of education. >> Totally, mate. Totally. >> Grade control, mate. >> Grade control. >> Remind me remind me about this segment, J. So we give a a letter like your your old high school mark a tof on a corporate move, a bit of government policy, a commodity trend, anything that sort of happened in the world of metals and mining in the past week. So we've got three or four topics to talk through today and we're going to start this one with tech struggles at Bradlanca which is in the north of Chile there. So that's their big flagship copper asset. They made the big move to sell the El Valley assets uh about a year and a half ago now. So high quality Metco projects that they owned in a sort of circaction. So obviously Metco peeled off a fair bit since then. So, they might be smiling about that, but there's still a lot of uh uh critics out there analyzing their decision to focus on the battery metals complex, especially in light of the fact that they've had a lot of troubles mining in the um battery metals, specifically in the copper space. So, they have assets all through the Americas. They are one of Canada's biggest mining names, you know, kind of thanks to a lot of the takeouts that have happened over the past few decades in that space. So for those not familiar here in Australia, they kept at kind of between 15 and 20 billion depending on how they're trading dollars. And what they've done recently this week is they've they've paused all major expansion capital across all their assets so that they can focus on fixing QB. So >> this is their flagship asset. >> Abs. Absolutely. So they in I want to say 2018 pressed go on QB2. That was the expansion project that was meant to be done 2021. that struggled no thanks to to co but that took them many years longer as well as$4 billion dollars more to complete. Now this was to to really lift it up a notch and we're talking at this point in time kind of mid 200,000 tons of copper production perom. So earlier this year they downgraded that by 40,000 tons for this year and 26 guidance is in in serious kind of doubt on on the back of these challenges. Specifically they've had issues with with tailings there as well as kind of infrastructure problems. So they got this operational review underway now but that sort of slow sand drainage challenge that they're having up there in the Andes. this asset is at 4 and a half thousand meters above sea level has you know ultimately kneecapped production and it's given them no shortages of issues. So what they wanted to do was mechanically raise that that down wall there so that you can have more tailings go at the back end of the plant and produce more copper. And it's kind of interesting when you think about tech because they had for for the longest time a track record as just phenomenal mindbuilders. that was their MMO. They built mines year after year after year and they did it really well. But that has sort of seen a bit of um a bit of it sort of armor chinkedked at in the past um decade or so with with challenges like what we're seeing here. So QB and QB2 certainly doesn't fall into the the assets that they've executed marvelously on. And if you're going to be a a copper focused producer in the Americas, you've got to be able to execute this, you know, understanding that it's it's super sort of hard to do. But as a result of all these challenges, their their COO retired in quotation marks has has sort of moved on because somebody evidently had to take the the brunt and walk the plank for for what we've kind of seen today. >> What do you what do you give them from a grade perspective, mate? Ah, I mean it's it's hard to give them anything other than like a a D right for this one because again understanding that mining is hard and these things are very common these these types of challenges. So you don't want to be overly critical but in the face of what they've tried to do and in the context of having spent you know $4 billion more than they previously had guided to the market already on this. There's got to be a point in time when when enough's enough and you got to kind of pull through and and make good on it, especially in the context of the dual share class structure that they have there. That's protected them for a long time. And tech would have been taken out 20 odd years ago if they didn't have that share structure. So they're in a sort of unique position, but there's a sunset on that. That that following what the deal with Elk Valley is going to ride out and it's going to be gone by 2029. But I think there's a lot of questions in the market now. Does that have to go sooner so that you can have a bit more of a orderly kind of market where the CEO and the management team pay pays a bit more of a a price where the major owners of the company have their kind of rightful say in operations. >> I I reckon tech disappears in the fullness of time. Um >> maybe once that share class structure is cleaned up. >> Exactly. So who so so tech owns 60% of of QB. >> That's right. Sumitomo owns 30% and Cadelo owns 10. >> Gotcha. Gotcha. I um Yeah, I'll give him there's there's two things he highlights to me like and I'll give him a D as well. One one is um I think I think people like for whatever reason standalone copper companies command a a higher multiple than the diversified miners. I think it's a a short-sighted kind of market reality. And I also think something like like this the these these are the times where it becomes kind of clear that there was and is a symbiotic relationship that can be had between large scale coal portfolio and your copper especially in a period where your your coal can be a cash cow. I mean I understand it hasn't been very cash generative for for Glenor so far given where markets are but in theory you know that's a tier one asset. it should be printing out cash throughout the cycle and in the fullness of time would have provided plenty of cash flows for them for for tech to um to allocate towards like you know the very capital intensive production growth that they want to be having in the South American copper portfolio. The second thing it highlights to me is um I suppose the premium that you should like that that we should undoubtedly allocate to the types of mining companies who have like teams and and track record of in-house delivery of capital projects like like you know on time on budget in tricky parts of the world like and and and that's that's why I I always I always think like first quantum is just such an an impressive company for for the reason for the reputation that they have in in actually like delivering in-house kind of project execution. in tricky parts of the world in innovative ways. They're very mindful of not wasting cost. They're very conscious of adding value. Sometimes they choose jurisdictions that are a bit, you know, spicier and there's political dynamics. But but yeah, I do think like a company like First Quantum is um is worthy of the execution premium that that you know, you're not going to get a a shocking surprise like you might get out of tech here. >> Yeah, absolutely, mate. Well, well said. First Quantum is a company that that uh deserves a lot of credit for for what they've done over the past sort of 15 or 20 years in building that company. Mate, >> while we're talking about the internationals, uh next next point is so Anglo-American, they launched an accelerated book build to sell their remaining 19.9% stake in Vera. This previously was Amplat. They spun it out. It's its own thing. It's called Vera Platinum now. Um so that amounted to 52 million shares valued at about 2.4 4 billion US and it will complete their exit from the platinum business. What do you what do you rate this one, mate? >> Uh you can you can slice this one up a couple different ways, mate. I'll I'll give them a a C plus. Like the the saving grace is that they held on to 20%. You know, selling that the whole thing would have been difficult. Obviously, it was his own listed business and brand change and everything. But three months later and they're getting a bit of an uplift, a few hundred million dollars, which is uh helpful in the um in the scheme of things for Anglo. You could easily sort of paint a a more negative rush on this one, but you know, the the fact of the matter is that they made the decision a year ago to split up everything and and go down the route that they've gone down and they're kind of living by that now. What do you think? >> Um I can see as well. I think I think like I know a lot of buyside people who have been interested in exposure in the the the platinum trade and they're like they they were actually waiting for this event knowing that you know Anglo shares are going to come to market. So I it gets me more interested in the in the PGM kind of um uh trade in some respects because this is the last kind of liquidity event there. Now all of a sudden if people want exposure to it, they're going to have to buy on market as opposed to wait for you know a big stake of something to come to the market. Um, so yeah, I find that interesting, but but you never you never want to be selling or divesting something when that, you know, commodity is in the doldrums and their hand was kind of forced here thanks to to to BHP and how they had to react to that. But, um, you never want to be selling something in a bare market. You want always want to be selling something in a bull market. Um, unfortunately PGM market is not in a book market right now. So, you know, they're doing what they have to do. I think it's also kind of just like reflecting a little bit again on I mean the coal devestment is has obviously become more complex since things with PE have heightened up. They're no closer to divesting to beers either. I mean the the government of Botswana the other day was uh like actually made some public comments that we should be the ones to take it over like they were really like you know just riing up the the public commentary in relation to everything that's going on with the beers at the moment. Um now that I I don't believe that the government of Botswana is going to take over to beers. I think it's kind of farfetched given the whole financial position of the government there. But the fact there's no trade sale of that yet and there's no there's no rumored actual kind of like buyer of that and there's clearly a bid ask spread on know there's huge stock piles or inventory on the on the books which are valued at diamond prices which don't seem like reasonable at all. um the hand like Anglo's hands are kind of forced to IPO that one, right? So what's going to happen if when when Anglo IPOs to be like what does that thing trade for in public markets? That's like you wouldn't know would I wouldn't buy shares in beers. Like I know there's brand value, but like that only counts for so much. Like um yeah, I don't know. I'm a bit I'm a I'm a bit trepidacious about how they go doing some of the the harder things ahead of them like um parting ways with the beers. I uh yeah, I struggle to see a buyer for for that one. >> Yeah, I I think you're spot on. Anglo is like a a fascinating company with such a rich history, but you know in 2025 the the value of the company like Debeers and and so on is is a bit harder to sort of conjure up. So we'll see what they do on on that front and we'll see what the company looks like in in three years and how they reflect on spinning off PGMs and and other assets. >> Yeah, mate. Um, the next one, Graeme Kerr, who's uh, yeah, the CEO of South 32, made some punchy comments about the attractiveness of investing in America versus Australia pretty pretty publicly this week. >> Yeah. Do you want to grade it, mate? What's >> uh, well, let's say what he said first and then we'll grade it. So, he goes he said the American process is clear. They have defined timelines and they hold everyone accountable. Um he said the US they they they have both the federal and state level permitting Zahar who coordinates the process and allows things to run in parallel. The total amount of work you need to do is the same just holding people to account on deadlines and making sure you have enough resources um and can parallel process the permits. Everyone talks about the US being challenging for permitting. For us it's been a dream compared to Australia. Pretty interesting. Um what do I grade it? I grade I grade it an A for saying it. um like he's if you look at what what he actually suggests Australia change he says um Mr. Kerr wants greater clarity and clear approval requirements and timelines as a starting point. He wants qualified experts rather than outsourcing of decisions to independent panels involved in assessments uh and adequate resources for government agencies to meet timelines. Like I don't think those are unreasonable expectations to have. And I and I think if you don't have those things, it's pretty hard to have international capital attracted to investing in a domestic mining industry. Um the interesting thing about Graeme Curry is he's he's on the way out, right? he's got like like a bit more than 12 months left at South 32 and when you're one foot out of the door you kind of just say things a bit more freely like who cares you know it's like and he's and he's like South 32 for a very long time um have have had a litany of issues in relation to their their domestic permitting dynamics uh particularly related to War Z I aluminina >> yeah well I mean good on him for for speaking up and actually sharing his thoughts there were super interesting comments to to call it sort of chalk and cheese obviously it's a bit anecdotal like I'm I'm not sure every company would exactly echo or reflect what what he has said there. So it is interesting. The way I kind of think about rating this one is um rating the US itself. And I I'll give him a B because I think it is really promising what they've done. But I think the the sort of A mark comes once a mine actually gets through because we still see lots of appeals and these sorts of things. But it also goes to show like a lot of people wouldn't have said super positive things about developing a mine in the US for the past 20 or 30 years. So things can kind of change for the the more constructive and that doesn't mean you sort of skimp through anything. But like Ker said the work is the same in Australia or the US. It's just taken seven years in one spot and four years in another spot. So if you can have more accountability in these sorts of things and actually make a a defined decision then that's the ideal kind of outcome for for both parties and you're not wasting people's time. So it's you know from a government perspective you're not static. You you can run things more efficiently. you you can go to first principles and understand what do we need who are the right people to make these decisions and go from there >> to I gave him an A for the comments but it's a D for thinking Hamosa is the best use of capital maybe an F um even if time's better up mate surely surely the project economics matter more >> call it contrarian mate >> very contrarian >> all right sweet and sour deal >> sweet and sour deal time okay so what do we do here we rattle through some big deals of the week and Is it a sweet deal or a Saudi? It's kind of It's kind of implied by the name, isn't it? >> Start us up, mate. Lotus raised 70 bucks earlier this week. What are your thoughts? >> Um, I don't love I don't love this one. Uh, I you know my views on restart uranium projects. I don't know. >> I think I've heard them in the past. >> Yeah. >> I'm sensing a sour deal. >> Yeah. Yeah. I mean, the flip side of a s like it's a sweet deal if you're the company that raised it, but like Yeah. I don't know. I find it hard to get excited when when that's the rationale for it being a sweet deal. So, I'm a sour deal. >> Yeah, I I would uh lean on on your side of thinking there as well. We ran through the troubles that Kaylea had some time ago. I think it was the beginning of the year when we spoke about these things and there are a lot of things. So, the um the work that the company has to do is clear as day in front of them and they've got no shortage of capital to unlock those things. So, wish them all the best on on that sort of route. Elemental Elus royalties mate. They did a really interesting uh number of deals sort of clumped together. Call it 80 million Aussie 50 odd million US. Um centered to that is Genesis Leverton project sweet or a deal. >> Yeah. So they've acquired this royalty portfolio. the cornerstone like royalty of of that portfolio and the large value contributor is a 2% gross revenue royalty over a bunch of the resource at at Leverton which um which Genesis just acquired from focus. I uh I find this so interesting, right? Like we elemental. So this is the royalty company that recently welcomed Tether as the major shareholder when the Muncher sold out. That episode I got so much flack for by the way. People were not happy about about um about my views in that one. But anyway, they're my views. I'm happy to share them. Um but yeah, a couple couple comments like like Elemental, they're not they're not a they're a small royalty company. Like their market cap's only 500 million bucks. This isn't a this isn't a Franco or anything like that, you know. This is a a very small kind of royalty company. This is a big this is a big uh big ticket kind of royalty deal. And for Elemental to to to do this, I think it signals that they have Tether's support in being inquisitive like buying more gold royalties and and often times being inquisitive as a royalty company like to write big checks means you you kind of got to have a very constructive view on on the valuation. And sometimes you pay overs in the process, but if you've got the support of Tether, happy to see you writing big checks and we'll provide the funding support as you endeavor to do that. Like I I feel like that's um that makes the whole royalty industry very interesting. Like prices might continue to get bit up to pretty high high values there. It's not a bad time to be in the royalty business if you own a bunch of royalties. The other thing it points out to me, just think of like the huge catalyst or the value catalyst that is a change of ownership of a of a mining project. Like look, what what would have this that royalty sold for when it was owned by um Focus just a year ago? Like not very much. There's no line of sight to production. All of a sudden, Genesis owner, they're talking about producing from from here in in due course. You can be pretty confident that Genesis is going to do what they say they're going to do. So all of like I don't think he would have gotten 20% of the the sale price if this sold a year ago. I think I genuinely think the value of this royalty like does more than 5x just because you've now got a a new operator there. And I just find that a a really interesting dynamic with with royalties. And I remember remember Spencer talking about this as well. Like if you can identify royalties that might benefit from a a change of control with a new like operator in a region or something like that then that's a big a big value catalyst for royalties. All up, I kind of rate it in an A. Like I um yeah, just I find it super exciting. >> Yeah, I'm I'm totally with you. It never ceases to amaze me the the value creation and the value unlock in this industry that can be brought to the table with a party that can kind of get things done in a sense whether it kind of be the cost of capital and we spoke about um the Hud Bay deal or the the genesis in this angle that are just going to move the project forward. it things just go from zero to one. It's kind of amazing. So, this is absolutely a a sweet deal. And I say that bearing in mind what you said earlier about the the Tether kind of backing. If that is the case, which we're getting an inkling of, then that's kind of remarkable in in a cost of capital kind of business that you're in in royalties, it's a a super super interesting proposition where it's not just the Franco and the Wheatens of the World which are the only ones which have a supreme competitive advantage. So, That's such a good point. >> It's fascinating. >> Yeah. Yeah. >> On that kind of theme, BHB, they announced a UN a US1.5 billion dollar bond offering split over a 500 million and a billion dollar over varying kind of long-term maturities. So, billion was done at 30-year maturity, paying 5.75%. Really interesting sort of stuff to speak about in the context of of gold, of inflation, of what government bonds are doing. So, what do you rate this one, mate? >> I reckon it's wicked. Um, yeah. So, what do you say? This week, the US 30-year yield on government bonds went to 5%. BHP is borrowing 30 years at 5.75%. That's not much of a a corporate risk premium, right? That's that's I think that's awesome. >> Exactly what I wrote, mate. >> That's the obvious takeaway. I think it's I think it's really cool. Um, and like like mate, sign me up if I could borrow for 30 years at 5.75%. Like, >> yeah, >> I'm doing it. Um, yeah, I I genuinely I would do it. I feel like it's it's I feel like the world is asleep to the fact that inflation can look very very different and interest rates can be very very different in a in a in a relatively short period of time. Like history seen this a lot. So when you can when you can borrow at a fixed rate for such a long duration like that. What what a what a what a tremendous ability to do like these sorts of um loans or you know you think of it a bond. It can literally turn from a liability on your balance sheet to an asset because the ability to borrow at such a like a you know low quotation mark interest rate for that duration can look very different if the world suddenly you know moves to one of um an a high inflation expectation >> like regime. And to be super super clear in this example, obviously you've spelled it out, but you're talking from BHB's perspective borrowing for 30 years at 5.75%. Because sometimes we sort of flip over, you know, the perspective we take when we when we rate these things. But if you were to sit in the other shoe, would you be giving them money at 5.75% over 30 years? >> No, no, no, no. >> Exactly. That's that's what makes it really interesting. >> Yeah. Yeah. Well, that and that's just the that's thanks to distorted markets. Like that's that's you know QE for you. You have you have an indiscriminate bidder of bonds you know bidding bidding bonds to adnauseium. Like what is QE? QE is the indiscriminate buying of government bonds. So that the the yield curve is is irrationally low. Like you have low interest rate for a very long tenant. That's that's part of QE. Um take advantage of that if you're a corporate and you have the ability to borrow out for a long tenure. I reckon um I reckon it'll be a very fruitful decision for BHB in the long run. I do think there's something else to be said for BHB's appetite for for the debt too. I did notice in their earnings um like they they've actually changed what their target net debt range is now. So you go back a year, their target net debt range was uh it was 5 to 15 billion US and they've now lifted that to between 10 and 20 billion US. So they've got more appetite for more net debt. their their net target net debt range has lifted. You know what what's that signaling? Well, they're they're comfortable with more debt. They have more uses for that capital. Those uses are not iron ore very much. Those uses are copper growth and and their potach expansion with with Jansen. I think BHP has tremendously resilient earnings through the cycle given the phenomenal nature of the the Pilgra operations, right? And they're when they brought out the capital allocation framework in 2018, they've got runs on the board with that now. you know, the the the market really trusts, well, gives them gives them leeway. Um, I I think I think I think adding a bit more modest debt is totally okay and and they're the sort of company that can withstand it. Not every company can. As long as the crazy days don't come back with with big debt fuel acquisitions, like you know, we're a long way from that. So, >> yeah, most companies can't sort of caveat, but BHB low cost curve assets. >> If we could borrow for 30 years at 5.75%, would you do it? Yes. >> Yeah. >> Yeah. >> Yeah. Every day of the week. >> You take that? >> Yeah. >> Totally. Do >> you guys want to give us a bond? >> Let's see what we can make happen, mate. >> Okay, mate. Hidden hidden gems. So, have you got you got something of value to uh to share with the audience? >> I think I do, mate. I got a couple to to share here. First of all, these are a bit left field, so for for people that don't know what we're talking about, just something that stands out to us. Doesn't have to be related to mining at all, but something in in our kind of lives. So, first of all, speechify, mate. Feature is wicked for anyone that that battles or just loves listening as opposed to just reading heaps. Get on it. Cost like a couple hundred bucks a year. And this is like this is where AI is doing really good things because it it gets better by the week. And it's it's really cool to have used for a number of years. >> You read more than anyone I know, but you don't actually read. You just you have you have the computer read it to you. >> Just just can't read. Yeah. And um another one is a specific podcast episode. So, the Acquired podcast did one on Standard Oil, which I've listened to a couple times. Standard Oil is an incredible business in the in the the whole history of capitalism. So, that's an episode that is I think it's a two-parter. It's absolutely a two-parter that's well worth listening to despite it being pretty long. So, for those that love a podcast, there's one. How about you, mate? What have you got? Um yeah, I think on the on the topic of pumping the tires of an of an app or a product like um if if the money mers if you've never downloaded an app called Quarter before, it's so worthwhile. Quarter is um it's just like a it's a free easy to use simple UI way to listen to earnings calls and um and and and transcripts. Well, it's like you're listening to the earnings call. It's recorded. You can go back in time. You can search. I think there's so much to be learned from just listening to earnings calls of companies like and don't just stick with the companies you're interested in investing in. Go to the market leaders of that commodity and you'll get very valuable insights on like the things impacting that whole kind of you know supply chain commodity related thing just by listening to the the analyst calls. You can usually skip the start go straight to the Q&A you'll learn heaps. >> Yeah, super well said mate. Awesome. Well, a massive thank you to our partners. Focus the platform brought to you by market tech Sanvic ground support and get your tickets to IMAK going to be in October Sydney 21st to 23rd. >> Hudoo. >> Hudoo. Now remember, I'm an idiot. JD is an idiot. If you thought any of this was anything other than entertainment, you're an idiot and you need to read out a disclaimer.