Gold Industry Insights: The podcast discusses the recent $3.8 billion takeover of Gold Road by Goldfields, emphasizing the strategic maneuvers and shareholder considerations involved in the deal.
Market Dynamics: The gold price surge to $3,700 is highlighted, with discussions on its historical trends and potential future movements, reflecting on how market conditions impact mining operations and investment strategies.
US Resource Nationalism: The conversation touches on the US government's increasing involvement in critical minerals, such as lithium and antimony, with strategic stockpiling and investment, indicating a shift in global resource politics.
Investment Opportunities: The podcast explores various gold and rare earth companies, including Yandel and Santana, discussing their exploration results and potential as investment opportunities in the current market environment.
Corporate Strategies: The discussion includes insights into corporate strategies, such as Linus's capital raising and potential acquisitions, highlighting the importance of strategic moves in maintaining competitive advantage.
Market Challenges: Issues like social unrest affecting Hudbay's operations in Peru and the challenges faced by Glencore's Mount Isa operations are discussed, illustrating the complexities and risks in the mining sector.
Financial Strategies: The podcast notes successful financial maneuvers, such as Minres refinancing its bonds at a lower interest rate, showcasing effective financial management in the mining industry.
Technological Advancements: The potential for new tools to visualize drilling results is mentioned, indicating advancements in technology that could enhance transparency and decision-making for investors.
Transcript
I just got the spidey senses that there were activists at play at Gold Road from from certain times. Was there or was that just a me perception thing? >> Yeah, I think that's fine. Yeah, you >> um >> Duncan Gibbs, we are uh privileged to have you sit and join us for a weekly rap everything going on in the mining industry. You've got a a long and sort of colorful history in the industry from Anglo Gold. Lots of experience from Sunrise Dam to Tropicana to Greer and most recently of course a fantastic takeover by your JV partners at Goldfield. So thanks for sitting down with us. >> Yeah, thanks Jy. >> Very fresh too mate. So uh this episode going out 5:00 p.m. Friday gold road is officially taken over by gold fields. >> Yeah, that's right. So effective date today. So binding on both parties. Uh you know it's a couple of weeks before we hit implementation. I'll be about mid October. Uh the most important thing we have to do next is make sure that shareholders get all the money of course. Uh you know the big special dividend coming through about 44 cents as well as the full consideration. >> Yeah. >> The goldfields is paying. >> Fantastic. And it could not have come at a better time with the gold price just tearing through $3,700. >> Yeah. And look, I mean, gold price has taken a, you know, a recent kind of rocket. Um, you know, where it goes next is I'm not quite sure. I mean, I guess I always take the view if you look at gold price in 5 years time will always be higher than it is today. You've only got a little gold price chart, but I mean, I start to think the market's getting pretty frothy at the moment as well. So, >> yeah. I mean it's kind of interesting because when you started your career in in the '9s shell acacia there gold had come off 20 odd years of going going in the opposite direction and then coinciding with your rise up through the industry you've had that tailwind be you know near on everpresent. Yeah, I mean look, I kind of graduated uh in 1987 which you know kind of coincided with the the gold boom then and and if people remember it was kind of black October. So you know had the massive share market crash. Uh but at the same time I kind of came out into a really bull market. I mean I had something like seven different job offers as a grad and you know that was everything from the majors right through. So it's like you know pick which one you wanted to do. Um, so it was a fascinating time to come through, but I mean like a lot of people I've lived with through multiple cycles and for example when we were developing Sunrise Dam, I mean gold was down at about 300 bucks an ounce and you know 4 and a half grand open pit and you know getting the economics to kind of work you know I mean by the time we actually got it into production I mean it basically did pay back in less than 3 months and all body >> before we um we we we cover all of the hot stories of the week and my god it's been a pretty remarkable week. Um, crazy stuff going on throughout the gold space, your your specialization, Duncan. Also, just some remarkable stuff going on with with uh, yeah, US resource nationalism. We're just seeing that in in in in spades at the moment. We're going to cover all those big stories. But first, I do want to I do want to I mean, we've got the lucky privilege of speaking to you um, in the aftermath of of a a $3.7 billion uh, takeover. And if you'd be so kind to indulge us, we've got some questions about how this kind of, you know, deal came together, what happened behind the scenes. Um, we were busy speculating, you know, frivolously on on on many episodes of our podcast and also in our our daily newsletter. Um, and yeah, like to the extent you're willing to to share with us some details, I kind of I really want to know like obviously Goldfields, um, there was there was a a standstill in the original JV agreement with with Goldfields. Um, now at what point or did did did Goldfields ever submit an NBIO throughout the the journey of like the LA the last like kind of 10 years or or did it only kind of come to fruition recently? So, I'll just start by correcting you on on the price. Uh, so I think if you actually to do the numbers on the final closing prices, it's 3.8 billion. >> So, we're going to we make because we've we throughout this process, >> probably the first is you going to correct. >> Well, we've been secretly focused on one thing, which is maximizing value, of course. So, um, so yeah, look, I mean, what you've said is correct. I mean there was a standstill agreement and I mean fundamentally the purpose of that was to prevent gold furs from kind of creeping up on the register and then kind of take over by stealth with no premium through to shareholders. own you know it was a mechanism to protect the interest of shareholders I guess you know I mean I've been on either side of deals and you know multiple conversations with peers and you know there's always conversations going on between all the gold companies um and look I think most transactions if they occur on a friendly bas well you know most of them occur on a friendly basis right and that usually starts with a conversation before any pieces of kind of exchanged >> in this case >> in this case we've kind of got an NBIO in the email and uh you know given that everybody kind of knows each other here then we've I mean as a starting point that was pretty like unusual as a way to start uh constructive engagement um you know from there and I think it's all well played out in the media and chairman put out a chairman's letter that kind of outlined the facts and I mean that was really to get our clear message of these are the facts as far as we're concerned and what occurred. So you can read you know all of that chairman's letter for for the detail. Um but in simple terms I mean there was you know kind of several days of discussions was really focused around the single issue of price and >> this subsequent to the bear hug or >> no this was subsequent to the initial uh you know NBIO and of course the NBIO came with obligations on confidentiality to us uh and you know was non-binding and therefore you know not market announceable etc. So I mean board and management acted accordingly to to all of those conditions. Um as I said I mean you know extensive discussion around transaction and all the rest of it and I think I mean I've described it in the past I mean MA MA 101 is uh as you know except the first price that comes at you you know dance to be done and uh you know so it was very surprising to us that then that was basically published by uh you know goldfields and they put it up at kind of 2:00 in the afternoon our time. Interestingly, we're actually in the middle of a shareholder briefing uh and uh you know, one of the guys there kind of uh read his Bloomberg screen up about you know, we're under a takeover place. So, that was probably about the shortest investor meeting uh with with uh with Brian who's just joined us as the brand new minted uh head of investor relations. So, it was it was quite a quite an interesting kind of first day of the job. Um, and I mean I guess I mean there's been a lot of kind of media and uh I mean I've I've uh you know been quoted a lot in the in the media and what have you through that whole journey >> from a strategy it worked for for Goldfields though like and and sure it's not the friendliest approach but but it got the outcome done and and yes there was an uplift but and it became friendly but um but the bear hug the bear hug worked you know. Oh, look I mean it's a strategy u if you like to break through the standstill but there was always the ability to goldfields to walk through the front door and put an offer on the table and sorted all of that behind um you know but you know behind the media rather than playing it out in the media and I don't know that goldfields have actually set themselves in goodstead for the future because you know if you're a prospective JV partner of goldfields they're going to be reading about, you know, how this has all played out. The other thing I'll kind of share with you is a bear hug. I mean, it's a kind of an interesting strategy. I mean, yes, it's a way to force the hand of the target um company to the table and I think there's a clearly a place to do that. I mean, if you've got a company that's just being uh, you know, difficult and they're not acting in the best interest of shareholders, then it's diff definitely a way to kind of break through and and and you know, it's occurred in the past and and I think when things have got to that kind of impass, but of course, if you think about it from the point of view of shareholders, you've then got to convince the shareholders of Gold Road uh that they're getting a fair price. But if you're a Goldfield shareholder, you've got to convince your own shareholders you're not paying too much. So who are you lying to when you're doing that? >> When when Goldro went into to Trading Halt on the on the Friday um 9 minutes after the director special email revealed in word on the decline that maybe Gold Road had received a best and final offer from from Goldfields. Walk me through that part. Was it us? Were we the Were we the leak? >> Uh yeah. And I'm going to share with you that uh so we've reported that as a media >> yeah you could have you could have sourced us but >> let's say that some of the mainstream media journalists were quite incredulous how it's reported to me that the source of this was was you two >> that's hilarious >> well I I appreciate um it was actually quite a nice moment because I mean we our newsletter is widely read it's like 15,000 people read it every day. But but for a uh yeah for like the board of a you know three billion odd dollar company or whatever 3.8 whatever the number was before the takeover um to take to take our rumor sort of seriously and um and reported as such like that was it was that was that was a good moment for our newsletter. >> So um yeah I guess the only thing that kind of went through my mind at the time was is when's knocking on your door? Uh but I mean look the leak occurred at the time fundamentally when we started opening up the data room. >> Yeah. >> For goldfields to do DD. >> Yeah. >> And we went from it being extremely tight to >> potentially a lot of people >> um having knowledge and only needs a bit of scuttlebutt. I'm not saying necessarily a gold fields personally. >> Totally. But, you know, goes from one thing to another to another to another. And >> yeah, >> so yeah, exactly where you got hold of of that bit of news flow. But >> sometimes leaks do come from people who have like a an angle to want to disrupt. This was not that I would never tell you where the leak come from, but like I was just lucky I found out really. Yeah. >> Yeah. And and look, I mean, I think, you know, there's a lot of these leaks occurring and I mean, you know, the Anglo gold stuff again in the paper last couple of days is it's kind of another thing. I mean, you know, half the time it's my view is there are people some commercial interest as to why they're putting that information. >> Yeah. It's usually the first linked the first listed advisor. No, I'm joking. Um, yeah, but I mean it, you know, often it's going to be people in financial circles. So whether it's advisers or even >> fund managers, >> fund managers, uh, yeah, because >> managers, BD teams, >> um, well, and you know, if you've got multiple companies bidding on an asset or whatever, where you throw your other opposition under the bus >> 100%. >> It's always in someone's interest. >> Uh, because, uh, you know, if everybody sees somebody's come equity raise or what have you, that kills their share prices and kills their participate. I I I think fundamentally it needs to have much greater regulation than it does. >> The Yeah, I totally agree with that. I do think there's um there's too there's too much on the leaking front which could be cut down pretty pretty easily, I think. Um yeah, I appreciate that. Sign up to the director special, guys. You'll uh you'll get word on the decline in your inbox every morning. Moneymind.com/subscribe. It it it it is interesting. You don't see a lot of it and you don't see a lot of it it for a for an obvious reason there. The I I keep kind of coming back to um you know the the the six or 12 months in the leadup to the deal as well. And as was reported in the media, Gold Road was pretty close to to doing a um a deal on on Greenstone as well um as a JV partner with with Equinox. How do you reflect on on like the media reporting of that and and potent, you know, like how how close was that deal to being done and if it were not for the leak, do you think it would have been done? >> Uh, look, we were in that process. I think it's fair to say that um had it yet to get to offer stage. Yeah, there was an initial premony offer stage which was really just to get you in the data room for the phase 2 process, but it had got yet to get to anything that was was binding. Um yeah, and that that process was clearly leaked. Um and and I guess I mean unfortunately we've been on the receiving end of of a few of those. Um I kind of think that a lot of the time that's been done for deliberate market kind of purposes. >> There there are lots of different types of shareholders, right? And and different shareholders have different time frames, different outlooks. Some of them care about the immediate 15% uplift. Some of them care about long-term sustainable value creation that can be a bit more gradual but maybe maybe more certain. Um I got I just got the spidey senses that there were activists at play in at Gold Road from from certain times. What was there or was that just a me perception thing? >> Yeah, I think that's largely a you perception. Um look I mean I think I mean shareholders to me I mean at the end of the day are quite short-term focused even even the long funds and >> you know if you kind of look at as a fund manager I mean a lot of their incentives are driven about how they perform relative to the market over a three or 3 month or 12 month period. >> Uh so they you know as an inherent kind of principle they have an obligation to outperform the market. So takeover comes through the door. Well that's a that's a give me isn't it? And I I I tend to think that for a lot of your funds, I mean, that just drives an outcome, they want to see the best premium that, you know, management can achieve, but there is only one outcome that's going to be delivered once you're kind of into that into that space. um you know as you look through the the transaction that we've done I mean ultimately there are a number of uh shareholders you know reasonably senior part of the register indicated that they wanted to accept in at the revised price I guess I saw I mean once that hit it was going kind of game over left to me I'd have pushed a bit harder but but uh you know at that point your your negotiating kind of position kind of is kind of spent right >> one of one of the one of the like the the markets like um I think there's like fair there's fair critiques and there's unfair critiques and one of the critiques of of gold road was um like a a high high overhead and like not not not the operational kind of control of course that high overhead was to fund exploration because you know that there's a return on investment of that and and gold gold road had a you know a BD team that was across a lot of the um the opportunities but it's hard to kind of like measure the ROI of that and so one of the critiques was the the high overhead um well what's the NPV of that you know over a long time frame could be quite substantial. Was there ever like a defense consideration that maybe maybe there is a place for for Gold Road the company to actually uh exist on an ongoing basis but with a much lower overhead and that be a more attractive thing to shareholders you know visav than a takeover of uh of goldfields. Yeah. And look, I mean, we obviously looked at what the strategies for the company were. And I mean, Gold Road in reality is one of the very few larger companies, one of the few producers is actually out there looking for a new um that's a quite unique space. I mean, most of the new mine exploration has been done by by the real small, you know, sort of penny dreadful end of Juniors. um got to say a lot of those are actually mining the market rather than than really focused on on making discoveries. I mean that's not always true but um and a lot of them are operating kind of subscale to actually be able to um to be effective. If you really look at the big discoveries that have been made I'm kind of talking of the plus 5 million ounce discoveries made in WA they all have kind of common themes. I mean they're made by companies that um uh you know have put together large coherent ground holdings that cover say an entire greenstone belt. So that's true of Griier, it's true of Hemi and it's true of kind of the Tropicana discovery. Of course, in one way or or the other, I've been personally involved in all of those either through Tropicana where, you know, I led the team that made the discovery, Griier, which I came into kind of midway through the construction and and Hemi were obviously a major investor into Deg Grrey. I mean, the key guys between in degra all work for me historically. So, you kind of got a direct connection into basically all the all the big discoveries made in WA in the last 20 odd years. Um so you know you kind of have to look at what where are those coming the discoveries coming out of they're coming out of what is relatively unloved ground in all of them large coherent ground holdings and and uh you know companies that kind of have the conviction of of doing that kind of work and and that's basically this kind of this key strategic element that we were trying to do in Gold Road as opposed to putting old mines back into production and you know with the run up in the gold price perhaps we should have had a finger in that pie because clearly that's been successful uh but that relies on a runup in the gold price to be successful and and of course that's paid dividends for for people in that kind of space. >> Did a takeover of Degra ever get close? >> Uh look you got to say that there were multiple discussions but really did it get to you know hard kind of clear negotiation space? Well, you're not right. The challenge I guess with the gray for Gold Road is I mean it's an amazing discovery. It's easily the best of the the big discoveries made in the last 20 odd years. If it had been any of the other discoveries, it would have been within the capacity for us to have done a takeover on a more assertive basis. But you know once the market cap of the gray went well beyond that of gold road really actually made closing a transaction pretty challenging. Gria Gria's future was going underground right now. Um with going going underground and uh and the likes. What what ground support would you have used if you if you went underground? >> Well, I've got to say Sanic the correct answer. >> That is the correct answer. Sanvic ground support mate. >> We had the privilege of going to the Sanvic facility at Qud. spoken a bunch about it, but it is magnificent to see bolts, mesh, all these things actually get galvanized. It was it was kind of eye opening to see that. And the team out there is a bunch of legends. Over 300 people working for Sanvic ground support here in Australia, which is fantastic to see. And yeah, supplying the mine sites all throughout WA, all throughout Australia, also using steel from Port Kembla in in Australia as well in part as well as sourced from other places as well. But it was fantastic to see that sort of manufacturing in Australia from a fantastic team that yeah we were lucky enough to to go and see all the all the machines punching out these things for the industry. >> I hope it was a condition of the deal to goldfields to make sure you use certainly ground support as a career goes underground. >> Well I mean the the scheme implementation deed is a public document so you can find it in there. >> Awesome. Go underground sport. What what was what was the the impass for um for a gold road tie up with any of the other kind of mid mid-tier producers as well? >> Oh, look, I think pretty much yeah I mean value I mean and guess I don't want to get into the detail of everybody we might have spoken to but you know there's stuff that's been in the paper but I mean we've spoken to you know half the ASX 200 you know kind of companies right? Yeah. Well, it's uh it's a it's a bloody exciting time to be um to have a specialization finding gold. Uh because the yellow medal is worth a hell of a lot. And like you say, mate, the juniors are absolutely going um berserk. Maybe some of them have something of substance. Maybe some of them are mining the market. We're kind of hoping to get your expertise um to to talk about a couple of those today as well. We've seen a lot this week specifically the US starting to cut rates. Inflation still not within their their band since 2021. That's a that's a long time now. And very interestingly, we've seen ETF inflows into the gold space for the first time in quite some time. So that sort of indicates that perhaps retail is starting to pay attention. Duncan, you've got a background as a as a GEO, then obviously done plenty of time working through studies, building minds, managing teams, but if we if we tap into your experience as a GEO, a lot of the juniors, like you mentioned earlier, have been running lately. So, I want to run through some of the exploration results that have been exciting. And one that will be near and dear to you that you've spent a bit of time looking at is Yandel. So they had a a terrific runup last year, fell away, and then just recently again they've they've rocketed on the back of sort of 1.2 grams over 50 odd meters kind of hits. How do you think about that region specifically and then the the results that they've come up with? >> Yeah, so I mean Gold Road is actually a significant shareholder. We hold about 17% in Yandel and I mean that originally came through the DJ gold acquisition which of course is what gave us the initial kind of cornerstone position in Deg Gray. Uh but I've always quite liked it and we've participated in multiple equity raises and the specific area that that we liked basically where they've got these these current intersections. Um so they've now got you know a couple of kind of 50 odd meter intersections that you know 1.2 or whatever it is you know 400 m apart. So there's there's enough space there to you know put a reasonable size resource. I mean to to me it's still very early days and I think uh I'd almost take a bearish view there's going to be a small pit there. Uh, and maybe it could turn out to be plus a million ounces and but there's a lot of drilling that still needs to be done. Um, and you know, I think there's a pretty uh pretty capable team with Chris and and and and the guys in in Gandal. Uh, you know, as an investment proposition, it's a bit interesting because the register is extremely tightly held. Um so there's no liquidity in the stock and and some of the former DGO uh kind of cohort a big in Yandel. So you add us and a couple of other major shareholders there is no liquidity. Um of course what goldfields do with that position uh you know that now the uh the gold road acquisition's kind of finished to me could be quite material of course and it could go either way. It's either going to be a piss pot or a jackpot story. If you're a vest depending on, you know, if bels want to grab it or they if they want to exit, of course, then you've got that, you know, block as an overhang. >> Yeah, absolutely. If we um jump to another country, New Zealand and Santana, there's um a a project, the rise and shine project being um built out over there and they did some stepout drilling that came up with some results. Did you have the chance to take a look at these ones? >> Yeah, look, I'm kind of familiar with that project. I mean, you know, somebody like myself, I mean, anything that looks like a, you know, discovery development kind of project, you keep an eye on it. You know what's kind of going on, you talk to them. Yeah, I like I mean, I like it. I think it's uh, you know, got pretty good chances of getting up as being a mine. Um, I think, you know, New Zealand again has had been a kind of a jurisdiction that's had quite a lot of perming challenges, but I think they're in a pretty good position. They'll ultimately get there with all of that. Um, and you know, New Zealand's getting a new buzz around it. You know, you've got Jake Klein also. Yeah, >> buying up federation and I mean to me there's a natural strategy there sooner or later to kind of do an a New Zealand kind of consolidation play and um you know there's few other kind of explorers things like siren and rur what have you pretty active in that part of the world and >> you know it's you know an area because of some of the regulatory issues and sort of green tape and all the rest of it that's had a lack of lack of expiration so to get your way through all of those it's that becomes an opportunity, right? >> Do you think that um that Oceanana's assets come into the mix in a in a larger kind of consolidation play under Jake there? >> Yeah, I I really don't know where Oxiana where where um Oiana's kind of mindset is to be honest. I mean, uh you know, raise means quite a bit of capital is kind of my understanding. So, so where they fit in the mix, but kind of look at it, I mean, if anything with where they were historically, they should have been the natural acquirer and player or all this, but I'm not convinced that they >> I think a bunch of it was originally all in the same Oceanana portfolio and it's kind of become fragmented because it was too disperate and now it's potentially all going to come back together again, which is um the way mining works. >> Yeah. Yeah. Well, I guess. >> Yeah. But no, Oshan is making a lot of money at the moment. They're they're very cash generative. surprisingly. Yeah, >> guys, I want to talk about the the US government and what they're doing. I think this is the biggest topic we are seeing in the mining industry right now and I think it will be for the decade and there's two particular stories here that that stand out. Firstly, what's going on at Lithium Americas and Takapass and secondly US Antimony Corp. So just to give a bit of context for for listeners quick quickly on lithium America's they had a funding package with the DOE in mind that the pass is jointly owned with GM the automaker and essentially this $2.3 billion loan is being in quotation marks renegotiated by the the Trump administration with the the inkling that they want a 10% equity stake which is very similar to what we saw with Intel and has some similarities with what we saw with MP materials a little while ago. So, a lot of shareholders were up in arms when the news came out that the the government's just going to take 10% of the company. Lo and behold, the stock nearly doubles on on the back of this. And the news hasn't even solidified yet. The company came out confirming that there's talks going on. This is this is just remarkable. And I think to me, I'm curious to hear what you guys think. This just just cements the new paradigm that we're in. The government in the US and we're seeing it all around us all. India wants to build stockpiles of of rare earth. We know our government here in Australia is talking about building a strategic reserve of critical minerals. These these these governments rather are building stockpiles not even necessarily to to piece into manufacturing just yet. Like there's a lot of these parts that haven't been figured out yet, but it makes sense geopolitically if you're going to separate yourselves from a lot of parts of the world and have trade wars that you want to get all this up and running. And I think there's a lot of other pockets, a lot of other commodities, a lot of other companies that um are going to be disrupted by this in time. And I'm I'm just kind of fascinated how have you kind of seen this evolution, Duncan, from 30 odd years experience in in the industry? >> Yeah, I mean, you know, it's not an area I play in directly, of course, but um I can understand it from a geopolitical iss perspective and let's let's hit the nail on the head. It's all about China, right? who have inserted themselves as a dominant position through a lot of this space. It's rare earths, it's lithium, it's the downstream use of lithium. Uh you know in rare earths of course it's magnets and what have you and a lot of those are one fundamental to our economy and particularly if you you know the climate change and electrification of everything kind of kind of thematic. Uh and then you've also got a whole bunch of metals that are, you know, strategically important from a military perspective. And the Chinese are not necessarily making decisions on normal capital investment grounds. And when you get into these minor commodities, shift the price around. Let's face it, none of them have a transparent pricing mechanism. uh it's not natural supply demand economics. So you know if these are strategically important for uh the economy of the country and and you know military positioning then this is fundamentally why you see government starting to get involved from an investment point of view. It's creating a lot of let's call it hype in all of those kind of areas. But you, the challenge I see with a lot of these minds is one new mind comes on the planet that's slightly better than the one you've got, they can eat your lunch. And it's kind of true AC across a lot of the minor medals. They're actually pretty high risk investments to play in. If you get it right, of course, you can make an absolute mozzar. If you get caught on the wrong side of it, you've just done everything. Um, so, you know, it's not a place that I uh focus my time, effort, or where I invest my money for for those kind of things. And and you're very much beholden to shifts in government policy here. So, uh, you know, I fully understand why the government is now getting into this space. fundamentally we need to um but from a personal point of view it's not uh not what I focus my time and energies on. Up until probably this week I shared yeah pretty much the exact same opinion as you on on kind of all of this trend. Um I I think this week is the first week I'm I'm thinking about it a little bit differently and um yeah I think I think like what we're seeing is it's not just resource nationalism out of the US. It's it's the institutionalization of of industrial policy in many ways. It's actually a mirror image of what China did just two decades ago as well. The US is is kind of late to the game. um you know for investors the riskreward profile it looks different this is a a this is this is like a new this is a new paradig >> it's a new paradigm right um uh so why is the riskreward profile different now >> yes there's hype yes there's niche markets yes new supply can come online that changes things but if if if the upside is now underwritten by governments and you know you've got You've got the price guaranteed. You've got the the demand a sure thing thanks to a government contract. Like those factors don't matter as much. In fact, they don't matter at all if new if new supply comes online because why do you worry if new supply comes online? Well, because you can't sell your material at the price you thought. No, that's actually not a risk anymore. So, I think I do I do think this is this is uh yeah, this is this is this is a genuine new paradigm in commodity markets and like I I have to change the way I think about about a lot of this stuff. I must have to challenge my own kind of like cynicism on on some of this stuff whenever I see >> Yeah. And there's a lot of dumb stuff happening in the markets on the back of this theme and a lot of it doesn't make any sense but at the core there's there's something very big happening here. >> Yeah. But I think the key thing you've said out of all of that is the most important piece is the guaranteed offtake. guar guar guaranteed guaranteed >> because if you if you don't have that then somebody else can either undercut you um >> you just can't compete right >> so suddenly your asset is worth nothing >> your point on on being at the whims of government policy changing again is absolutely right too you know your your off tech is guaranteed until until you get new government that says you can rewrite the rules when you're new >> so so if you just go back in the investment cycle back into the juniors and the developers have yet to get to to that point where they've got the guaranteed offtake. You know, your investment is going to be linked to whether you get that little golden card, which is the offtake agreement. You're really relying on which project the government supports is anointed. Yeah. Looking across the rare earth market though, there seems to be a um a feeling that this 110 NDPR price per per kilo is going to go across the the industry. And that's not the case just yet. That that's just with MP materials. But it is fascinating to sort of gauge what what investors are thinking, what companies are thinking because there seems to be a consensus view that everyone's going to get that sooner or later and that that's not the case. When you look at like a US Antim Corp, it makes a whole lot more sense. I mean, there is only two of these production plants in North America. They own them and yet you're in a beautiful position there if if you're the company. The the defense department, they're not even going to use the stuff. They're just going to pile up the ingots at this moment in time. So, it's it's remarkable. So, yeah, $245 million over over five years for them. It's not not massively surprising that the the company's share price has run 3,000% in from a very low base over the over the past year. It's kind of just I'm I'm surprised, but I don't think I should be. I guess that's one way I'd kind of put it with this one. >> So, I mean, if you're one of these companies that's got that locked in government guaranteed, you know, hopefully it's happy days. What happens when the antimony stockpile gets to the point we don't need anymore becomes another problem, of course. But you know you can look in that whole antimony market and of course antimony is you know a lot of times is a byproduct to gold or something else. There's actually not that many just pure antimony plays and you know most of the time you're talking about an antimony gold con and treated somewhere and I mean at least a dozen uh you know let's call them gold companies that are promoting themselves as antimony producers and getting a flood of money around all of that. But the the longerterm value of that antimin product to me is could be anything. >> That there's a fascinating case study in in tin because there was these massive stock piles all the way up until the the mid to late 80s and then that just put a damper for 20 plus years on the tin price as they just got sold down and sold down and sold down. But we're in the other end of the the cycle right now. So >> yeah, mate tin tin looks good. >> Yeah. And and I mean I kind of graduated at that time as you know tin was one of the commodities people were actively outgoing in expiration and it just died overnight. So I mean I I kind of put tin in another bucket. is one of these relatively minor metals where swings in supply and demand can really be quite extreme and that can be driven by a whole all the government policy and where China plays in all this space and it can also be just driven by you know you find a really high quality deposit and undercut everybody on the cost curve set the market. >> Okay, grade control time Duncan JD. Uh this will be fun. Can to get your thoughts on grading some of these uh some of these corporate stories of the week. First one we've got is um Hudbay's pausing operations at Constantia. So down in Peru, HUB's Constantia copper mines become the latest kind of flash point of uh of social unrest. What started as community process uh protests over unfulfilled social commitments and environmental concerns. It's now escalated. There's road blockades and mill shutdown. adding the pressure from informal artisal miners resisting tighter government regulation under a um under a government scheme there and now things have um have escalated to where HUD base had to demobilize it staff production and it's uh yeah scrambling to reassure investors it can still hit its guidance. What do you uh what do you think of this one and what do you grade it Duncan? >> I'm not sure how you want me to grade it but let's A to F. Yeah, look, I mean, in terms of management action here, you got to say they're doing the right thing, right? In terms of protecting the health and well-being of their employees. So, you know, you kind of give them a A or a B for that. As an investor, of course, I mean, you know, that flows through to share price taking a bath sooner or later. Um, so that's a D or an F. Um, but you know, once that share price uh has corrected, that maybe becomes the buy opportunity because these things usually resolve over time. Yeah, absolutely. It's uh this week in copper has been fascinating obviously with what's happening at Grassburg which has been quite tragic and deserves a lot more attention but the copper market has kind of been rocked on on the supply side. How how things get to a level here specifically with Hud Bay that you got protests is is worth investigating as a investor and it's not new there in in those parts of Peru. They're not the only company that's been kind of subject to this one >> with Lo Bombas is is kind of Yeah. caught up in a similar situation. >> Exactly. And the the government component is is tied in with that as well with the artisals wanting kind of someone someone to blame. You've got a mining company there. So that makes them an easy kind of target. So kind of like you Duncan, I think I'll go middle of the the row and call it a C. You have to pause the mine. There's nothing you can really do about that. And as an investor, like you said, perhaps that creates opportunity in a copper market where the um the supply side is really tightening. >> Peru Peru supplies 10% of the world's copper. Um yeah, and if if projects like like Constantia can can be Yeah. I all those bombers can be kind of held hostage in some respects. I think it just underrates how how fragile our copper supply is. and throw in mix grass. Throw in the mix a whole host of of these uh yeah supply shocks that are unanticipated. We see them all the time. Um we've got a pretty tight copper market. I'm going to grade it to see because I don't speak Spanish and I can't deduce where fault lies here. So >> to see, but the copper market is fragile. >> Yeah, totally. Maybe on the other side we see Cobra Panama come back online sooner or later. Next story is the Glen Cormanizer/ Aussie government negotiations. So this has been happening in the background for quite some time, but it seems to be coming to a head now. You've got the federal government in Australia reportedly pushing the state government in Queensland to to contribute a bit more to the the rescue. Ultimately, the two kind of came together and put forward a proposal to to Glen Core. Now, Glen Cor said anything under $600 million wouldn't be enough to give them enough time to assess the viability of the the project over the the long term given it's pretty loss making. So, they then came out and put another number saying they would lose $2.2 billion over seven years. Now, I dare say being Glenor that's just a negotiating bargain that they're they're driving there, but there is a lot of jobs and other implications from this one. So 600 Glenor employees, but we're talking about 17,000 people indirectly. You know, Dino Nobel, you look at the refinery, the the smelter, the families involved, all the other small businesses. So it's a huge decision to to kind of make and we've spoken about this previously. It this comes on the back of firstly you got higher costs in in Australia and then breaking down the high cost. Energy is the big one. Then then labor as well. So, we really need to think very hard about how we um as a country navigate this and I find it very hard to to see where we've got a a strategic advantage here and why in a sense we need to kind of do this given that all the product is just sent overseas anyway. So it makes it it makes it very challenging to me and in a cost of living type crisis environment giving another a $600 million is tough. So good on the government for trying to extract a lot of investment out of Glenor on the back of this one. But maybe I'll sling over to you guys before I I contribute a rating to this one. What do you guys think? >> Um I think I think the other part of the profitability equation there is like like it's very hard to run a profitable smelter when it's you don't have a consistent reliable source of of feed for it as well. >> Yeah. >> Um >> I have unwavering views on my appetite for government intervention in the loss making parts of any industry and those unwavering views are not changing. Um I hate to see it. I just think it's yeah not a fan. Um, and I also uh like I don't I don't see any horizon where where that smelter becomes profitable unless you find yeah giant new copper discovery or get a better operator who can pull a bunch more copper out and um and also fix energy problems. Now it's a very strategic asset. Of course you talked about dino noble. I mean heck it's it's even important to BHP by virtue of the um of the fact that it it it can it can take some of the high uranium content from from Olympic Dam. Um, I I'm going to rate it a a C. I I actually think Glenor is trying to sell Eiza very actively as well. I don't know what we're going to emerge with on the on the flip side of it, but um but I wouldn't be surprised if there's a bit of a song and dance here and and the ultimate deal that kind of the government agrees to also involves a new operator of of FISA. Duncan. Yeah, look, I agree with your sentiments, right? I just don't see this as the place that government should be playing. Government's role is to set a fiscal regime in Australia that is attractive and have policies and, you know, includes things around labor and energy and all those kind of things that are critical for for viable resource investments to kind of get into handouts to prop up things that don't wash their face is not to me the role of government. um you know perhaps putting aside the strategic metal kind of piece that we were talking uh so you know and the reality is it's going to be tough on people who lose jobs or you know their economic investments in that part of the world but but let's be realistic about it there's not a lack of employment or other economic opportunities in Australia and sometimes labor has to migrate to to uh where those opportunities are and you kind of putting a pretty cold cold heart face on it but but I think That's actually what's got to happen. >> Yeah. Yeah. I think that I think that's well said. I'd probably call it a C like you said there sort of fra with the sort of caveat that nothing's finalized here. So, we'll see what actually comes out. >> Last one on grade control. >> Good news story for you, mate. >> Let's hear it. >> Minres they uh they refied their well 700 million US bond. Um so they've you know pushed back the the the maturity to 2031. Importantly, the coupon 7%. For reference, last time Minres went to the uh US bond market, it was October 2023. They uh they sought a US $1.1 billion in uh in bonds, and the coupon was 9.25%. So, I mean, this is just it's it's an obvious grade. It's an A+. Um absolutely shocked me. I'm Yeah, hats off to them. They've they've uh they've refired at a at a lower cost of debt than they had before. like that's um it's very impressive. >> Yeah, I think I agree. You've got to give them the tick in the box. So yeah, when you call it an A or B or whatever, but it's definitely up at that end of the spectrum. And uh I think the market loves it from what I kind of saw. I think Minres was up four to 5% something like that. Um as well as the kind of things, I mean it obviously takes out any, you know, a lot of the kind of risk of debt overhang and refi risk. That's kind of thing that management and boards are also kind of quite conscious of. >> Yeah. Fantastic. There's a sorry you're going to give it name but I was just going to add a point. >> There's definitely this trend of um of miners refinancing their debt at a at a you know substantially lower cost of debt than they had before. The first the first one that came to mind was for excuse 2% bond in R&B terms was pretty um pretty remarkable. Then then of course yeah minres here we saw nickel industries uh yeah yesterday with a with a with again like paying an interest rate which is like like two three 4% lower than what they were before. I like some some someone's got to explain to me it's got to be more than just like rates coming lower like what is what is driving the the cost of debing so much substantially lower is is it is it really the risk profile of the companies or is it or is there something else at play here? I don't know. Yeah, it's a it's a big sort of story and we're going to see it across the the complex. BHB as well add add to that have recently >> they did that 30 year they did the the 30-year bonds as well. Like take the money the these fixed these fixed rate things when you've got real assets you're churning out. We're coming into a rate cutting environment >> when like we said earlier inflation in the US has not been within their band since 2021. You've got inflation and you can lock in these things at at 5%. It's just remarkable. Nickel industry is another one like you said paying over 2% less than when they uh last went out to the market to to sign up bonds. It's just it's just awesome to see for the miners. >> Who's owning these bonds? Like who's buying these bonds, you know, like >> what happens with inflation? Yeah. Anyway, >> wouldn't want to be on the other side of these ones, but that's their decision. All right, guys. Sweet and sour deal. And there was quite a bit happening in this end of the market. So, we're going to talk through some deals as well as some capital raises here. First up, Deterra. So, we all know Dera did the deal with Trident last year and they picked up a bunch of assets there and they've had a bit of a program to flick out a few of them. So, they netted from this sales $60 million US. 56 of that came from these gold off takes that they sold. And then the other four was from a Staint Ives and a Dando royalty. So, this will go to reduce their net debt. It's the um the final piece they said of their sellown program of these noncore assets. And yeah, this one's a a sweet deal if only for the fact that it's a great time to be selling anything gold related at this moment in time. What do you think, Duncan? >> Um well, if you depends what your sentiment towards gold is, of course. So, you know, if you think we're kind of the top end of a bull gold market, well, it's a sweet deal. if it's keeps running well bit of egg on your face. Um I I kind of actually put it as a bit of a rounding error for you look at it. It's kind of 60 million or whatever it is and what's their market cap three and a half four bill. I don't know the detail but um you know it's a pretty small deal for value of the company. >> You're right. >> Uh it's a big deal for Vox. That's >> big deal for Vox. Absolutely. >> Pretty substantial one for them. And um yeah, kind of like gives Yeah, I I I'm give it a a good deal for Vox. I think if you're a if you're a company like the size of a broad company the size of Fox, like what's what's a no-brainer strategy for you right now, add just buy as much like gold gold royalty exposure as possible and Tether will come pay premium and take you away. >> Tether the elephant in the room. >> Next one is Lionus. Now, this one is fascinating. I'm very excited to talk about this one. So, they obviously did did their capital raising a little while ago and they had an SPB SP as you do at the back of these things. They were seeking $75 million. They had $182 million in applications and they decided to take them all. So, something is going on here at Lionus. This is a $17 billion company now. They got about a billion in cash. they are explicit in their desires to go downstream and look at magnet manufacturing or whatever it might be producing heavies and all sorts of things. Their paper is, you know, it's if things keep going, they will actually crack their 2010 highest, which I didn't think I'd be saying. So, they are going to be buying something soon. And got a few sort of guesses, but um yeah, I mean, it's kind of funny one to to rate for the shareholders. It's a sweet deal because you're buying in at 1325 and the the thing's 17 bucks already. So well done on that front. But um yeah, Lionus a company definitely to watch. >> Tell it's such a tell. Yeah. Well, the raise was done at 1325 stocks, but the stock the day before they they did the the raise was was $1473 and now it's $17 and they're taking every every single dollar of the SP extra hundred million bucks or whatever it was. They're uh they're they're they're buying they're buying something. They're buying something soon, I think. Or they want to buy something soon. Personally, I think they go hard at Neo Performance Materials. That's my bet. Like, yes, there's a there's a a big stake you got to negotiate with there. But everyone's talking about building out that um yeah, the the separation and then magnet production part of the supply chain rare earth and there's a bunch of projects coming on the scene which Lus talks about. But why why back a new project in the US with when that is such like core expertise? Just go buy Neoerformance Materials. It's still less than a billion dollar market cap and Linus is much bigger than that. It's like, you know, from a dilution perspective, a drop in the ocean. Sweet deal. >> Yeah. Look, I mean, in terms of shareholders, of course, I mean, that's that's doing the right thing by by the participants in that uh PP. A lot of the time, I mean, you know, the money goes to the institutional holders at a discount and your existing share register kind of gets diluted. So, you know, I think you got to give that as a that's a that's a tick. That's that's the right thing and the sweet deal for for those investors that that chose to come in. E bits, as you've kind of said, is what does management do with all the money. That's where it's going to be sweet or sour. We don't know yet. >> I'm excited to see. All right. An IPO, Meda Gold. Now the reason I've included this one is because this was the biggest IPO in Indonesia for the year and they finished the limit up that this is a sort of rule they have in the exchange there 25% on the first day of trading. They pulled in US $280 million in this IPO selling a 10% stake in a spectacular gold environment in a week where the gold price hit a record high. This is a very sweet deal for the the company and it's got me very excited for the uh the Zene Gold International IPO. So, they want to list that on the Hong Kong exchange, raise US $3.2 billion, which would be the biggest raising in uh in the world since uh May or so. And I'm I'm very excited. That one got delayed because of the the typhoon up there, but let's see how that one goes. It's um you know, gold is in the air at the moment. >> They got great timing, MCA. I remember when they did the battery metals I think it was like the peak peak battery metals thematic they just >> is that the sell sign >> maybe maybe great timing yeah sweet good on you >> Duncan >> uh look and I mean the ward broader thing here of course is it's very positive for other players that have uh good assets and opportunities to raise money I mean you know there's pretty good chance you're going to be able to bring it in in the current market climate so >> so anybody who's is in that that's it's uh That's pretty sweet, isn't it? >> Totally. If we change tack for a moment, we're going to Cameroon and talking about Bork site. So, Canyon raised over $200 million. Now, they were a less than $500 million company before this. And this sees them write those famous words fully funded. So, they have a debt package as well with this one. Now looking at the breakdown of the financing is quite interesting because you've got their strategic EA which took about half about $110 million and Afreland who took another 70. Now they are a subsidiary of the biggest bank in Cameroon. So great to have that strategic interest from the the country in which you're operating there. $180 million of the raise just done just like that. So, I think it's a great job getting all those people aligned that having that buy in is is vital in this day and age and it puts them on the way to developing the um the BSA project out there. So, sweet deal. Sweet deal. Afroand um yeah I I haven't seen them take equity in in anything before but having them on board you know I think that that's a a big big indicator of of incountry support. I think they also took a higher proportion of the rail asset conjunction with this um sweet deal. >> Yeah. And the world, I'll just add wants to diversify from having 25% coming from Guinea of of B site reply supply. So that's a tailwind for them too. The thing the thing to really like pay attention to here is like look at the difference it makes to a junior going into development when you have a a strategic on your register who can write massive checks and will like push this thing into into into development. I'm talking about yeah eagle eye asset management there. Um, my god, that's a that that that completely has has been such a a gamecher for this company's cost of capital as they've like continued off hurdles to get into development. >> I've got one last one. Rare X and this is in that, you know, in the rare earth sort of field. We know they did a deal with Aluca somewhat recently. They're still waiting for some local approvals which ties in with this raising. So, a $50 million equity facility. It's not a raising straight up for a $20 million market cap company. Super interesting stuff. It's contingent on the Myiramar Hill project getting that approval like I said from from Kenya there. These facilities aren't always viewed of too positively because they leave that overhang in the market if you can just tap it again and and get the equity. This one's sort of structured in in two tanches and it's a bit sort of different, but it's a lot of financing to to get them going. And I think um if they get that approval in place, this could be one that that runs quite hot in a in a strong tailwind environment. >> Um I've got Yeah, I think it's a sweet deal. I think it's a sweet deal. Yeah, sweet deal for both both investors and and the company. >> Fantastic, guys. I'm all out of capital raises and and IPOs unless there was any more to add to that pile. >> All I want to know JD is um is yeah what what you got any hidden gems for us this week? You've always got a good tip. >> I I've got a hidden gem. It's it's a bit of a different one. So I was I was just thinking and we were speaking about this earlier, but the the weather changing here in Perth has been spectacular. The last week has been awesome. And I love getting on the bike and just going around the the river and it makes you just think how how damn beautiful Perth is. like cycling around the the river there, seeing the sun come up in the morning is kind of spectacular. So, anyone out there just get on the bike and go for it or go for a trot because it's um it's stunning out there and this time of year is my favorite time of year in Perth. Duncan, anything standing out to you? >> Yeah, I'm going to use this as a bit of a blatant plug for some gold road people and uh get you to have a look at some of the post by Jeff Spirick on LinkedIn. And I mean he's kind of outlining some of the creative stuff we've done around exploration kind of data management uh which I'm pretty sure is kind of industryleading and you know there's going to be a lot of gold road people kind of walking the street in next few days and uh you know some of the stuff we've actually been doing it's been uh been pretty creative. >> What what exactly are we talking about from a data management? Uh look, I mean what we basically almost have is a touchless uh system from you know geo's collecting the data out in the bush right through to you know the environment where you look at the data in GIS or leaprog or what have you and you take out let's call it a lot of the menial work in the middle by using a number of tools like FME and what have you. We've also done a lot of work in the kind of the AI space as well. So, uh, you know, without me stealing the thunder of what's on LinkedIn, I'll let people go and go go and hunt some of that down. >> We'll include a link in the show notes so people can find that one. Awesome. >> Yeah, I think that kind of like leads into to my one, which it's not a recommendation yet, but I think it will be very shortly. But, um, yeah, definitely seeing a few tools pop up for for investors, which will be like incredibly useful to immediately visualize drilling results. Like I think we're very very close to a product or products which interpret um like announcements digest put in a 3D model and I I think that's going to be such an important part of the equation for for transparency for you know investors to actually just really grasp what's going on rather than sometimes being like misled by by certain promotional elements or or things out of announcements. So I'm excited for that. >> That's a fantastic one. Awesome. Duncan, thanks a lot for for coming on, sharing your thoughts, sharing a bit about the the Gold Road story, and yeah, looking forward to to seeing what the future holds for you. Thank you. >> Yeah, thanks J. Thanks, Trav. And uh I'm sure you'll see us around again. Just don't know where it is yet. >> Congrats. Congrats on uh congrats on concluding a you know, a pretty significant chapter and um yeah, I'm sure lots of shareholders have congratulated you and good luck with your future from us. so knowledgeable and so great to chat with and it is all made possible thanks to our fantastic partners mate Sanvic ground support focus the platform by market tech and IMAK get your tickets for the conference in late October money miners >> uru 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
Inside a $3.8B Gold Deal + The US Wakes Up
Summary
Transcript
I just got the spidey senses that there were activists at play at Gold Road from from certain times. Was there or was that just a me perception thing? >> Yeah, I think that's fine. Yeah, you >> um >> Duncan Gibbs, we are uh privileged to have you sit and join us for a weekly rap everything going on in the mining industry. You've got a a long and sort of colorful history in the industry from Anglo Gold. Lots of experience from Sunrise Dam to Tropicana to Greer and most recently of course a fantastic takeover by your JV partners at Goldfield. So thanks for sitting down with us. >> Yeah, thanks Jy. >> Very fresh too mate. So uh this episode going out 5:00 p.m. Friday gold road is officially taken over by gold fields. >> Yeah, that's right. So effective date today. So binding on both parties. Uh you know it's a couple of weeks before we hit implementation. I'll be about mid October. Uh the most important thing we have to do next is make sure that shareholders get all the money of course. Uh you know the big special dividend coming through about 44 cents as well as the full consideration. >> Yeah. >> The goldfields is paying. >> Fantastic. And it could not have come at a better time with the gold price just tearing through $3,700. >> Yeah. And look, I mean, gold price has taken a, you know, a recent kind of rocket. Um, you know, where it goes next is I'm not quite sure. I mean, I guess I always take the view if you look at gold price in 5 years time will always be higher than it is today. You've only got a little gold price chart, but I mean, I start to think the market's getting pretty frothy at the moment as well. So, >> yeah. I mean it's kind of interesting because when you started your career in in the '9s shell acacia there gold had come off 20 odd years of going going in the opposite direction and then coinciding with your rise up through the industry you've had that tailwind be you know near on everpresent. Yeah, I mean look, I kind of graduated uh in 1987 which you know kind of coincided with the the gold boom then and and if people remember it was kind of black October. So you know had the massive share market crash. Uh but at the same time I kind of came out into a really bull market. I mean I had something like seven different job offers as a grad and you know that was everything from the majors right through. So it's like you know pick which one you wanted to do. Um, so it was a fascinating time to come through, but I mean like a lot of people I've lived with through multiple cycles and for example when we were developing Sunrise Dam, I mean gold was down at about 300 bucks an ounce and you know 4 and a half grand open pit and you know getting the economics to kind of work you know I mean by the time we actually got it into production I mean it basically did pay back in less than 3 months and all body >> before we um we we we cover all of the hot stories of the week and my god it's been a pretty remarkable week. Um, crazy stuff going on throughout the gold space, your your specialization, Duncan. Also, just some remarkable stuff going on with with uh, yeah, US resource nationalism. We're just seeing that in in in in spades at the moment. We're going to cover all those big stories. But first, I do want to I do want to I mean, we've got the lucky privilege of speaking to you um, in the aftermath of of a a $3.7 billion uh, takeover. And if you'd be so kind to indulge us, we've got some questions about how this kind of, you know, deal came together, what happened behind the scenes. Um, we were busy speculating, you know, frivolously on on on many episodes of our podcast and also in our our daily newsletter. Um, and yeah, like to the extent you're willing to to share with us some details, I kind of I really want to know like obviously Goldfields, um, there was there was a a standstill in the original JV agreement with with Goldfields. Um, now at what point or did did did Goldfields ever submit an NBIO throughout the the journey of like the LA the last like kind of 10 years or or did it only kind of come to fruition recently? So, I'll just start by correcting you on on the price. Uh, so I think if you actually to do the numbers on the final closing prices, it's 3.8 billion. >> So, we're going to we make because we've we throughout this process, >> probably the first is you going to correct. >> Well, we've been secretly focused on one thing, which is maximizing value, of course. So, um, so yeah, look, I mean, what you've said is correct. I mean there was a standstill agreement and I mean fundamentally the purpose of that was to prevent gold furs from kind of creeping up on the register and then kind of take over by stealth with no premium through to shareholders. own you know it was a mechanism to protect the interest of shareholders I guess you know I mean I've been on either side of deals and you know multiple conversations with peers and you know there's always conversations going on between all the gold companies um and look I think most transactions if they occur on a friendly bas well you know most of them occur on a friendly basis right and that usually starts with a conversation before any pieces of kind of exchanged >> in this case >> in this case we've kind of got an NBIO in the email and uh you know given that everybody kind of knows each other here then we've I mean as a starting point that was pretty like unusual as a way to start uh constructive engagement um you know from there and I think it's all well played out in the media and chairman put out a chairman's letter that kind of outlined the facts and I mean that was really to get our clear message of these are the facts as far as we're concerned and what occurred. So you can read you know all of that chairman's letter for for the detail. Um but in simple terms I mean there was you know kind of several days of discussions was really focused around the single issue of price and >> this subsequent to the bear hug or >> no this was subsequent to the initial uh you know NBIO and of course the NBIO came with obligations on confidentiality to us uh and you know was non-binding and therefore you know not market announceable etc. So I mean board and management acted accordingly to to all of those conditions. Um as I said I mean you know extensive discussion around transaction and all the rest of it and I think I mean I've described it in the past I mean MA MA 101 is uh as you know except the first price that comes at you you know dance to be done and uh you know so it was very surprising to us that then that was basically published by uh you know goldfields and they put it up at kind of 2:00 in the afternoon our time. Interestingly, we're actually in the middle of a shareholder briefing uh and uh you know, one of the guys there kind of uh read his Bloomberg screen up about you know, we're under a takeover place. So, that was probably about the shortest investor meeting uh with with uh with Brian who's just joined us as the brand new minted uh head of investor relations. So, it was it was quite a quite an interesting kind of first day of the job. Um, and I mean I guess I mean there's been a lot of kind of media and uh I mean I've I've uh you know been quoted a lot in the in the media and what have you through that whole journey >> from a strategy it worked for for Goldfields though like and and sure it's not the friendliest approach but but it got the outcome done and and yes there was an uplift but and it became friendly but um but the bear hug the bear hug worked you know. Oh, look I mean it's a strategy u if you like to break through the standstill but there was always the ability to goldfields to walk through the front door and put an offer on the table and sorted all of that behind um you know but you know behind the media rather than playing it out in the media and I don't know that goldfields have actually set themselves in goodstead for the future because you know if you're a prospective JV partner of goldfields they're going to be reading about, you know, how this has all played out. The other thing I'll kind of share with you is a bear hug. I mean, it's a kind of an interesting strategy. I mean, yes, it's a way to force the hand of the target um company to the table and I think there's a clearly a place to do that. I mean, if you've got a company that's just being uh, you know, difficult and they're not acting in the best interest of shareholders, then it's diff definitely a way to kind of break through and and and you know, it's occurred in the past and and I think when things have got to that kind of impass, but of course, if you think about it from the point of view of shareholders, you've then got to convince the shareholders of Gold Road uh that they're getting a fair price. But if you're a Goldfield shareholder, you've got to convince your own shareholders you're not paying too much. So who are you lying to when you're doing that? >> When when Goldro went into to Trading Halt on the on the Friday um 9 minutes after the director special email revealed in word on the decline that maybe Gold Road had received a best and final offer from from Goldfields. Walk me through that part. Was it us? Were we the Were we the leak? >> Uh yeah. And I'm going to share with you that uh so we've reported that as a media >> yeah you could have you could have sourced us but >> let's say that some of the mainstream media journalists were quite incredulous how it's reported to me that the source of this was was you two >> that's hilarious >> well I I appreciate um it was actually quite a nice moment because I mean we our newsletter is widely read it's like 15,000 people read it every day. But but for a uh yeah for like the board of a you know three billion odd dollar company or whatever 3.8 whatever the number was before the takeover um to take to take our rumor sort of seriously and um and reported as such like that was it was that was that was a good moment for our newsletter. >> So um yeah I guess the only thing that kind of went through my mind at the time was is when's knocking on your door? Uh but I mean look the leak occurred at the time fundamentally when we started opening up the data room. >> Yeah. >> For goldfields to do DD. >> Yeah. >> And we went from it being extremely tight to >> potentially a lot of people >> um having knowledge and only needs a bit of scuttlebutt. I'm not saying necessarily a gold fields personally. >> Totally. But, you know, goes from one thing to another to another to another. And >> yeah, >> so yeah, exactly where you got hold of of that bit of news flow. But >> sometimes leaks do come from people who have like a an angle to want to disrupt. This was not that I would never tell you where the leak come from, but like I was just lucky I found out really. Yeah. >> Yeah. And and look, I mean, I think, you know, there's a lot of these leaks occurring and I mean, you know, the Anglo gold stuff again in the paper last couple of days is it's kind of another thing. I mean, you know, half the time it's my view is there are people some commercial interest as to why they're putting that information. >> Yeah. It's usually the first linked the first listed advisor. No, I'm joking. Um, yeah, but I mean it, you know, often it's going to be people in financial circles. So whether it's advisers or even >> fund managers, >> fund managers, uh, yeah, because >> managers, BD teams, >> um, well, and you know, if you've got multiple companies bidding on an asset or whatever, where you throw your other opposition under the bus >> 100%. >> It's always in someone's interest. >> Uh, because, uh, you know, if everybody sees somebody's come equity raise or what have you, that kills their share prices and kills their participate. I I I think fundamentally it needs to have much greater regulation than it does. >> The Yeah, I totally agree with that. I do think there's um there's too there's too much on the leaking front which could be cut down pretty pretty easily, I think. Um yeah, I appreciate that. Sign up to the director special, guys. You'll uh you'll get word on the decline in your inbox every morning. Moneymind.com/subscribe. It it it it is interesting. You don't see a lot of it and you don't see a lot of it it for a for an obvious reason there. The I I keep kind of coming back to um you know the the the six or 12 months in the leadup to the deal as well. And as was reported in the media, Gold Road was pretty close to to doing a um a deal on on Greenstone as well um as a JV partner with with Equinox. How do you reflect on on like the media reporting of that and and potent, you know, like how how close was that deal to being done and if it were not for the leak, do you think it would have been done? >> Uh, look, we were in that process. I think it's fair to say that um had it yet to get to offer stage. Yeah, there was an initial premony offer stage which was really just to get you in the data room for the phase 2 process, but it had got yet to get to anything that was was binding. Um yeah, and that that process was clearly leaked. Um and and I guess I mean unfortunately we've been on the receiving end of of a few of those. Um I kind of think that a lot of the time that's been done for deliberate market kind of purposes. >> There there are lots of different types of shareholders, right? And and different shareholders have different time frames, different outlooks. Some of them care about the immediate 15% uplift. Some of them care about long-term sustainable value creation that can be a bit more gradual but maybe maybe more certain. Um I got I just got the spidey senses that there were activists at play in at Gold Road from from certain times. What was there or was that just a me perception thing? >> Yeah, I think that's largely a you perception. Um look I mean I think I mean shareholders to me I mean at the end of the day are quite short-term focused even even the long funds and >> you know if you kind of look at as a fund manager I mean a lot of their incentives are driven about how they perform relative to the market over a three or 3 month or 12 month period. >> Uh so they you know as an inherent kind of principle they have an obligation to outperform the market. So takeover comes through the door. Well that's a that's a give me isn't it? And I I I tend to think that for a lot of your funds, I mean, that just drives an outcome, they want to see the best premium that, you know, management can achieve, but there is only one outcome that's going to be delivered once you're kind of into that into that space. um you know as you look through the the transaction that we've done I mean ultimately there are a number of uh shareholders you know reasonably senior part of the register indicated that they wanted to accept in at the revised price I guess I saw I mean once that hit it was going kind of game over left to me I'd have pushed a bit harder but but uh you know at that point your your negotiating kind of position kind of is kind of spent right >> one of one of the one of the like the the markets like um I think there's like fair there's fair critiques and there's unfair critiques and one of the critiques of of gold road was um like a a high high overhead and like not not not the operational kind of control of course that high overhead was to fund exploration because you know that there's a return on investment of that and and gold gold road had a you know a BD team that was across a lot of the um the opportunities but it's hard to kind of like measure the ROI of that and so one of the critiques was the the high overhead um well what's the NPV of that you know over a long time frame could be quite substantial. Was there ever like a defense consideration that maybe maybe there is a place for for Gold Road the company to actually uh exist on an ongoing basis but with a much lower overhead and that be a more attractive thing to shareholders you know visav than a takeover of uh of goldfields. Yeah. And look, I mean, we obviously looked at what the strategies for the company were. And I mean, Gold Road in reality is one of the very few larger companies, one of the few producers is actually out there looking for a new um that's a quite unique space. I mean, most of the new mine exploration has been done by by the real small, you know, sort of penny dreadful end of Juniors. um got to say a lot of those are actually mining the market rather than than really focused on on making discoveries. I mean that's not always true but um and a lot of them are operating kind of subscale to actually be able to um to be effective. If you really look at the big discoveries that have been made I'm kind of talking of the plus 5 million ounce discoveries made in WA they all have kind of common themes. I mean they're made by companies that um uh you know have put together large coherent ground holdings that cover say an entire greenstone belt. So that's true of Griier, it's true of Hemi and it's true of kind of the Tropicana discovery. Of course, in one way or or the other, I've been personally involved in all of those either through Tropicana where, you know, I led the team that made the discovery, Griier, which I came into kind of midway through the construction and and Hemi were obviously a major investor into Deg Grrey. I mean, the key guys between in degra all work for me historically. So, you kind of got a direct connection into basically all the all the big discoveries made in WA in the last 20 odd years. Um so you know you kind of have to look at what where are those coming the discoveries coming out of they're coming out of what is relatively unloved ground in all of them large coherent ground holdings and and uh you know companies that kind of have the conviction of of doing that kind of work and and that's basically this kind of this key strategic element that we were trying to do in Gold Road as opposed to putting old mines back into production and you know with the run up in the gold price perhaps we should have had a finger in that pie because clearly that's been successful uh but that relies on a runup in the gold price to be successful and and of course that's paid dividends for for people in that kind of space. >> Did a takeover of Degra ever get close? >> Uh look you got to say that there were multiple discussions but really did it get to you know hard kind of clear negotiation space? Well, you're not right. The challenge I guess with the gray for Gold Road is I mean it's an amazing discovery. It's easily the best of the the big discoveries made in the last 20 odd years. If it had been any of the other discoveries, it would have been within the capacity for us to have done a takeover on a more assertive basis. But you know once the market cap of the gray went well beyond that of gold road really actually made closing a transaction pretty challenging. Gria Gria's future was going underground right now. Um with going going underground and uh and the likes. What what ground support would you have used if you if you went underground? >> Well, I've got to say Sanic the correct answer. >> That is the correct answer. Sanvic ground support mate. >> We had the privilege of going to the Sanvic facility at Qud. spoken a bunch about it, but it is magnificent to see bolts, mesh, all these things actually get galvanized. It was it was kind of eye opening to see that. And the team out there is a bunch of legends. Over 300 people working for Sanvic ground support here in Australia, which is fantastic to see. And yeah, supplying the mine sites all throughout WA, all throughout Australia, also using steel from Port Kembla in in Australia as well in part as well as sourced from other places as well. But it was fantastic to see that sort of manufacturing in Australia from a fantastic team that yeah we were lucky enough to to go and see all the all the machines punching out these things for the industry. >> I hope it was a condition of the deal to goldfields to make sure you use certainly ground support as a career goes underground. >> Well I mean the the scheme implementation deed is a public document so you can find it in there. >> Awesome. Go underground sport. What what was what was the the impass for um for a gold road tie up with any of the other kind of mid mid-tier producers as well? >> Oh, look, I think pretty much yeah I mean value I mean and guess I don't want to get into the detail of everybody we might have spoken to but you know there's stuff that's been in the paper but I mean we've spoken to you know half the ASX 200 you know kind of companies right? Yeah. Well, it's uh it's a it's a bloody exciting time to be um to have a specialization finding gold. Uh because the yellow medal is worth a hell of a lot. And like you say, mate, the juniors are absolutely going um berserk. Maybe some of them have something of substance. Maybe some of them are mining the market. We're kind of hoping to get your expertise um to to talk about a couple of those today as well. We've seen a lot this week specifically the US starting to cut rates. Inflation still not within their their band since 2021. That's a that's a long time now. And very interestingly, we've seen ETF inflows into the gold space for the first time in quite some time. So that sort of indicates that perhaps retail is starting to pay attention. Duncan, you've got a background as a as a GEO, then obviously done plenty of time working through studies, building minds, managing teams, but if we if we tap into your experience as a GEO, a lot of the juniors, like you mentioned earlier, have been running lately. So, I want to run through some of the exploration results that have been exciting. And one that will be near and dear to you that you've spent a bit of time looking at is Yandel. So they had a a terrific runup last year, fell away, and then just recently again they've they've rocketed on the back of sort of 1.2 grams over 50 odd meters kind of hits. How do you think about that region specifically and then the the results that they've come up with? >> Yeah, so I mean Gold Road is actually a significant shareholder. We hold about 17% in Yandel and I mean that originally came through the DJ gold acquisition which of course is what gave us the initial kind of cornerstone position in Deg Gray. Uh but I've always quite liked it and we've participated in multiple equity raises and the specific area that that we liked basically where they've got these these current intersections. Um so they've now got you know a couple of kind of 50 odd meter intersections that you know 1.2 or whatever it is you know 400 m apart. So there's there's enough space there to you know put a reasonable size resource. I mean to to me it's still very early days and I think uh I'd almost take a bearish view there's going to be a small pit there. Uh, and maybe it could turn out to be plus a million ounces and but there's a lot of drilling that still needs to be done. Um, and you know, I think there's a pretty uh pretty capable team with Chris and and and and the guys in in Gandal. Uh, you know, as an investment proposition, it's a bit interesting because the register is extremely tightly held. Um so there's no liquidity in the stock and and some of the former DGO uh kind of cohort a big in Yandel. So you add us and a couple of other major shareholders there is no liquidity. Um of course what goldfields do with that position uh you know that now the uh the gold road acquisition's kind of finished to me could be quite material of course and it could go either way. It's either going to be a piss pot or a jackpot story. If you're a vest depending on, you know, if bels want to grab it or they if they want to exit, of course, then you've got that, you know, block as an overhang. >> Yeah, absolutely. If we um jump to another country, New Zealand and Santana, there's um a a project, the rise and shine project being um built out over there and they did some stepout drilling that came up with some results. Did you have the chance to take a look at these ones? >> Yeah, look, I'm kind of familiar with that project. I mean, you know, somebody like myself, I mean, anything that looks like a, you know, discovery development kind of project, you keep an eye on it. You know what's kind of going on, you talk to them. Yeah, I like I mean, I like it. I think it's uh, you know, got pretty good chances of getting up as being a mine. Um, I think, you know, New Zealand again has had been a kind of a jurisdiction that's had quite a lot of perming challenges, but I think they're in a pretty good position. They'll ultimately get there with all of that. Um, and you know, New Zealand's getting a new buzz around it. You know, you've got Jake Klein also. Yeah, >> buying up federation and I mean to me there's a natural strategy there sooner or later to kind of do an a New Zealand kind of consolidation play and um you know there's few other kind of explorers things like siren and rur what have you pretty active in that part of the world and >> you know it's you know an area because of some of the regulatory issues and sort of green tape and all the rest of it that's had a lack of lack of expiration so to get your way through all of those it's that becomes an opportunity, right? >> Do you think that um that Oceanana's assets come into the mix in a in a larger kind of consolidation play under Jake there? >> Yeah, I I really don't know where Oxiana where where um Oiana's kind of mindset is to be honest. I mean, uh you know, raise means quite a bit of capital is kind of my understanding. So, so where they fit in the mix, but kind of look at it, I mean, if anything with where they were historically, they should have been the natural acquirer and player or all this, but I'm not convinced that they >> I think a bunch of it was originally all in the same Oceanana portfolio and it's kind of become fragmented because it was too disperate and now it's potentially all going to come back together again, which is um the way mining works. >> Yeah. Yeah. Well, I guess. >> Yeah. But no, Oshan is making a lot of money at the moment. They're they're very cash generative. surprisingly. Yeah, >> guys, I want to talk about the the US government and what they're doing. I think this is the biggest topic we are seeing in the mining industry right now and I think it will be for the decade and there's two particular stories here that that stand out. Firstly, what's going on at Lithium Americas and Takapass and secondly US Antimony Corp. So just to give a bit of context for for listeners quick quickly on lithium America's they had a funding package with the DOE in mind that the pass is jointly owned with GM the automaker and essentially this $2.3 billion loan is being in quotation marks renegotiated by the the Trump administration with the the inkling that they want a 10% equity stake which is very similar to what we saw with Intel and has some similarities with what we saw with MP materials a little while ago. So, a lot of shareholders were up in arms when the news came out that the the government's just going to take 10% of the company. Lo and behold, the stock nearly doubles on on the back of this. And the news hasn't even solidified yet. The company came out confirming that there's talks going on. This is this is just remarkable. And I think to me, I'm curious to hear what you guys think. This just just cements the new paradigm that we're in. The government in the US and we're seeing it all around us all. India wants to build stockpiles of of rare earth. We know our government here in Australia is talking about building a strategic reserve of critical minerals. These these these governments rather are building stockpiles not even necessarily to to piece into manufacturing just yet. Like there's a lot of these parts that haven't been figured out yet, but it makes sense geopolitically if you're going to separate yourselves from a lot of parts of the world and have trade wars that you want to get all this up and running. And I think there's a lot of other pockets, a lot of other commodities, a lot of other companies that um are going to be disrupted by this in time. And I'm I'm just kind of fascinated how have you kind of seen this evolution, Duncan, from 30 odd years experience in in the industry? >> Yeah, I mean, you know, it's not an area I play in directly, of course, but um I can understand it from a geopolitical iss perspective and let's let's hit the nail on the head. It's all about China, right? who have inserted themselves as a dominant position through a lot of this space. It's rare earths, it's lithium, it's the downstream use of lithium. Uh you know in rare earths of course it's magnets and what have you and a lot of those are one fundamental to our economy and particularly if you you know the climate change and electrification of everything kind of kind of thematic. Uh and then you've also got a whole bunch of metals that are, you know, strategically important from a military perspective. And the Chinese are not necessarily making decisions on normal capital investment grounds. And when you get into these minor commodities, shift the price around. Let's face it, none of them have a transparent pricing mechanism. uh it's not natural supply demand economics. So you know if these are strategically important for uh the economy of the country and and you know military positioning then this is fundamentally why you see government starting to get involved from an investment point of view. It's creating a lot of let's call it hype in all of those kind of areas. But you, the challenge I see with a lot of these minds is one new mind comes on the planet that's slightly better than the one you've got, they can eat your lunch. And it's kind of true AC across a lot of the minor medals. They're actually pretty high risk investments to play in. If you get it right, of course, you can make an absolute mozzar. If you get caught on the wrong side of it, you've just done everything. Um, so, you know, it's not a place that I uh focus my time, effort, or where I invest my money for for those kind of things. And and you're very much beholden to shifts in government policy here. So, uh, you know, I fully understand why the government is now getting into this space. fundamentally we need to um but from a personal point of view it's not uh not what I focus my time and energies on. Up until probably this week I shared yeah pretty much the exact same opinion as you on on kind of all of this trend. Um I I think this week is the first week I'm I'm thinking about it a little bit differently and um yeah I think I think like what we're seeing is it's not just resource nationalism out of the US. It's it's the institutionalization of of industrial policy in many ways. It's actually a mirror image of what China did just two decades ago as well. The US is is kind of late to the game. um you know for investors the riskreward profile it looks different this is a a this is this is like a new this is a new paradig >> it's a new paradigm right um uh so why is the riskreward profile different now >> yes there's hype yes there's niche markets yes new supply can come online that changes things but if if if the upside is now underwritten by governments and you know you've got You've got the price guaranteed. You've got the the demand a sure thing thanks to a government contract. Like those factors don't matter as much. In fact, they don't matter at all if new if new supply comes online because why do you worry if new supply comes online? Well, because you can't sell your material at the price you thought. No, that's actually not a risk anymore. So, I think I do I do think this is this is uh yeah, this is this is this is a genuine new paradigm in commodity markets and like I I have to change the way I think about about a lot of this stuff. I must have to challenge my own kind of like cynicism on on some of this stuff whenever I see >> Yeah. And there's a lot of dumb stuff happening in the markets on the back of this theme and a lot of it doesn't make any sense but at the core there's there's something very big happening here. >> Yeah. But I think the key thing you've said out of all of that is the most important piece is the guaranteed offtake. guar guar guaranteed guaranteed >> because if you if you don't have that then somebody else can either undercut you um >> you just can't compete right >> so suddenly your asset is worth nothing >> your point on on being at the whims of government policy changing again is absolutely right too you know your your off tech is guaranteed until until you get new government that says you can rewrite the rules when you're new >> so so if you just go back in the investment cycle back into the juniors and the developers have yet to get to to that point where they've got the guaranteed offtake. You know, your investment is going to be linked to whether you get that little golden card, which is the offtake agreement. You're really relying on which project the government supports is anointed. Yeah. Looking across the rare earth market though, there seems to be a um a feeling that this 110 NDPR price per per kilo is going to go across the the industry. And that's not the case just yet. That that's just with MP materials. But it is fascinating to sort of gauge what what investors are thinking, what companies are thinking because there seems to be a consensus view that everyone's going to get that sooner or later and that that's not the case. When you look at like a US Antim Corp, it makes a whole lot more sense. I mean, there is only two of these production plants in North America. They own them and yet you're in a beautiful position there if if you're the company. The the defense department, they're not even going to use the stuff. They're just going to pile up the ingots at this moment in time. So, it's it's remarkable. So, yeah, $245 million over over five years for them. It's not not massively surprising that the the company's share price has run 3,000% in from a very low base over the over the past year. It's kind of just I'm I'm surprised, but I don't think I should be. I guess that's one way I'd kind of put it with this one. >> So, I mean, if you're one of these companies that's got that locked in government guaranteed, you know, hopefully it's happy days. What happens when the antimony stockpile gets to the point we don't need anymore becomes another problem, of course. But you know you can look in that whole antimony market and of course antimony is you know a lot of times is a byproduct to gold or something else. There's actually not that many just pure antimony plays and you know most of the time you're talking about an antimony gold con and treated somewhere and I mean at least a dozen uh you know let's call them gold companies that are promoting themselves as antimony producers and getting a flood of money around all of that. But the the longerterm value of that antimin product to me is could be anything. >> That there's a fascinating case study in in tin because there was these massive stock piles all the way up until the the mid to late 80s and then that just put a damper for 20 plus years on the tin price as they just got sold down and sold down and sold down. But we're in the other end of the the cycle right now. So >> yeah, mate tin tin looks good. >> Yeah. And and I mean I kind of graduated at that time as you know tin was one of the commodities people were actively outgoing in expiration and it just died overnight. So I mean I I kind of put tin in another bucket. is one of these relatively minor metals where swings in supply and demand can really be quite extreme and that can be driven by a whole all the government policy and where China plays in all this space and it can also be just driven by you know you find a really high quality deposit and undercut everybody on the cost curve set the market. >> Okay, grade control time Duncan JD. Uh this will be fun. Can to get your thoughts on grading some of these uh some of these corporate stories of the week. First one we've got is um Hudbay's pausing operations at Constantia. So down in Peru, HUB's Constantia copper mines become the latest kind of flash point of uh of social unrest. What started as community process uh protests over unfulfilled social commitments and environmental concerns. It's now escalated. There's road blockades and mill shutdown. adding the pressure from informal artisal miners resisting tighter government regulation under a um under a government scheme there and now things have um have escalated to where HUD base had to demobilize it staff production and it's uh yeah scrambling to reassure investors it can still hit its guidance. What do you uh what do you think of this one and what do you grade it Duncan? >> I'm not sure how you want me to grade it but let's A to F. Yeah, look, I mean, in terms of management action here, you got to say they're doing the right thing, right? In terms of protecting the health and well-being of their employees. So, you know, you kind of give them a A or a B for that. As an investor, of course, I mean, you know, that flows through to share price taking a bath sooner or later. Um, so that's a D or an F. Um, but you know, once that share price uh has corrected, that maybe becomes the buy opportunity because these things usually resolve over time. Yeah, absolutely. It's uh this week in copper has been fascinating obviously with what's happening at Grassburg which has been quite tragic and deserves a lot more attention but the copper market has kind of been rocked on on the supply side. How how things get to a level here specifically with Hud Bay that you got protests is is worth investigating as a investor and it's not new there in in those parts of Peru. They're not the only company that's been kind of subject to this one >> with Lo Bombas is is kind of Yeah. caught up in a similar situation. >> Exactly. And the the government component is is tied in with that as well with the artisals wanting kind of someone someone to blame. You've got a mining company there. So that makes them an easy kind of target. So kind of like you Duncan, I think I'll go middle of the the row and call it a C. You have to pause the mine. There's nothing you can really do about that. And as an investor, like you said, perhaps that creates opportunity in a copper market where the um the supply side is really tightening. >> Peru Peru supplies 10% of the world's copper. Um yeah, and if if projects like like Constantia can can be Yeah. I all those bombers can be kind of held hostage in some respects. I think it just underrates how how fragile our copper supply is. and throw in mix grass. Throw in the mix a whole host of of these uh yeah supply shocks that are unanticipated. We see them all the time. Um we've got a pretty tight copper market. I'm going to grade it to see because I don't speak Spanish and I can't deduce where fault lies here. So >> to see, but the copper market is fragile. >> Yeah, totally. Maybe on the other side we see Cobra Panama come back online sooner or later. Next story is the Glen Cormanizer/ Aussie government negotiations. So this has been happening in the background for quite some time, but it seems to be coming to a head now. You've got the federal government in Australia reportedly pushing the state government in Queensland to to contribute a bit more to the the rescue. Ultimately, the two kind of came together and put forward a proposal to to Glen Core. Now, Glen Cor said anything under $600 million wouldn't be enough to give them enough time to assess the viability of the the project over the the long term given it's pretty loss making. So, they then came out and put another number saying they would lose $2.2 billion over seven years. Now, I dare say being Glenor that's just a negotiating bargain that they're they're driving there, but there is a lot of jobs and other implications from this one. So 600 Glenor employees, but we're talking about 17,000 people indirectly. You know, Dino Nobel, you look at the refinery, the the smelter, the families involved, all the other small businesses. So it's a huge decision to to kind of make and we've spoken about this previously. It this comes on the back of firstly you got higher costs in in Australia and then breaking down the high cost. Energy is the big one. Then then labor as well. So, we really need to think very hard about how we um as a country navigate this and I find it very hard to to see where we've got a a strategic advantage here and why in a sense we need to kind of do this given that all the product is just sent overseas anyway. So it makes it it makes it very challenging to me and in a cost of living type crisis environment giving another a $600 million is tough. So good on the government for trying to extract a lot of investment out of Glenor on the back of this one. But maybe I'll sling over to you guys before I I contribute a rating to this one. What do you guys think? >> Um I think I think the other part of the profitability equation there is like like it's very hard to run a profitable smelter when it's you don't have a consistent reliable source of of feed for it as well. >> Yeah. >> Um >> I have unwavering views on my appetite for government intervention in the loss making parts of any industry and those unwavering views are not changing. Um I hate to see it. I just think it's yeah not a fan. Um, and I also uh like I don't I don't see any horizon where where that smelter becomes profitable unless you find yeah giant new copper discovery or get a better operator who can pull a bunch more copper out and um and also fix energy problems. Now it's a very strategic asset. Of course you talked about dino noble. I mean heck it's it's even important to BHP by virtue of the um of the fact that it it it can it can take some of the high uranium content from from Olympic Dam. Um, I I'm going to rate it a a C. I I actually think Glenor is trying to sell Eiza very actively as well. I don't know what we're going to emerge with on the on the flip side of it, but um but I wouldn't be surprised if there's a bit of a song and dance here and and the ultimate deal that kind of the government agrees to also involves a new operator of of FISA. Duncan. Yeah, look, I agree with your sentiments, right? I just don't see this as the place that government should be playing. Government's role is to set a fiscal regime in Australia that is attractive and have policies and, you know, includes things around labor and energy and all those kind of things that are critical for for viable resource investments to kind of get into handouts to prop up things that don't wash their face is not to me the role of government. um you know perhaps putting aside the strategic metal kind of piece that we were talking uh so you know and the reality is it's going to be tough on people who lose jobs or you know their economic investments in that part of the world but but let's be realistic about it there's not a lack of employment or other economic opportunities in Australia and sometimes labor has to migrate to to uh where those opportunities are and you kind of putting a pretty cold cold heart face on it but but I think That's actually what's got to happen. >> Yeah. Yeah. I think that I think that's well said. I'd probably call it a C like you said there sort of fra with the sort of caveat that nothing's finalized here. So, we'll see what actually comes out. >> Last one on grade control. >> Good news story for you, mate. >> Let's hear it. >> Minres they uh they refied their well 700 million US bond. Um so they've you know pushed back the the the maturity to 2031. Importantly, the coupon 7%. For reference, last time Minres went to the uh US bond market, it was October 2023. They uh they sought a US $1.1 billion in uh in bonds, and the coupon was 9.25%. So, I mean, this is just it's it's an obvious grade. It's an A+. Um absolutely shocked me. I'm Yeah, hats off to them. They've they've uh they've refired at a at a lower cost of debt than they had before. like that's um it's very impressive. >> Yeah, I think I agree. You've got to give them the tick in the box. So yeah, when you call it an A or B or whatever, but it's definitely up at that end of the spectrum. And uh I think the market loves it from what I kind of saw. I think Minres was up four to 5% something like that. Um as well as the kind of things, I mean it obviously takes out any, you know, a lot of the kind of risk of debt overhang and refi risk. That's kind of thing that management and boards are also kind of quite conscious of. >> Yeah. Fantastic. There's a sorry you're going to give it name but I was just going to add a point. >> There's definitely this trend of um of miners refinancing their debt at a at a you know substantially lower cost of debt than they had before. The first the first one that came to mind was for excuse 2% bond in R&B terms was pretty um pretty remarkable. Then then of course yeah minres here we saw nickel industries uh yeah yesterday with a with a with again like paying an interest rate which is like like two three 4% lower than what they were before. I like some some someone's got to explain to me it's got to be more than just like rates coming lower like what is what is driving the the cost of debing so much substantially lower is is it is it really the risk profile of the companies or is it or is there something else at play here? I don't know. Yeah, it's a it's a big sort of story and we're going to see it across the the complex. BHB as well add add to that have recently >> they did that 30 year they did the the 30-year bonds as well. Like take the money the these fixed these fixed rate things when you've got real assets you're churning out. We're coming into a rate cutting environment >> when like we said earlier inflation in the US has not been within their band since 2021. You've got inflation and you can lock in these things at at 5%. It's just remarkable. Nickel industry is another one like you said paying over 2% less than when they uh last went out to the market to to sign up bonds. It's just it's just awesome to see for the miners. >> Who's owning these bonds? Like who's buying these bonds, you know, like >> what happens with inflation? Yeah. Anyway, >> wouldn't want to be on the other side of these ones, but that's their decision. All right, guys. Sweet and sour deal. And there was quite a bit happening in this end of the market. So, we're going to talk through some deals as well as some capital raises here. First up, Deterra. So, we all know Dera did the deal with Trident last year and they picked up a bunch of assets there and they've had a bit of a program to flick out a few of them. So, they netted from this sales $60 million US. 56 of that came from these gold off takes that they sold. And then the other four was from a Staint Ives and a Dando royalty. So, this will go to reduce their net debt. It's the um the final piece they said of their sellown program of these noncore assets. And yeah, this one's a a sweet deal if only for the fact that it's a great time to be selling anything gold related at this moment in time. What do you think, Duncan? >> Um well, if you depends what your sentiment towards gold is, of course. So, you know, if you think we're kind of the top end of a bull gold market, well, it's a sweet deal. if it's keeps running well bit of egg on your face. Um I I kind of actually put it as a bit of a rounding error for you look at it. It's kind of 60 million or whatever it is and what's their market cap three and a half four bill. I don't know the detail but um you know it's a pretty small deal for value of the company. >> You're right. >> Uh it's a big deal for Vox. That's >> big deal for Vox. Absolutely. >> Pretty substantial one for them. And um yeah, kind of like gives Yeah, I I I'm give it a a good deal for Vox. I think if you're a if you're a company like the size of a broad company the size of Fox, like what's what's a no-brainer strategy for you right now, add just buy as much like gold gold royalty exposure as possible and Tether will come pay premium and take you away. >> Tether the elephant in the room. >> Next one is Lionus. Now, this one is fascinating. I'm very excited to talk about this one. So, they obviously did did their capital raising a little while ago and they had an SPB SP as you do at the back of these things. They were seeking $75 million. They had $182 million in applications and they decided to take them all. So, something is going on here at Lionus. This is a $17 billion company now. They got about a billion in cash. they are explicit in their desires to go downstream and look at magnet manufacturing or whatever it might be producing heavies and all sorts of things. Their paper is, you know, it's if things keep going, they will actually crack their 2010 highest, which I didn't think I'd be saying. So, they are going to be buying something soon. And got a few sort of guesses, but um yeah, I mean, it's kind of funny one to to rate for the shareholders. It's a sweet deal because you're buying in at 1325 and the the thing's 17 bucks already. So well done on that front. But um yeah, Lionus a company definitely to watch. >> Tell it's such a tell. Yeah. Well, the raise was done at 1325 stocks, but the stock the day before they they did the the raise was was $1473 and now it's $17 and they're taking every every single dollar of the SP extra hundred million bucks or whatever it was. They're uh they're they're they're buying they're buying something. They're buying something soon, I think. Or they want to buy something soon. Personally, I think they go hard at Neo Performance Materials. That's my bet. Like, yes, there's a there's a a big stake you got to negotiate with there. But everyone's talking about building out that um yeah, the the separation and then magnet production part of the supply chain rare earth and there's a bunch of projects coming on the scene which Lus talks about. But why why back a new project in the US with when that is such like core expertise? Just go buy Neoerformance Materials. It's still less than a billion dollar market cap and Linus is much bigger than that. It's like, you know, from a dilution perspective, a drop in the ocean. Sweet deal. >> Yeah. Look, I mean, in terms of shareholders, of course, I mean, that's that's doing the right thing by by the participants in that uh PP. A lot of the time, I mean, you know, the money goes to the institutional holders at a discount and your existing share register kind of gets diluted. So, you know, I think you got to give that as a that's a that's a tick. That's that's the right thing and the sweet deal for for those investors that that chose to come in. E bits, as you've kind of said, is what does management do with all the money. That's where it's going to be sweet or sour. We don't know yet. >> I'm excited to see. All right. An IPO, Meda Gold. Now the reason I've included this one is because this was the biggest IPO in Indonesia for the year and they finished the limit up that this is a sort of rule they have in the exchange there 25% on the first day of trading. They pulled in US $280 million in this IPO selling a 10% stake in a spectacular gold environment in a week where the gold price hit a record high. This is a very sweet deal for the the company and it's got me very excited for the uh the Zene Gold International IPO. So, they want to list that on the Hong Kong exchange, raise US $3.2 billion, which would be the biggest raising in uh in the world since uh May or so. And I'm I'm very excited. That one got delayed because of the the typhoon up there, but let's see how that one goes. It's um you know, gold is in the air at the moment. >> They got great timing, MCA. I remember when they did the battery metals I think it was like the peak peak battery metals thematic they just >> is that the sell sign >> maybe maybe great timing yeah sweet good on you >> Duncan >> uh look and I mean the ward broader thing here of course is it's very positive for other players that have uh good assets and opportunities to raise money I mean you know there's pretty good chance you're going to be able to bring it in in the current market climate so >> so anybody who's is in that that's it's uh That's pretty sweet, isn't it? >> Totally. If we change tack for a moment, we're going to Cameroon and talking about Bork site. So, Canyon raised over $200 million. Now, they were a less than $500 million company before this. And this sees them write those famous words fully funded. So, they have a debt package as well with this one. Now looking at the breakdown of the financing is quite interesting because you've got their strategic EA which took about half about $110 million and Afreland who took another 70. Now they are a subsidiary of the biggest bank in Cameroon. So great to have that strategic interest from the the country in which you're operating there. $180 million of the raise just done just like that. So, I think it's a great job getting all those people aligned that having that buy in is is vital in this day and age and it puts them on the way to developing the um the BSA project out there. So, sweet deal. Sweet deal. Afroand um yeah I I haven't seen them take equity in in anything before but having them on board you know I think that that's a a big big indicator of of incountry support. I think they also took a higher proportion of the rail asset conjunction with this um sweet deal. >> Yeah. And the world, I'll just add wants to diversify from having 25% coming from Guinea of of B site reply supply. So that's a tailwind for them too. The thing the thing to really like pay attention to here is like look at the difference it makes to a junior going into development when you have a a strategic on your register who can write massive checks and will like push this thing into into into development. I'm talking about yeah eagle eye asset management there. Um, my god, that's a that that that completely has has been such a a gamecher for this company's cost of capital as they've like continued off hurdles to get into development. >> I've got one last one. Rare X and this is in that, you know, in the rare earth sort of field. We know they did a deal with Aluca somewhat recently. They're still waiting for some local approvals which ties in with this raising. So, a $50 million equity facility. It's not a raising straight up for a $20 million market cap company. Super interesting stuff. It's contingent on the Myiramar Hill project getting that approval like I said from from Kenya there. These facilities aren't always viewed of too positively because they leave that overhang in the market if you can just tap it again and and get the equity. This one's sort of structured in in two tanches and it's a bit sort of different, but it's a lot of financing to to get them going. And I think um if they get that approval in place, this could be one that that runs quite hot in a in a strong tailwind environment. >> Um I've got Yeah, I think it's a sweet deal. I think it's a sweet deal. Yeah, sweet deal for both both investors and and the company. >> Fantastic, guys. I'm all out of capital raises and and IPOs unless there was any more to add to that pile. >> All I want to know JD is um is yeah what what you got any hidden gems for us this week? You've always got a good tip. >> I I've got a hidden gem. It's it's a bit of a different one. So I was I was just thinking and we were speaking about this earlier, but the the weather changing here in Perth has been spectacular. The last week has been awesome. And I love getting on the bike and just going around the the river and it makes you just think how how damn beautiful Perth is. like cycling around the the river there, seeing the sun come up in the morning is kind of spectacular. So, anyone out there just get on the bike and go for it or go for a trot because it's um it's stunning out there and this time of year is my favorite time of year in Perth. Duncan, anything standing out to you? >> Yeah, I'm going to use this as a bit of a blatant plug for some gold road people and uh get you to have a look at some of the post by Jeff Spirick on LinkedIn. And I mean he's kind of outlining some of the creative stuff we've done around exploration kind of data management uh which I'm pretty sure is kind of industryleading and you know there's going to be a lot of gold road people kind of walking the street in next few days and uh you know some of the stuff we've actually been doing it's been uh been pretty creative. >> What what exactly are we talking about from a data management? Uh look, I mean what we basically almost have is a touchless uh system from you know geo's collecting the data out in the bush right through to you know the environment where you look at the data in GIS or leaprog or what have you and you take out let's call it a lot of the menial work in the middle by using a number of tools like FME and what have you. We've also done a lot of work in the kind of the AI space as well. So, uh, you know, without me stealing the thunder of what's on LinkedIn, I'll let people go and go go and hunt some of that down. >> We'll include a link in the show notes so people can find that one. Awesome. >> Yeah, I think that kind of like leads into to my one, which it's not a recommendation yet, but I think it will be very shortly. But, um, yeah, definitely seeing a few tools pop up for for investors, which will be like incredibly useful to immediately visualize drilling results. Like I think we're very very close to a product or products which interpret um like announcements digest put in a 3D model and I I think that's going to be such an important part of the equation for for transparency for you know investors to actually just really grasp what's going on rather than sometimes being like misled by by certain promotional elements or or things out of announcements. So I'm excited for that. >> That's a fantastic one. Awesome. Duncan, thanks a lot for for coming on, sharing your thoughts, sharing a bit about the the Gold Road story, and yeah, looking forward to to seeing what the future holds for you. Thank you. >> Yeah, thanks J. Thanks, Trav. And uh I'm sure you'll see us around again. Just don't know where it is yet. >> Congrats. Congrats on uh congrats on concluding a you know, a pretty significant chapter and um yeah, I'm sure lots of shareholders have congratulated you and good luck with your future from us. so knowledgeable and so great to chat with and it is all made possible thanks to our fantastic partners mate Sanvic ground support focus the platform by market tech and IMAK get your tickets for the conference in late October money miners >> uru 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