Buybacks, Cost Curves & Dingo’s Picks

Episode Transcript
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(00:00):
How did you actually join Nero? Mate it's actually quite a cool
story. Rusty and I like have known each
other my whole career. Basically I was an engineer but
basically quickly jumped into corporate finance and he's
working for a boutique out of Melbourne.
I. Remember Rusty saying it was the
best presentation you'd ever seen?
From the worst, from the worst company.

(00:21):
Worst company? Yeah, yeah, yeah.
The quote was something along the lines of that is the best,
most institutional presentation I've ever seen for a bucket of
shit. That's a banger.
That's a banger, JD. Another week, another big
mining. This week there's a lot
happening. And this week, the wonderful

(00:42):
Daniel Gingo. Harrogonzo Gozo.
How do you say his last? Name Aaron Gozo.
I'd never say his last name. It's Dingo.
We've got Dingo. Dingo Gozo.
Yeah, Anyway, just what what it Gozo?
Tell me how to say your your surname.
I love a correction on that one.But the wonderful Dingo who is a
a true thoughtful genius at at the very the very smart Nero

(01:03):
Resource fund. He he's titled the Ceoi.
Think you're right? Yeah, yeah.
Stoked to have him on the show and very excited to unpack with
him all the big events from thisweek because we had a heap going
on from anti involution discussions in China to what's
happening in the midcap gold space, all the way through to
resolution rare earth movements and then going through the the

(01:27):
best deals with a bunch of hot takes throughout.
Mate so came to share this one. Very keen.
You said big events and that reminded me of a big event in
our calendar. You know what I'm going to I'm
going to call our friend Dom about this big event.
Trav, how are you, man? It's.
Very well, Dom. Dom, you were.
Came to hear why people should come down to Adu.
Come down to Adu. I mean, that's probably the

(01:47):
simplest question to answer in the world, lads.
I mean it's the, you know, Africa Down Under is other than
the mining in Dhaba, which I know you guys have been to in
Cape Town. This is the largest African
mining event in the world, whichis pretty remarkable given that
it's all the way over the IndianOcean here in little old Perth.
But you know, 20 years ago when we started this conference that

(02:10):
we could have had it in a phone box.
And now there's well over 1000 people coming to the conference.
So look, I think it's a, it's, it's one of the main events on,
on the Australian mining calendar these days.
I'm so, I'm so back. You've got me, I mean.
I haven't even got to the program yet really about.
Unpacking, the program told. You how big it was.

(02:32):
I mean, I think your blokes havetalked a lot in, in a recent
past about, about the African scene and the complications of
it. I mean, there's no hiding away
that, that there's an African discount for a reason.
You know, there's, there's, there's a high level of risk
associated with some jurisdictions.
But if you look at the cold, howhard facts, I mean, you see some

(02:53):
of the companies that are on, onthe programme on the 3rd, the
5th of September and, and you realise just how well they're
performing on the A6 at the moment.
You've got Purses Mining and West African Resources, probably
the two best performers in the last three years amongst the
gold miners on the ASX, both nowmultibillion dollar companies
and I think both would argue still undervalued in comparison

(03:15):
to their peers. Even in the last couple of weeks
we've seen companies like TaracoGold and Cote d'Ivoire raise
65,000,000 on the market. Then even just in the last
couple of days, a company like Lindian Resources with the Kunga
kinda rare earth project in in Malawi, a country that doesn't
have any mining really as such in a commodity that we all

(03:37):
thought a bust raised more than 90 million for that project.
So I mean they, you know, these are up and coming companies, a
host of others of course that we've got on a program and we
look forward to having you blokes there as well.
That's the the bread and butter of what you guys do regularly
now. You find those sort of bombed
out or deep in the cost curve commodities that are not getting
all that much love. Yeah, yeah, we love hunting in

(03:59):
the ugly places where nobody else is at times.
And yeah, it's not easy. It takes a bit of takes a bit of
belief at times. It takes a lot of luck.
Yeah. I think anybody who who denies
that is, is probably lying. But equally, yeah, there's
method to the madness in that. And often it's it is a strict

(04:22):
discipline to cost curves. It is a strict discipline to the
cyclicality, the cyclical natureof of what we invest in and
being comfortable with that, being comfortable with
volatility. Volatility is your friend as
long as you can use it to your advantage.
So you. Have to be patient.
You have to be patient and equally volatility creates value

(04:45):
opportunities. So you have to be brave enough
sometimes or willing enough to make that investment at that
valuation because the risk return is there.
So then yes, you might have to be patient in how it's realized
or or whatnot. And not always simple, but

(05:08):
typically, yeah, if you've got acommodity in the cost curve,
it's been there for a long time.The equities are implying A
commodity price that is reflective of spot or lower and
and there's an A real asset basethere or an asset base to be de
risked. They're wonderful opportunities
that tend to be not liked by themarket at the time.

(05:32):
Yeah, I love the style. Hopefully we can peel more into
into it today. Dingo, we're stoked to have you
on for the the the weekly wrapped.
We're going to start with all the big stories in the mining
industry, the money miners. You start to get familiar with
this style and yeah, to start up, we've got China anti
involution. The the big thing that I think
is sort of playing out slowly. Firstly from a sort of cultural

(05:54):
perspective in in China. I think it really sort of
started to take shape through the early twenty 20s and now in
the last couple years from a sort of policy setting.
And I think in the last couple months in particular, this one
has really sort of exploded intothe the consciousness, of
course, for for resource investors, because the
ramifications across the full sweep from items that are

(06:18):
produced manufactured all the way to the raw materials are
pretty sort of a pretty eye watering, I think.
So how have you guys at at Nero to to start with this?
One thing I've been been thinking about this is this the
theme you think is is real or a bit of a flash in the pan?
Yeah, I think Chinese anti involution, I think it's a real
theme. I think that we're seeing

(06:40):
evidence of it occurring probably stop short of
necessarily being in the headspace yet that this is the
supply side reform of the the mid twenty 10s or whatever which
led to a radical repricing of the entire sector necessarily.
But I think there's good credible evidence of it
occurring in in, in isolation with a particular focus on

(07:02):
sectors that are unprofitable. So, you know, I think we've seen
it perhaps in in the coal sectorwith some of the environmental
sort of strictness or regulationthat they're they're placing
around some of the miners there.I think we're seeing evidence of
it in lithium, perhaps in bauxite and these types of
unprofitable commodities, if youlike equally, I'm not sure that

(07:28):
the idea of this is to see thosecommodities like, you know,
price 3-4 times higher than whatthey are today in quick
formation. I still think there's probably a
rationalism there. And so I'm constructive, you
know, I'm, I'm optimistic aroundeach of those sectors in

(07:49):
isolation cautiously, but I think at the moment as well,
it's not necessarily being coupled with a demand side
stimulus that you'd probably like to see.
So how do, how do you think about the, the demand side
there? Do you expect stimulus to to
come in in that form because thethe interest rate side of it and

(08:09):
all of that, it just operates sodifferently in in China to the
to the way it has historically here in the West at least.
Yeah, I think it, it, I think it's still a massive opportunity
on the policy side for China. I I still think they're holding
that sort of gun in the holster,if you like.
They can do more to stimulate demand.

(08:31):
And the real stimulatory unlock will be if they can get the
consumer to start pulling out ofthe savings which have been
continuing to accumulate in China over the last five to 10
years now and commit that into either investment.
And whether that be in in equitymarkets, which promotes a

(08:51):
capital cycle or into capital itself or even into consumption,
they've still got that in the arsenal if they need a pull on
it. They they at the moment appeared
to be comfortable with how the stimulus is as sort of supported
or provided a safety net to the economy there.

(09:12):
So I fall very short of being being bearish on China, even
though I think there's a little bit of sogginess in the data at
the moment. We've had a ton of a ton of
conversations on this theme thisthis week, JD, but like, you
know, various, various fund managers or commodity guys or
the likes and how, how, how this, you know, anti involution

(09:34):
policy shift plays out. There's so much money to be made
if you are, if you can kind of read the tea leaves, you know,
accurately here. And it's it's kind it's it's
kind of a little bit ironic and perplexing as well.
Because at the exact same time as the rest of the world has
come to the realization that we should be, we should be more
like China. We should have we should have
more government control and strategic priorities and more

(09:57):
socialism. China's doing the opposite and
say, no, we should be more profitable out our enterprises
should be yeah, yeah, we should have like less, less, less, less
price wars and more, more profitability in the enterprise
to to, to have, you know, betterhealth of the of the private
business dynamism, which is incredible.
The the irony is, is is so rich.I actually remember listening to

(10:19):
a podcast maybe 3-4, five years ago and they were talking about,
it was a resource fund manager talking about China stimulus and
and getting along behind it. And I think the same could be
said by much more experienced people that there's for a long
time being a hope that this China stimulus sort of comes in.
And you know, from the, from thevery first signs of the property

(10:42):
market slowing down through 2020-2021, people sort of hoped,
but they've really let that kindof cool out.
So it's, it's fascinating to seewhere it goes.
And they've got lots of levers. Like for one, savings rates are
much higher because they don't have the type of welfare system
that we kind of have in the West.
So there's lots of ways in whichthey could implement that to
pull it back more to, to resources though.

(11:03):
Dingo Lithium is the big one that's captured the, the
imagination because it's run up like 3040% in, in 60%.
Yeah, it's run up a long way in a, in a very short time.
But you guys love to, to hunt around in, in the fringes and
stuff. You mentioned books out there.
Are there more medals or other sort of esoteric ways that
you've thought about playing this theme at all?

(11:26):
I don't think it's changed our investment thesis or
philosophies or approaches too much to be honest.
I think we have had fundamentally at a really
structural level, have certainlyhad a view that China is kind of
safety netting the economy and the bazooka is not coming.
However, they maintain enough levers that if it got

(11:48):
sufficiently dire, if it got systemic, then yes, like they
can go back to the old playbook,they can go back to property
and, and, and being more outright in in stimulating that
to promote the wealth effect, which could then bring the
consumer back. Bring it back to the to the

(12:09):
question with that as our baseline, and that's been our
baseline now for for several years.
Anti involution is kind of a helpful extension of that, that
policy process that hasn't necessarily changed how we
invest. So, you know, lithium was a
really interesting place to do alittle bit of hunting when
you're deep in the cost curve. And I reckon that's been the

(12:31):
difficult thing in lithium. So it's been difficult to find
attractive valuation even withinthat context.
So you've been able to find it in in the fringes in some of the
developers and some of the best sort of new assets coming to
market in the next cycle. Because one thing is for sure,
it is cyclical, it will recover structurally.
That industry is very complicated, much more

(12:52):
complicated than when I used to work in it.
And there is latent capacity andwe haven't necessarily seen the
level of physical product or or or investment come out of the
market that would have make it structurally more attractive.
Do you know what I mean, where you could really get behind I
think a 60% reprice in the commodity and say maybe we're

(13:13):
just finding a new, a new level here?
Yeah, yeah. Totally agree.
I think that the valuations on the, the bigger end of town, you
always kind of wanted to get them, you know, a little a
little cheaper, a little cheaperlike sort of Pilbara and in line
town sort of sort of comes to mind.
But all of a sudden they've they've sort of rolled away from
us once more. And you know, like in this
commodity downturn, quite unusually, I wouldn't say

(13:39):
investment really stopped. Pilbara expanded in RES have
light and capacity, IGO green bushes expanded, Africa kept
growing. Argentina is now just getting
those brands into a place where they're going to start coming
into the market in larger volumes.
So despite the price signal not being there, investment still

(14:00):
was. And that is, you know, that will
have a consequence, right, Whether it's just it caps prices
out at a lower level or we stillneed to work through a bit of
that capacity before we get to amore sustained balance totally.
Let's talk about Regis, guys. Trav, this is this is right in

(14:22):
in your wheelhouse. Regis have been rumoured to be
hunting, looking around, doing adeal.
I think, I think they've been named to be in every single data
room that's existed in the in the last couple years.
Yeah, they've, they've found themselves in the news again and
the wording has been kind of interesting.
Yeah, well, they. Rebutted the Street Talk
article. St.
Talk article basically said thatthey're they're doing their work

(14:44):
to pick up the other 70% of Tropicana.
There's been rumours swirling about and like old Ashanti's you
know future in Australia. Sunrise Dam is rumoured to be on
the chopping block. Regis also pole position there
too. Mate if you are read all the
Regis rumours. Regis actually the most off if
you look at the just like the the focus focus chart today,
they're the gold miners. I think there are 4% this

(15:05):
morning which for all the Goldies, they just stood out
like a sore thumb. So on.
The back of the the rumors earlier, they came out with the
full year results today as well and about 38,000,000 bucks out
in the dividend and then yeah, it costs to sort of very much
now in the high 2000s going forward so.
They come out with this responseto the speculation.
They say we're, you know, we're not in not in advanced

(15:25):
discussions. Do you read into that Dingo?
I think they're in discussions, just that with every intention
of them becoming advanced. Do you think, do you think
there's a deal to be done with Anglo Gold?
Do you, do you think you know what is just going to buy?
They're going to buy something they buy.
How do they get the deal done in?
Some regards I feel a little bitsorry for Regis because they
feel like they're just the kid in the playground getting picked
on, but like they've got a big. Pile of cash.

(15:48):
It's not all they do. Every journalist who wants to,
he can throw something at me when it's a slow.
Newsday I write about. Where you submit now, I think,
you know, but again, where there's smoke, there's fire and,
and perhaps it's reflective of, you know, where valuations on a
lot of these Australian gold miners are, right.

(16:10):
And, and their portfolio probably looks like it needs
something else or, or, or, you know, it's repriced to a certain
level that, that, that their paper has value.
And So what are the things you would look at the things that
are for sale, obviously, and then the things you already own.
So I'd be absolutely shocked if they weren't in a discussion for

(16:33):
me more broadly, if I step it back to, is it interesting for
us? Well, at this point in the
cycle, people paying up for assets is exactly what we don't
want to be invested in. You know, I don't think that
that's good capital allocation policy and maybe it is better to
distribute more of that cash outand a dividend, right.

(16:53):
And, and this is what I think the sector often gets wrong.
There is a you know, I think Zeppy said the other day, you
know M&A is this kind of a matter of timing if you like,
like it's when you can do a dealnecessarily as opposed to is it
the best part. And so and I can I sympathize
with that in some regards like you need buyers and sellers to

(17:15):
agree those bid are spreads needto meet.
But the best guys or the best capital investment that we see
in the space is done. It is done counter cyclically.
You find a way or you find a wayto find the cheap assets that
can be unlocked. And that that's the challenge

(17:36):
Regis has got, I think. And to their credit, they, they,
you know, they not to date, we haven't seen, they haven't
announced anything on, on the, the very public asset sales that
have been out there and discipline and discipline, yeah.
And they, they probably didn't have a license to do M&A for
quite a while just because of the way the market reacted to
the acquisition of the initial 30% of job.

(17:57):
Yeah. Exactly right an interesting.
Part of that deal and that was like I think early 2021 that
came out because they've got 30%of job now they actually have a
a pre emptive right over the other 70%.
So in the same way that were these kind of favourable
dynamics for for great land gold, you know, getting hold of
of of Telfer and other part of Haveron at a reasonable enough

(18:20):
price because the pre emptive right they had Regis has kind of
got the same. And because of the exact
procyclical you know thing you've talked about.
No, no gold miner really wants to do procyclical M&A.
And if you if if Anglo Gold makes a decision that they are
going to leave Australia in their entirety, the whole
Australian gold portfolio is forsale, who who he's going to,

(18:42):
who's going to throw in a bid for for Trump, knowing that
Regis has a pre emptive and he'sgoing to pay is would happily
pay overs. It actually gives them a kind of
a favourable, you know, sales dynamic to participate in and
maybe buy at a reasonable price just because the pre emptive is
there and the apprehension of the peers to to pay overs.
Definitely the original 30% acquisition came with a lot of

(19:04):
criticism big time and and what they paid for it.
And it's ironic that we're back there years later on the other
70%. But yes, like in doing that
deal, they now have probably a good strategic position on the
other 70%. And you know, if they've got
time to be patient and you, you probably can be.

(19:28):
I'm not intimately intimately inthe detail around either the
asset or, or, or their strategy or anything like that.
It always helps to have that last rite of user because then
you get, you can't be disciplined.
You can you get the final look. So you made the comment when you
when you started there Dingo about looking at the valuations
across the like, let's focus in on the midcap Goldies to to

(19:50):
start. And this will tie in with our
next story about Vault doing, doing a buyback.
But are you, are you sort of seeing value in that, you know,
call it one to to $5 billion space with, with the Goldies
like the gold prices run massively.
Their earnings have showed up. Most of them have appreciated
pretty healthily, but there's, there's still debate out there

(20:10):
about sort of are they being priced appropriately?
Where do you kind of fall in on on that debate?
I think it, yeah, I think there's a bit of a spectrum out
there across valuations. I think overall the sector feels
pretty reasonably priced to be honest and it and it's repriced
pretty well. You know, what's your your
overall view on where the commodity goes?
I think we'll probably dictate that in the shorter term if you

(20:33):
believe. Spot gold price is the new gold
price then. My God they're criminally
undervalued. Well.
Exactly right. Yeah.
If you run that out in perpetuity, yeah.
You can you. Can mount the argument yeah I
think names like Vault to be fair they they did look cheap
relative to the sector and therewas a a fundamental argument to

(20:55):
to run there probably as well you know fascinating to see what
they they did yesterday in the market and the.
Market loved it as well like they jumped up 1112% finally
putting in that sort of Capital Management yeah piece into the
into play I mean. It was a bit of a it was very
interesting day. They had three announcements, 1
and earnings beat. You know, there's a part of the

(21:16):
market that loves that in isolation, ACEO stepping away
and at the same time putting in a buyback.
So, you know, I think if I'm, ifI'm ACEO stepping away, what a,
what a beautiful day to do it when I've just beat earnings and
I'm putting a buyback in place. Yeah.
I think you're right, but you have to sort of think that's

(21:38):
like a 300 odd million, you know, total sum of what they're
sort of guiding that will spend buying back stock over over the
next 12 months. That's that's a pretty healthy
dent in the cash power that theyhave if they end up fully
deploying that and buying all the shares back.
Yeah. I mean, look, it's a good, it's
a good signal, I think on, on how they view the value of their

(21:59):
equity. If they're willing to commit
that much money to buying it back, I find it.
Disappointing that they they come to this realization now
where they had every opportunityto to cancel the shares that
Silverlake owned in red 5 at thetime of the deal.
Remember, they owned, I think itwas like a 10 cent stake.
They didn't they monetized it just, you know, effectively like
cap price is ish Oh for the fact.

(22:20):
So, but now they're doing a buyback like in what's changed
between now and then? Well, the hedge book is now more
out of the money. The CapEx profile is maybe
building, you know, like I, I just, I'm, yeah, I, you know,
commend them if they've, if they've wanted to explore a deal
and now that deal doesn't look possible.
And so they've had to reconfigure their capital
allocation. But I don't understand why they

(22:41):
they didn't come to a similar decision at the time of the deal
with Red 5. Yeah.
Look, I think hindsight vision is 2020, So I'm somewhat
cautious, yeah, in these types of backwards looking analysis.
But you know, look it could theyhave foreseen this?

(23:01):
And so therefore did they, you know, could they have just
cancelled the shares back then at a much lower price?
Could they have been buying backshares a lot earlier?
Possibly. You know, so there's I suppose
you can mount an argument. Equally the gold price has
significantly rewrited in the last two years.
They feel like they've been, youknow, working through a process

(23:23):
of getting the capital stack clear to the market.
King of the Hills has been through several downgrades.
And yeah. And so maybe they maybe they
needed to work through that process to get to a place of
comfort in, in being able to allocate the capital the way
that they now have in the stack.I mean that would be the

(23:44):
optimistic way of of looking at it fault.
Makes me think about manga, makes me think of mines in the
gold fields. Makes me think of the one
organization I trust to turn bigrocks in the gold fields into
the little rocks because they'vebeen doing it forever.
Superbly. Axis Mineral.
Services. Absolutely phenomenal.
We know that they turn big rocksinto little rocks.

(24:06):
We know that they've got this enhanced backing from from Robex
now to embark on on bigger things in more broad locations.
But we haven't talked about the quality of their people before
JD because they've got some of the the the most dynamic people
who are so solution oriented to the client throughout that
business 100. Percent mate Jason O'Rourke,
these this team has heaps of experience you mentioned that

(24:27):
the takeover they've got the engineering capability behind
them, the financial backing. I think all of that is the the,
the suite or the keys to the success that they're gonna have
in pushing themselves outside the gold fields with all these
goldies that we spoke about. But we know they've worked on
pretty much every project in that area and pushing the
horizons out to the Pilbara, to the southwest and beyond, mate.

(24:50):
Solutions. What does making, what does a
solution look like? When you're when you turn big
rocks into little rocks, we'll make stuff goes wrong all the
time. You're breaking parts, you think
things are getting jammed in allthese different places.
Equipment goes down. But with someone like Axis
operating kit, they know what they're doing to make sure that
you're always turning big rocks into little.
Rocks in a. Predictable way and they come up

(25:12):
with unique solutions to make itall happen 100%.
Mate, whether it's a bit of civil work, airstrips, mobile
crushing solutions, their bread and butter, they'll look after
you quality. People axis.
Mineral services go Axis. To do great control guys, let's
do. It mate, this is got to give a
letter grade A to F of a major corporate move or policy or or
whatever that we've come across this week commodity trend

(25:34):
explain your reasoning debate. You know, we're, we're all for
it, Punchy. Views.
Punchy views. Yeah, All right, let's start
with Peabody terminating their deal with Anglo.
So we we actually spoke about this one last week.
Trev, kick us off, mate. What do you what do you give
this one? It's not just.
It's not just that they've terminated like Anglo in
response to saying they're goingto, you know, they're going to
sue them. Sue, sue them for.

(25:55):
Yeah. I mean, just as a result of it,
they disagree with the with the ability to terminate it given
they disagree on whether or not what's going on there is a
material adverse event. Mate.
I actually think, like if I think about it from, from, from
from anybody's perspective, I'm going to actually give them,
give them a, you know, AB here. I, if they couldn't, if they

(26:16):
didn't think value was there anymore, even though their stock
is rebounded, like, like good onthem for actually not having so
much deal commitment. There's a lot of momentum in a
deal. There's so much momentum to just
get a deal done. And for them, they came to
market, you know, all of a sudden the asset did change.
And also the response to the deal in the 1st place, like for
Peabody was like, no one was expecting this.

(26:38):
They hadn't guided the market that they were going to be in
and around the hoop here. The price was probably higher
than the market thought, you know, you had to pay for for on
a multiple basis for coal assetsas well at the time and the
stock tanked because there was afunding concern.
So they've probably got a bunch of shareholder feedback and if
they've actually, you know, likebeen able to pull themselves out

(26:59):
of them and the deal momentum and and and, you know,
reconfigure on that basis, then,you know, I'll give them AB on
Anglo. Like I think it's also a you
must see, just because there's Ithink they'll find an outcome
here. It'll sell for less, but they'll
get an outcome here. They'll sell the assets.
Yeah. I.
Think I think you're right Dingo.

(27:20):
Got a rating for this one mate? Really interesting.
So initially I'd give Peabody like an EI think that
transaction was history, almost history repeating itself.
Yeah. And that was, it was crazy to
think that it might occur again,right?
The last time Peabody made a major transaction like that was

(27:44):
at the top of the market. They end up going into Chapter
11 bankruptcy, right? It was the deal.
It was poor deal discipline thatplayed a major role there.
And then here we are again several years later at the top
of the coal market, playing a top price like a multiple of
their market cap almost. Well, certainly once the the

(28:05):
shares derated what they had to fund, which just seemed
radically illogical to me. And the market obviously agreed
with that. Now it's almost like, you know,
you failed your exam and your your professor or whatever
really likes you. So it gives you a second chance.

(28:27):
And the way and the way that they've responded here by
pulling the levers at their disposal to try and walk away
from the deal be because of the,the risk that it poses, I think
is sensible. Like it it, it's good to see
them going down with a fight. I don't have a view on the

(28:50):
grounds which they've got here. And and there's still a risk at
what that liability might look like.
They've pulled the, you know, the Mac clause, the infamously,
you know, uncertain clause that that you could, you get to
basically interpret in your, in your own way.

(29:11):
You'd have to refer to lawyers as to how you fight this one
out. But yeah, I, I, I think there's
still a little bit of risk associated with that, but it's
good to see them pulling that lever, particularly if it's less
dilutive or less costly than actually having to complete at
that price. Totally.
Yeah, I, I, I think you're, you're spot on.
So this deal got announced like November 2024 and straight away

(29:35):
like the the share price starts plummeting.
So the the share price had pretty much halved by the time
there's the fire end of March, early April at at Moranbah.
And this would have been the thething that like Peabody were
praying for this gave them the out and they were, they were
begging for begging and praying,I reckon every single night for

(29:56):
for an out on this deal. And.
I reckon, I reckon. This so much.
Like I, I do think there's a lotof push back, but many, like the
world is full of empire builders, empire building
management teams, especially US listed companies, because the
bigger your company, the more assets you own, the more you pay
yourself. And yeah, and it scales insane.
I just think, like, I think my default assumption is that

(30:17):
management teams want to build empires.
And even though it would have been bad for shareholders, it
could have been better for management.
And so like, I feel like there'sso much commitment to go through
with it, like. Agreed, agreed.
But within six months, they'd realized this wasn't the right
move and they were praying for an out and like praying for a
second go at that, at that move.And they got it.
And who knows what the, the, theliability ends up being.

(30:39):
But like, I, I can't, I cannot give them a, a positive rating
at all. You know, it's going to be AD or
an E for the discipline going into the initial transaction
like that, that that was very poor.
And you know, like you said earlier, Dingo, like Hansard's
2020, but it proved to be very, very poor timing to to Trav's
point. This type of diverse capital

(31:03):
allocation from executives, it is really poor.
Do you know what I mean? And, and at a point in time,
they made a decision, either they hadn't consulted
shareholders or they just had a radically different view to the
reality of, of how this would beperceived.
And they kind of went with it anyway.

(31:24):
And that's the difficult bit. If you're looking at Peabody now
as like, you know, can you, could it, could it be a good
investment? And it would have been.
If we went into Chapter 11 againand you could buy it out of
chapter. 11 It would have been fantastic they wanted to do it
with. So much debt as well.
So sort of like ridden with riskthe the whole way through, yeah
and that. Like the best guys I think that

(31:45):
have long term success in this industry.
Like there's a lot of guys that do this industry and I'm talking
about now that's anyone, whetheryou're where you're running a
company or you're a fund manageror whatever.
There's a lot of guys that do this industry and there's only
so many guys that I think do it well.
And there's a big, big difference.
And doing it well is about beinga disciplined capital allocator.

(32:07):
You know that is where you will get you will get reward in the
long run and there are guys thattrade on the A6 with huge
premiums because of of you know that characteristic speaking.
Of discipline capital allocationmate.
The next thing to give a great control to you see this one,
this stock Kaylee resources KLR extraordinary very disciplined

(32:30):
capital allocation which. Quick, whoever was.
Buying stock on market but clearly just wanted to.
I mean 94% was controlled by thetop 20 shareholders.
It's very interesting. Curious register and clearly a
liquid micro cap but sword an astronomical intraday
percentage. I've never seen anything like it
before. What was the number?
Like 8600% or something. I was watching it in real time

(32:54):
when somebody clued me on to it just for 10 minutes.
I was trading up 6000%. That's crazy.
Yeah, I put it on Iris and I watched it trade in 15 minutes
to 9000%. So it was a great buy there at
6000. Percent up good if you can get
it. Only $2,000,000 worth of shares
traded hands. The whole is that.
Right. Yeah, the.

(33:14):
Whole day and then so it it broke a high of over 3 bucks
dropped by yesterday afternoon when I checked in on it to $0.19
and this morning up another healthy 350%.
So went into a pause in trading because the assets put in a
pause at like $0.82. I don't know how to to to rate

(33:34):
this one. Not not a big fan of that.
The pump and dump. I'll give that one.
Yeah, probably an F, but a for entertainment like eye-catching
sort of stuff. What do you guys reckon?
Yeah, I think. Like markets will be like funny
games will happen on markets to the extent they're allowed to
happen. So I just give ASX an an an F.

(33:56):
For the yeah, it's very hard to it's very hard to say much more
than that. It there's a very curious
register, there's clearly some very suspicious things going on
there of absolutely no insight. Let's.
Change tack and go to America for a second.
So resolution couple was in the news again this week and it was
actually a few different things all kind of coalescing on on the
same day. So on the day that the heads of

(34:19):
both BHB and Rio went to the White House, got a photo with
with Mr. Trump, you had another appeal lodged by a group of
environmentalists as well as Native American groups.
Now this had come a couple months after what was supposedly
the the final approvals needed for this project that's been in

(34:39):
the works for well over kind of 20 years now.
So maybe I'll go 1st and give a give a rating and explanation.
I think this one's AD in my mindand how I sort of thought about
it is like the ability to build mines in in the US because like

(35:00):
mines always come with with trade-offs, as we all know.
And there will be, you know, land disturbance because of this
mine of the sort of block cave kilometer and a half, but below
the ground. But it's a trade off.
And if they're going to be serious about having this copper
come from the States, then there's no sort of perfectly
desolate part of America where there's going to be copper there

(35:21):
for them to kind of take. So you're going to have to pick
and choose and it's going to have to come from somewhere.
Otherwise it's going to come from elsewhere in the world or
prices will go up and it was sort of adjust with that pricing
sort of mechanism. So the the way in which the US
is just so litigious these days and even after final approval is
given for a mine, it still gets bogged down is kind of mind

(35:43):
blowing. But it's kind of been that way
for the best part of 50 years. And that's why I think capital
will keep going to to other jurisdictions where you can
actually get kind of things done.
I'm not sure if you guys think about this one in a kind of
different light, but yeah, I don't think any of us are
massively surprised on on this front.

(36:03):
Probably not surprised in a verycontroversial asset this one
over the journey. It's been through a long a long
journey. I would take a different route
just to start here. And I would say I'm going to
give the US probably AB plus here on where they're trying to
take policy because I think investment, often what I reckon

(36:28):
the market misses here is that commodities are long lead,
right? They're long lead investment.
They require vision, they require the ability to think
long term. And arguably that's why China
has pulled the West pants down and spanked it so hard in the
last 1020 years. Just taking a step back, back to
that last point, you need two things.

(36:48):
Therefore, to invest. You need a price signal or a or
a view on a price signal and youneed a policy setting that you
can you can get behind because you need to make investment and
you're not going to see the reward from that investment or
the detraction from that investment until a point in the
future, right? So those two things need to

(37:09):
marry up. And the USI think are trying to
get this policy setting much more stable, much more clear at
least like here is the pathway. If you go down this path and you
tick all the right boxes, you will get permitted.
And I mean, it's partly existential to what they want to

(37:30):
do, right? They need these localized supply
chains if they're really seriousabout having local
manufacturing, about reinvigorating the refining part
of the supply chain, if they areserious about reducing China's
leverage over them, which is, you know, hugely concentrated in
metals processing. And you've seen it at the tip of

(37:52):
the spear in rare earths. But it's so much bigger than
that, which I think most people don't understand.
So I give the US sort of AB plusin, in the way that they're
trying to in very QuickTime get sharper and better at, at
getting these processes going interms of the judicial nature of

(38:14):
the system in the US, I've got no issue with the process in in
some ways that it's there as a check.
The extent to which it's exercised in the US just feels
excessive and yeah and and can get things bogged down and in an
asset like this. And then if I even go another

(38:35):
angle, I'll give the sector an Ein the way that it promotes
itself, right? The way that it is generating
groundswell or, or going back tograss roots and educating people
on the significance and importance of these of this
industry to their livelihoods, to, you know, all the things

(39:01):
that they consume to, to growth.They're so scared of coming out
from behind the veil, right? And for the last 20-30 years
they've stayed behind there. They haven't wanted to rock the
boat, you know, and I think it'sdone them a disservice.

(39:21):
I think a lot of people, the easiest place for people to go
and pick on, you know, from an ideological point of view is
mining because they've been toldand taught it's bad.
But it's that is a fundamental misunderstanding that it is
fundamental. If it wasn't grown, if it wasn't

(39:43):
like the food and grains and wood timber that we grow, it was
mined, you know, absent recycling, which is just no way
that recycling can ever support the level of consumption that we
have on, on materials it was mined.
So how can you love a farmer andhate a miner?
It's illogical, right? And the overall footprint on

(40:06):
the? Like on a, on a, on a area basis
versus mining is a fraction. But you never hear BHP or Rio
Tinto talking about that. You never hear them trying to
promote this sort of education within school systems or or

(40:26):
communities. And instead we end up in these
very complicated places where ideology drives the outcome.
You know, this is a copper mine that we're talking about here
that is a kilometer underground,right?
Yes, the ground disturbance, there will be some, but it will

(40:46):
be tiny in terms of area. And as far as I've I've
understood and, and, and again, I'm no expert on this asset in
particular, it's not really where we hunt is that, you know,
the indigenous lands that are recognized, the closest one is
20 miles or something from wherethis will have a disturbance.
So we're not, they're not very good at presenting or marketing

(41:11):
those facts to the community and, and generating support.
And this is much bigger than just an asset.
This is about reshaping how people think about this industry
and coming out from behind the valve.
So being so scared of, of peoplecriticizing and asking and, and
having the conversation. So in that regard, I think these

(41:31):
guys have been their own worst enemy over a 20 year period.
The next one I'm going to talk about is the NDPR price.
So this nearly hit US 90 bucks this week, which is a huge 50%
plus rally, very similar to to the lithium price since about
late June. So as as Tom O'Leary at Luca
called it this this might be thethe inklings of a non China or

(41:53):
bifurcated price. The the reason we've seen this
kick up is actually a confluenceof a hyper factors.
So you've got this peak production season from a, from a
manufacturing sense in China occurring right now.
So that that gives a bit of a demand boost.
Then you've got pretty strong home appliance numbers coming
out of of China and and globallyin in pockets as well, which

(42:16):
boosts that demand. Hence more magnet production is
is taking place. And then on the supply side,
you've got a, a supply contraction very similar to the,
the license sort of debate that we spoke about with, with YJ
and, and last week in the lithium world, the Chinese are
taking a a stricter sort of viewon environmental licenses.
And of course they're, they're huge producers of rare earths as

(42:38):
well as processes. So this adds to a bit of a, a
self fulfilling thing with big cargo holders of of rare earth
of rare earths in China saying, hey, maybe won't sell, we'll
hold on a little bit longer. Prices run up, you're pulling
more supply out and then tradershave jumped on board and pushed
this up. So you've had a kind of

(42:58):
beautiful confluence and a run up of a price from, you know,
really in in the doldrums for a pretty long period around 50
bucks, which is not economic forfor anyone.
So all of a sudden there's a lotof love and a lot of the names,
which I'm sure you're very familiar with Dingo have no,
they've run up sort of 5X from the beginning when all this MP

(43:19):
materials announcement started taking place.
So it's a, it's a hard one to kind of write, but if I take the
perspective of the junior, you know, battlers in the, on the
ASX in the railroad space, I'd love to give them an A because
they're finally getting a bit more attention on them.
The the importance of what they're doing is kind of being
highlighted and hopefully along the way a few projects get a bit

(43:39):
more capital they need and the the sort of cream rises to the
to the top there. Yeah, for the.
Sector I'll give this one an eyeas well.
I think you know like it it's great to see that that the
theory works across all commodities.
You know, like these rare earthshas been in the cost curve for a
while and, and the rare earths cost curve is very hard to
decipher with any real accuracy,as I would say, But it, it is

(44:05):
certainly felt like it's been there.
It's been a, the incentive pricehasn't been there.
And there's a very big geopolitical overlay on this
one. Like this is right at the tip of
that spear and and China love toput the foot on the throat and I
think they still maintain a fairlevel of leverage there.
So, but equally, it's good to see the commodity price

(44:25):
responding in such a way to meetthese funny supply demand
dynamics, I think, which then enable the sector to, to raise
the capital to advance the assets.
That doesn't, my opinion doesn'tmean that I think all these
assets are good assets and that they're all going to get there.
I, I, I think you have to be selective in this space to, to

(44:50):
protect your downside, right? But I think a few of these
assets will get built. They need to be at the right end
of the cost curve, but we don't need 100 rare earth assets.
Well said. Well said.
I think I've got one more for for grade control, unless we
want to Chuck in a few more. This one was plucked out of the
Endeavour Minings conference call.
It was actually a few weeks ago,but it sort of come onto our

(45:12):
radar just just recently. You can hear it.
Straight from horses now, I don't know if there's a CFO or
the CEO. Ones just on, on the hedge, you
make the point that's been quitefinancially painful to you,
although I understand the reasons why you, you put it in
fair to assume that as we go into 26 you'll comment that
you'll be unhedged means that wewon't be expecting to see any

(45:32):
hedging goes through the accounts in the into the into
the next year. Anybody who proposes A hedging
program for 2026 will have to deliver the proposal along with
their resignation slip. Excellent.
Who wants to go? I'll give the comment and I just

(45:56):
for the for the. Yeah, make it, make it a joke.
It was pretty funny. I like the character in a
conference call. They're usually pretty dull.
Yeah. But I just thought that I think
I think the same. The CEO also made a comment in
the same call. Use the word bum fight.
There's going to be a bum fight.Just.
You know, implore, implore all of that kind of stuff that you
said a bit of character in the conference calls on, on hedging
itself. You know, like of course you

(46:18):
want to be unhedged in what whatin these good times.
I do think it's, it's you can, you can easily see and interpret
how we have procyclical capital allocation in the sector.
It's like in, in the times wheregold price is really high,
everyone, everyone wants to be fully unhedged.
And then it's like when the times times are low, then
everyone's putting hedging in place because they've been,

(46:38):
they've got that, you know, short term bias of, of history
in the head. And also it's what all the
investors are talking to them about, right.
So I just think more long term thinking and long term kind of
thinking about this sort of stuff in a counter cyclical way
like you invest every day dingo like would be welcome in the
capital allocation front. Yeah, no arguments on that
front. I mean, and we don't always get

(46:59):
it right, but it's certainly a framework of thinking that we
work within. I love conviction.
I love, you know, I give that anA he's he's, he's telling the
entire world clearly what he's telling his employee, I think.
But structurally gold looks pretty reasonable.
You know, the best hedge that they could have is to focus on

(47:20):
costs, right? And that's probably doesn't get
enough focus in the gold world. Best hedge you can have here
with a really healthy commodity price, whether it whether it
trades at this level or, or around 3000 or, or or up is to
get your costs down. Yeah, you maximise those
margins. Yeah.
And and have that discipline at the top of the commodity.

(47:42):
Is this a top at A at a healthy commodity price?
You can if that's an interestingpoint too, because you can hedge
your diesel like those are thoseare options to lock in your cost
for a long duration. Let's let's try a sweet deal
sale deal. There's been a few deals this
week. Yeah, some some interesting
different kind of deals. Again, the cap raises are are
horrific. You must just be, yeah, getting

(48:02):
getting crossed on the regular for a cap raise or you know the
likes at the moment, dingo, I'vebeen busy.
For a couple of months, yeah, yeah.
So let's start there. I mean, the the ones that kind
of come to mind this week. I mean, it's just big in the
rare earth space like Lindian and an Arif Euro.
You know, it was $180 million together between the two.
They're just kind of massive, massive on the cap raise front.

(48:24):
Did you participate in in eitherof them?
So we deal with Saudi. I think overall suite it's good
to see capital being injected back into the sector to to
advance the assets and and of ofdecent quantums.
Yeah, participate in Lindian, Yeah, Yeah, happy to to, you
know, ring the bell on that one if you like and.

(48:45):
Got a pathway to yeah, I mean it's it's fid it's getting it's
a. Fantastic asset, right to the to
the point I think we've made just before.
Very happy to be asset selectivehere.
Yeah, very happy to, to take a, a, a sort of stock pickers view
of different things. And it's low capital intensity,
it's low cost, it's in a, you know, it's not in the simplest

(49:08):
of jurisdictions, but this runway should see it fully
funded. And you know, they've got the
relationship and agreement with Iluka.
So commercial pathway to production has a lot to like
about this one. Yeah.
Yeah, you didn't say it, but I, my, my views on Nolan's are very
public. So I'll say that then in the

(49:29):
cold space we we are magnetic came to mind.
I don't know if there are any other ones on your on your radar
that came up this week that werewere worthy of your of your
participation, but I think they.Were the two big ones?
Yeah, again, I think both of them are sweet deals.
Both of them will enable those companies to go and advance
their assets further and and they have very credible places
to to commit the capital. Beautiful.

(49:52):
Then on the on the strangely royalty front, Regal's royalty
Fund so that they, you know, they, they are raising money to
acquire this royalty over Malabar's Maxwell Underground.
So it was coal royalty NSW $94,000,000 so.
It's pretty interesting, right? So 1.25% life of mine royalty,

(50:12):
just another demonstration here that money is going to go into
NSW assets and continue to to look away from Queensland coal
assets because we're in a prettytough environment.
And I think sort of the the White Haven team really
emphasizes this week, but in a tough environment and it's still
only 5 bucks away from the royalty marketing.

(50:35):
Incrementally 40% on your earnings means capital is going
to be starved from from that space until there's a shifting
of the of the rules. This is.
This is a massive issue, right? This I think we sort of semi
touched on it when we were talking about BHP brio Tinto
resolution. This short termism of policy for

(50:58):
which our political system seemsto support is so damaging to
industry and it's so damaging tocapital.
And The thing is that you don't see it straight away.
So, and the political cycle isn't long enough for them to
bear the consequences of it either.

(51:21):
And so you, you, you have to have that long term vision.
You have to understand that the,you're having long term
implications by these policy settings.
I think, you know, a key take away from BH PS earnings this
week and BHP is not necessarily a place where we hunt either,
was what they weren't saying, you know, it was where are they

(51:41):
allocating their marginal dollargoing forward?
It wasn't into Australia, right?And nowhere is this more this
idea that the, so the if the commodity price signal is there,
the policy setting clearly isn't.
And this is so evident in the oil and gas sector who've been

(52:01):
saying this and acting or behaving with their feet leaving
and capital not coming in for the last 10 years and it's now
just starting to come to materials.
And it completely is. It's a completely disrespectful
to the fact that over the last 20 years, the majority of our

(52:22):
GDP growth here in Australia hascome from the material sector.
But it impacts everybody. Whether you work in services on
the East Coast or whether you work in a mine in the Pilbara,
it impacts you. And this is the bit that the
politicians I I don't think haveare they, are they don't care
for or they, or they don't have an understanding of.

(52:44):
And you know, we've just had this policy, this productivity
roundtable this week. And to me, it's frightening what
what's coming out of that? It's not surprising that BHP to
me are committing capital offshore, you know, and and
ironically enough into Argentinathan they are into SA copper.

(53:06):
And mining barely had a seat at the table at the at the
productivity. Barely.
Had a seat in the table and and more more commentary.
Let's increase taxes more, let'sincrease royalties more.
Despite the fact in Queensland quite starkly, they have
railroaded the Met metallurgicalcoal industry.

(53:28):
I mean, they were some of the lowest cost, highest grade,
highest quality assets globally going into, you know, primarily
going into steel production for for metallurgical.
And yes, there is some thermal up there Who those assets at
this price point now are, are, are uneconomic and nobody's
investing in them. And that's going to have a

(53:50):
radical impact on Queensland. And you know, again, in if you
want more evidence of this, Victor and and Sam Barrage talks
to this a lot. You guys spoke about this last
week. Victorian gas, yeah.
What you're seeing now in terms of the cost of living pressures,
the the price of of utilities, the price of the gas, the

(54:14):
uneconomic nature of industry. There is a function and a direct
impact of policy that was put inplace 5 or 6 years ago and
you're only just like seeing theconsequences of that now and
it's damaging, right. It takes a long time to fix and
you know, it takes a lot longer than a three-year political

(54:36):
cycle to fix. And so it it is going to require
people to be more aware of thesethings, to understand what it is
that you're the consequences of what what's occurring.
I think to tie in what you said earlier as well, Dingo, it's the
the advertising of what the industry does for the country.
It's not present in the minds ofthe people, the value add to the

(54:59):
country that that these companies bring from operations
that are on the other side of the country.
And that advertising needs to bemore present to to highlight the
the positivity of of what the industry does.
Yeah, like where? In this Productivity Roundtable,
has anybody spoken about cost, about economic growth, about an
understanding that, you know, ifwe stay on energy for a second,

(55:22):
fundamentally economic growth isenergy converted.
So you have, we have invested all of this capital and seen all
of this capital not come right because of a policy setting that
is just sending the price higherand higher and higher and for
some reason we think we're goingto get productivity out of that.

(55:43):
It's the exact opposite. At a very, very fundamental
level, economic growth is just energy converted.
We have to be competitive on a global scale with the inputs
that we're putting into our industry, whether they're
service based or whether they'reprimary industry.
I think we've, we've done ourselves no favours with this
like marketing or like framing or siloing out of what we what

(56:08):
we classify as critical mineralsfrom the rest.
And I just think it's that get such a hugely unwarranted
political focus compared to likeespecially relative to what like
Australia's GDP composition is from the mining sector.
Every mineral, mineral is critical.
That's why we mine it. We mine it because we need it.

(56:28):
We don't mine it for fun. It's absurd that, you know, if,
if, if we just like reframed mining is critical.
All of the minerals is critical.And I just think that that you
get like a better focus on what matters because iron ore costs
matters a lot. Coal mining costs matters a lot,
yeah. Totally.
And I'm so sympathetic to the the person, the general person

(56:50):
on the street is feeling the financial repression that has
been here for a while, right, that they are feeling it.
They don't quite, I don't think everybody fully grasp it and
understands it, but they can feel.
I'm so sympathetic to that and but where we land, I think
politically is we try and just we keep just keep band aiding
things, right. If we change this policy over

(57:10):
here, hopefully that will work. Or if we give you some subsidy
over there or we change this singular thing in the tax
system, none of that stuff is isgoing to fundamentally work.
What about the idea of growing the pie, right?
We're so fixated on the pie is fixed, whether it's the economy
or or investment or never. What about the old adage that I

(57:34):
think we had, we, we did very well in this country, which is
let's grow the pie, right? And how do we be economic and
how do we be competitive? And as we grow that pie, how
does our our well-being as a community grow with it?
And we've just moved so far awayfrom that in the rhetoric and it
because it's hard on the street,it's hard for people to get away

(57:57):
from the real short termism of it.
And that's where our politics, you know, that's where really
ambitious people who who are strong leaders, I think could be
very powerful. Unfortunately, it's not what I
think we've got at the moment, yeah.
I mean, we've done such a great job in this in this country for

(58:18):
so many years. Just hopefully we can kick back
some of their own goals and and keep going in a in a positive
direction to to round out with one more sweet and sour deal.
There was talk about Tianchi potentially proposing to take
over IGO stake in Kwinana. And there's a few sort of policy
tie insurance in this one as well, because it ties in with

(58:38):
that whole downstream narrative,which our government was very
big on and still, you know, not quite as loud, but there's
things like the tax credits thatare supposedly going to kick in
in in a few years time. Now, IGO wrote down this
investment to to nothing a shortwhile ago.
The last quarter alone, it operated I think about 35% of

(59:00):
nameplate capacity and they still lost $29 million in the
quarter. So it throws up a whole heap of
questions about, you know, wouldFerb even approve any, any deal
like this? But it was a very interesting
catch, which I only saw right atthe end from Frank Hart, who's
the CEO of Tianchi saying, hey, Yep, we would be interested in

(59:20):
buying your stake in Kwinana. We're very keen to keep going
and keep putting in money and there would be a catch that you
would have to sort of sell your stake in green bushes if you
were wanting to sell your stake in Konana to us.
So yeah, I love the balls from Frank there.

(59:41):
He knows what he's sort of playing with and the dynamic in
that that JV, as with most JV's is, is kind of fraught, or at
least starts out friendly enoughand then ends up being fraud.
I love the commentary that came out of Tianchi.
I think it's so loaded. Yeah.
You know, on one hand, it's it'sso almost funny.

(01:00:04):
It's hard to say. It's not to say you've been
ramping up this plant for five years.
I still committed to it. It's still nowhere near even
half of its capacity. So.
You know, looking deeper, like, why, why are they doing that?
And I think maybe that last comment that you made there,
maybe that's the rub. Maybe it's like, yeah, we

(01:00:26):
wouldn't mind squeezing IGO out of green bushes.
And how do we do that, You know,and whether that's going to
work, I've probably not, right? And that's not what I'm saying.
And I'm not expressing an opinion on IGO here.
I know why I agree with them. I would want out of that
downstream processing it as well, yeah.

(01:00:46):
Doesn't it, doesn't it just really highlight the, the
limitations of a of a, of a joint venture agreement where,
Yeah, where like when you buy into a joint venture and you
don't have control like effectively and that's a.
Complicated run, right, That's aJV on a JV, Yeah, yeah, yeah,
big. Time, big time.
It's it's yeah, you, you managedto buy a stake in the lowest

(01:01:10):
cost lithium ion in the world, but it came with its, it came
with its attachments and those attachments where a a joint
venture that is, it is incredibly onerous.
And yeah, you don't have the ability to curtail, you know,
the capital that is going towards like it's literally just
a money hole. Yeah.
Exactly real. Like very logically, like, yeah,

(01:01:34):
I think RGL, like we are wastingthe value of one of the best
resources in the world by just plugging it into this downstream
processing facility that is lossmaking.
That is very rational. You know that that's entirely
rational where they're coming from.
Absolutely. Last but not least fellas, any
any hidden gems, any any Nuggets, any podcasts, any

(01:01:56):
movies, any concerts or anythingsticking out in your mind
something you want to shine a shine a light on?
I can't stop. Well, I'll let you go first, JD,
All right. I'll kick off.
I went down to found which is the the brewery in a in a spot
that's seen a few breweries go through that in in the middle of
Subi there and they've good little spot, good pizza and

(01:02:19):
stuff, but they've got this wicked new beer called Zest West
and I've I've punched a good fewof them lately.
So go down to your local and support them because that was a
that was a Ripper. How about you fellas?
Yeah, I've probably misinterpreted this, this, this
segment, but. I just give it to us.
I'm still. Pumped up about so Janie did
this big historical like episodeon, on, on Fortescue.

(01:02:42):
And as a result of that, a couple of people who were right
there at the beginning sort of reached out.
We got coffee with him yesterdayand I'm just buzzing.
It was, it was, you know, two hours with the people who've
lived through this absolutely formidable thing, you know, like
create creating a true major from from nothing.
And you like that. Yeah, I was just, I was buzzing
all day yesterday and, and last night from, from, from that

(01:03:05):
combo. It was just wicked.
Yeah, nice. I might just carry on in that
theme because it just reminded me of a conversation I had last
night. But yeah, and, and to be
positive about what this sector can create, you know, and the
opportunity that it can have formultiple people, you know, New
World resources taken over recently by Cantera.

(01:03:27):
And, you know, just speaking to a few guys there.
You know, there's a guy who who is now he, he is effectively
going to buy a house for every single one of his kids, right?
And he is just an everyday guy. I I believe he was a landscaper
or something like that, right? He runs a very honest business.
He lives a very honest life. He's made an investment there

(01:03:50):
and it's paid off in spades. He's now, and there's several
guys Fortescue reminds me because there's several people
on that register that have, you know, at the the most incredible
stories you've ever heard. And that is so fantastic to
hear, you know, like guys havinga win like that.
But this is truly life changing.And that is, yeah, if we can, we

(01:04:13):
all play a role in this, in thissector, if we can keep promoting
and growing these assets and anddelivering value and what it
means to the people that are involved can be just enormous,
you know? And yeah, equally a new world
guys that that, you know, are ondrill wrecks, guys that that
pick up rocks for a living, you know, they've all had a win

(01:04:35):
there. And I just think that that those
stories are they're just so good.
They're so good to reflect on. It's, you know, it's there has
to be something more to what we do.
And, and I love that aspect. Perhaps more to the theme of
what you of the segment, something that caught my eye
this week on the on the arts front, which is, you know, not
necessarily something my expertise is, is Quentin

(01:04:58):
Tarantino is is coming back, butnot with the 10th movie that I
think all the fans are waiting for.
He's coming out with a stage play next year.
So really you're interested in abit of blood, gore and, you
know, quirky dialogue that appears to be where he's
directing his attention. So yeah, that that that perked
up my interest this way. That's awesome.

(01:05:18):
Have to catch that one before you go mate.
OK, anything. Anything in the portfolio that's
been changing lately you want totalk about?
We are I think we had a good chat on the phone the other day.
And I know, I know you're thinking of a few things, but
are there anything you want to kind of air out, you know, in
relation to the things you're interested in?
Right. Oh, I.
Love that get again really passionate about the next suite

(01:05:40):
of assets and you know when whenmarkets are hard, you know,
hunting around in these things can be a very friendless thing
to do. But I think it's, some of them
now are just starting to, just starting to come out and, and,
and be seen and, and, you know, I think Black Canyon's right at
the top of that list. So this is a, a, a manganese

(01:06:01):
discovery in, in WA. It, it, it, it, the drill
programme there that they've undertaken in incredibly
QuickTime. It's been 12 months and, and
probably $3,000,000 worth of investment, I think is unveiling
a, a true bulk commodity project.

(01:06:21):
You know, it's going sort of 30%manganese.
We haven't seen this since Woody, Woody.
It's it's 80 kilometers from Woody, Woody and equally as a,
as a bit of a kicker. Also I think they've got some
exciting iron ore discoveries there.
So you know that that's really front of mind and under 50 mil
market cap. There's nothing, nothing

(01:06:41):
ambitious about that at this point in time.
So great to see that investment into exploration is still
leading to discovery discoveries.
Are back. Yeah, it's great.
It's awesome. Yeah.
And that's what it's all about. And then, yeah, on the on the
rare earth fronts, I've probablygot to give a shout out to, to

(01:07:02):
Veritas in, in Brazil. Yeah, Ding, Ding, Ding.
You know, that has has been a tough journey, but they've done
good work. That is a a equality asset on
the economic front. So which I think is pretty
important and they've just gone ahead now and got the
sponsorship really of the Brazilian capital market.

(01:07:24):
And that is, yeah, that's truly fundamentally changing that sort
of life changing for that project and company.
I think, I think it will allow it to mature and grow, grow up
in in many ways. So latest change is.
Substantial there I think came from a Brazilian fund.
So you can kind of tell the local yeah, the, the, the local

(01:07:47):
capital allocators are this is this is the the, the clays
project that they're, they're backing into production.
Yeah, I think. It's significant that that's
where you're seeing the investment.
So that's a great sign to me. I love seeing that level of
sponsorship on the ground from sophisticated capital
allocators. It brings a high level of
validation to to the project. And you know, to get an asset

(01:08:12):
from discovery through to production, it takes a lot of
people, takes plenty of capital and it and it takes a lot of
things to go right. Yeah.
Barbs St. Barbs, do you have you?
Have you? Do you own it yet?
Are you still waiting to? Yeah, no, we own St.
Barbara, I only say. Barbs.
Yeah, I think. Like deep value proposition deep

(01:08:33):
value. Deep value.
Yeah. So in terms of the potential
like portfolio of gold growth that is advanced and well
understood light and infrastructure, it's, it's I'm
not sure there's any better exposure out there lights up.
Green on this on the value screen every every time I've

(01:08:54):
ever. Looked at it, it has for.
A little while now. That's why I always love hashing
out the the bio thesis for it. And like, yeah, it's because
it's. Yeah, that's it's got its warts
and, and everything has its warts for sure.
Yeah, but there's something to be said for, you know, in a
world where I think we've discussed today that permitting
is not easy in any jurisdiction if you have latent

(01:09:16):
infrastructure, if you have sunkcapital, if you can, if the
policy setting turns for you. Well and and look in PNG,
they've just got their well, it looks like they'll get that
mining license extension. It's it's been recommended to
the mining minister that he he approves such Yeah, the, the

(01:09:37):
platform there is pretty significant.
So they've got a few things theythey still need to work through,
but ultimately with a with a long term big picture sort of
view there it looks pretty deep value fantastic.
Awesome go, it's great to great to have you join us and bit of
room mate bit of room. Thanks for having me boys.
Bit of room. Cheers.

(01:09:58):
Big thanks to Dingo. Big thanks to our partners who
make it all happen mate our. Awesome partners focus the
platform brought forward by Market Tech Sound at Ground
support Adu. Get your tickets to the
conference September 3rd till September 5th and Axis Mineral
Services O Doro O Doro. Now remember, I'm an idiot.

(01:10:19):
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.

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