Lithium Mayhem and Mozal Woes (Sam Berridge)

We’ve got a new style of show that we’re pumped to share.

The weekly wrap covering all the big stories in detail plus plenty highlights. We’ve got analysis, ratings and hot takes. And we're joined by Sam Berridge, Portfolio Manager of the Perennial Natural Resources Trust.

Today’s show gets into the lithium melt-up, South32’s Mozalheadache, the cracking Hudbay-Mitsubishi deal as well as touching on Greatland, Stausholm’s farewell tour, the SYA-PLL deal struggle, Australia's Nyrstar rescue, Barrick’s Reko Diq financing & Energy Transition Minerals

Stocks: LTR, MIN, IGO, PLS, S32, HBM.TSE, GGP, RIO, SYA,PLL, B.NYSE, ETM, LZM.NYSE, SMI, BNZ, WTM, CTM, WA1, FAL, AAL.LSE, BTU.NYSE……………

TIMESTAMPS

(00:00) Introduction and New Show Format
(01:28) We’ll be at Africa Down Under
(03:01) Lithium Market Mayhem
(09:05) Government investing in Liontown
(14:52) South 32 and Mozal’s Power Woes
(23:52) Mitsubishi’s Hudbay deal
(32:30) Grade Control: Greatland Guidance
(34:18) Jakob Stausholm’s Farewell Tour
(36:30) Energy Policy
(38:17) Piedmont Shareholder Vote Turnout
(40:22) Australia's Nyrstar Bailout
(43:59) Barrick's Pursuit of Reko Diq Debt
(47:43) 60 Minutes Pumping Microcaps…
(48:58) Sweet Deal or Sour Deal: Capital Raises, Lifezone and Peabody-Anglo
(58:32) Big Brain, Small Brain: Smart and Dumb Moves

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Episode Transcript

(00:00):
Who's the Bogan Air? That book, That somebody's
autobiography. Nathan Tinkler.
I think, I don't know if I mentioned last time he's owns
one of the great one liners whenhe's, you know, had somebody
from Four Corners or someone up in his face trying to get a
reaction out of him. How's it feel to be broke,
Nathan? A lot of people would like to be

(00:22):
as broke as I am. That's fantastic.
Money miners. We are going to try something
new and this is Take Two becausewe've got to record the first
time. We have got a, we've got a brand

(00:44):
new style of show that we're very excited to share.
We're going to be talking about the biggest news in the industry
from this week. We've got stories about the
lithium world. We've got stories about S 32
talking about that HUD Bay deal with Mitsubishi and a whole
bunch more that we're going to fire.
Through Sammy Barrage is joiningus as our Guinea pig as we
experiment with this new style. I'm excited mate, because we've

(01:05):
got segments. I love segments Segments are
fun. You like you say the thing and
then you're like, what do I think about it?
I thought this that's got. A A rating section.
So you're going to get punchy responses and we're going to
pick through a lot of the the big drivers behind the the
decisions being made in our industry and like you said mate,
with none other than Sammy B. In the comments below, give us
your great control of what you think of this style of episode,

(01:27):
JD. We've also got some news we're
looking at the calendar ahead and between the 3rd and the 5th
of September next, sorry, next month, couple weeks time.
We've got the Africa down under conference here in Perth.
You and I are going to be attending that one.
We hope to see some of the moneyminers there.
This is this has become like quite an event, like payday to
put this on for for many years now.

(01:48):
It's grown into like, you know, this is the the premier occasion
that you get literally Africa in, in Australia, it's Africa
down under. But you know, it's the mining
investment. It's true.
It comes together and you get you get a really good diversity
of people from different backgrounds.
Government comes together with with investment capital and you
get a great perspective into what's going.
On and mate, we saw the ratings come out on on countries you

(02:09):
want to invest in a lot of thoseones are in in Africa, you want
to be there. So we've got companies from
explorers through to developers through to producers, as well as
delegates and a whole bunch of people from these countries.
So you can learn a lot from going to a thing like this.
And if you're in the market, being an investor or service
provider, you want to expand in the industry, it's a perfect
place to be. It's well we're going to be

(02:29):
there so obviously and we hope to see there are two links here
in the show notes if you want tocome along with us.
All right mate, let's. Let's tuck in.
Sammy, thank you so much for coming, coming and sitting down
with us today. We're doing something a bit
different and you have kindly accepted our invitation to join
us for for the type of the type of show, type of episodes that
we haven't done before. Absolute pleasure guys.

(02:52):
And you guys could open an envelope and I'd come and have a
look at it. So there's no problems at all.
So no anthrax in this one. We've got a bit on the on the
shopping list today. We're going to start with three
of the biggest stories in the the mining industry and first
and foremost lithium. This one we can sort of tackle
in a in a few different ways, but we get this news that

(03:12):
Albemarle perhaps has a couple issues.
Rumours sort of spread through the market that their La Negro
operation in Chile is being paused.
Nobody kind of knows. You see lithium futures in China
limit up on a couple of days earlier in the week and then
they come out and it's a it's a bit of a non event, but it was
on the back of cattle pausing inJiangxi, their operation for for

(03:35):
three months. And you get quoted in in the AFR
saying, yeah, you're actually looking to to trim holdings,
which was a bit counter to to what the market and what other
people that had sort of said. How did you weigh up all this
news this week? When you get, I mean, there's
new snippets for, you know, various commodities pop up
almost daily, you know, and it'sall about assessing the

(03:57):
materiality of that announcement, you know, to the
the size of the market you're talking about.
And, and you know, whether it's going to be a blip or whether it
might be or hang on, you know, this is a real inflection point
here. You know, when that dam
collapsed in Brazil for iron ore, like, you know, that was an
inflection point. Whereas a three month sort of
hiatus from one of the lithium producers or be it a, you know,

(04:17):
a big, a big producer. I don't think that by itself is
enough to to put a bottom under lithium prices and and get
spodumene up to a level. You know, that's being implied
by some of the equities at the moment.
So, yeah, I mean, it's, you know, when you're dealing with
a, you know, quite a boutique market like lithium, it's only
one and a half million tons. Like it can be pushed around

(04:39):
very easily by financial flows and, and even the existing
market participants deciding to restock a little bit.
All of a sudden you can have sort of apparent demand go well
ahead of supply, whereas absolute supply and demand, if
you, you take out the, the swings in inventory, you know,
it still looks like it's pretty,you know, pretty comfortably
covered like in terms of, you know, supplies pretty completely

(05:02):
covering demand. There's still more supply coming
out out of Africa. So yeah, I think it's an
opportunity for, you know, maybefor a quick turn and, and
probably the hedge funds who are, you know, you know, who are
short the this industry would have got nervous and you know,
you know, if you have a short that goes the wrong way, it can
really, really hurt. So it's understandable that some

(05:23):
of them might have covered. But ultimately, you know, are we
about to have another big RIP in, in lithium?
I I don't think so. I'd need to see a little bit
more material come out of the market or or see demand, you
know, training a little bit stronger.
Yeah, it's, it's super interesting because we, we had a
very similar event late last year with the the pausing of an
operation where like UBS broke the news and one of these cattle

(05:46):
operations is going to be pausedfor three months.
Everyone is over their skies to to buy the stock again.
And it turns out in time to be anon event and lithium falls from
I think 800 of the time that closer to to 500 and a few weeks
later everyone's kind of forgotten about it.
And you're tying what we what you said there about the price

(06:07):
that you back out of a number ofthese equities and it's 12113
hundred when we're still in the in the mid $900 range like IGO
Lion town means it's a bit more of a complex cow.
Pilbra. Pilbra as well, like they've
they've run really, really hard like Uber's near on doubled in
in the past few months alone. Yeah, I mean, and but they're

(06:29):
all heavily shorted like these stocks.
And yeah, I mean, if you know, if people have never shorted
sort of company themselves, theyprobably don't understand the
sensitivity of when it goes the wrong way.
You know, it's not like when you, you know, go long a stock
and if it doesn't work out, well, the position size gets
naturally smaller and it's sort of self solves.
Whereas in a short position it'sthe exact opposite.

(06:50):
You know, if it's going wrong, it turns into a bigger and
bigger position in your portfolio.
So you have to do something about it.
So because of that sensitivity, I think you do get some of these
upside moves when you get sort of bullish news for the lithium
price. And also, I mean the lithium
price itself is as has ticked up, you know, ticked up a bit.
But are the speed and quantum ofthose moves justified by the

(07:15):
news itself, like the underlyingnews, like how much materials
come out of the market? I I don't think so.
But you know, everybody's entitled to their own opinion
and that what's make that what'smakes market.
Yeah, the whole short, the dynamic with the short interest
is, is super interesting to build into it because you've got
the, the return of like retail behaviour in markets in a very
big way kind of globally, globally again.

(07:37):
And the the the retail portion of of ASX market like a few
years ago was super concentratedon, on lithium names.
Those guys have been asleep for,you know, in hibernation for a
couple of years waiting, waitingfor the right moment.
And, and because globally, you know, a lot of, a lot of retail
stocks are performing, even though those stocks might
actually be, you know, questionable businesses or, or

(07:59):
whatnot. I, I think some of that's just
like following into the, into the, into the ASX market.
It's concentrating again in, in lithium stocks.
And you know in periods like this valuations, you know, you
do your NPV calculation, it almost doesn't matter to what
the stock does in the short termin these in these weird periods
of of market behaviour. Yeah.
And I think for some reason like, and lithium certainly

(08:19):
falls into this, but uranium hada similar sort of situation was
that couple of months ago when they the the the spot trust
raised, I think 202 hundred million had a similar type
event. And you know, since then, Mark,
the sort of sector sort of drifted sideways to down rare
earths is is another sector where you get these sort of

(08:41):
outsized moves in equity in equities.
And I think it's, you know, maybe there's a bit of a theme
there in commodities where, you know, China is a material
component of supply, like they are in lithium and and rare
earths as well. Yeah, maybe that's, you know,
you've got investors up there that are willing to move around
the Australian market, you know,a little bit faster than what

(09:02):
they are for, for other for other commodities where they're
not so relevant. Yeah, Yeah.
I mean, we can't talk about lithium and and you know, rare
rest there and the news we've seen and not ask you about our
our government buying stakes in in projects.
Lyontown's the the big one, I mean.
Ding, Ding, Ding, Ding, JD. We're we're, we're all
shareholders of Lyontown. We're all shareholders of blind

(09:24):
Town. So for those that didn't catch
it, 50 million bucks went from ataxpayer money into the 300 plus
rays of Lion Town. And like this is just enormous
news in in my mind. We saw it with rare earths MP
materials in the US and we're starting to see it more and more
in bits and pieces. Like, I mean, how do you feel

(09:46):
about it? I don't, I don't think it's the
right way to go about stimulating the industry.
The government has shown itself to be actually utterly useless
at picking winners in this. I mean, I think what was the
last big investment? There was some quantum computing
thing over in Queensland. The government stuck like 600
million or something, which is, you know, questionable whether

(10:09):
we'll ever see that money again.But if you want, if the
government wants to support the industry, you do it in a sort of
a broad brush way. Like, I mean, you know, maybe
you can again, I think this would be a bad idea, but you
know, you could set a floor price for lithium at which you,
you know, you guarantee that youwill buy at.
And that allows, you know, an even playing field for all, you

(10:30):
know, companies in Australia to,to participate in that rather
than picking winners. So, you know, when you pick
winners, you know, one, I think it's there's you're at risk of
basically just getting the investment wrong because, you
know, same reason anyone who gets an investment wrong.
But I also think it's required, it applies a level of
discrimination, you know, between other companies that

(10:52):
don't enjoy that, that level of government support.
But yeah, I, I don't think it's the right way of doing it.
But you know, whatever it's, it's just an observation.
Yeah, Was it weird to say so? It was, yeah, Lintown did that
cap raise last week. Then you had the like at the
pellet over the weekend. It was the news of the cattle
mine closing kind of surfaced oron Sunday all of those like

(11:13):
lithium stocks opened up massively.
Lintown the most, it was like up20% on on Monday.
Pilbara was 15%, IGO 11%, min res 10%.
That was all like the opening moves on Monday when we're
looking at the the, the focus charts, mate.
By the way, behind you there Sammy focused by market.
Check out the charts. Check them out.

(11:33):
Very, very savvy, but and and and since then, the the latter 3
have have kind of like retained their elevated price from the
from the where they were the week before line towns drifted
back back below where it started.
Is that just a function of the the the cap raise dynamics?
It quickly rallied above cap raise price and then you just
have have the inevitable sell off that comes after.

(11:54):
Cabaret is like, oh. It's, it's, it's very difficult
to sort of tease out exactly what the drivers were because
there's, you know, there's a mismatch of, of funds and
entities that all have differentagendas and different
sensitivities to, you know, movements in price.
I mean, I think Lion Town was roughly 13% short, you know,
short at the time. So, you know, those guys would

(12:14):
have been waiting for a capital raise.
It did come perhaps they didn't get stock in, you know, in the
raise. And so then they have to cover
on market if their thes if that was their thesis and they want
to get out, you know, so you've got those guys probably buying
back, whereas other people may be looking for a quick turn on
on the raise. I mean, volumes were huge, you
know, in the in the couple of days.
So, yeah, I mean, it's, it's difficult to predict the way

(12:36):
things these, you know, in the one or two days after.
But you know, ultimately, you know, people look at the value
of the that company at, at, you know, whatever it is, 80 was it
at now 8590 cents a share. 82 this morning. 82, yeah.
And think, well, you know, they've got they, you know, went
on the call or the conference call, they said they basically
bought them enough time out to Ithink it was mid 2027 assuming

(13:00):
$700.00 US off the top of my head.
I think that's right, yeah. Is it worth $0.82 a share for,
you know, is that enough time for the lithium sort of supply
demand outlook to improve? I mean, and that's a subjective
view and I suppose that's will be expressed through the share
price as we get towards that date.
Yeah but the the final piece on online Tan did you did you catch
the dynamic with the call with with Tony O on Gina's

(13:24):
shareholding for Jane obviously not not playing in in line and
having to to issue an apology for for speaking on her part
that that cracked me up. I think yeah, it's pretty
telling that she hasn't since the the three back sort of, you
know, mucking about with the takeover partaking in in any
sort of raising but. Staying corrected there.

(13:46):
She did. We just didn't know about it
until the change of substantial that went up yesterday.
That's the first one that they've lodged.
But she did follow her money in the dollar 81 that came, which
you can see in yesterday's change of substantial, but that
was the only place that was. Reported.
Yeah, yeah. Gotcha.
Interesting stuff all around there.
Yeah. I mean, I, you know, I, I don't
think it's a good idea to be criticising, you know, one of

(14:06):
your major shareholders in the, in the public domain.
I mean, she's not under any obligation to chip into any
raising that she wants to be in.But to frame it through some
ideological lens of like she's pro oil and gas or something in
the USI mean, she's also got, you know, a huge rare earth
exposure across her investment portfolio, which is, you know,

(14:27):
very central to the critical critical minerals thematics.
So I mean, she can do whatever she wants.
I mean, she's not, you know, she's not obligated to do
anything or support anybody else's.
She'll probably invest. I'm sure she, you know, assesses
any investment on its merits andshe decided not to participate.
I mean, that's the end of story.Yeah, I think there might have
been a bit of forgetting that she is the owner of 20% of that

(14:50):
business there. Came to talk about S 32 next.
I think this is a really big story with what's happening at
Moe's Hours. So for those that haven't
followed this one got the the the whole aluminium supply chain
that the end of it comes out at Mozel in Mozambique and it
relies on a heap of power from SCom, the South African power

(15:13):
company, as well as contracts for for power within Mozambique.
And interestingly, getting back into the weeds on how this all
sort of came about, Mozambique had come out of a a long kind of
civil war when the the smelter is getting started and at that
time S com is producing near on the cheapest energy in the
world. And Moselle also gets super

(15:34):
favorable settings in terms of Rd. he's paying only 1% and
favorable tax settings as well. And that is about 25 odd years
ago. So we've we've really come kind
of full circle and they can't agree on on a power deal.
Firstly like S 32 pills off 5 or6% on on the back of this news
they said. They're going to write down 360

(15:56):
odd $1,000,000. Yeah, a bit over 360 usus.
So it's a, it's a chance obviousit's going to go on cash for our
maintenance. From March next year.
Yeah, yeah. I'll put it to you, Sammy.
Is this, is this a hard bargain they're driving or you think
this is this is quite genuine? I think they, well, I think it's
both. I mean, I think they are
genuine. I mean, if they can't secure a

(16:19):
power off take agreement that enables them to make a margin on
that, then they 100% will shut it down.
And making, you know, the various stakeholders in this
agreement aware of that. I think is, is, is more than
fair enough. But it's, you know, it's this
issue of power, which again, youknow, again, we should be near

(16:39):
and dear to our hearts in Australia because our own
smelters over here have been, you know, having this sticking
their hand out on account of howhigher power prices is, is not
an issue confined to Mozambique.But I also think there's a bit
of a weather component to it, like I think is, whilst Escom I
think mostly gets its power fromcoal, there is a decent sized
hydro component over on the eastern side of the of that grid

(17:01):
there. And, and rain's been a bit light
on. So I can just sort of highlight
some of the sensitivity of, you know, these big industrial users
to, you know, to to weather patterns and and hydro is not
always reliable as, as you thinkit might be.
But yeah, I think it's they really have to think long and
hard about what they do there, because once that smelter shuts

(17:23):
down, I mean, it'd be very unlikely that it would ever be
restarted. I think it was our core.
I think it is has has a smell drop in Spain which got shut
down when they had the big blackout in in April.
That thing won't be back up and running at nameplate until I
think 2026. Like it's a huge amount of time
to restart. Gotta keep these things hot
like. 100% yeah, 100% so you know, and there's and that

(17:46):
involves a huge amount of cost. So you know, I think if they if
they do shut it down, it's gonnastay that way.
It's about .5% of global aluminium supply.
So it will cause a little bit ofa ripple there.
But yeah, I do, you know, back to your point, I think they are
genuine. And if they can't get, you know,
aluminium itself is basically congealed electricity and you
don't need so much of it to makeit.

(18:06):
And if they can't get electricity at a reasonable
price, well, that production is going to be got shut down.
Yeah, I I agree with you that it's that they're serious.
I mean, Even so S 32's playbook though, when, when they couldn't
quite get an environmental agreement for, for Worsley last
year, they they're kind of cut. You know, it came to a point
where they came out and said we're going to have to do a

(18:28):
pretty substantial impairment onWorsley.
Because the environmental approval that we've we've had
for the area of bauxite that we want to mine at, at Boddington
is, is, is so conditional and prohibitive from of what we want
to be able to do that that, you know, there's, there's going to
be a material write down that that that disclosure LED like
paved the pathway And you know, seven months time for them to

(18:49):
actually get an approval that was, you know, probably met in
the middle somewhere. Yeah, but but you've got.
To be public in order to get to get that, that kind of a oh.
That's right. And I don't the miners don't
want to go public. They'd be very happy for them to
put their application in, you know, early enough.
And my understanding is they applied in like 2017 for those
mining lease expenses. So they gave the government
heaps of time. Yeah.

(19:10):
And if the answer was no, then say no.
But this non answer for what is that eight years or whatever is
ridiculous. So if you're allowed to mine
there, then say so. And if you say no because it's
too close to the water catchmentor whatever, then that's the
answer. And then the company will take
that on board and sort of move around it as best they can.
Also on the a theme here of, of renegotiate, like what's what's

(19:34):
happening is like, well, S 32 had a had a sweet power supply
agreement at Mozel for a long time and now that's rolling over
and you, you're facing the outlook of much higher energy
prices. Probably this is a global theme
and even like even local to, to home a bit more.
Like I remember when our Co acquired A whack and you could
you could read in the scheme booklet there when they

(19:55):
consulted A whack that that the the a whacks.
Gas agreements that like they'vegot 80% of their gas supply
contracted at the moment that progressively rolls off between
2027 and 2032 and as they like, you know, re enter the gas
supply agreements, a $1.00 increase, $1.00 per gigajoule

(20:17):
increase in the gas price in Australian dollar terms, nukes
NPV by $2.5 billion, right? That's the independent technical
valuation. Like pointed out some pointed
out that's some spicy sensitivity.
So spicy. That's why you see them teaming
up with Wesis and the other sortof the people with the companies

(20:39):
that need the energy here in Washington to rally against the.
The onshore, granted, you know, WI gas prices have have tapered
off a little, a little bit sincethen.
So maybe they'll be able to, youknow, secure something that's
that's, that's appropriate over the long term there.
But this is, this is a pretty sensitive, you know, topic.
And I know you have a lot to sayabout, you know, the gas prices
and energy prices in general. Yeah.

(21:01):
I mean, it's, I mean, it, it, itthrows the development of or
development approvals of, you know, other gas projects, you
know, off the Northwest Shelf and elsewhere into, into sharp
relief like in brows is the big one.
Like, if that doesn't go ahead, then WA gas supply starts to
look a bit tight, you know, you know, 5-10 years out.

(21:21):
So, and you know, that's not a project that you can just snap
your fingers and turn on. So, you know, when you've got
largely the federal government can, you know, sort of pretty
hostile to approving that project, but it, you know, it'll
be to the detriment of WI if it doesn't go ahead.
Yes. I mean, there's, I know it's CO2
rich, so there's, you know, there's emission concerns,
etcetera. But it's not, it's not without

(21:45):
substantial, you know, angst forthe WA economy.
If if all of a sudden our power prices start going up and we're
seeing that around the world, which, you know, Mozambique's a
case in point. But yeah, this power issue is,
is everywhere and you can't get away from the economic
implications, quite dire economic implications of higher
power prices. Yeah, Mozambique and and South

(22:07):
Africa as well, just fantastic examples of poor, poor, poor
energy settings over the past three decades.
And the ramifications have have been huge.
So many other projects in so many industries become
uneconomic. And this is like a huge deal for
for Mozambique as well, because aluminium is their third biggest

(22:27):
export. And for that to that all comes
from Mozel. There's no other smell to that's
entirely Mozel. And interestingly, electricity
is their 4th largest export. So oh really they they're
talking because there's huge demand from Zambia from the DRC
who are short energy. So yeah, they could repurpose
some of the energy and sell it on.

(22:48):
But there is a, you know, I did a value add as well in in the
aluminium as well as a a cost intransmitting that energy through
the whole country up to other parts of the continent.
Big deal for Mozel, it's a big deal for S 32.
Like I saw that this was, this was some, some analysts were
were wiping $0.30 off of their NPV.
So that's 10% of their, their, their NAV just from, you know,

(23:11):
the, the, the indicative curtailment of of this
operation. That's a yeah substantial to
them. And we and we'd heard people
talk about, you know, when is South 32 gonna spin off the
alley business that the old alley supply chain people made
that argument 4-5 years ago. But that becomes a bit more
mutant in this sort of environment.
It's the rationale is still there though, right.
Like you look what the the standalone aluminium businesses

(23:34):
trade out on like a on a, on an EBITDA multiple.
It's like, you know, close to close to 10 times and yet yeah,
right. S 32, we trade, trade it like
like 4 or 4 1/2 times like yeah.All right, we've got one more
sick deal to to speak about, which I'm pretty pumped to talk
about Mitsubishi and HUD Bay. This is a really interesting
deal. So US $600 million is what

(23:56):
Mitsubishi is paying for a 30% stake in Copper World.
So we're talking Arizona copper.This is a a prospective project
not not yet built. So stage 1 outlined 85,000 tons
per annum of copper production over a 20 year period.
And stage 2 would encompass federal lands being utilized and

(24:17):
that can lift the the copper output.
But it's, it's cool for a numberof deals in, in my mind,
firstly, it's done at a premium to NAV for copper world that
pretty much every broker had. So that's a boon for for HUD
Bay. It then reduces and defers the
CapEx that HUD Bay were going tohave to spend.
So it pushes out what they were going to have to spend and it

(24:39):
reduces it to the tune of that 200 million bucks now at the
earliest 2028. And you've lined up a super well
capitalized partner in in the Japanese in in Mitsubishi.
So I think it's a little surprise the stock's up like 25%
over over the past week. I'm not sure if you had a chance
to sort of sink your teeth into this one, Sammy.
I mean, it's an excellent deal for for HUD Bay.

(25:01):
And you know, the fact that they've the Japanese have
decided to invest in the in the US, where I think there's
probably a, you know, a clearer path to permitting.
Get that mine up and running nowis would be certainly part of
their of their consideration. And and also, you know, secure
of of I think because it did come with off take agreement for

(25:21):
their pro rata share. I I couldn't find that
specifically in the wording, butI would assume that Mitsubishi
is going to take it all and do it in country as well I would
imagine too. Yeah, I mean, copper concentrate
is is, you know, is rare as hence teeth at the moment, I
think still like spot TCR C So what the, the, you know, the
miners used to pay the smelters to treat their concentrate.

(25:43):
It's actually negative. You know, the only way that
these copper smelters are makingany money is off the the
sulfuric acid which they produceas a byproduct.
So, you know, the fact that you've got a, you know, a big
trading house like Mitsubishi willing to pay overs to secure
copper concentrate, I think is indicative of the view they have
of the, you know, supply demand balance going forward.
Yeah, yeah. So Stage 2 if they they make

(26:06):
that decision would involve the the the building out of an SXCW
facility to make cathode. But for all of stage 1, there's
more con in the market. It gets to that point.
HUD Bay was a HUD Bay is a $6 billion company.
Last week it was a $5 billion company.
Like this deal added a billion dollars in market cap, which is

(26:26):
extraordinary that the, the, like the, the funding
requirement to develop is this isn't a Tier 1 project.
This is like tier Tier 2 best, you know, and the, the, the
funding requirement goes from 1.3 billion down to 200 million
that HUD Bay has to, has to, youknow, come up with, with modest,
modest project finance in there.It's only like 350 million.
They put a stream in there, but they've retained 70% of the, of

(26:48):
the project level economics. It's, it's kind of it's, it's,
it's remarkable. And because of the, you know,
the project IRR goes from from 19% now, yes, there's debt.
So this is a leave it IRR goes to 90%.
That's that's like, this is one of the rare deals that pop up
and you're like, you know, the, the financial engineering
geniuses have actually created shareholder value.
Like 19 to 90. It doesn't always happen, mate.

(27:11):
It's like this is it's, it's, it's a wicked deal.
It's excellent. And I mean, you know, more
broadly, I mean the Japanese have shown themselves to be
fantastic partners in the commodity industry for decades
and decades and decades. So I think, you know, that is a
big tick. But also it's, it follows on
from a raft of copper M&A. We saw was that last month or

(27:31):
the month before where we saw Xanadu, Mac copper and, and New
World all get, you know, all getbids.
So, you know, the, the, the corporates are moving here ahead
of, you know, I think a big, youknow, big spike in copper price,
which is, you know, sort of beenflattish.
Recently, yeah, I think I think you can call the the Japanese
trading houses the the kingmakers when it comes to

(27:52):
these porphyry and not just copper porphyry big scale copper
projects, but they've done a fair bit of work in in coal
throughout Australia as well. And like the the iron ore deal
they did with on roads Ridge a couple months back as as well.
When they come in the de riskingand the the long term mindset
that they have is is just a phenomenal bone for for a lot of

(28:15):
these projects. They're such a good partner to
get along and is not a big sort of splash about it made, but
it's been happening for the better part of 50 years now.
It's all cost of capital, isn't it?
It's like they can borrow it 0 percent or negative and.
Thanks to Japan's and our own challenges.
And what a. What a, what an, what an impact
it has to, you know, someone like HUD Bay had pretty

(28:35):
substantial cost of capital. But you apply you, you know, you
apply like 30% of the, like, youknow, all this, all this project
funding that's like, you know, 0% cost of capital and, and what
does it do? Like HUD Bay's the beneficiary
of that when when they're introduced as a partner at the
project level, it's remarkable. Oh, that's a core point.
And people often forget or overlook, look, the fact that
without these, you know, international finance or

(28:56):
companies coming in and investing in these projects, and
a lot of them would have never gone ahead because the cost of
capital for these smaller companies is just prohibitively
expensive to to finance these things into production.
So, yeah, you know, 5-10 years down the track, I'm sure
Mitsubishi does very well out oftheir investment there.
But you can't overlook the fact they were willing to stump up a
huge amount of cash, you know, when this project was, you know,

(29:17):
basically an idea on paper. Streaming is the the other point
on that one. Are you a fan?
I, I, I prefer to avoid it if I can.
I mean, it's, you know, it's sort of another form of royalty
and it, it can and often is, youknow, an expensive form of
financing. But if that's all that, if
that's the only offer that's on the table and it's that or

(29:38):
nothing, well, you know that's you got to, you got to take it
if it's there. Yeah, it has its.
I'm increasingly coming to the view that has its place.
Yeah, I do think like and the, the, the, the example I do think
of is like is, is Bellevue had they done project finance with
the stream instead of the, the, the project finance package they
came to market with? With the Hedge book.

(29:59):
Yeah, they, they actually have alignment and like as, as their,
you know, like expectations being reset and I think, I think
the equity would be a lot highertoday.
Yeah. I mean the, the 2020 hindsight
on, on the hedge was imposed with that that debt, which was
standard practice at the at the time.
But I mean, they weren't the only ones that got stuck with
the nasty hedge hedge position due to taking on debt at that

(30:21):
particular point in time. But yeah, unfortunately the
production under, you know, under shot.
And so that hedge book was all of a sudden a bigger problem
than it than it would have been.Just one last interesting detail
on the stream there. They tweaked it in there.
They're looking to tweak it. It hasn't completely gone
through, but they don't want a flat fee for the, the precious
metals that they're going to sell.
They only get 15%. So there's a, a small bet on

(30:43):
precious metals continuing to torise.
So they wanted us to to sub thatone out, which was an
interesting quirk. Mate.
We've just unpacked some big stories with regards to energy,
some of the biggest companies inthe industry and deal making.
All those things together make me think of one company mate,
and it is Access Mineral Services.

(31:04):
Access Mineral Services, that's I don't know where you're going
with this one, mate, because when I think of Access Mineral
Services, I think of turning rocks off.
It's big rocks into little rocks.
That is what they do. These are the they're.
The crushing experts. That's what they're known for.
They've mastered the skill of crushing big rocks into little
rocks. You can pretty much go and ask
anyone who operates a gold mine in the gold fields, have axes
done great work for us, and the answer will be yes.

(31:26):
And they are expanding their horizons.
Now they're going north, southwest, SE, anywhere you've
got a project, they can bring a mobile crushing solution to you.
Not just mobile crushing solutions, that's what they're,
that's what they've done in the past, but now they can also do
these like, you know, semi, semiportable, big crushing units
that you don't even need to fundthe CapEx for.
Imagine the whole front end of the plan Axis Mineral services

(31:46):
fire a build and operate model can actually make that happen
for you to reduce the upfront CapEx if you're, if you're
building something, you know, funky.
Civil works you can lay a strip.You know why?
Because they're now backed by Robex construction group.
That is that's that's huge. That's huge firepower.
Big firepower, big balance sheet.
And they're also bolstered by none other than Jason O'Rourke.
Jason O'Rourke, he's the the CEOindustry veteran mate.

(32:09):
Jason, Jason, Jason was happy tosee everyone at Diggers, he
said. I said hello to people at
Diggers. It was good.
There we go. If you need crashing solutions
at your mind site, get in touch with Axis Mineral Services.
Turn the big rocks into little rocks.
Also sorting the little rocks out if you if you need that too.
And also now that there's rollbacks they can do Shields
and everything. Engineering and also know how,
man. Nothing's too hot.
It's turnkey, turnkey. Turn your keys.

(32:30):
Turning back to Sammy D, this first new segment, it's called
grade control. Like maybe the name needs some
improvement, but I kind of like grade control.
Basically, we've, we've all got to give a letter A to F, we're
grading things right to A to a major corporate move or it's a
government policy or it's a commodity trend from the week
just gone. Explain your your reasoning.
Hopefully we have a bit of debate in the process.
But to kick things off, what's your grade of of, of Greatlands

(32:54):
guidance that came out and resetexpectations a bit lower than
where the prospectus was? Yeah.
I mean in isolation, it probablywouldn't have been so bad if
they hadn't given guidance a fewmonths before.
I mean, that's, you know, thingsdon't move that quickly.
I think so, you know, I'll give them AD and it's, it's it's a
struggle because you know, when you're, you know, building your

(33:16):
model and, and you don't have access to the data room.
I mean, you're basically relyingon management's guidance of, you
know, what they're going to produce, you know, next year and
the year after. But also you get a bit of a
steer on, you know, what the project should produce out in
time. And if it turns out those
numbers are wobbly, will yeah. I mean, you've got nothing to
base your, you know, you basically sort of at your
forecasts on and it all becomes very uncertain.

(33:38):
And the more uncertain somethingis the the lower multiple it
trades on. And that's what's happened.
Trav, you're rating. Mines in it, mines in E but I.
I think this will be a theme to I read to continue.
I read to please explain like, you know, the ASX.
Yeah, yeah, yeah. I was like some of that let
just, you know, left, leave, left a little bit to the

(33:58):
imagination. So it's it's it's it's a knee.
Like they can still improve froma knee.
You can go from a knee to an A if you just deliver.
But I've got a day I think. I find it hard to believe they
would not have known a couple months prior and they would
depend that vigorously. Mate, you can't.
Yeah, all right. Next one Jacob Stalzems farewell

(34:19):
tour. I mean, it's going better than
Alan Joyce's farewell. I'll give you credit for that.
I mean, I don't know what is these farewell tours for these
high and you know, high flying executives is often just the
launchpad into whatever next role they've got their eye on.
But you know, one thing that didI did come across a comment of

(34:40):
his from his round table with sell side.
I think that was yesterday or the day before, was that the
difficulty in operating in Australia, you know, due to
rising costs, labour permitting delays, etcetera, etcetera.
I mean, you know, Rio obviously might, you know, create a
problem of his own making with its with its permitting issues

(35:02):
in the Pilbara after they went and blew up that Duke and Gorge.
But that's one thing that's comeout again, a global miner, you
know, suggesting that things aregetting harder in Australia
relative to the rest of the world.
And it's, you know, it was an innocuous comment, but it's, it
has far reaching implications, Ithink when it's being, you know,
I think repeated by other peoplein the industry.

(35:22):
Yeah, I'm going to give him AAC.He's he's making some noise.
I do think like the like Yacob was probably the right person
for Rio at that point in time, that point in time when he when
he came in, Rio's biggest issue was you can gorge and he
addressed that. But now he's, he's, I do believe
the critique that he's kind of let that become the overwhelming

(35:44):
kind of cultural identity of Riois a sense of, of, of, of guilt
and self like self loathing that's perpetuated since that
event. Rio's biggest issue right now is
not you can gorge or or or or oror anything like that.
It's, it is, it is, it is what'sactually happened in the Pilbara
like the the great decline, the inability to, to, to get things

(36:05):
developed on time that the coststhat are that are growing there.
I don't think that's the biggestproblem.
Yeah, I'd push back slightly. I'd give AB because I think a
lot of those things are right, but they are in part a
ramification of what happened five years ago.
So yeah, it's hard to say. And this farewell tour has been
going on a few weeks and there'sbeen loads of really interesting

(36:27):
Nuggets that have that have comeout of it.
One was on the importance of good energy settings across the
country. And that was said in the context
of Tamago in NSW, which is at risk of being uneconomical,
uneconomic as it sort of stands.So there was a few really good
bits of information that came out.
And I think the media framing around the words that are said

(36:49):
by an executive can always be a bit sort of confused.
So I sort of read some of the titles and then read what was
actually said, and it didn't always kind of marry up.
Yep, I was going to say that point on energy is a is a good
one and it's it's relevant. And I've got a bit of sympathy
for where how these major minerssort of position themselves in
their sort of government relations versus, you know,

(37:10):
their public relations and that,you know, I understand that, you
know, they need to have a functional working relationship
with whatever government is in power.
And so you can't be too critical.
But then, you know, when you hadTom ago, I think come out and
said, oh, you know, we've just signed a a power purchase
agreement. That's, you know, taking a huge
amount of wind and solar energy and, and, you know, this is

(37:30):
going to power us through, you know, beyond 2028 or whatever.
And they're no more than I thinkit was a couple of months later,
a month and a half later, they've, they're back in the
paper saying, well, they need billions of dollars from the
government to subsidize their existence with this PPA in
place. And so they would have known
when they signed it that it was probably at a negative margin
for, you know, based on their their aluminium production.

(37:52):
But you know, can you be a little bit more upfront than
this upfront with this and sort of avoid some of this mixed
messages that go out into the media about what exactly is a
reasonable power price and what is a reasonable power solution
for for this heavy industry which you know is supports so
many jobs around the place? Absolutely.

(38:13):
And it's an international industry, right?
It's going to be internationallycompetitive.
Yeah, exactly. Next one is the Santa Piedmont
deal. So there was a the shareholder
vote that that was held by people and they couldn't, they
couldn't, they couldn't get the 50% required PLL votes because
it just weren't enough people voting.
Not that they didn't get the required They couldn't get the

(38:34):
people to vote. Yeah, it's.
Been extended I think. Well, I mean, I'd have to have a
quick look at their register andI sort of had a glance and I
could, you know, it's a bit bizarre that they just couldn't,
you know, get people incentivized enough to put pen
to paper. But if it's a a largely retail
investor base that, you know, probably stuck this stock in
their back in the bottom drawer somewhere and hasn't haven't
looked at it since. I mean they.

(38:55):
Don't want to look. It's a pain.
It's painful to look at it, you know?
But that's right, you know, it'sa tax loss that they, they, they
haven't realized. And I can, I can sort of
understand how it might happen, but you know, you just, you
can't, I don't think you can stick things in the bottom
drawer anymore. I mean, that, that adage is, has
been proven incorrect time and time again.
So people are, you know, lookingat gift horse in the mouth and

(39:17):
it's a frustration. I but I don't know how they, how
they change it. I mean, unless they go, you
know, cold calling people, you know from their from the
shareholder register individually.
I mean, what do they do? I think, I think making the
process of voting so much more like user friendly is such low
hanging fruit. Like it's still a cumbersome
thing to to vote your stock. So yeah.

(39:37):
And if you're trying to appeal to retail people like simplify
that, get some UI expert to justlike cut out all of the the crap
involved in voting. Just the Xanadu on your phone,
The xanadu thing that issued a cheque like.
Yeah. Is this 1955 like AI don't even
know what to do with the cheque.Blows my mind.
This this one, I'd I'd give it asort of AD.

(39:57):
And that's not to the company, that's to the shareholders.
You're the owners of a business here.
Like, yeah, it hasn't gone great, and maybe you want to
blame management for that, but this?
This has gone on for so long. This takeover like this has been
3/4 of a year at least this time.
That's where the your friendly fund manager can come come in
handy because we might look after all that paperwork for

(40:18):
you. Yeah, exactly.
There you go. See from me next one Australia's
rescue package of Nightstar. I'll give this an EI mean it is
ridiculous that, you know, we adopt an energy policy that
makes energy more expensive. You need to subsidise the

(40:39):
producers of this new energy so that they're profitable.
But in doing that, you thereforealso have to subsidise your
incumbent energy producers because they're, you know,
margins get hit periodically, but you can't have them leave
the grid otherwise it'll all fall over.
And then you have to subsidise the people that use that energy
to keep them in business. I mean, we've just had the RBA
come out and talk about productivity.

(40:59):
I mean, this is a, you know, productivity killing zone, this
sort of negative feedback loop of subsidy after subsidy after
subsidy. And it it can't go on.
I mean, the country, this will drag the country down if it's
not nipped in the bud at some point.
But, you know, do you want once this manufacturing does shut
down, is it ever going to come back?
Probably not. So you got to save it.

(41:20):
But it's just so regrettable. And and the fact that was so
foreseeable is also regrettable.Crap F massive own goal like
what a yeah and the but the the frustrating thing for my for me
is like it sets the precedent there's every smelter in the
country is going to need a handout by the way, it's not a
once off handout. This thing's going to be a
perpetual motion machine of handouts because there is no

(41:42):
short term solution here like this is a this is a long term
problem. And now we've we've, we've made
a commitment to to subsidise an uneconomic reality as a as a
result of just a big own goal. Yeah.
And so I mean, how does the government differentiate
between, you know, the smelter that is going under and, and,
you know, the employees there versus the, you know, the the

(42:02):
guy that owns the bakery down the shop who he goes under
because of power prices, but youknow, he's not big enough to be,
you know, to be saved. Like there's.
Yeah, it's just very, very inconsistent in terms of who
gets the handout and who doesn't.
Yeah. And you're dead right.
Like the the when these things go negative margin, the revenue
and the cost line are in the hundreds of millions of dollars.
So you know, if you once you go negative, you end up in big

(42:26):
bucks very, very quickly, which is, you know, why these sort of
one off sugar hits is bad idea. They need to have a look at the
the underlying reasons and address them.
Yeah, I I really agree. Port Perry alone is losing in
the range of 10s of millions of dollars a month.
So $135 million check is, I think I saw going to keep them
sorted until early 2026. This is a Band-Aid fix on a

(42:48):
serious, serious problem. And the idea that you're going
to let them run this study to see if they can produce gallium
and bismuth and antimony to to traffic era like of all people
that that's who owns this thing.And there's no mention of
repayment. This is just a handout that goes
like that. Like I really do grapple with
actually writing this one because I also on the other hand

(43:10):
don't want to end up in a situation where China is the
only one that can run the downstream on every single metal
in the world. So it is a complex issue and
this is not a well thought through solution to that
problem. Now, I don't think they want to
admit what the underlying problems are.
So it's band aids all around until we get to the next
election and then we kick the can down the road a bit further

(43:32):
again. But you're gonna run out of
money at some point. Yeah.
And the, and the paying for votetype element to this, because
there are a lot of jobs at stakeis an incredibly slippery slope.
And, and it's been something that's happened for for many
years and decades in in other regards.
But because there are thousands of jobs at stake here, the
government feels that in that sort of inkling to to write a

(43:54):
check that that's a a sort of very damaging part of it all.
Next one, there's news, news in the FT that you know, barracks,
barracks pursuing $3.5 billion in in debt for for Rico Dick.
I'll be interested to see whether they get the debt and
what the cost of that debt is. But you know, they're only like
4050 KS. I'm from the border of Taliban

(44:15):
country up there. They're quite close.
Yeah, it's quite. Close.
So I mean, I must have been, I haven't had a good look at the
economics of that project, but it would want to be an absolute
cracker to sink cash into that part of the world, I think.
But yeah, I mean, it's, I think it's CapEx is like roughly 1010
to 12% of their market cap or something like that.

(44:36):
So it's a big swing for for Barrick.
They previously disclosed that there was going to be this
minority project sell down had been earmarked with up, you
know, up to 20% to go to Menara Minerals, which is the the, the
JV between modern and Saudi Arabia's PIF.
And it also in that article it basically said Menara couldn't
get over the line. Now the question I have is

(44:56):
Menara couldn't get over the lotlike the Saudis and this, you
know, they couldn't get over theline.
Like it does give me a lot of doubt about the ability to
operate in that part of the world And the huge amount of,
you know, the company's capital that has to be diverted to, to
to build this project. You know, debt is still capital.
Like that's still your capital. So that's, that's a that's AI
think. I think, I think for me, this is

(45:18):
AAD because I also do think the activist opportunity for Barrack
is very much alive. There's there's a real
opportunity like break up opportunity here, diversion of
of capital, you know, even even you know, the chance to to
separate, you know, like your your developing country copper
growth assets in in one and thenyou've got your US gold in
another. Like it's very like, you know,

(45:40):
Nevada gold mine focused. Those are those are those are
alive and and barracks if they if they continue on this path of
of questionable capital allocation like I think we'll
find themselves at at the mercy of the activists like Elliot.
Well, I mean, if you're a sorry a prospective debt lender, I
mean, you'd, you want to ask some questions about their sort
of Foreign Relations policy withregard to Mali.

(46:02):
I mean, I don't think they just took a billion dollar write down
on goldmine that they just lost there.
I mean, it's that situation I think could have been handled
much better. So you know things are going to
be different in Pakistan. To, to your point on being
pretty close to Taliban country,I remember we spoke about this a
few months back and I think one of us made the comment that it's
about 100 KS from the from the border.
So and somebody sent through a photo.

(46:24):
It's a whole lot closer than that.
And it was just sort of turned off.
I think it was 40 odd kilometersfrom the from the border there.
So it's a, it's a spicy sort of jurisdiction.
Stage 1 CapEx is US 6.6 billion.They haven't updated these
numbers in in a little while, but 6.6 US and given given the
ownership they were talking about Barrick doing about 1.5

(46:46):
billion, Pakistan government doing about 1.5 billion as well.
And then looking for that 3.5 billion in debt funding with the
specific sort of earmarking thatit would be Development Bank
financing and also limited recourse financing.
Now it would say if that actually sort of comes comes to
fruition, if they can get anything like that over the

(47:08):
line. But the one saving grace if you
do get Development Bank financing is that they can
really impinge Pakistan, for what it's worth on it's sort of
economics as a, you know, as a global lender for, for the
government of, of that country. So yeah, we'll, we'll sort of
see if that at all kind of comesto fruition.
But I think, like you said, Trev, that that break up play is

(47:33):
I think there's a a bit of legs to to that one and yeah, to to
what you said, Sammy, there's a bit more water to go under the
bridge in in Bali as well there,which is.
I'd say so. Yeah.
Next one is, I don't know if youcall it this, but Sunday night
in Australia, 60 minutes add some some segment on Greenland
rare earth investment and then the stock on the ASX energy

(47:55):
transition minerals, like one point I looked at it was up like
123% on Monday. I think I read through the the
the please explain afterwards. Like they were quoting in situ
value of resources as a means tofluffing up the value of their
project. I think that's probably what it
caught a few people's eye. But I mean, So what?

(48:15):
Like, you know, the in situ value of gold in the ocean is
probably billions and billions of dollars, but you can't get it
out economically. So who cares?
Oh, that's a good starting point.
Great control. Is it an F?
Yeah, an F for 60 minutes. I think it's an F for 60
minutes. Yeah, I think so.
I mean, there's, it's not hard to sort of, you know, get some

(48:37):
context from someone. It only, only takes one or two
phone calls and would have thought the reporter or whoever
put the story together might have, you know, got a bit of
colour around, oh, what's the right way to be framing this
project? But then if you knock a few
zeros off the number that they were quoted, then perhaps it's
not as not as interesting. I think F is a pretty suitable
rating for that. I like it.
All right, mate, we've got another segment for you.

(48:58):
This is so it's called sweet deal or sour deal.
It's going to rattle through, rattle through three different
sets of, of deals this week and just just rapid fire if it was a
sweet deal or sour deal. And, and, and why the the first
one? I'm just going to group all of
the cap raises. There's been so many cap raises.
There's been a cap raise week like Santana 60 million bends,

(49:19):
30 million, Waratah 30 million, Centaurus 23 million, Falcon 20
million, WA one, 100 million. And that's just like the ASX
ones that were like above 20 million, right?
North America's had plenty over the last week as well.
But just the group of of cap raisers participating Cap
raisers this week. Sweet deal.
What's our deal? I mean, so there's some real
standouts in there like that. Ben Steel is an absolute

(49:41):
cracker. I mean that for that stock to
his run as hard as it did and then raise at a new discount to
last well done. But I think it's overall like
the, the commodities, the sectorhas sort of been grinding higher
for the last couple of months and and I think you know, with

(50:01):
interest rates generally coming down, it's supportive of the
sector. So hopefully on balance, no, no,
I didn't participate in all of them, but I didn't some
hopefully it's you participate. In.
I have to remind me through, through, through this.
Santana. No.
Miss, Miss. Miss.
Santana. Ben's.
Ben's were already there. Fortunately.

(50:21):
Saratar No. Santoris.
No, no nickel. Yeah, Falcon, Falcon.
I think we, yeah, I think we did.
Yeah, WA 1. So WA one's interesting one like
we look closely at it, but we'rehave a small position in
encounter which sits around WA one which is, you know, I think
also interesting and and probably more so after they've

(50:44):
raised the amount of capital that they did.
Ding Ding Ding WA 1. In the context of of what you
sort of said there, Sammy, I think it's a sweet deal.
I don't think we can have that sort of argument that the, the
capital isn't there for a bunch of miners at the moment.
Like if you've got 1/2 decent type project, you're you're
getting financed and they're notlike tiny raises like 30 million
bucks you can do a fair bit of work with.

(51:04):
So I think from an industry typeperspective, it's not a bad
thing in the context of a lot offrothiness in broader markets
right now. So I wouldn't be sort of jumping
to participate in everyone, but from the company perspective,
not a bad thing. Sweet deal for all, I think
because this is the phase of thecycle where being in deals is

(51:25):
like everyone, everyone wants tobe in deals as well, because the
deals are actually not necessarily strictly drifting
back to the offer price. There's, there's a, you know, a
day one bump in, in more than 50% of the cases.
So there's yeah, I feel like, I think it's a sweet deal for all
the the share prices of these companies with elevated prices,
They're doing them at local highs instead of at 12 month
lows. And and the participants are

(51:46):
getting rewarded in the short term immediately afterwards as
well. Yeah, No, I think that's, that's
right. I think whilst, I mean, I mean,
most of those raises were in gold and, and sort of the gold
sector is a bit a bit frothy, but the, you know, these
companies are making money. And I don't think broadly
speaking, where the industry's wasting money.
Like it's not, it's not like it was in 2012, 1112, things like

(52:10):
that where, you know, I think itwas just you've absolute
euphoria. I think generally speaking, the
money that's been raised by those companies is being put to
good use and they're, you know, they're legitimate projects that
are being advanced. So yeah, so hopefully works out
well. Said local hires.
But the exception there is, is Centaurus and I, I actually
thought this was, would have been an interesting 1 to
participate in because it came with, I mean, it was, you know,

(52:32):
on demanding price. So and it came with this free
attaching option for every, every two shares.
So it was the, the incentives were there to participate if you
if you did, but it's at the expense of the existing
shareholders who will experiencethe, the punitive dilution.
But that's, that's nickel, right?
Which leads into the other deal.I wanted to talk about get your
opinion on if it's a sweet deal or sour deal.

(52:53):
Life zone, don't know if you follow this one, but they've got
the Kabanga project in Tanzania.It's, you know, like along with,
along with Jaguar, one of these,you know, still quite high grade
interesting nickel solar fire projects.
PHP was, was at one point when they were still in nickel,
pretty interested in this one, right?
They announced a $60 million secured bridge loan with Taurus

(53:13):
and, and effectively it's a bridge line.
What are they bridging to? Well, they're, they're, they're
running, they're progressing towards FID order, you know,
ordering some like long lead things, but they're running a
strategic process to, to bring in a strategic partner at the
same time. Sweet dealers.
How do? I, I think I'm tentatively to
say sweet deal as long as it works because, I mean, you know,

(53:34):
the tourist bridging debt wouldn't have come cheap.
And if they don't have a, something to grab onto at the
end of that loan, well, it's, it's going to be very, very
expensive for them. But yeah, I mean, it's, you'd
hope that they already had theireye or a reasonable conviction
on one or two strategics to, youknow, get them out of trouble.
Yeah, at the other side of it. And I, I would have thought that

(53:56):
was the case. Otherwise you'd be be a bit
risky to do it. And also in, you know, in
nickel, it's certainly an unloved commodity at the moment.
I mean, you wouldn't want to be,you wouldn't want to be starting
fresh. So, you know, as a way, as a
means of avoiding dilution and, and on the assumption that
they've already got their eye ona potential strategic partner, I
think is, you know, might be theright idea.

(54:18):
Yeah, the the bridge has got to get you to the other side and
you can't just fall off the other end.
So there's there's got to be something firm there.
Otherwise they're going to have a lot of egg on their face.
But yeah, I mean, really interesting.
It was only a few months ago that BHB finally said they're
going to walk away from this one.
We're in a completely sort of hated space.
So it's an interesting time to kind of participate in in these

(54:40):
types of companies and and be involved, albeit Nico is in a
particularly interesting part ofthe cycle.
I hope it's a sweet deal. I'm worried it's going to be
Saudi or it all depends on if that's bridging to an outcome or
not. But yeah, I'm sure everyone's
done their data here. But you know me, I'm just
cynical. You'd have, you'd have to have
faith in the board that they're not rolling the dice on on a

(55:02):
strategic waiting at the other end of that rainbow.
Because yeah. If it's not there, it's going to
be painful. All right, last deal swear sour
the Peabody Anglo Cole deal. This one has also been in the
works for quite some time and itfeels as if you know D-Day is is
pretty imminent rating. This one is, is is kind of hard,

(55:24):
but have you got thoughts on on how you're thinking about this
deal many months later? I've just got real sort of, I
suppose, sympathy for whoever the the analysts are that have
to assess the the value of one that caught fire.
And then that's complicated the deal.
Yeah. Like how do you because I mean,

(55:44):
I've got don't have any insightsinto what the situation is, you
know, underground, whether or not the the fires out and it's
all been sort of contained. But you know, these these issues
when they pop up can take a verylong time to solve.
And if you're in the middle of asales process, then trying to
quantify the cost and therefore the value and what you pay and
then, you know, the competing sort of sides of that.

(56:07):
Yeah, it's difficult to do. But I, well, I think if Peabody
ends up getting it, I think in the fullness of time, it'll,
it'll probably turn in to be a sweet deal because, I mean,
trying to get these mines permitted is, is near on
impossible. So, you know, it's the, the
incumbent producers is is where you want to be because getting,
you know, additional supply up and running is, is so tough.

(56:30):
I think it's, it's, I mean, the deal, the deal's still in doubt
in some ways. There's the Peabody saying it's
a material adverse event, Anglo saying it's not.
Peabody's like share prices has gone from as low as like 10:50
when everyone was worried about how they're going to fund this
thing back to 18 bucks. And, you know, now they're
actually in a position where they they could fund it.

(56:50):
I think they've got to like, yeah, I think their earnings is
on the on the 19th and they're going to have to, they're going
to say, you know what, they're what's going on here.
But I feel like there's an opportunity to do a swing big
deal, reprice it Anglo. Anglo probably will reprice it
lower because like what's the alternative for them?
Like the, the quality of they'renot going to get the same price.
The quality of these assets has absolutely diminished since the
start of the sale process as a result of what's unfolded.

(57:12):
Like as well as the coal price just peeling.
Yeah, all of this stuff now I wouldn't like if I was Peabody,
I'd, I'd try to reprice it. It's something that's actually
just like, you know, a reasonable thing where it's not
so onerous to fund it and your share price is where it is right
now. And, and I'd even let like, I
wouldn't even care if, if, if ifAnglo wanted to shop it around,

(57:32):
like, you know, the rumoured second highest bidder, that
process was M resources in in consortium with, with their
various funding partners. If, if M resources wanted to pay
higher, like, you know, So what,like, you know, you're kind of
you're half in, you're half out.You don't you're saying you
don't want it like let let someone else over pay.
If you think that what fair value is and and close who is

(57:54):
angry going to sell it to like they do want they're going to
sell it. And you can probably reprice it
and just settle all of the legalshenanigans that would go on if
you're trying to argue for a material adverse event and just
reprice the deal. And I think I think it can be
win, win. Yeah.
Yeah, I think that's well captured.
And again, the Japanese, they'resaying they will buy big stakes
in the assets themselves again to to support the deal to get it
through, which is part of the reason I would say the Peabody

(58:16):
share price rebound because theyhave that support, which was the
big worry that saw them I think over more than half on the back
of doing this deal at what turned out to be a bit of a high
point in, in coal prices. Last one for you.
So I mean, this is our last, last, last segment, big brain,
small brain, we're calling it for now.
Might, might change that. All the names are iterations

(58:39):
that can be worked upon. Yeah.
So each of us just get the opportunity to share the
smartest and the dumbest thing that we've either done or seen
done this week. And and yeah, like I can start
if you want me. Oh, I was going to say, I mean,
as referenced before, the smartest thing I've seen this
week is that that Ben's deal, you know, getting that away I

(59:01):
think is all the other mining executives to have a look at,
at, you know, what can be done. I suppose if you scour the earth
for capital and find it, as you know, at a reasonably cheap
rate. Yeah, that was, that's something
special, that one. The small brain.
My small brain thing is probablynot participating in the Lion
town raising for a quick for a quick turn.

(59:22):
I thought about it, but you know, we're, I mean, generally
speaking, we're not traders. But yeah, it's there was an
opportunity there for a quick for a quick turn around, but
didn't take it unfortunately. So left a little bit of money on
the table. Trav, big brain, small brain,
what do you got? Big brain was it was it was
actually just like watching the the diggers things like a live

(59:45):
stream of them as opposed to going to diggers like my my
health was in far better Nick. And yeah, I could, I could
follow things that were happening across all the
companies pretty, pretty, prettysuccinctly.
And I could also just touch basewith people who who were who
were there. So that was the big brain thing.
Small brain. Just not using my calendar,
mate. Like it was Wednesday.

(01:00:06):
I got a phone call from mum in the evening.
She's like, are you coming with me at a funeral at 2:00 PM
tomorrow? And I was like, what funeral?
So anyway, just using my calendar using my calendar when
I first hear about something. Shocker.
Yep, I had one outstanding howler over the past week that
outshines or work related ones but got a pizza out of the

(01:00:27):
fridge on Saturday. Had been there a couple days
longer than I might have thoughtit had reheat it and feel shit
all Saturday afternoon so I can't look beyond that.
One big brain side of things. Premier League season is
starting tonight. I've got Stan sport sorted.
I'm good to go. So a big nine months ahead that
I'm very pumped for to see Liverpool win the league again.

(01:00:49):
Beautiful. But I'm saying this to a
completely non soccer audience. It's falling on deaf ears here.
It was, it was a lot of fun, Sammy.
It was, yeah. What do you think of what do you
think of this format? Did you enjoy it?
I always enjoy a chat with you guys and yeah, I mean it's
there's quite a lot of breadth, you know, I suppose I think we
got, we got through today international and and domestic.
So you know, a few political sort of angles in there too.

(01:01:11):
But that's always a enjoy chat and you know, you guys are
always very well researched as as usual.
Did that? Did did you?
Was there anything you wanted totalk about that we didn't talk
about today? I mean, I, I think it's, you
know, this, this, this power policy thing, which is sort of
a, an ongoing bug bearer of mind, particularly in the light

(01:01:33):
of the federal government battery subsidy, which if you
haven't had a look at this, you should because it's free money.
Well, it's, it's free money fromother people who, you know, pay
their taxes. But yeah, the federal
government's giving you, you know, roughly 10 grand off the
cost of a, you know, 20 kWh battery for your home.

(01:01:54):
And I was just looking at some numbers which one of the sort of
regulators put out yesterday, I think roughly a four to five
year payback if you also participate in the, in the, you
know, the various governments, government schemes.
But you still need circa 10 grand of your own money spare
to, to make up the balance, you know, the, the bit that the

(01:02:17):
government doesn't subsidized. And not everybody has that sort
of money lying around. And that's assuming you've got
solar panels on your roof already.
So a great win for, you know, for those that can afford it.
But if you can't, unfortunately,you know, you're going to be
more exposed to, you know, rising and rising power tariffs
as the, the network charges, which used to be paid by the

(01:02:39):
people who, who didn't have solar power on their roofs or,
or did have solar. But still, you know, tap, tap
into the grid for, you know, when the sun goes down, you
know, as they're not using the network, they're also not paying
for it, but the cost still exists.
So they end up being borne more and more by the people who don't
have solar and don't have batteries.
So it's, it's not really fair. But you know, that's, that's the

(01:03:01):
situation. So if you do have the cash lying
around I I recommend having a good look at it.
And on the on the theme of buying votes that we touched on
earlier, this one was announced one week before the WA election,
I think. Yeah, yeah, it's, it's a winner.
I think there's AWA subsidy on top of it as well.
But it's, you know, for the reasons I just pointed out, like
it's become such a, a sensitive topic for the people who have

(01:03:23):
sunk that capital into their ownhomes that the government would
be very reluctant to touch it. But it's, it's making the power
grid very regressive, I suppose.And it's, you know, for
something that's a, a need, it'sa necessity of life, an absolute
human staple. I think it's, you know, the,

(01:03:44):
the, the path that we're on hereis, is not great.
And yeah, it probably needs to change.
But you know, nobody who's, you know, already enjoying the
benefits of government largesse is going to be going to give
them up willingly. Absolutely, mate.
Well, I think that's a, a great place to to round up on and let
let people reflect mate. We've got some fantastic

(01:04:05):
partners. We've got to got to thank you.
In addition to thanking Sammy Barridge for joining us, Axi's
mineral services, mate, crushingservices for for all your
requirements, seeing the ground support like the best of ground
support there ever has been. Africa Down under, join JD and
I, we're going to be there from the September 3rd to 5th.
You didn't know that was an ad, did you?
And also focused by market check.

(01:04:26):
That's a wonderful platform right behind Sammy's head
checking out. It's a wonderful mining user
market needs all in one platform.
Have a 10 day free trial in the show notes.
Hey Daru. Hey Daru.
Thanks guys. 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.