June 20, 2025 • 34 mins
Hostile M&A is back! Kinterra Capital and CAML are going head-to-head in their quest to take out New World Resources, giving us no shortage of enjoyment.
We also picked up on a chunky financing package for Asante Gold, who has secured ~US$500m+ to make their Ghanaian gold mining dreams a reality. Could there be an opportunity in the recapitalisation?
.……………
TIMESTAMPS
(00:00) Introduction
(01:56) The Rack Attack in Arizona
(19:16) Why Asante caught the eye
(21:12) What’s the opportunity
(32:15) Who’s done it before
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DISCLAIMER
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
JD this is aggressive, this is hostile.
There are two well capitalised bidders going toe to toe and
neither has showed discipline onprice yet.
This is the rare and beautiful situation where someone could
end up paying a stupid price. Are you interested?
(00:21):
Yeah, I bought this water to hijack me because of padded
oils, and I was like, oh, you know what?
I've been coming here for lozenges the last couple of
days. It's.
Probably funny, mate. I know what's going to get you
excited what M&A is back. Well, hostile, hostile, hostile
M&A mate, this is. Yeah, I'm in SO.
Camel, they have upped their offer for for New World and it
looks like Cantera is snapping up stock in the market.
(00:44):
We're also going to go to West Africa.
We're going back to Ghana, mate.It's been a little while.
There is a super interesting quick little company that was a
bit off the radar. I think it was off.
A lot of people use radars and. $500 million US financing for a
company that I've never heard of.
The big dollars, yeah, But they've attracted big names in
the mining finance world. And yeah, I'm keen to see if
(01:06):
they can sort of promise on someof these, deliver on some of
these. Promises, they're special, sits
Alpha potentially in this episode, JD.
And Speaking of delivering on promises, this episode is
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(01:28):
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(01:50):
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OK JD, my favorite thing happened today.
Favorite thing ever. A hostile MMA.
It's on and and whenever there'sa hostile battle and it's and
it's competitive and it's contentious and these things,
(02:11):
they need a name, right? When we had Genesis going head
to head with Silver Lake, it wasthe battle for Leonora.
When PRM was tussling with Leon Oil and Gemcorp for Sierra
Rutile, it was the fumble in thejungle and JD.
Now I think we have the trilogy in the series and the third, the
third one in the series is always the best 1.
You know that. But you know what?
(02:32):
You know what the name is? The rack attack in Arizona all.
Right. No, no surprises.
We're talking about new world mate.
And I'm keen to hear from the money minders what they reckon
of rack attack. Let's let's RIP into this.
It's got me excited because we've got an update to the
takeover situation and we spoke about this on a very last
episode just two days ago. So I won't, I won't rehash the
(02:53):
first installment in the Rack Attack in Arizona.
You can go back and listen to the Rack attack part one.
It wasn't called the rack attackback then, but it is now.
But here's where we left off last time.
New World originally accepted anoffer from Camel for $0.05 a
share. Then the stock started trading
above the bid price in the days after that.
It turns out Quintero Capital, anew mining private equity fund,
(03:15):
was buying the stock on market and they found themselves with a
12% stake, which was ultimately disclosed.
New World went into a trading halt.
They flagged there was going to be an increase in consideration
from Camel to come. And that's where things were
like left off. Until this morning, JD, because
the action today, the action hasjust been awesome.
What? What is the latest mate?
(03:36):
So New World comes out this morning with an amended deal
from Camel. It's not, it's not $0.05
anymore. It's 5.3 cents a share.
And remember Quintera when they were buying on market in the
days before they went into a whole, they were buying all the
way up to 5.1 cents a share. That's where they were pushing
the price to. They disclosed they paid as high
as 5.1 cents a share. Now this move by Camel to
(03:57):
increase the consideration the scheme consideration in in their
offer, it was a pre emptive consideration bump.
That wasn't all. There are a few really cool
structuring pieces in the amended deal that came to
surface this morning. First, there's this placement to
Camel for 10 million bucks at 5.3 cents a share at the same
(04:18):
time. So $10 million placement to
Camel who are also increased their offer to all other
shareholders for 5.3 cents as well at the same time.
This placement was enough for Quintero to get their knickers
in a knot in a pretty big way. They see it as a frustrating
action. They go to the takeovers panel
and they ask for an urgent orderto prevent the placement to
(04:39):
Camel. The acting president of the
Takeovers panel knocked back theurgent nature of the request.
And yeah, but this is the cool structuring part of it that that
this placement was made conditional on New World not
receiving a superior proposal from a third party in the next
14 days. Yeah, I don't think they picked
(05:02):
that one up in How to Win Friends and Influence People.
Mate. Explain the difference there.
Why does it make a difference? Well, two, two reasons.
It's it's not like it's not a frustrating action in my mind.
It's actually the, it's the opposite.
I, I actually think this encourages a bid from Quintera
here rather than prohibits a third party from, from, from
making a bid. Like the risk for the risk for
(05:24):
New World on New World shareholders is Quintera buys a
blocking stake and they block the scheme and and and then
doesn't make a bid for the 100% of the company themselves and
shareholders left like. Hello, Gina Linus.
We've seen this. We've seen this.
Yeah, the blocking, blocking stake dynamic, but the
conditionality of that placement, it actually puts a
clock on Quintero. You've got 14 days to make a
(05:46):
real takeover bid here. Otherwise your stake is going to
get diluted 5% from this placement and your odds of
blocking a deal are much harder.It's it's a really, really cool
piece of deal structure, but that's not the only part made.
What else was there? So there's there's an amendment
to the scheme consideration too.In fact, there's now a takeover
offer conditional on the scheme failing.
You. Remember this mechanism, the
(06:07):
dual transaction structure designed to fend off those pesky
deal blockers? Well, that's there now too, just
like we saw used really effectively in a ZUA twice and
used by used for Spartan very recently by Remelius.
All of this deal maneuvering is pushing things in One Direction
and that is putting pressure on Quintera, and that's where
(06:30):
things escalate quickly. What happened?
Eyes on Quintera here right yourmove.
What's Quintera going to do? So new web resources that come
out of they come out of Holt this morning with all of this
disclosure and you bid 5.3 centsper share and you're just
looking, you're looking at the screens being like what's
happening on screen? Where's the price going?
And what what is Quintero? Well, the stock goes to 5.5
(06:51):
cents all day. At least it's like 5.5 the new
the new low, not 5.3 where the deal is, it's already trading
above the new deal price. Big volume like, yeah, big
volume for this, for this stock.It's a relatively, you know,
illiquid stock, but but big volume for this stock on this
day. And the read through like the
thing you're kind of deducing when you're seeing this is
Cantera is still buying on market and they're buying up to
(07:12):
5.5 cents a share. In fact, there's a very chunky
line of stock that crossed at 5.5 cents a share, and that was
equivalent to about 4.9% of the ordinary shares on issues.
It's, you know, someone who owned at least 4.9% of New World
crossed it in a single line of 5.5 cents per share.
And you, you're kind of assuminghere this is Quintera.
(07:33):
They're still aggressively buying up to 5.5 now.
And if you look at New World's register, I'm pretty sure this
could have only come from RCF, right?
RCF to me look like the only, the only entity there with at
least 4.9% stake. In fact, they had a bit more
than 4.9%. They've got a bunch of options
which I think are, you know, in the money there.
But if you convert them, you know, their, their, their
(07:53):
shareholding could be as much as10%, but you know, they've,
they've clearly offloaded half of their economic interest here,
I think to Quintera. So in my mind, there's a pretty
good chance here that Quintera has close to 19.9% stake now
like that 12% already there's 4.9 there.
They've probably picked up a couple more percent in the rest
(08:14):
of the volume throughout the daythat they'd be close to that
19.9% that they were looking forthat we reported they were
looking for. And we won't know for sure until
there's a change in substantial lodge just how how much stock
Quintera now has. But I think the highest price
paid for stock buy Cantera so far, it's probably 5.5 cents.
It could be 5.6 is which is where they've closed today.
(08:34):
But I think it could be 5.5 cents.
I've just had the butt in here. I've just been editing the
podcast. And as I'm editing, I'm looking
at the screen and I would like, hey, I was wrong.
It was actually Camel that was that bought that 5% on market,
that line of that line of stock that crossed today for that 5%
of New World that was bought by Camel, not like in Terra at 5.5
(08:56):
cents. And simultaneously with this,
this announcement that's come out from newer resources right
now. So the scheme consideration has
been bumped again to 5.5 cents. They're saying this is, this is,
this is insane. Campbell's got FOMO already.
They probably saw Quintero buying stock on market again and
they've already preemptively bumped the price again and they
preemptively bought a line of stock.
(09:19):
This is this is, this is FOMO. This is amazing, unbelievable.
Anyway, I'll let you get back tothe rest of the analysis.
I am losing my mind. This is just awesome.
And and that conditional placement to Camel right?
It puts time pressure on Quintera to make an offer in the
next 14 days and and they can't offer less than 5.5 cents if
(09:40):
that's the highest price they'vepaid for stock that's takeover.
Laws. OK mate.
So so what's your view then? Quintera here?
Do they make an offer for 100% of the company or do you think
there's an ulterior motive? I did, I had heard a theory that
maybe Quintero had an angle to, to block the deal and put
pressure on New World to do AJV instead.
I, I honestly don't give that theory too much weight, to be
(10:03):
honest. Like Quintero, they went to the
takeovers panel before this placement was even announced.
The market like there was, therewas, I think it was yesterday
because New World had been in the trading hall for two days.
And then it triggers the voluntary suspension of of
quotation. And within that disclosure, they
actually reference a placement for the first time.
And it's just on that disclosurein that in that, yeah, like
(10:26):
typical announcement, no detailsor anything else other than a a
placement. Quintera, go to the Takeovers
panel, demand an an urgent ruling.
So I don't think you do that. I don't think you go to the
takeovers panel and demand an urgent ruling if you're not
serious about owning 100% of this company.
And like the response from New World with this, we are with
this pressure from this, you know, private equity group is
(10:48):
beautiful that everything about the structure is forcing
Quintero to put up or shut up. It's, it's just, it's
fascinating because you think the the board of, of New World,
they're in this situation where they can't engage with Quintero
until an offer has actually beenput on the table here.
Back we've seen, we've seen somereally interesting structuring
and and sort of deal making lately.
So why has Quintero, do you reckon, been so aggressive in in
(11:11):
their sort of approach without, you know, before even making an
offer? It's, it is interesting to to
think through right like it is an, it's an it's not the most
typical strategy you, you see out there.
But at the point where the deal is announced between New World
and Camel Quintero's of the viewthat hang on, we're actually
willing to pay more here now. They, they've, they've been
(11:32):
super aggressive, but they're probably also thinking New World
is monitoring the, the register on a daily basis.
Maybe maybe they're worried about being outed as a potential
buyer if they start kind of creeping up, you know, in small
amounts on that, on that register, because then you could
get named and all of a sudden ina pretty awkward situation, you
don't even have a strategic stake at that point.
So I think they've just, they'vebeen so aggressive and and
(11:55):
trying to get their hands on 19.9% in a combination of like
cross stock on market, pushing the share price higher, you
know, forcing forcing camel to actually increase the scheme
consideration. And they've done all of this
before actually presumably heading a single offer to the
board of New world. New World can't even engage with
them until they do that because they're under no shop no talk
(12:15):
provisions of the of the scheme Camel.
Yeah, Yeah. Before, before we dive into that
further, then do do you think this placement to Camel could
potentially become an issue? I can see like, you know, the
question being posed around thisand and the takeover's panel.
Yeah. So the, the, I mean, what the
acting president of the panel said in in the, in the, in what
came out today was, you know, there's no grounds for an urgent
(12:38):
ruling on this. Like this will be reviewed in
the ordinary course of time by the by the panel.
I, I, I'm not an expert on like Takeover's panel rulings or
anything like that, but, but I'mactually a big fan of this
placement. And I think I think a
frustrating action like is when you, you're deterring A
competing bid. I truly think this placement
(12:59):
encourages a competing bid and I'll.
Certainly expedite. Yeah, I like it's only for 5% of
the company. It's not sized like very big
where it's, you know, prohibitive to potentially to,
to, to, to, to a third party kind of actually kind of, you
know, coming in the conditionality, you know, part
I've I've talked about because Iquite I quite like that.
(13:19):
But it also also gets both bidders committed.
Like for Camel, it becomes a lotharder to justify walking away
when you've dipped into your pocket for another $10 million,
You know, you've committed to a placement.
It's more advisor fees, more legal fees you're paying along
the way. Like it's that's like, yeah,
that that to me actually makes adeal here and outcome like a
lot, lot more certain. And the the probability of it
(13:41):
getting more like a lot more likely to.
And at the same time, it gives Camel an incentive to walk away
if Quintero wants to blow their brains out on price.
And, and and, you know, love a love a bid that is, is, is super
high. Well, now, now Camel actually
gets upside of that too. So it does give them an
incentive to walk away. So like I, I actually really
like the mechanism from, from the I don't think it's a
(14:02):
frustrating action. I think it's, I think this is
like this is very good for shareholders and it encourages,
it encourages Quintero to bid. Yeah, and and pacing the whole
narrative together now. Any other sort of tidbits on the
Grapevine that that finish the sort of painting that is this
kind of story? Last last episode JDI said that
it looked to me like Quintero was was buying on market without
(14:25):
having done DD and I was I was assuming that because well like
to be able to buy a market. They haven't signed a
standstill. I assume everyone that is in
this process understands. The timing of the fun coming
together. Yeah, well, yeah.
And I actually suspect if I've been wrong about that, that
statement. Now, I reckon Cantera has done
DD on a new world, but not in the current process, not in the,
(14:47):
not in the process that has has happened here.
I reckon Cantera likely did DD on new world, call it like 9
months ago, not not in the in the last six months like was the
process that was ultimately run for strategic funding options,
which resulted in a Camel offer.But I do think Cantera has done
DD and that actually makes this even more juicy because they're
(15:07):
not bidding blind that to some extent there might be still some
more DD they'd want to do and atthe point in time and then they
ultimately may or may not submitan NBIO.
But if Dundee, they're serious, this is.
Yeah. And we should, we should touch
on again the the kind of historyof Cantera and the the firepower
that they have behind them because that's an important
(15:28):
piece. You know, you're thinking
private equity coming in. You're trying to figure out how
much can they like how much? Yeah, like the, the, how much
weight do they have to actually like, make a full bid for 100%
of this company? And so I did some homework here.
The, the fund that's named on the substantial notice for, for
New World when when Kinterra declared that they own 12% of
(15:50):
the company to start with. So that's the Kinterra Critical
Minerals and Infrastructure Opportunities fund #2 quite the
mouthful. But this isn't, this is a new
fund. And in fact, it was.
This fund was only incorporated this year according to the SEC
filings. And that timeline might explain
why Quintera did not pay up ninemonths ago when they may have
(16:13):
done DD on New World in the 1st place because they didn't have
the funds finalized and the fundwasn't actually launched yet.
So. So we had fund one in 23 and
then this is the bigger and better.
This is new funds to deploy, right?
And this SEC thing says that it,it was incorporated in 2025.
And if Quintera did DD nine months ago, well, this fund
(16:34):
wasn't around in order to, you know, do the deal then, but it
is now. And clearly the company is in
play now. This, this new fund, I clearly
raised a bunch of money. My sleuthing amongst other SEC
filings, I found this document which says the gross assets of
the fund are US $444 million, which I assume is just cash
(16:55):
right now because there's no information of them having
deployed any of it anywhere elseother than New World chairs
right now. To answer like the question, I
think they've got a lot of firepower and I think that's
what is really, really, really interesting about this special
situation right now. This is the rack attack in
Arizona. JD.
(17:15):
This is aggressive, this is hostile.
There are two well capitalized bidders going toe to toe and
neither has showed discipline onprice yet.
This is the rare and beautiful situation where someone could
end up paying a stupid price. Think Cardinal ignorant.
This could be one of those, mate.
God, I hope it's one of those. You know, I like I we just I
(17:39):
pray for those beautiful situations.
I don't have any skin in the game here, but like for for for
new world shareholders that are out there like I'm I'm stoked
for them like this is this is kind of what you want to say?
This is really cool. Hot off the back of the 96%
premium gets better. Yeah, yeah.
And if you zoom out enough, you're like, oh, you know, like
if you've been holding New Worldsince 2021, then maybe, you
know, there's some there's some room to go, but.
(18:00):
But I'm I'm just stoked. This is yeah, this is like this
is what yeah, gets people reallypumped up in our industry.
Like I Wolf gets me really pumped up.
Like I want to see a. Bit of great headlines as well.
Oh, mate, you know, and yeah, like if someone pays a stupid
price, then we'll talk about it in five years time and be like,
man, they paid way too much. But like for the shareholders,
they got to sell at a stupid price.
It's just awesome. Like I'm, I'm really stoked by
that thought. It'll be a sort of another
(18:22):
chapter in the book of private equity if it does go down that
route and we'll we'll see how itplays out.
Well, that's and that's, yeah, like another like kind of
conversation I was, I was havingthis morning.
It was it was about this, Yeah, this private equity group that
have popped up and because Quintero was born out of
Waterton. Just started in the late 2000s,
another private equity Toronto based group.
(18:43):
Are they I don't think Waterton had like fantastic returns.
So like it is it is, you know curious how how yeah, that.
And again, another, another fundhas been raised to sort of do
something and we're seeing the, the kind of buying activity that
luck could be ill disciplined ormaybe it'll prove to be fruitful
every time. But but regardless, like yeah,
(19:05):
there isn't an episode to do on the on the fruitfulness of the
private equity model in mining, which we're certainly dubious of
as a strategy. All right mate, that was
awesome. Fantastic.
Now tell me what I need to know about this West African gold
producer that I didn't know about before all.
Right, mate, I'll, I'll start with why it's so fascinating,
(19:25):
why it caught my eye. So we're talking about Asante
gold here, huge financing like you sort of said at the top of
the show, half a billion U.S. dollars.
It's think of it as a as a recapof this business and you'll
remember when we spoke about God345 months ago.
I can't remember, but we, we sort of categorized the types of
(19:47):
way in which you can make money in resources.
It was, you know, what you spoketo was the, the combination of
different kind of strategies we've, we've come across and,
and think kind of work in the resources space.
And one of them was broadly recapitalizations them sort of
fitting in this sort of umbrellaof turnarounds.
OK. And in a nutshell, that's when
(20:08):
things have not gone well for whatever reason, but maybe some
of the fundamentals or enough ofthe fundamentals.
Remain intact and the changes that you think are appropriate
have been made and things have been addressed and therein can
lie an opportunity. So I think Resolute 2022 ish as
an example. Free.
You mentioned Resolute. It is, and that's sort of pretty
(20:29):
the kidnapping debacle. But they they had a good run.
So there's plenty of other examples out there, but I
thought for that reason, it's interesting enough to to crack
open the presentation and see what we find.
So I'm flicking through the presentation and here's what
jumps out at me. You can see in this chart here,
right that, you know, take it with a grain of salts from the
company itself, but they're talking about US $300 million in
(20:51):
free cash flow next year. Now this is a company again in
U.S. dollar terms, that's cappedat about like 555 hundred ish
and that's off the back of a little bit of a run this year.
So it's worth digging into quitea bit because that's sort of 300
million as they put it is a is apit stop on the way to to bigger
and better things. So there is an ambitious plan
(21:14):
here and we want to kind of see can they, can they fill that out
and actually achieve those goals.
Who the hell is Asante? Like what do they actually own?
So we're in Ghana for this one, specifically in the southwest of
the country and they own the Bibiani project and the Toronto
project. So these are both decent sized
gold mines very close to one another.
(21:36):
So they're on the, they're on the same trend.
The the processing plants sit literally 15 kilometers from one
another. These assets were bought from
Resolute and Kinross respectively, again for pretty
decent amounts of money. Over 300 million US all up was
spent to acquire these assets and there's a bit of drama in
there as well in in how they gotthem, but we won't digress for
(21:57):
now. There's substantial Ghanaian
ownership in this company, whichis an important point because
that ties in with how they actually got their hands on the
asset and it gives them that local buy in.
At least least like in that ownership is on like listed on
the Ghanaian Stock Exchange. And the Frankfurt Stock Exchange
mate and the Canadian Stock Exchange, that's not the TSX,
(22:19):
that's the Canadian, this is theCSA, yes.
So they will as a condition of the financing list on the TSXV,
which is the kind of stepping stone on the way to the the TSX
if things work out. So bit of debt 50 odd million
from one of the transactions with Kinross before this deal.
They come off the back of a disappointing 2024 a 190,000
(22:40):
ounces to give you a bit of feelfor the scale at a bit over US
$2000 all in sustaining costs. So they had problems
constructing the sulfide plant at at or delays rather at
Bibiani delays and troubles on recoveries and instead of
producing 300,000 oz plus you'reproducing below 200,000 oz.
(23:02):
Therefore, as we know, you're all in sustaining costs just
blown out the water. So it wasn't wasn't a good year
and things haven't progressed asthey would have liked.
Hence, you're recapitalizing thebusiness.
Before I ask you about the financing, OK, I am I am curious
the the the management of a scientist is this like, you know
a Ghana's local like management expertise that has gone into
(23:26):
this kind of like thinking of like a a cement core in South
Africa? It's it's a bit different.
There is a lot of local talent that is within senior
management, but you've got running the company a guy called
Dave Anthony who was the CEO of Barrick Gold West Africa and you
(23:48):
know, undertook CapEx projects to build a host of mines across
West Africa and in South America.
Previous experience as well. And you've got ACEO, who from
the name is of maybe Brazilian or Portuguese heritage, South
African fellow and yeah, Anglo Gold experience, Harmony
(24:11):
experience. So these kind of major mining
companies. And then you've got a lot of,
like I said, yeah, yeah, in there.
But that, that point is super important in who who's running
the company, given what lies ahead, this company.
So yeah, they're, they're a bit of an unknown entity.
I mean, you spoke about the stock exchanges there.
They're listed on there, not much coverage, which and in
(24:35):
terms of like sell side coverage, I'm talking about
there, which makes it enticing for me.
It it, it adds a layer of potential interest because it's
brushed under the carpet. People don't care about it, but
maybe they will if all of a sudden it starts printing cash.
So yeah, the financing. 500 million US is a lot of money.
Yeah. So there's a few different
announcements all come together.If you, if you do go through the
(24:56):
weeds here and see they, they came out with a 470 million
dollar announcement yesterday. And then today they pace in the
equity placement component of that, which was a bit over is
what they were after. But it's, it's a lot of money
coming together. And in terms of who's chipping
in, you've got Appian big name kind of finances sort of making
(25:17):
more of a name in, in recent times, $175,000,000.
That's a that's a decent chick carved up in, you know, various
tranches to it. And then you've got first brand
people will know through their subsidiary RMB as well doing
another 170 million. Kinross are converting.
So they're going from a 7:00-ishpercent equity ownership up and
(25:40):
they're getting some of their debts paid out as well.
So recapitalization, but they'restill going to be a chunk of
senior debt and subordinated debt in the stack, which
obviously we're not we're not massive fans on for for anyone
that's listened to more than a couple shows that there is a bit
more resiliency in the business given there's two assets as
opposed to just the one. But there's still a timeline.
(26:02):
You know, you got five years on the senior, seven years on the
subordinated. Yep.
If things don't go right and they don't go to the mine plan,
it's it's going to be grim regardless, but.
And you've got a shareholder in Kinross who probably not a
natural shareholder has had to convert that to equity, but
ultimately will probably want tosell at some.
Point exactly, exactly. So you've got those things to to
(26:24):
contend with, but really what itcomes down to is can they
deliver on the mine plan? So they came out with a new
flash five year plan for the twoassets.
They're coming to the end of a pretty heavy investment.
I mean, I need this capital to finish the investment cycle, but
they're going underground mostly.
(26:46):
So beyond 2028, you're going to be fully kind of underground
mining company finishing off theopen pits.
And here you'll like this mate. 2028 five 100,000 oz at less
than US $1000 an ounce. That's the that's the headline.
Then you dig into the weeds hereand what a coincidence, 2028
(27:08):
they're going to produce 501,000oz at $999 an ounce.
It just it just so happens to line up with the targets
perfectly, but you you can kind of see they're doing mid 400 ish
1000 oz kind of range right 26272829 over this period if
they can pull it off. And a history of underperforming
(27:31):
over over the course of. Yeah, OK.
A history of underperformance. So if we look at Bibiani, this
is the asset they got from Resolute.
There have been various projectsunderway.
They've had to move a, a highwayto start with, they're adding in
new kind of satellite pits. They're they're going
underground, but most importantly, they've built a
sulphide plant. So they needed to improve
(27:53):
recoveries that they had had shocking results as they started
to kind of go underground, but they didn't have the sulphide
plant complete yet and recoveries were coming out in
the 70s. So no good.
So this should see them hit the hit the benchmark of 92% and
that should be complete in a matter of months.
Awesome. So 170,000 ounces is guided to
(28:15):
come out of here this year. 2025reserves run through to to the
early twenty 30s. So not too stressed on that
front. But if you then look at the
other asset, Toronto open pit mining has been extended three
more years. Mining costs were were a real
challenge here. So they've they've got to
swapped out the fleet. They bought a new fleet with
increased equipment size. The underground fleet is being
(28:38):
rebuilt and more or less replaced as well.
Just like Bibiani, they're actually installing conveyor
systems across the various hits that they've got here to to pull
down costs and you've got reserves that only run for, for
another four years. So there is a a good track
record of resource to to reserveconversion here.
(29:00):
But I think investors get a bit more confidence if you see a A5
year kind of plus time frame on that one.
But they've got work cut out to get them from over 2000 oz at
$2000.00 an ounce, down 1000 bucks.
Well, they're pretty confident they're going to improve grade
there from 1.5g per ton to 2G per.
Ton yeah. And that will happen as they as
they kind of go underground as well.
(29:22):
I mean, it's it's not out of this world grade, but going from
1 1/2 grams a ton to 2 grams is a big difference.
Big difference. So combined business, JD, like
what do you, what do you make ofit?
I think this goes back to the management point because there's
a lot of investment that has gone into this business.
A lot still kind of has to be done throughout the remainder of
2025 and into 26. So like firstly, you kind of
(29:45):
credit the management for getting the financing done that
had to be done. Businesses reset in a sense.
But like I said, you want to make sure you're backing the
team that can deliver on this because in my mind that so much
of it hinges on whether you're backing the right team.
Yeah. And you know, everyone's going
(30:06):
to have to kind of do their own work and come to their own
assessment on who we mentioned Dave Anthony and Adriano
Sabrera. That's the CEO and CEO there.
You you can see that they've gotkind of big company pedigree in
a sense. But yeah, I think I think you've
got a lot of things on your side.
I think the Ghanaian ownership helps in an era of increased
(30:28):
resource nationalism that we've seen across West Africa.
I think you're kind of thankful that you've got a lot of the
CapEx out the way already and that and that's kind of done.
They've drilled out, they've done these things, they've spent
the money on building the new plant.
They just need to make sure things can kind of come
together. And to to go back to the initial
(30:49):
chart that we showed on what thefree cash flow could look like,
like these are stretch targets if you like.
That's kind of if everything goes well by the gold price
exceeding your expectations, that's what the cash flow could
be. But you know, you know, a lot of
people will know what it's like working inside a mining company
far more than I will. But you understand that this is
(31:12):
kind of the the bar and you needto work your way up there like.
Broadcasting free cash flow in 2029.
It's a good spreadsheet task then.
Yeah, you, you don't know what kind of reality that's kind of
rounded in, but the, the, the numbers kind of look good.
And to, to compare with another miner who mines in the area,
(31:32):
Perseus, that, that that's one of the golden child of ASX
listed W African miners. You know, W African are doing a
great job as well. But these guys Perseus are in
Ghana as well. So I thought they'd be a kind of
relevant peer to look at. And they came out with this five
year plan where they want to kind of average roughly 500,000
oz per annum. So Asante doing a bit less than
(31:54):
that. The Perseus have a proven track
record. They've got an enormous cash
pile as well and they are kept at 4.8 ish billion dollars.
So with all their cash, that's an enterprise value of over 3
1/2 billion. Now that's 5-6 times what Asante
(32:14):
is, even more. We'll see what it all shapes
that once this financing comes out.
But you can see like investors do do pay a good bit and the
profiles are not massively different like Perseus all in
sustaining costs over that period is mid thousands, sort of
14-15 hundred US if Asante can get near to what they're kind of
(32:37):
forecasting there. Again, a bit smaller and nowhere
near with the track record there.
But you can get a bit of a feel for the idea that investors will
pay you if you can get it right now there's jurisdictional risk
that's sort of spread for Perseus.
They've got growth projects and all these other things, but they
also need to spend over a billion Aussie to develop
(32:58):
assets. So there is some some
comparability in the in the nature of the businesses.
Yeah, the, the yes pool of questions I'd, I'd really want
to know more about is in the category of can you get the
capital out of Ghana like you produce free cash flow in
country. That's all well and good.
What's it like to actually get it out?
(33:18):
Like is there a, is there a realistic means to, to, to
distribute to shareholders of other countries in any sort of
like tax efficient way or is that maybe more complicated?
I mean, there clearly was a bit of resource nationalism from
Ghana in the 1st place and that's why these assets belong
to Asante. And and maybe having sort of 40%
(33:39):
plus Ghanaian interest in on your register is a good thing
for that because they're less, you know, apprehensive to
perhaps paying a dividend or these sorts of things knowing
half of it's coming back into the country, maybe open-ended.
But yeah, that the point is super valid on achieving all
these things. You want to get paid for it,
right? We know Perseus have preferred
(34:01):
the buyback kind of method. That's one way to go about and
that sort of reflected what theythought of the value of their
stock. But super value question,
because we know W African as well in Burkina have
complexities about how they get capital out of the country, but
to invest in another asset in the country.
(34:21):
Awesome mate. We could.
Well, we've got a couple partners to thank.
Firstly mineral mining services and then grounded Sandy ground
support, K drill and last but not least cross boundary energy
Hoodoo Hoodoo. 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
(34:42):
and you need to read out a disclaimer.
JD this is aggressive, this is hostile.
There are two well capitalised bidders going toe to toe and
neither has showed discipline onprice yet.
This is the rare and beautiful situation where someone could
end up paying a stupid price. Are you interested?
(00:21):
Yeah, I bought this water to hijack me because of padded
oils, and I was like, oh, you know what?
I've been coming here for lozenges the last couple of
days. It's.
Probably funny, mate. I know what's going to get you
excited what M&A is back. Well, hostile, hostile, hostile
M&A mate, this is. Yeah, I'm in SO.
Camel, they have upped their offer for for New World and it
looks like Cantera is snapping up stock in the market.
(00:44):
We're also going to go to West Africa.
We're going back to Ghana, mate.It's been a little while.
There is a super interesting quick little company that was a
bit off the radar. I think it was off.
A lot of people use radars and. $500 million US financing for a
company that I've never heard of.
The big dollars, yeah, But they've attracted big names in
the mining finance world. And yeah, I'm keen to see if
(01:06):
they can sort of promise on someof these, deliver on some of
these. Promises, they're special, sits
Alpha potentially in this episode, JD.
And Speaking of delivering on promises, this episode is
brought to you by the crew who just gets it done, JDMMS.
MMS mate, if you're out there and you need a contract, minor
MMS are the. People you call beyond just
ripping out the dirt, they've got a top notch tech services
(01:28):
team, engineers to schedulers and surveyors all to get the job
done for you. It's even better if you want to
de risk a project but you don't even have the bandwidth.
You know, the ore body is just sitting out there, the cash flow
is just waiting to be ripped out.
Get in touch with the team, it'll tailor a solution.
For you mate, I'm picturing thatyou're just ripping the cash
flow out of the ground. Don't sleep on this $5000 per oz
(01:50):
gold price. Whether it's mining, drilling,
blast or loading hall work, there is no job MMS cannot
deliver on. Go MMS.
OK JD, my favorite thing happened today.
Favorite thing ever. A hostile MMA.
It's on and and whenever there'sa hostile battle and it's and
it's competitive and it's contentious and these things,
(02:11):
they need a name, right? When we had Genesis going head
to head with Silver Lake, it wasthe battle for Leonora.
When PRM was tussling with Leon Oil and Gemcorp for Sierra
Rutile, it was the fumble in thejungle and JD.
Now I think we have the trilogy in the series and the third, the
third one in the series is always the best 1.
You know that. But you know what?
(02:32):
You know what the name is? The rack attack in Arizona all.
Right. No, no surprises.
We're talking about new world mate.
And I'm keen to hear from the money minders what they reckon
of rack attack. Let's let's RIP into this.
It's got me excited because we've got an update to the
takeover situation and we spoke about this on a very last
episode just two days ago. So I won't, I won't rehash the
(02:53):
first installment in the Rack Attack in Arizona.
You can go back and listen to the Rack attack part one.
It wasn't called the rack attackback then, but it is now.
But here's where we left off last time.
New World originally accepted anoffer from Camel for $0.05 a
share. Then the stock started trading
above the bid price in the days after that.
It turns out Quintero Capital, anew mining private equity fund,
(03:15):
was buying the stock on market and they found themselves with a
12% stake, which was ultimately disclosed.
New World went into a trading halt.
They flagged there was going to be an increase in consideration
from Camel to come. And that's where things were
like left off. Until this morning, JD, because
the action today, the action hasjust been awesome.
What? What is the latest mate?
(03:36):
So New World comes out this morning with an amended deal
from Camel. It's not, it's not $0.05
anymore. It's 5.3 cents a share.
And remember Quintera when they were buying on market in the
days before they went into a whole, they were buying all the
way up to 5.1 cents a share. That's where they were pushing
the price to. They disclosed they paid as high
as 5.1 cents a share. Now this move by Camel to
(03:57):
increase the consideration the scheme consideration in in their
offer, it was a pre emptive consideration bump.
That wasn't all. There are a few really cool
structuring pieces in the amended deal that came to
surface this morning. First, there's this placement to
Camel for 10 million bucks at 5.3 cents a share at the same
(04:18):
time. So $10 million placement to
Camel who are also increased their offer to all other
shareholders for 5.3 cents as well at the same time.
This placement was enough for Quintero to get their knickers
in a knot in a pretty big way. They see it as a frustrating
action. They go to the takeovers panel
and they ask for an urgent orderto prevent the placement to
(04:39):
Camel. The acting president of the
Takeovers panel knocked back theurgent nature of the request.
And yeah, but this is the cool structuring part of it that that
this placement was made conditional on New World not
receiving a superior proposal from a third party in the next
14 days. Yeah, I don't think they picked
(05:02):
that one up in How to Win Friends and Influence People.
Mate. Explain the difference there.
Why does it make a difference? Well, two, two reasons.
It's it's not like it's not a frustrating action in my mind.
It's actually the, it's the opposite.
I, I actually think this encourages a bid from Quintera
here rather than prohibits a third party from, from, from
making a bid. Like the risk for the risk for
(05:24):
New World on New World shareholders is Quintera buys a
blocking stake and they block the scheme and and and then
doesn't make a bid for the 100% of the company themselves and
shareholders left like. Hello, Gina Linus.
We've seen this. We've seen this.
Yeah, the blocking, blocking stake dynamic, but the
conditionality of that placement, it actually puts a
clock on Quintero. You've got 14 days to make a
(05:46):
real takeover bid here. Otherwise your stake is going to
get diluted 5% from this placement and your odds of
blocking a deal are much harder.It's it's a really, really cool
piece of deal structure, but that's not the only part made.
What else was there? So there's there's an amendment
to the scheme consideration too.In fact, there's now a takeover
offer conditional on the scheme failing.
You. Remember this mechanism, the
(06:07):
dual transaction structure designed to fend off those pesky
deal blockers? Well, that's there now too, just
like we saw used really effectively in a ZUA twice and
used by used for Spartan very recently by Remelius.
All of this deal maneuvering is pushing things in One Direction
and that is putting pressure on Quintera, and that's where
(06:30):
things escalate quickly. What happened?
Eyes on Quintera here right yourmove.
What's Quintera going to do? So new web resources that come
out of they come out of Holt this morning with all of this
disclosure and you bid 5.3 centsper share and you're just
looking, you're looking at the screens being like what's
happening on screen? Where's the price going?
And what what is Quintero? Well, the stock goes to 5.5
(06:51):
cents all day. At least it's like 5.5 the new
the new low, not 5.3 where the deal is, it's already trading
above the new deal price. Big volume like, yeah, big
volume for this, for this stock.It's a relatively, you know,
illiquid stock, but but big volume for this stock on this
day. And the read through like the
thing you're kind of deducing when you're seeing this is
Cantera is still buying on market and they're buying up to
(07:12):
5.5 cents a share. In fact, there's a very chunky
line of stock that crossed at 5.5 cents a share, and that was
equivalent to about 4.9% of the ordinary shares on issues.
It's, you know, someone who owned at least 4.9% of New World
crossed it in a single line of 5.5 cents per share.
And you, you're kind of assuminghere this is Quintera.
(07:33):
They're still aggressively buying up to 5.5 now.
And if you look at New World's register, I'm pretty sure this
could have only come from RCF, right?
RCF to me look like the only, the only entity there with at
least 4.9% stake. In fact, they had a bit more
than 4.9%. They've got a bunch of options
which I think are, you know, in the money there.
But if you convert them, you know, their, their, their
(07:53):
shareholding could be as much as10%, but you know, they've,
they've clearly offloaded half of their economic interest here,
I think to Quintera. So in my mind, there's a pretty
good chance here that Quintera has close to 19.9% stake now
like that 12% already there's 4.9 there.
They've probably picked up a couple more percent in the rest
(08:14):
of the volume throughout the daythat they'd be close to that
19.9% that they were looking forthat we reported they were
looking for. And we won't know for sure until
there's a change in substantial lodge just how how much stock
Quintera now has. But I think the highest price
paid for stock buy Cantera so far, it's probably 5.5 cents.
It could be 5.6 is which is where they've closed today.
(08:34):
But I think it could be 5.5 cents.
I've just had the butt in here. I've just been editing the
podcast. And as I'm editing, I'm looking
at the screen and I would like, hey, I was wrong.
It was actually Camel that was that bought that 5% on market,
that line of that line of stock that crossed today for that 5%
of New World that was bought by Camel, not like in Terra at 5.5
(08:56):
cents. And simultaneously with this,
this announcement that's come out from newer resources right
now. So the scheme consideration has
been bumped again to 5.5 cents. They're saying this is, this is,
this is insane. Campbell's got FOMO already.
They probably saw Quintero buying stock on market again and
they've already preemptively bumped the price again and they
preemptively bought a line of stock.
(09:19):
This is this is, this is FOMO. This is amazing, unbelievable.
Anyway, I'll let you get back tothe rest of the analysis.
I am losing my mind. This is just awesome.
And and that conditional placement to Camel right?
It puts time pressure on Quintera to make an offer in the
next 14 days and and they can't offer less than 5.5 cents if
(09:40):
that's the highest price they'vepaid for stock that's takeover.
Laws. OK mate.
So so what's your view then? Quintera here?
Do they make an offer for 100% of the company or do you think
there's an ulterior motive? I did, I had heard a theory that
maybe Quintero had an angle to, to block the deal and put
pressure on New World to do AJV instead.
I, I honestly don't give that theory too much weight, to be
(10:03):
honest. Like Quintero, they went to the
takeovers panel before this placement was even announced.
The market like there was, therewas, I think it was yesterday
because New World had been in the trading hall for two days.
And then it triggers the voluntary suspension of of
quotation. And within that disclosure, they
actually reference a placement for the first time.
And it's just on that disclosurein that in that, yeah, like
(10:26):
typical announcement, no detailsor anything else other than a a
placement. Quintera, go to the Takeovers
panel, demand an an urgent ruling.
So I don't think you do that. I don't think you go to the
takeovers panel and demand an urgent ruling if you're not
serious about owning 100% of this company.
And like the response from New World with this, we are with
this pressure from this, you know, private equity group is
(10:48):
beautiful that everything about the structure is forcing
Quintero to put up or shut up. It's, it's just, it's
fascinating because you think the the board of, of New World,
they're in this situation where they can't engage with Quintero
until an offer has actually beenput on the table here.
Back we've seen, we've seen somereally interesting structuring
and and sort of deal making lately.
So why has Quintero, do you reckon, been so aggressive in in
(11:11):
their sort of approach without, you know, before even making an
offer? It's, it is interesting to to
think through right like it is an, it's an it's not the most
typical strategy you, you see out there.
But at the point where the deal is announced between New World
and Camel Quintero's of the viewthat hang on, we're actually
willing to pay more here now. They, they've, they've been
(11:32):
super aggressive, but they're probably also thinking New World
is monitoring the, the register on a daily basis.
Maybe maybe they're worried about being outed as a potential
buyer if they start kind of creeping up, you know, in small
amounts on that, on that register, because then you could
get named and all of a sudden ina pretty awkward situation, you
don't even have a strategic stake at that point.
So I think they've just, they'vebeen so aggressive and and
(11:55):
trying to get their hands on 19.9% in a combination of like
cross stock on market, pushing the share price higher, you
know, forcing forcing camel to actually increase the scheme
consideration. And they've done all of this
before actually presumably heading a single offer to the
board of New world. New World can't even engage with
them until they do that because they're under no shop no talk
(12:15):
provisions of the of the scheme Camel.
Yeah, Yeah. Before, before we dive into that
further, then do do you think this placement to Camel could
potentially become an issue? I can see like, you know, the
question being posed around thisand and the takeover's panel.
Yeah. So the, the, I mean, what the
acting president of the panel said in in the, in the, in what
came out today was, you know, there's no grounds for an urgent
(12:38):
ruling on this. Like this will be reviewed in
the ordinary course of time by the by the panel.
I, I, I'm not an expert on like Takeover's panel rulings or
anything like that, but, but I'mactually a big fan of this
placement. And I think I think a
frustrating action like is when you, you're deterring A
competing bid. I truly think this placement
(12:59):
encourages a competing bid and I'll.
Certainly expedite. Yeah, I like it's only for 5% of
the company. It's not sized like very big
where it's, you know, prohibitive to potentially to,
to, to, to, to a third party kind of actually kind of, you
know, coming in the conditionality, you know, part
I've I've talked about because Iquite I quite like that.
(13:19):
But it also also gets both bidders committed.
Like for Camel, it becomes a lotharder to justify walking away
when you've dipped into your pocket for another $10 million,
You know, you've committed to a placement.
It's more advisor fees, more legal fees you're paying along
the way. Like it's that's like, yeah,
that that to me actually makes adeal here and outcome like a
lot, lot more certain. And the the probability of it
(13:41):
getting more like a lot more likely to.
And at the same time, it gives Camel an incentive to walk away
if Quintero wants to blow their brains out on price.
And, and and, you know, love a love a bid that is, is, is super
high. Well, now, now Camel actually
gets upside of that too. So it does give them an
incentive to walk away. So like I, I actually really
like the mechanism from, from the I don't think it's a
(14:02):
frustrating action. I think it's, I think this is
like this is very good for shareholders and it encourages,
it encourages Quintero to bid. Yeah, and and pacing the whole
narrative together now. Any other sort of tidbits on the
Grapevine that that finish the sort of painting that is this
kind of story? Last last episode JDI said that
it looked to me like Quintero was was buying on market without
(14:25):
having done DD and I was I was assuming that because well like
to be able to buy a market. They haven't signed a
standstill. I assume everyone that is in
this process understands. The timing of the fun coming
together. Yeah, well, yeah.
And I actually suspect if I've been wrong about that, that
statement. Now, I reckon Cantera has done
DD on a new world, but not in the current process, not in the,
(14:47):
not in the process that has has happened here.
I reckon Cantera likely did DD on new world, call it like 9
months ago, not not in the in the last six months like was the
process that was ultimately run for strategic funding options,
which resulted in a Camel offer.But I do think Cantera has done
DD and that actually makes this even more juicy because they're
(15:07):
not bidding blind that to some extent there might be still some
more DD they'd want to do and atthe point in time and then they
ultimately may or may not submitan NBIO.
But if Dundee, they're serious, this is.
Yeah. And we should, we should touch
on again the the kind of historyof Cantera and the the firepower
that they have behind them because that's an important
(15:28):
piece. You know, you're thinking
private equity coming in. You're trying to figure out how
much can they like how much? Yeah, like the, the, how much
weight do they have to actually like, make a full bid for 100%
of this company? And so I did some homework here.
The, the fund that's named on the substantial notice for, for
New World when when Kinterra declared that they own 12% of
(15:50):
the company to start with. So that's the Kinterra Critical
Minerals and Infrastructure Opportunities fund #2 quite the
mouthful. But this isn't, this is a new
fund. And in fact, it was.
This fund was only incorporated this year according to the SEC
filings. And that timeline might explain
why Quintera did not pay up ninemonths ago when they may have
(16:13):
done DD on New World in the 1st place because they didn't have
the funds finalized and the fundwasn't actually launched yet.
So. So we had fund one in 23 and
then this is the bigger and better.
This is new funds to deploy, right?
And this SEC thing says that it,it was incorporated in 2025.
And if Quintera did DD nine months ago, well, this fund
(16:34):
wasn't around in order to, you know, do the deal then, but it
is now. And clearly the company is in
play now. This, this new fund, I clearly
raised a bunch of money. My sleuthing amongst other SEC
filings, I found this document which says the gross assets of
the fund are US $444 million, which I assume is just cash
(16:55):
right now because there's no information of them having
deployed any of it anywhere elseother than New World chairs
right now. To answer like the question, I
think they've got a lot of firepower and I think that's
what is really, really, really interesting about this special
situation right now. This is the rack attack in
Arizona. JD.
(17:15):
This is aggressive, this is hostile.
There are two well capitalized bidders going toe to toe and
neither has showed discipline onprice yet.
This is the rare and beautiful situation where someone could
end up paying a stupid price. Think Cardinal ignorant.
This could be one of those, mate.
God, I hope it's one of those. You know, I like I we just I
(17:39):
pray for those beautiful situations.
I don't have any skin in the game here, but like for for for
new world shareholders that are out there like I'm I'm stoked
for them like this is this is kind of what you want to say?
This is really cool. Hot off the back of the 96%
premium gets better. Yeah, yeah.
And if you zoom out enough, you're like, oh, you know, like
if you've been holding New Worldsince 2021, then maybe, you
know, there's some there's some room to go, but.
(18:00):
But I'm I'm just stoked. This is yeah, this is like this
is what yeah, gets people reallypumped up in our industry.
Like I Wolf gets me really pumped up.
Like I want to see a. Bit of great headlines as well.
Oh, mate, you know, and yeah, like if someone pays a stupid
price, then we'll talk about it in five years time and be like,
man, they paid way too much. But like for the shareholders,
they got to sell at a stupid price.
It's just awesome. Like I'm, I'm really stoked by
that thought. It'll be a sort of another
(18:22):
chapter in the book of private equity if it does go down that
route and we'll we'll see how itplays out.
Well, that's and that's, yeah, like another like kind of
conversation I was, I was havingthis morning.
It was it was about this, Yeah, this private equity group that
have popped up and because Quintero was born out of
Waterton. Just started in the late 2000s,
another private equity Toronto based group.
(18:43):
Are they I don't think Waterton had like fantastic returns.
So like it is it is, you know curious how how yeah, that.
And again, another, another fundhas been raised to sort of do
something and we're seeing the, the kind of buying activity that
luck could be ill disciplined ormaybe it'll prove to be fruitful
every time. But but regardless, like yeah,
(19:05):
there isn't an episode to do on the on the fruitfulness of the
private equity model in mining, which we're certainly dubious of
as a strategy. All right mate, that was
awesome. Fantastic.
Now tell me what I need to know about this West African gold
producer that I didn't know about before all.
Right, mate, I'll, I'll start with why it's so fascinating,
(19:25):
why it caught my eye. So we're talking about Asante
gold here, huge financing like you sort of said at the top of
the show, half a billion U.S. dollars.
It's think of it as a as a recapof this business and you'll
remember when we spoke about God345 months ago.
I can't remember, but we, we sort of categorized the types of
(19:47):
way in which you can make money in resources.
It was, you know, what you spoketo was the, the combination of
different kind of strategies we've, we've come across and,
and think kind of work in the resources space.
And one of them was broadly recapitalizations them sort of
fitting in this sort of umbrellaof turnarounds.
OK. And in a nutshell, that's when
(20:08):
things have not gone well for whatever reason, but maybe some
of the fundamentals or enough ofthe fundamentals.
Remain intact and the changes that you think are appropriate
have been made and things have been addressed and therein can
lie an opportunity. So I think Resolute 2022 ish as
an example. Free.
You mentioned Resolute. It is, and that's sort of pretty
(20:29):
the kidnapping debacle. But they they had a good run.
So there's plenty of other examples out there, but I
thought for that reason, it's interesting enough to to crack
open the presentation and see what we find.
So I'm flicking through the presentation and here's what
jumps out at me. You can see in this chart here,
right that, you know, take it with a grain of salts from the
company itself, but they're talking about US $300 million in
(20:51):
free cash flow next year. Now this is a company again in
U.S. dollar terms, that's cappedat about like 555 hundred ish
and that's off the back of a little bit of a run this year.
So it's worth digging into quitea bit because that's sort of 300
million as they put it is a is apit stop on the way to to bigger
and better things. So there is an ambitious plan
(21:14):
here and we want to kind of see can they, can they fill that out
and actually achieve those goals.
Who the hell is Asante? Like what do they actually own?
So we're in Ghana for this one, specifically in the southwest of
the country and they own the Bibiani project and the Toronto
project. So these are both decent sized
gold mines very close to one another.
(21:36):
So they're on the, they're on the same trend.
The the processing plants sit literally 15 kilometers from one
another. These assets were bought from
Resolute and Kinross respectively, again for pretty
decent amounts of money. Over 300 million US all up was
spent to acquire these assets and there's a bit of drama in
there as well in in how they gotthem, but we won't digress for
(21:57):
now. There's substantial Ghanaian
ownership in this company, whichis an important point because
that ties in with how they actually got their hands on the
asset and it gives them that local buy in.
At least least like in that ownership is on like listed on
the Ghanaian Stock Exchange. And the Frankfurt Stock Exchange
mate and the Canadian Stock Exchange, that's not the TSX,
(22:19):
that's the Canadian, this is theCSA, yes.
So they will as a condition of the financing list on the TSXV,
which is the kind of stepping stone on the way to the the TSX
if things work out. So bit of debt 50 odd million
from one of the transactions with Kinross before this deal.
They come off the back of a disappointing 2024 a 190,000
(22:40):
ounces to give you a bit of feelfor the scale at a bit over US
$2000 all in sustaining costs. So they had problems
constructing the sulfide plant at at or delays rather at
Bibiani delays and troubles on recoveries and instead of
producing 300,000 oz plus you'reproducing below 200,000 oz.
(23:02):
Therefore, as we know, you're all in sustaining costs just
blown out the water. So it wasn't wasn't a good year
and things haven't progressed asthey would have liked.
Hence, you're recapitalizing thebusiness.
Before I ask you about the financing, OK, I am I am curious
the the the management of a scientist is this like, you know
a Ghana's local like management expertise that has gone into
(23:26):
this kind of like thinking of like a a cement core in South
Africa? It's it's a bit different.
There is a lot of local talent that is within senior
management, but you've got running the company a guy called
Dave Anthony who was the CEO of Barrick Gold West Africa and you
(23:48):
know, undertook CapEx projects to build a host of mines across
West Africa and in South America.
Previous experience as well. And you've got ACEO, who from
the name is of maybe Brazilian or Portuguese heritage, South
African fellow and yeah, Anglo Gold experience, Harmony
(24:11):
experience. So these kind of major mining
companies. And then you've got a lot of,
like I said, yeah, yeah, in there.
But that, that point is super important in who who's running
the company, given what lies ahead, this company.
So yeah, they're, they're a bit of an unknown entity.
I mean, you spoke about the stock exchanges there.
They're listed on there, not much coverage, which and in
(24:35):
terms of like sell side coverage, I'm talking about
there, which makes it enticing for me.
It it, it adds a layer of potential interest because it's
brushed under the carpet. People don't care about it, but
maybe they will if all of a sudden it starts printing cash.
So yeah, the financing. 500 million US is a lot of money.
Yeah. So there's a few different
announcements all come together.If you, if you do go through the
(24:56):
weeds here and see they, they came out with a 470 million
dollar announcement yesterday. And then today they pace in the
equity placement component of that, which was a bit over is
what they were after. But it's, it's a lot of money
coming together. And in terms of who's chipping
in, you've got Appian big name kind of finances sort of making
(25:17):
more of a name in, in recent times, $175,000,000.
That's a that's a decent chick carved up in, you know, various
tranches to it. And then you've got first brand
people will know through their subsidiary RMB as well doing
another 170 million. Kinross are converting.
So they're going from a 7:00-ishpercent equity ownership up and
(25:40):
they're getting some of their debts paid out as well.
So recapitalization, but they'restill going to be a chunk of
senior debt and subordinated debt in the stack, which
obviously we're not we're not massive fans on for for anyone
that's listened to more than a couple shows that there is a bit
more resiliency in the business given there's two assets as
opposed to just the one. But there's still a timeline.
(26:02):
You know, you got five years on the senior, seven years on the
subordinated. Yep.
If things don't go right and they don't go to the mine plan,
it's it's going to be grim regardless, but.
And you've got a shareholder in Kinross who probably not a
natural shareholder has had to convert that to equity, but
ultimately will probably want tosell at some.
Point exactly, exactly. So you've got those things to to
(26:24):
contend with, but really what itcomes down to is can they
deliver on the mine plan? So they came out with a new
flash five year plan for the twoassets.
They're coming to the end of a pretty heavy investment.
I mean, I need this capital to finish the investment cycle, but
they're going underground mostly.
(26:46):
So beyond 2028, you're going to be fully kind of underground
mining company finishing off theopen pits.
And here you'll like this mate. 2028 five 100,000 oz at less
than US $1000 an ounce. That's the that's the headline.
Then you dig into the weeds hereand what a coincidence, 2028
(27:08):
they're going to produce 501,000oz at $999 an ounce.
It just it just so happens to line up with the targets
perfectly, but you you can kind of see they're doing mid 400 ish
1000 oz kind of range right 26272829 over this period if
they can pull it off. And a history of underperforming
(27:31):
over over the course of. Yeah, OK.
A history of underperformance. So if we look at Bibiani, this
is the asset they got from Resolute.
There have been various projectsunderway.
They've had to move a, a highwayto start with, they're adding in
new kind of satellite pits. They're they're going
underground, but most importantly, they've built a
sulphide plant. So they needed to improve
(27:53):
recoveries that they had had shocking results as they started
to kind of go underground, but they didn't have the sulphide
plant complete yet and recoveries were coming out in
the 70s. So no good.
So this should see them hit the hit the benchmark of 92% and
that should be complete in a matter of months.
Awesome. So 170,000 ounces is guided to
(28:15):
come out of here this year. 2025reserves run through to to the
early twenty 30s. So not too stressed on that
front. But if you then look at the
other asset, Toronto open pit mining has been extended three
more years. Mining costs were were a real
challenge here. So they've they've got to
swapped out the fleet. They bought a new fleet with
increased equipment size. The underground fleet is being
(28:38):
rebuilt and more or less replaced as well.
Just like Bibiani, they're actually installing conveyor
systems across the various hits that they've got here to to pull
down costs and you've got reserves that only run for, for
another four years. So there is a a good track
record of resource to to reserveconversion here.
(29:00):
But I think investors get a bit more confidence if you see a A5
year kind of plus time frame on that one.
But they've got work cut out to get them from over 2000 oz at
$2000.00 an ounce, down 1000 bucks.
Well, they're pretty confident they're going to improve grade
there from 1.5g per ton to 2G per.
Ton yeah. And that will happen as they as
they kind of go underground as well.
(29:22):
I mean, it's it's not out of this world grade, but going from
1 1/2 grams a ton to 2 grams is a big difference.
Big difference. So combined business, JD, like
what do you, what do you make ofit?
I think this goes back to the management point because there's
a lot of investment that has gone into this business.
A lot still kind of has to be done throughout the remainder of
2025 and into 26. So like firstly, you kind of
(29:45):
credit the management for getting the financing done that
had to be done. Businesses reset in a sense.
But like I said, you want to make sure you're backing the
team that can deliver on this because in my mind that so much
of it hinges on whether you're backing the right team.
Yeah. And you know, everyone's going
(30:06):
to have to kind of do their own work and come to their own
assessment on who we mentioned Dave Anthony and Adriano
Sabrera. That's the CEO and CEO there.
You you can see that they've gotkind of big company pedigree in
a sense. But yeah, I think I think you've
got a lot of things on your side.
I think the Ghanaian ownership helps in an era of increased
(30:28):
resource nationalism that we've seen across West Africa.
I think you're kind of thankful that you've got a lot of the
CapEx out the way already and that and that's kind of done.
They've drilled out, they've done these things, they've spent
the money on building the new plant.
They just need to make sure things can kind of come
together. And to to go back to the initial
(30:49):
chart that we showed on what thefree cash flow could look like,
like these are stretch targets if you like.
That's kind of if everything goes well by the gold price
exceeding your expectations, that's what the cash flow could
be. But you know, you know, a lot of
people will know what it's like working inside a mining company
far more than I will. But you understand that this is
(31:12):
kind of the the bar and you needto work your way up there like.
Broadcasting free cash flow in 2029.
It's a good spreadsheet task then.
Yeah, you, you don't know what kind of reality that's kind of
rounded in, but the, the, the numbers kind of look good.
And to, to compare with another miner who mines in the area,
(31:32):
Perseus, that, that that's one of the golden child of ASX
listed W African miners. You know, W African are doing a
great job as well. But these guys Perseus are in
Ghana as well. So I thought they'd be a kind of
relevant peer to look at. And they came out with this five
year plan where they want to kind of average roughly 500,000
oz per annum. So Asante doing a bit less than
(31:54):
that. The Perseus have a proven track
record. They've got an enormous cash
pile as well and they are kept at 4.8 ish billion dollars.
So with all their cash, that's an enterprise value of over 3
1/2 billion. Now that's 5-6 times what Asante
(32:14):
is, even more. We'll see what it all shapes
that once this financing comes out.
But you can see like investors do do pay a good bit and the
profiles are not massively different like Perseus all in
sustaining costs over that period is mid thousands, sort of
14-15 hundred US if Asante can get near to what they're kind of
(32:37):
forecasting there. Again, a bit smaller and nowhere
near with the track record there.
But you can get a bit of a feel for the idea that investors will
pay you if you can get it right now there's jurisdictional risk
that's sort of spread for Perseus.
They've got growth projects and all these other things, but they
also need to spend over a billion Aussie to develop
(32:58):
assets. So there is some some
comparability in the in the nature of the businesses.
Yeah, the, the yes pool of questions I'd, I'd really want
to know more about is in the category of can you get the
capital out of Ghana like you produce free cash flow in
country. That's all well and good.
What's it like to actually get it out?
(33:18):
Like is there a, is there a realistic means to, to, to
distribute to shareholders of other countries in any sort of
like tax efficient way or is that maybe more complicated?
I mean, there clearly was a bit of resource nationalism from
Ghana in the 1st place and that's why these assets belong
to Asante. And and maybe having sort of 40%
(33:39):
plus Ghanaian interest in on your register is a good thing
for that because they're less, you know, apprehensive to
perhaps paying a dividend or these sorts of things knowing
half of it's coming back into the country, maybe open-ended.
But yeah, that the point is super valid on achieving all
these things. You want to get paid for it,
right? We know Perseus have preferred
(34:01):
the buyback kind of method. That's one way to go about and
that sort of reflected what theythought of the value of their
stock. But super value question,
because we know W African as well in Burkina have
complexities about how they get capital out of the country, but
to invest in another asset in the country.
(34:21):
Awesome mate. We could.
Well, we've got a couple partners to thank.
Firstly mineral mining services and then grounded Sandy ground
support, K drill and last but not least cross boundary energy
Hoodoo Hoodoo. 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
(34:42):
and you need to read out a disclaimer.
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