Righto buddy Motors Happy Monday GC How was your barn me just then? You know what, Maddie? I didn't actually get a barn me today. Why don't you go? No, no. So I went to saw Q&T now going on a bit of a bit of clean eating post post diggers to feel a bit better about myself. So I went to Q&T at let's say at lunch bar. I said QTI need something a bit healthier today.
What have you got for me? So they use their culinary X Factor. It's to recommend me a roast pork bowl and it was actually so good. And you know who else does that? A lot access mining technology. So you went to them with a request a problem. Q&T are the trusted barn me advisers in bloody Australia essentially. Pretty much quite the metaphor for Axis being the trusted advisor for drill survey
instrumentation. Experts in what they do, always available to help their clients when they're in a sticky situation. Ohh, turnkey solution, JD. G'day, JD. OK, I love how do you I love how the roast pork bowl was the the healthy option to cleanse you out of a week of drinking Pierce. Better than crispy chicken I guess. Oh, JC's had six saunas this weekend. Oh. Literally cleansed, right? We're gonna be going on today. We're gonna be to. We're gonna get into. What's gonna happen?
What are red gonna do? Next we've we've started at red five and then going down into the Leonora Laverton abyss essentially, JD, you got a bit you're you're our foreign correspondent for what's going on in Serbia with Rio and black rocks lithium on holy snap of duck shit. Yeah, fair bit on, on X and pretty much every mainstream media channel under the sun reporting on that one. And then there was a few other bits and pieces out.
We spoke about beach energy and there their strategy that came out a couple months ago. Now they've had a a massive downgrade today on reserves. So they're getting whacked. And the other one was Galan, remember on Monday of Diggers, this supposed takeover offer came out of out of nowhere really late on the day the AFR reported it. And yeah, there's been a bit more water under the bridge since then, so we'll touch on that one later on.
Beautiful JC. Now before we get started, oh I'm glad to see everyone enjoyed our unofficial Diggers and Dealers awards. But one story I forgot to add to your Best on Grand Award was the fact that you received some phenomenal praise on the potty and the Director's Special from a very highly regarded head of the Insto desk at one of Australia's biggest stockbroking houses. And he even went on to offer you a job on the desk should money
or mine go put. So guys and girls who are on the desk and just want to excel at life, get that Comm up in this market. Get onto the director's special links in the show notes. But jeez, Maddie, I reckon you be an absolute animal. I love it on the desk. I'll be like mate, I'll be like, I'd make everyone on the other line end of the line feels special. It'd be absolutely love it. I'd love, I'd love to.
Hear the the sign off you adopt you know, if we got a a go Australia or something the Maddie version of that let's. Make money. I mean, forget the Wolf of Wall Street, we've got the the dingo of Saint George's Terrace. Oh, actually, let's play the snippet like you know how the oh, Jordan Belfort did his Steve Madden like big ramp up for the dare slot. I'd love to see you do something like this. You'd. Be ferocious. You'd be relentless.
You'd be telephone fucking. Let's knock this motherfucker out of the box. Oh, oh, I love you work JC, Right. We better get onto the news. Let's get through too much fun. OK, and just before you start, Maddie, just a Ding, Ding, Ding for me on Genesis. Oh there you go you got bloody sneaky Ding Ding Dings everywhere JC right now. Let's get into it then. So this this coming up last week, which was essentially Red Red 5 selling their own shares sort of in.
Yeah, effectively. And this, this comes from the, I guess the history of Silver Lake buying the stake in Red Five and then Red 5 and Silver Lake merging. And there's been this, this set of shares sitting there that can either be sold to the market to bring in money or they could essentially cancel them 'cause like Silverlight could sell them to Red 5, which is essentially selling it to themselves. It's like a buy back effectively. But take us through what's happened here.
Alrighty, so Red last week sold around 412 million red shares it acquired through this process. They originally bought Silver Lake, originally bought them for 108 million and they sold them last week for 137,000,000. So a very tidy little 30 million profit there. So Red now have cash and bullion of almost $500 million and no debt lens discussion and tone on
on this particular matter. These these red shares was was mentioned in his diggers Prezzo last week and it gave him the way he talked about it and the tone at least to gave me the impression that this is sort of a medium term thing they were looking at sort of dealing with and evaluating. There was gonna be some action on it by June of next year. Have a listen to what he said here.
The unique situation of holding 6% of our shares provides a potential non diluting source, non dilutive source of liquidity out to June 2025. The investment has generated a strong return and we now have significant flexibility to realise this return, which has only been somewhat recognised by the market today through either a recycling of the capital or cancellation of the shares. So then literally the next day the there was a block trade to to sell the.
State like it was going to be a bit more Elon like. Yeah, No, it's definitely going to some, whether they cancelled the shares or sold the shares, it was definitely going to be happening at some stage. But one could definitely read into the mismatch between how Len was talking about it versus sort of the very expedient nature of what was actually
done. And it, it doesn't seem like they were trying to take advantage of, you know, a rocketing share price or something because the stock's been off about 2025% since three months ago. So that leads us to believe that there must be some near term need for the cash to sort of exercise this option right now and especially in sort of cancelling the shares. But what actually is that? Yeah.
So like if they so they've cancelled it, they've now got more cash, but they're they haven't really, they haven't really gained anything because it was classed as a listed investment before that. But if they cancelled it, they would have had less shares on issue and like maybe had a better, you know, price, share price almost. What's the play Earnings per share? Yeah, No, that's right. So it had, it would have had a similar impact to say a, a, a share buyback or something like
that. So I mean, as far as the options on the table for them with this, this huge pile of cash, I mean, here's a snapshot from the Reds Diggers presentation on their FY25 outlook and priorities. And that sort of gives us a few hints. I mean, King of the Hills or or cough as it's known, a lot of options there as far as doing the northern and the southern cutback. They've got at least 2,000,000 ounces in resource between those
two. You know, they could expand the mill which is currently operating at nameplate. And they say in their presentation that the the cough mill is constrained, sorry, cough is mill constrained. They've got about 7 million tonnes in all stockpiles at the moment, let alone the extra or from cutbacks, exploration and anything else, you know, outside of red that they might choose to pursue. And they're processing costs, you know, super cheap there. You know, could we see a sugar
zone race star? I don't know. I feel like there's more interesting and exciting options in the in the local asset based than than sugar zone. Oh. My, I've got some comments about that later, José, José, we'll. Get on to that. Very good tidying up the hedge book could be an option. They've got around 290,000 oz at Aussie $2769 an ounce for delivery between FY25 and FY20 7. Mind you, this is just like roughly 2/3 of, you know, this year's current production and about 7% of reserve.
So it's not massive, but. That could what, 250 mil out of the money about that? Yeah, so I mean it. I mean, 250 mil is 2 50 mil, right? So hedge book cleanups like for for Capricorn and Catalyst we've seen recently have worked pretty well in a rising gold price market. So, you know, that could be an option. They could do a, you know, special dividend, a share buyback. But here's the juicy one. Could they do some M&A? Here's what Len has to say about M&A in his recent Diggers
presentation. There's always a lot of noise around M&A, particularly for those who are not in the arena. The merger was underpinned by the strategy to combine the strengths of two companies to leverage the compelling commercial logic to create a stronger, better company with a platform for further growth. It was not about trying to fix the problem or combine more of the same.
Oh, we're outside the arena and we love talking about M&A, whether it happens or. Not let's talk about it, Ted. Good. Fun, Oh, what a day job. Oh, it's it's very interesting where they're sitting. They've got a shit load of cash now and then. And this all I guess makes them very appealing for if someone did want to go with them and we want to expand the king of the Hill mill and we got bloody half a billion dollars sitting in the bank account. Very appealing because I haven't
released any FY25 guidance yet. OK, so I guess you got you got your got your eyes peeled a bit to see if now I've talked about it divesting some of the the smaller silver like assets, maybe spinning sugar zone out into another vehicle as a North American play with another North American Gold Bond or something. There is some links with other smaller ASX listed companies and ex Silver like people that have North American assets.
Look, word on the decline the contractor change out at Rothsay is having some hiccups so I just yeah, I I still wouldn't be surprised to see red 5 and Silver Lake just become red 5 again, but. Just with more money. With heaps of cash, I'll just Yeah, I just think that so yeah, until they we see some guidance about what this year's gonna look like with what they've got at the moment, Yeah. Got me your eyes peeled, JC. No, very good.
So as far as the the M&A angle we'd like to throw, this is rabbit wire #1 magnetic. And to be honest, I think when we went through this exercise, I sort of felt a certain way before doing the work, and I feel a bit of a different way after. So let's let's go on. The Jay dude, I believe we want a bit of research. We've been mate, me and JC have been on WAMEX and everything today like we are on fire. Converting longitude and latitude to easting and northings and stuff.
It's just like we. Gotta, but once you get in deep, geez, can't things change, Jason? Oh, it's amazing. So what was your, what was your thoughts before doing the research then seeing as you say, there's there's been a bit of a change? Yeah. So I mean, look on, on the face of it, it is, you know, outside the grey. And I mean we've touched on this in our fantastic gold piece we put out the other week. So check that out.
It is pretty much one of the larger undeveloped open pit assets is not held by a major in WA pretty much, yeah, other than degrade in Ozgold. It's in such an active region, not just operationally, but M&A wise as well. And there's a lot of underutilised processing infrastructure in that region as well. So on the face of it, you know, it sort of does it, it does tick those sorts of boxes as far as and you know an interesting
proposition. But like we always say, you know the devil is always in the details. So let's get into that a bit now. So Magnetic, they're now capped it around just over $400 million and they're one of the only stocks that went up last week and on big volume as well. Admittedly, they did put out an update to their PFS they did earlier in the year. So here's here's Magnetic on the Spark chart.
And that was that. And that's pretty high volume for them 'cause there's not much free float with magnetic, is there? No, that's right. It's pretty tightly held between the major shareholders. So that is the to have a period of quite sustained high volume is a bit unusual. But like I said, they did put that pretty interesting PFS out. Major shareholders, which are funny. I'll bring them up now. Chinese and Dial Alcock. Just to throw something into some. Pics get some checked dollars
out. Western Australian property developer so and like I said before, Magnetic appears to be one of the larger undeveloped assets that isn't owned by Major in in the region and that's open pit as well. So let's set the scene and let's take a look at the map. This is we'll pull up the map here from red fives
presentation. Magnetic is roughly where that little red dot I've drawn is between Goldfields Granny Smith three and a half million tonne per annum plant which is operating about 50% below capacity and the the town of Laverton. Genesis is Mount Morgan's 2.8 million tonne per annum, which is in care and maintenance at the moment. About a year away from restarting is not too far to the West.
Both I. Think, I think it's about 10 to 15 KS or. Something that's quite close and yeah, and then Grady Smith's about 35 KS away. And then if you look further to the West, you'll see Red Fives, King of the Hills, five and a half million tonne per annum, you know, mine and plant and that's around 150 KS away from
magnetics Lady Julie Asset now. So what there's a, as you said, it doesn't sort of stack up as logical, but we've seen Silver Lake, which is now Red Five, do some things that haven't been too logical to do with Genesis. No, that's right, history. We certainly can't forget recent history, the Battle of Leonora, which certainly underpinned at the beginning of this podcast for Saint Barbara's Leonora assets.
Silver Lake sort of bought a pre pre bid stake in Red, which at the time sort of seemed quite strange because there was no sort of, you know, direct, immediate, obvious operational synergies. And many at the time sort of argued it was to sort of piss off Genesis. And then, you know, they then accepted Silver like then accepted a deal from Red where they got acquired at a bit of a
discount. And basically the sort of a bit of a feeling that there's the long game is some sort of eventual tie with with Genesis. So you know, how how do they make Genesis need red more than Red needs Genesis? And that one way to do that is land banking, their regional
synergies in the area. So you know, Mark Morgan's needs higher grade and you know more feed where they're going to get it from it. The Lady Julie asset purely on a, you know, a proximity basis makes sense to fit into the Genesis or or Goldfields portfolio. And it's, I think it's pretty bloody obvious it's up for sale. Of madness. I mean, you only have to have George Sekoledy's literally body almost explicitly say it in his digs presentation. Have a listen to this.
The Genesis and Morgan's operation, they're on caring maintenance and the goldfields at Granny Smith. In both cases, we believe that there's a chance to be interested in our project that have been in our data room for a while. And at the same time, we're increasing the size of what we have. So we think there's synergy there. So they're in the data room. They're in the data. Room if you didn't know. So there you go.
So for so for context, so the Lady Julie project that Magnetic has it's 1.8 million oz at 1.7 grammes a tonne gold in an open pit resource. It's obviously near with these mills and processing infrastructure.
They put out a updated PFS on the first day of dig is just you know, perfectly timed as they always do, you know, sort of putting forward a 104,000 oz per annum production profile for eight years, almost a billion dollar pre tax project MPV eight at 3200 Aussie mind you spots another, you know, 500 bucks an ounce more than that now as well. I was you looked at building a 2.2 million tonne per annum mil
that they said is planned. If they did go out alone for 74,000,000 bucks, I don't know, I reckon if you you might be able to get it built for that in China, but I don't know, she might be a bit tough out at Laverton to. Yeah. Sub hundred mil for that. I saw a few of the, the brokers sort of chirp in and the, the numbers they'd kind of put to it was about double the, the CapEx that the company had provided. And you know, this is, this is APFS. So we'll kind of see what comes
out in, in the DFS. But there was also some kind of discussion that they they might tweak the sizing like you said maybe 2.2 million tonne per annum, but they might look at a slightly smaller thing with bearing in mind that this could go underground. That was their sort of commentary in the in the longer term.
Yeah, yeah. And I think like the other ones that I've heard might be in the data room or you'd think might be as well would be like your Regis and Anglo Gold Ashani cause Tropicana and Sunrise Dam are in very close. They're not too far away either. There as well so hey, everyone's probably everyone goes in the data room all the time for everything no doesn't mean you're gonna block buy the bloody thing but. No, that's right.
Don't, definitely don't take that as a. It's like saying, oh, I had a beer with Shane Warne. Yeah, cool. Yeah. Yeah, I didn't know him. I haven't added it. I played pool against David Warner once. Oh, did ya? Yeah, that's a good. And he introduced himself as a different name. I'm like. I know you're Dave Warner. I know you Dave. Oh, that's fantastic. Anyway, so yes, OK, you've set, you've set a good scene there, GC Yes. When did your when did your life
start to change? My life started to change when we started looking at appendices and Geo view and Webex is when I just have a few questions so because. I and because I just trying to and where I was where I landed as well is just trying to think of this will be. Much of a bug. Even if Red did purchase this for whatever reason, would it be a bargaining chip to get Genesis? I'm not sure we're going to figure that out, right? Let's figure it out together.
Change of life point #1. The magnetic price tag is getting expensive now market cap, like we said before, they're just over 400 million market cap now. If you whack the standard 30% M and a premium, I think arguably given the shortage of sort of big simple open pit assets in Australia or WA even you could argue that premium might be even more if a prospective deal went ahead.
So that's taking you to a ticket size of, you know, five, $600 million and you haven't actually built anything just yet. Yeah. And and because it's got that low free float, it's like whether I think of the, it's been turned to me price discovery in terms of what it what it's trading at at the moment on a very low free float, it's like, well, is that the most accurate valuation for this stock? We don't know and that certainly
would have an impact. Probably the bigger question for me is PFS with no reserve And look, I haven't been in the market as long as some others which you know that's fine. But in the time that I have, I've rarely if not ever seen something that's been at APFS level or beyond not have a reserve. I just and even in our recent gold piece we did that was the case. Everyone who had APFS onwards had a reserve except magnetic. But, and the question isn't more so why wouldn't you?
Why wouldn't you put one forward and getting stuck into the appendices a little bit, sort of, I don't know, gave us some hints or some sort of answers. I mean, having a look at the excerpt from the updated PFS appendix. And this is more so in relation to, you know, delineating an oil reserve said the current focus is on expanding the resource base rather than infill and the resource to be mined in the first four years is largely indicated. So would fit the probable reserve category.
Now that makes in light of a few single asset gold developers in recent history. We've heard this before and it sort of makes us a little nervous, you know, and they've appointed Argonaut as dead advisor. So we can imagine, in light of the recent Daisy and Gascon Caledis sort of debacles, any potential project financier. Look, they would do this anyway, but even more so now they would want a very high level of confidence in the geological model. And so that infill work will
have to come eventually. Yeah. And and like look, yeah. And it is coming across that there needs to be a lot more work done on that resource definition because and it even says in the job table here that no independent verification of drilling sections has yet been carried out. Yeah, right.
That would be something that banks and like people providing debt, I assume would require of course, 'cause like you know like the hits look good inside as the resource done, but look 20 metres at 3.8 grammes for a drill hit. You'd bloody take that any day. The friggin wait. But you you say on the maiden mineral resource estimate that 73% of the drill hole metres, 130,000 metres worth of call well worth of chips were done with RC. Yep, so and you also which. Is pretty standard.
Yeah, yeah, yeah. And you also see it here where it talks about like the the risk with RCS, like drill holes, samples are sometimes wet, which may result in sample bias. So like, and what happens there, like the muddy muddiness of the sample coming back up the string can sort of bits of gold can get stuck and then sort of smear over a longer length side look. And it's just an example why they're having an independent geologist sign off on all the historical drilling is, you
know, very important. It's definitely very useful to. Make a bloody bank happy. So yeah, that's yes. I I still I just find that really strange in this day and age and sort of going along on to the next point there. There isn't currently an ML or a mining lease on the Pro SEC just as yet. That's. Probably that's probably the most thing that gets undecided the most with M and I I'd reckon is like whether it is on a mining lease or not or exploration or prospecting
lease. So 'cause that not having that mining lease can slow down, that could be like another freaking two years. Like 'cause they, they, they did put mining lease application in for Lady Julie N for last year, yeah. Late in December. Yep, that's where it hosts most of it, and that's where the where the project's gonna be. But like that could.
So it's in the wings, but it's, there's still, there's still a bit bit to go. And you know, again in the, in the lovely PFS appendices, they say that they're still working on ML applications, so that sort of other deposits as well and wrapping a mining proposal around the whole thing is underway right now. However, it says the grant of a mining lease and approval of a mining proposal is subject to signing of a native title agreement, negotiations for
which are currently in progress. So we all know how slow project approvals are going these days, you know, Australia, WA in particular. So you know, by the time you sort of native title, then OK, they've got the application in for the ML, which is fantastic. Then they've got to get that granted. Then they've got to submit a mining proposal, then they have to have that approved.
Then they've got to do ADFS and you know, if FID and funny there is at least, you know, another at least another 12 months, if not more. There's a lot more water to go into the Bridget. Not saying it's not going to get there, but you know, we hope that it does. But there's still a lot more work that needs to be done as as part of getting a mine up and underway.
It just goes to exactly what we spoke about as one of the takeaways from Diggers last week, right, permitting and all these things taken a bit longer than they used to. And I mean for for this company, it seems kind of appropriate that the PFS level they're going to work that in tandem while hopefully they have a you know, diamond programme and then tighten up the drilling and build the confidence in the resources all sort of comes together over time, but it takes
time. I think that's the take away. Oh, and you look at what what line town in Bellevue went through to get their native title agreements and the people and energy that goes into that process for them to get to the stage of mining now, it's a huge, huge effort, huge job. 100%. Is there This is where big Wham X got involved. Equal hair goods Wham X. I'm a friggin that's my new That's my front tab. Now you look at look at where the pit is.
So I'll bring up that there that Lady Julie N pit is right on that northern extent like literally looks like a tenement batting the tenement boundary. And look that this square. I'll I'll bring up the the Wamex stuff, the square with the little top right corner chopped off. That's the magnetic tenement. They did recently acquire the tenements to the east from Rincon resources. So that's for the potential sort of East extensions down dip, but. Look at your Webex.
Screenshot scroll through so many Webex pitches. But right to the north of the Lady Julie N pit boundary are two tenements owned by Focus Minerals and that's where the pit abuts to at the north. And I, I just think looking at where that's all situated, that would make things a bit difficult. At the moment. It's like especially I'm I'm not sure if the ore body if it just goes out to the east to Rincon, if there's any other extensions. That go the other way. At depth go venture into the
focus things to the top. It just it just might be tidier owning the neighbouring one as well. But I'll tell you. But a bloody a verify model would be handy, right? Oh. God, trying to do all these bloody conversions and stuff on where it sort of sits and oh God, the verify would have helped so much. Yeah, yeah. And I'll just want, I want to know if it's trending that way or that way. I probably could have checked Azzie's and all that. I'm, I'm, I've taken the first
step to understanding this. I've probably, actually, I've probably been a bit lazy with, you know, reading drill tables and like plotting things because I, I've only ever used verify models and I've just, I've just started getting used to it. So I WAMEX give verify a ring and try and integrate verify software into the WAMEX platform and I'm a happy camper.
And they could brawl fight and the drill aisles and bloody, they could actually put the AI in there to tell WAMEX where the probably the next Yeah, fuck it. Unbelievable turnkey solution. Turnkey government should cough up some decent money for it. Look at 'cause you look at Focus Minerals as interesting ones. I think it's like 30 mil market cap. But look at where all the ground that they have in and around Laverton. Yeah, it's freaking everywhere.
And obviously, well, a lot to the north of Lady Julia. But Focus is 63% owned by Shandong Gold International Mining Corp Chinese Magnetic are also about. It appears the major shareholders make up about 30%, which are Chinese. So even even a tenement sale from focus to magnetic would need or vice versa or whatever, or be focused to magnetic, that'd even need FURB approval, yeah. Potentially.
Yeah, let alone a frigging merger of a Chinese to Chinese in Australia be a bloody, bloody difficult one. So yes, I think we've we've landed. Oh, and the oh and then oh and the bloody CapEx. Yeah. And the CapEx and OpEx seems to be a bit undercooked as well, which you know we've sort of touched on in, in previous chats and, and and newsletters as well. So I guess the question here is, do you think Red will pop up here just for the sake of frustrating Genesis? What do you think, JD?
I'm not sure how long a a business strategy can just be the frustrated it'd. Be good fun, it keeps you interested. It would be I I, I do, I do think the you know, the point you mentioned earlier, Maddie, of trimming down the portfolio of getting rid of the, the non core as the company sort of migrates upward in the chain and
becomes bigger. You know, Northern Stars a good example of evolution bit by bit as they get bigger, they trim the the, you know, less tier one type ones and they acquire even better deposits. So that's the kind of natural progression of all companies. And I think that's definitely going to happen with the the more fringe assets here. Oh yeah, to be I don't think, but always that really I'm throwing darts now things not happening.
Haven't I evolved? I'm usually saying bloody trying to think of what's going to happen now I'm saying what's not going to happen. But I, I don't think anything will happen here in terms of like Genesis are obviously focused on probably getting Mount Morgan's back up and going even though it is 10K away or whatever. But look, no mining lease, no native title agreement, no mining proposal. Probably a bit more work to be done on the resource and, and everything like that.
Even without building a mill there, you know, it could be frigging 2 years away. So if they're right starting Mount Morgan's, they can't get the dirt for frigging ages anyway. So look, maybe. It's rubbish. Might be something that could come in later on, but I reckon if Red 5 bought it for whatever reason that Genesis would be like, Oh well, ain't enough to suck us in yet because we're restarting Mount Morgans anyway.
But I think more the key thing is that if because I think Genesis, what have they got about? I think they've got 100 and 100 odd million cash 140 mil yeah they've got a lot to do right there I know they're busy they'll get fucking debt like that. Oh big row will just walk in and say in her over big follow but he but I think now red red with all that cash as well like that look it it's going to happen eventually it's just the timeline of when Genesis and red five will tie up.
I, I noticed in, if you get where I think maybe it was the Aspire 400 thing in Genesis where they were talking about the Leonora mill expansion potentially to 4 million tonne at Gualia. So then Tower Hill didn't go have to go to Mount Morgan's. But then watching that Diggers presentation, it was sort of reverted back to just talking about Tower Hill going to Mount Morgan's, which I which I cannot personally ever see happening for that deposit.
Everything belongs in that king of the hill mill. It's just when that actually happens. But if they're going to sort of do a lot of work in pacing this whole thing together, Red five's half a billion in cash would that's. Just half a billion in cash now, let alone what they build in the next, you know, quarters and. Especially if they start divesting stuff like yeah for for cash, like yeah, I think yeah, I wouldn't. I wouldn't be surprised if it happens sooner rather than
later. Yeah, I think with my with my old bank I had on the only thing that sort of made a little bit of sense to me is get doing a Remelius Spartan types, you know, strategic investment into a magnetic purely for option value as far as putting a foothold on it. And whether you wanted to acquire the company later when you're ready yourself or if someone else bit over the top of you, you'd make a bit of money on your stakes.
So you sort of ideally it's sort of you're not losing all the way and you've got that option there. But I think, yeah, my conclusion after going through the weeds, it's, you know, definitely a very interesting large open pit development story in a very active region. A lot of underutilised processing infrastructure in that region as well. But like you say, Mehdi, there's a lot more water to go under the bridge until this fade can actually get mined and put into someone's or their own, you
know, processing schedule. These are out there. One, if it's going to happen, I reckon it's going to be a block trade for Dal Lawcock steak. Yeah, that'd be. Because there's there's not really the free float or anything to. So he's got 111%. So that'll. Cash, well, that that can block, it's enough to block a compulsory acquisition. It's more than 10%, Maddie. Jeez, you. Would be good on the desk. Don't you worry about me.
Oh Bunny, give us a ring mate. I'll pop in and do a bit of work experience for you Cover. Oh, Jesus. Oh, there you go. Good stuff, Jay. So actually I learned a lot today. I did learn a bit and also as an aside, I thought this was a bit cheeky for for those who are in the know, have a listen to this snippet here of again, this is Red 5 Slen. Who do you? Which gold producer do you think you might be having a crack at here?
Have a listen. We have significant financial strength with $520 million of liquidity to pursue and internally fund projects, exploration and growth with the business facing no existential imperative to pursue M&A, an increasingly differentiated position in the gold industry today. Who do you reckon? Must be rageous, I. Surely, Surely. But isn't it funny that I reason he can say that now it's because he's got King of the Hill? Because. I think that was. Silver like not long ago.
Oh, what goes around comes. Around. I love it good work JC. We've taken we're going into a new frontier today, mate. Step change. Bloody. Oh, brilliant. You wouldn't believe it. It'll work hard when you're not supervising me, JD. You should be proud. Rather but. I'm very, I'm very proud of you. You should actually give a couple comments onto what Wymax is, I think a few punters out there, yeah. They're publicly available. It's like Geo view dot WA.
It's like WA, yeah, mineral exploration, bloody whatever. It's the government website where you can see all the all the tenements, whether they're prospecting, exploration or mining lease. Who owns? Who owns? It takes a bit to get bloody used to and. Pretty handy, hey? Yeah, yeah, mate, I told you might pick up some ground, sell it on the desk. Righto. JD Rios. JD Rios Jadar.
Yeah, we're we're going back to back to Serbia and I think it's actually yada Maddie, I got that, got that one after we spoke about it last time. So we'll we'll play a couple videos while we're talking here. You can see sort of how Rio envisioned the project. It's their sort of mock up of what it's going to look like if Slash when it gets developed. But essentially when we spoke about this a couple months ago, things were looking to be back on track.
If you're if you're Rio Tinto from their perspective, and we'll give a brief timeline, about 20 years ago is when they discovered this thing. Since then, it's been in study after study as the the the broader lithium market has kind of matured. They've spent €500 million on the project over various studies to date. Get get lubricated, JD. That's it mate. The the throat's still a bit rusty after the years. So essentially in Jan 2022, the Serbian government revoked the
licences or some key licences. And then what we saw in July or late June was that the court had ruled that unconstitutional and essentially given back the licences. Now over the weekend, there's this massive protest. It was all all over Twitter, all over the the various news stations out there, between 24 and 30,000 people, with the bearing reports of how many people were in the streets of Belgrade, the capital of Serbia, fighting against the development
of this project. So we've got in Times Square, that's. Just amazing. Bloody unbelievable. Yeah, it looked, it looked quite busy and to, to try and get a feel for who's actually out there. From reading into it, you know, you've got farmers from the, the Yadda Valley and then you've got environmental groups, you've got people from a sort of political band, people from, you know, more just out and out environmental kind of left leaning political groups there.
But it seemed to be a pretty broad range of people that are kind of anti Rio Tinto, anti development, all with the, the crux being that they are scared that the mining will pollute the land, it will pollute the waterways that flows a couple of rivers there through the whole of the country. That, that really seems to be the, the core issue that all the people there have with the, with the development and it's, you know, it's not completely like unfounded.
Serbia is a country with some of the worst air pollution in all of Europe. I just found that out doing a bit of digging. That comes from industry they had from, you know, back in the, the Yugoslav when, when it was all Yugoslavia throughout the sort of 1950s to 1990s. And that is, you know, led to a whole bunch of health problems with a lot of people there. So it's very front and centre, this issue of pollution, bad air quality.
And they're kind of, you know, a bit traumatised by that in a way, and they don't want to risk anything, not to mention all the farmers, they don't want to ruin their lifestyle. That's what they were kind of want to pass on to their children and so on. And there's this interesting sort of comment floating around from various political groups. They're saying, essentially, why should we develop lithium for electric vehicles that we can't even afford?
And that's sort of pushing back firmly against the Western European countries like Germany, France, England and Spain, who are very pro the development of this project that's, you know, not in their backyard, but still in the EU. So a bit of, you know, not in, you know, Nimbyism is still very prevalent here. They don't want the mining to go ahead. But clearly the EU is still trying to push on with its goals of getting the project online.
There right, God fragging. Good luck being a copper there with 30,000 angry Serbians coming at you. Jesus Christ. Mate. It is scary a lot of. Shivering just thinking about it. Yeah, and it's it kind of flies into the face of what's unfolded over the past couple of months. So like I said, the EU wants this to go ahead. You've seen Mercedes Benz, you've seen Stelantis, they've signed deals to get, you know, early stage off take kind of agreements to to get the lithium.
And we've spoken a bunch about the the E US Critical Raw Materials Act. This project alone would provide 90% of the lithium needed for that, you know, if they can build the downstream battery facilities in time in the EU as well. But that that whole goal is looking very shaky because there's not a whole lot of other off scale mining projects out there that could fill in the the supposed 90% slot that this project would would come up with. So how's Serbia as far as the
government? How have they if if they have responded to to these protests? It, I mean it, it's really interesting. You've got this guy, Alexander Vukich, he's been there since 2017 from memory. So he was there when the project was pulled. He was there and sort of championing it when they gave the licence back. And he's actually called a crisis meeting and said this is all a kind of ruse to overthrow me via a coup. So he's saying this isn't
actually to do with yada. This is the people uprising under the guise of another sort of cause and they want to overthrow him. So I, I don't know how much to, to kind of read into that. Into you. It's me, yeah. It's. It seems a bit far fetched from the outside, but what I don't haven't even been to to Serbia, but I think the real consequence is with Rio Tinto. We know with without a, a social licence, you just can't operate and Rio Tinto more than any
company on earth knows that one. In the mining space, the the Serb energy minister said it's going to take at least two years to get the permits to start construction, but that all hinges on an environmental impact study. The AAP, AP, existing JD, what's the what's the metrics on it? She's going to be a big hum digger. 58,000 tonnes of lithium carbonate equivalent. Yeah, right. So that's what times that by 858, so like bit under half a million tonne of spot equivalent, so exactly.
Similar. Exactly, people are long town so it's a pretty decent size. Mate, it's, yeah, it's it's chunky. And I mean, I'm thinking about Rio Tinto. I'm thinking about what we've spoken about in the last week or two, Jabiluka, their kind of stance on that once you guys need to need to find another. Water. Oh God, this happened to me at the bloody the mining club. Oh no MC thing.
I was up there talking and I started getting a tickle in the throat and someone, someone was actually telling it. Like a very. Important story. A very personal story and I'm like I'm so sorry mate I've got a lot. Then lucky they got me a bloody water and fixed me up. Oh bloody. The timing is just like then I started sweating and then once you start sweating you start sweating more because you're thinking about sweating, sweating.
Oh, once I got myself back on track, got it again this bloody this Wednesday actually I'm up for another round. Very good bloody. So I'm taking up a pint of water with me. This. Time, Yeah, Take up a pint. That's my fair, so I'll get a dingo all. Right, so you've got it into contour now. I've got you. I'm fit and fighting. Back on my feet.
Go, brother. So you, you got Rio Tinto, Jabiluka, obviously what we spoke, spoken about, they're obviously going to continue to try and change the sentiment in Serbia in the background. But if you're in the boardroom now at Rio Tinto, you're having a serious conversation asking are we serious about lithium? They're kind of said they are for a while. And the follow on, if you say yes to that is what are we going to buy?
Is that a project? Is that a company that I mean, that's where you're kind of left at, right? Because this, this is going to take forever. It's it's kind of been in the background. I mean, I'm sure they've known this for a while. We saw the protests in Jan 22. But I think that's where they kind of left it and maybe we say something.
You know, but you look at like you look at how much they fucking make out of iron ore and copper, like like how big scale it is, their iron ore, their copper and you know everything else. But you see the the effort they would have to go to for this just to get it's not like it's the biggest friggin lithium mine in the world. Like it's sounds like it's a bit smaller than line town. So it's like. Still chunky It's.
It's chunky, but it's not like if they're going to really have a swing at lithium, it probably goes back to what you're saying the other week, JD, they'd just fucking buy Pilbara, wouldn't they? Like. Yeah, I mean. Then it's got proper proper scale. Kind of got to weigh out the differences between the, the amount you'd have to buy the thing out for. I mean, this, this thing's got a 40 year mine life as it stands at the moment.
So it's, it's not small. But yeah, I guess we'll kind of we'll kind of say I'm sure there'll be some stern conversations in the back. You've also, I mean, the the other kind of takeaways right are that this is long term bullish polythium on on the margins at least it was down the track and our conversations in the West about taking power from China, they just keep going. This is, you know, they're
actually doing stuff over there. They're actually building things and we keep going back and forth so. Look, I wouldn't want to, I wouldn't want to put those guys in the bloody trenches after seeing those videos. But I reckon there might be a need for the CRE insurance team to get over to Serbia and sort of give Rio some assistance
here. ISIP because like talk international mining, international insurance in tough mining jurisdictions like that's just another day in the office for CRE like they they love it. Anything in Australia is just a bonus. Like easy, they love international. They absolutely. Africa. Big in Africa? Do it in Perkina, they do it all over West Africa. Said you'd be a walk in the park, you'd think.
And I think that it's probably good for them as well because they could actually insure themselves when they go over there in case they get stuck in one of these bloody blockades in the middle of the city. So there's there's insurance going everywhere. So that'd. Be everyone gets they'd. Be protected themselves, they'll go and protect the mining right and we are going to have it sucked down a couple of points with not true Harvey, the CRE
insurance team, the savvy. So looking looking forward to to them. I do send us a message if you were lucky enough to have a point with Druber at Diggers, but he we'll draw up some T shirts. Sure, I'm sure that he wanted 2. Messages chase money more if you had a point with Druber. I love it right JD? Finish it off mate, before your bloody throat caves in. That's it Galan. I was getting a few WhatsApp messages about this. Oh what's the talk about Galan
diggers? I'm like oh shit, sorry I haven't talked about mining all day. But anyway. I'll give it, I'll give it one last hurrah. So the deal is not going ahead at Galan. So this this fuss came up late Monday while the stock was still trading. If you guys remember, it was, you know, quickly put into a pause after the stock had jumped kind of 15% and then the day kind of closed. More information surfaced before stocks started trading the next day.
But the, the headline we saw from straight talk was US $150 million takeover, which you know, sounds sounds pretty juicy before you start scratching beneath the surface because they were kept at 64,000,000 Aussie at the time. Now the, the reported bid came from a group called Energy X. They're not listed. They're a a start up. They are, they're an American company, although there's kind
of varying reports out there. One headline said they are headquartered in Austin, TX, Another one said in San Juan, PR. So you know, you can, you can dig into this company and, and watch a few videos on YouTube. They are trying to get their DLA technology advanced and they thought that Galan's project would be the ideal sort of vehicle to kind of do it through. But digging into the detail, you can see the the supposed takeover in quotation marks isn't exactly what it seemed at
first. The ASICS queried Glenn and you know, overtime Glenn came out with a bit more information, but this was essentially an unsolicited conditional non binding indicative proposal. It actually came about around a month ago on the 12th of July is when the company started talking before St Talk broke the news. But this was not AUS $150
million takeover by any means. What Galan came out and said was that there was US 50 million in cash, 50 million in Energy X stock, plus 50 million in project financing. That's all very kind of airy fairy because they're a private company. They were going to value their own stock, that 50 million. It'd be like us trying to do a bit of a takeover using money and mine paper. Of course we give it a quite a generous valuation, I think, and of course I could. Probably basically.
They'd probably be an independent valuer in between there as well. But you know, those things can get a bit blurry. And not to mention the other 50 million was for project finance. Now that was going to go to the project that Energy X we're going to own. So of course, Galan isn't getting that cash at all. And then there was talk of a 10% royalty as well. But essentially here we are a week later and Galan has come out and said there is no chance of this turning into a solid
deal. You know, we're just going to move on from here and keep developing and yadda, yadda, yadda. It reflects well on the project and all these sorts of things. But you know, it was a interesting week for the stock. It jumped up from circa 12 cents up to 17 and then now it's back down in 12. There's a bit of a a spike in volume as you'd expect in between. But here we are.
I think, you know, the lithium market is still kind of in the doldrums and these guys are just going to have to keep chipping away at trying to develop this thing. Oh, JD, mate, you have done sensationally because I know you. I know though, isn't that the worst thing? I'm just going to finish this sentence because and I'll just the tickle. The tickle is right there. It's just won't go away.
Mate, Do you want to scrap the last one because since you're struggling or you want me to read through it for you? Go for it mate, go. For it mate. I'll tell you what nothing more than I'll dive into each day more than beach energy fucking beach energy first thing I look at all the time. Love me beach mate. Having a bit of a shocker ajd down 12% like coming out with their full year results today. I guess look, the stand out point to me was, you know, 2P reserves fell by 20 percent,
20%. So that's pretty big. That's 1/2 years of potential production losses from the revision. So it's a bit of a kick in the guts look, which I think, look, when I wasn't looking at beach and you were JD, we spoke about when the new strategy came out a couple of months ago there, there was a bit of a expectation that the new management had cleaned the closet, you'd say. And look, add, add everything negative that needed to be aired, leaving them to, you know, get on with the job, get
on with the beach story. So look, this point is far out, Sean. Anything else the company had to say? Maddie, what was what was kind of behind the the reserve down. There oh look I bloody look I Dave right into it look they've they've hooked up the enterprise enterprise field in the Otway and look that that's the one that just sits north of Port Campbell on the Victorian coastline. So I. I think you'll find it's just to the South in in the in the water
there. South, I was just testing ya but yeah, bloody. Yeah, you're all over it, man. Just sits South of Yeah, 'cause it can't sit north of Victoria coastline. Yeah, look. Oh, it's just that friggin clustered how much time I put into this. And look, they, they've said they've observed a bit of a pressure decline JC over the past few weeks. And look, that's look, that's consistent with the reservoir being smaller than I guess
originally estimated. So look, two pay reserves dropped from 50 M MB OE. Yeah, barrel equivalent. Oil barrel equivalents? Yep. Yep to 2:05. Yeah. And a, and a good bit of that came from the the enterprise downgrade, not to mention, you know, yet the the production that they spat out over FY24. But here they are that 12% chalking off is over $300 million in in market cap. So they've got their work, they've got their work cut out
for them. And I think it's just, you know, kind of perennial disappointment for Beach shareholders. It's been a disappointing stock to hold for quite a while. Geez, you know who's not perennially disappointed? The customers of Axis Mining Technology. Great Segway. They're always happy.
Go Access. I thought you're gonna say seeing barrage there from go access go the rest of the bloody partners MMS the go the go to mining contractor, verify Smeg power and technology, DSI underground Silverstone CRE insurance, Greenlands equipment, K drill and you saw a couple of spark charts in there. Bloody great, thanks for carrying me through team. Ohh mate, I'll interject on beach anytime you want. Jada Hodoro, Honest.
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