Right eye money miners, we're just ripping straight in men Rez and Bald Hill, bit of news there and we have some deal action in the sort of sandstone sort of land or a sort of Laverton and it's some bloody regular offenders here. Forget Gina, mate, there's a New Deal blocker in town. Maybe God? Oh, to compare these people to, right. Take it, take it away. We'll save that one. That's going to be a big segment. JD Minrez, Bald Hill on us.
Yeah, first and foremost the Ding, Ding, Ding from Ali, the customary one there, she's a Minrez shareholder. Minrez chucking Bald Hill on us. Like you said, Maddie, it is actually, it's only the the second WA mine to go on full care and maintenance, which is kind of a bit funny to think about with. But you've had a lot of sort of production, you know, slow downs and these sorts of things, Pilbara, Lion Town and everything.
But yeah, they also actually slipped in late on Tuesday, a response to an ASX query which I'll give a couple comments on to start with and then we'll get into the Bald Hills sort of story. But Long story short, the Min Res Board admitted they should have said two years ago when they first found out about these events that there were in fact related party transactions. So that's a sort of another
strike against the the board. Obviously there's a very similar board to what it was two years ago. Not quite the case with everything that happened in the the mid to late 2000s, but they the current board that is deemed
it immaterial to shareholders. And I think like we sort of touched on in the past that hey, a managing director profiting at the expense of a shareholder, no matter really what the quantum is, whether it's 10 bucks or whether it's a few 1,000,000 bucks is material and people should know. But unless you guys had sort of extra comments on that one, I think we can jump into the bald hillside of things. Well, it's not. It's not material financially,
but it's material on a corporate governance standpoint. 100% is, yeah, yeah, I think. Leave it at that. Yeah, absolutely. Needless to say, the AGM in one week's time, 21st of November is going to be a juicy one. I'm looking. Forward to that in a week. Yeah, one week. Fuck, that's awesome. Yeah, it's going to be, it's going to be large. So let's talk a bit about bold here. Like we said, care and maintenance will run through a
couple of the details. Just looking back at the clock, it was almost a year ago to the day, roughly within a couple of weeks of Minres officially scooping up Bald Hills. So they haven't had it for all that long. Unfortunately, the the shutdown is going to impact about 300 employees. That's sort of sad to say. Minerals did say they'll try and redeploy a few people, but there will undoubtedly be a few redundancies happening now, given that the care and maintenance decision was almost
with immediate effect. The spot plant will be running for a few more weeks, but by early December things will be kind of shut down. Shipments for FY25 will be therefore kept at about 60,000 dry metric tonnes as opposed to the 1:20 to 1:45 guidance on an SC6 basis that they had given not really that long ago. I think in in August is when that guidance had come out. Care and maintenance estimates sort of 15 to $20 million per annum.
That's kind of standard. But importantly on a free cash flow basis, they're saying that this will save them money. That's the the most important decision in min res and that's the kind of lens that they've taken. Although, you know, again, as we've kind of touched on in the past, it, it is a bit surprising that they've made the decision right now. I mean, for one, why not just a couple weeks ago with the quarterly with all that info?
Granted, they did have a bit going on, but I think most people that follow the lithium space quite closely be saying why they why didn't they do this a while ago? But you know, hindsight's kind of 2020 the, the main decision has been made and it's, yeah, it's, it's the right thing to do and something they needed to do. Just just looking at the the
cash balance. It's tough, very tough to redeploy people when you're all the lithium, the lithium part of the business have gone from even time to two on one. And so there's already been pressure there. So it's. Yeah, I mean even. Very hard to redeploy them, so redundancies would be a cost.
Your point of redeploying is actually really interesting on Maddie because I the most staggering part about the announcement, to me it was a statement that if the market turned, it would only take four to six weeks to restart, which is bonkers. Surely there's no way. Yeah, I think of think of the restart of what you know that was that was like like a six month process. Because you got the you got some whether they keep coming, keep some of the gear at Mount Marion lot near Bola.
They keep the gear there like they've redeployed some of the gear to Mount Marion. Like you might be able to get it up and going pretty quickly. I'm not sure. Not a not a not a restart expert in terms of how long it would take. So. Anyone can restart a plan in four to six weeks. I'll just. They probably could. But did they actually? Why couldn't I? Did they actually say to nameplate capacity? I think that's an important detail. When is that ever happened in history?
Someone restarting a plan in four to six weeks with it after after you've made a care maintenance decision, you've reduced your staff, like you said, 300 people. You've got to rehire people. You've got to, you know, retrain people in a lot of instances. You can't just pick up where you left off and like it just there is the it's just AI believe a
bonkers statement. Yeah, I mean, you can I. Think, I think when you've got people on other sites that you can redeploy and when you probably possibly could be over manned at the time, you can redeploy processing personnel to restart. I don't think it's not doable. I think it's I think it'd be too hard to make an assumption from where we sit to say it's not doable. Yeah, Yeah, I lean towards what you're kind of saying on, on
that one. I think the the big kind of talking point here is why Bald Hill versus the the other operations and then we'll check up the FY25 guidance that they give. And you can pretty clearly see on an FOB basis that Mount Marion has slightly high cost. Now the, you know, FIB, it's not the the Bay all and end all. There are a couple other costs. But I think the, the big point to address is that the other operations are joint ventures.
You've obviously got Albemarle at Wodgina and at Matt Marion you've got Gangfang. Both of them are 5050 splits. So firstly on on Wodgina, it's no secret that Albemarle have been bleeding cash. They reported a $1 billion loss for the quarter just gone, not a complete cash loss. There was a big write down in there, but they're in a pretty fragile position. Although I was actually surprised to see that the quarter over the last quarter,
the stock has jumped 50%. But that sort of comes with the the volatility and it's undoubtedly been a downward trend for some time now. But they're a bit complex to kind of read and it's, it's harder to make a judgement on what their kind of thinking is because they've got downstream, not that their partners at Matt Marion don't have downstream as well, but you're piercing in a lot of pieces together.
You've obviously got Greenbush's interest in Australia, you've got downstream in China. It's it's kind of hard given we're not as close with album out to see how many spongemen tonnes do they actually need to meet the requirements that they've got the offtake commitments to fulfil, You know, the the hydroxide plants and all these kind of things. Is a pretty opaque like. Would you be able to figure out how much they need from Australian operations?
You definitely would be able to, yeah, Yeah. But I think in comparison to Gang Fang, what they're doing and what their kind of strategy is, it's a little harder because I think Gang Fang strategy is is a bit more simple. They want to maintain market share in, in the downturn.
That has been the playbook a lot of a lot of Chinese companies and the go to case, you know, example for me is what C Mock did with 10K finger rumour in 2016 when everyone else was selling assets, they came in. I think that's a good sort of point to example of how Chinese companies have in the past operated in mining downturns. They're keen to get market share. And you know, Needless to say, everyone wants to pick up market share in a downturn.
But some of these players have actually gone and done it. And I think that I think that's the the MO that they're trying to stick to here. And that's why I think, you know, if you're looking at the decision they made at Mount Marion, I think Gang Fang would have just said no. I'm not sure if you guys differ on on that one.
On Albemarle, like I listened to their quarterly call, they were asked specifically by an analyst, there's been rumours in the press that you've been weighing up selling green bushes and and Wagina. And how did Ken Masters reply? He says we would never sell green bushes. Yeah, full stop. Pretty pretty conclusive, isn't? It Wagen is for sale, I think at the right price, yeah. Yeah, do you think so? How is Bald Hill the smallest output on the lithium units for minrays?
Yeah. Yeah. So it's interesting to see they they put Bald Hill on care and maintenance. Spot price went up overnight. I'm not sure if it was all attributable to Bald Hill being put on care and maintenance, but that's what one note said. So it's like you put that on care and maintenance, save a bit of cash, lift the spot price a bit, interesting to get a bit more cash for watching her and Mount Marion operating.
Yeah, to to the point on the price is bouncing, I think maybe the futures might might even be a bit of a better read and that they also jumped jumped quite a bit and you can sort of see what maybe financial participants might be thinking. I mean the overall component of global lithium carbonate equivalent supply that Bald Hill makes up is about 1%. So it's, you know, it's, it's not a massive operation on a on a global kind of scale, but interesting to kind of think of
in, in that kind of light. Do you do you think that bounce could have been like yes, the bald hill went on care and maintenance better though maybe a future signal for intentions for other operations? I, I probably learned to just zooming out. One day is one day. Let's just let's just kind of see what happens. It just went up. It went up. Just went up and that. 'D be welcome news for for
plenty of them out there. It what it is just surprising though, because like even in miniser's own numbers, you know, bald hill is a higher cost. Sorry, it is a is a higher margin mind and Mount Marion and they're kind of like you look at their relative guidance ranges and this is a this is a point that was sort of like made by YJ on on Twitter. He's like, why, why is it? Why is it Bald Hill that's, you know, being closed instead of instead of Mount Marion?
Like Mount Marion is the one that we thought would close first If if it is more profitable, Yes, there's the mining services business that might offset it because you share it with gun thing. But you know, it's pretty hard for for observers and analysts and everyone to really believe that Bald Hill would be that Mount Marion be making more money than Bald Hill. We all think Matt Marion is a
less profitable operation. And I think that, yeah, I think the exact read through is that gang for thing don't want to shut down Matt Marion. Yeah. That that's kind of how, how else could you kind of explain it's a, it's a tough one. Yeah. You know, we looked at the same numbers there and, you know, just on paper, I mean, you might look at FY24 numbers and they're very different. Marion actually came in lower.
But the guidance for FY25 clearly indicated that you know, Bald Hill wouldn't be the one you logically pick to to flick off first. But. Was that was that considering that min raise as a combined entity might possibly lose a bit more on the lithium compared to Bald Hill, but make up more from the mining services that they charge? That's a point. That's a point, yeah. Yeah, I mean you, you make this decision on the whole business. No, no good.
You know if the if the net is negative, you make it on a net basis on how minerals as an entity is going to operate and what their cash flow is going to be like. That's why we should talk about briefly that the mining service is part of the business. So this is sort of shave off 20 million tonnes per annum. They sort of quite a roughly 2
bucks EBITDA per tonne. So thinking 40 ish $1,000,000 per annum of EBITDA for the mining services business given how they kind of separate out those the margins that they make when they report which is which is a bit of a hit, but did. You did you figure out with that 20 million tonne JD, if it's, it's, is that like haulage plus crushing of the same tonnes and all those tonnes get added up together?
How does that? Work. Yeah. Pit hit to port is kind of how they talk about it. That's it's everything logistics. So any piece of tongue that's whether even though they're crushing the same tongue that they've hauled, they get added up. Yeah, I'm not going to be able to say that I can give you the full definition, but that is broadly how they describe it. OK. Yeah, yeah. I can't get into the intricacies. I'm not as up to speed, but that that is how Inres reported.
So with them saying shutting down is net cash flow positive means the losses at Bald Hill from the lithium part of the business must have outweighed that 40 million bucks EBITDA earnings on the mining services side of the business? But how does that, how does that work? If you got like let's say Bald Hill, you got Min min res have to effectively pay CSI for all the contracting they do on site.
So Peter's pine Paul. Yep, within the same family, but at Mount Marion you haven't got there's that 50% component where Gang Feng is playing CSI. So I know they're getting half the only half the revenue from it, but there's one less component that Min Rez is having to pay for because you got game fan paying that bit whether, whereas they're paying themselves at Bald Hill. Wonder if that's you.
See what I'm saying? Yeah, Yeah, the the JV structure allows them to maybe operate at a, at a below break even price they otherwise would because your JV partner is is subsidising the net. You know the the negative economics in some ways. Oh. I suppose this sorry, they're they're only getting the margin from game thing because they're still having to pay the people and the equipment to operate the mining services. Yeah, but there is that margin, yeah.
What that is? You can only do that to some extent too. And until you're the negative economics of the the mine itself, yeah, completely offset it too. Yeah, and. That and that sort of brings me to my next point. It's, it's interesting looking at their FY25 guidance presentation on the, I think it's the FY24 annual report presentation. They've, they clearly say that their mining services business is unlinked to commodity prices.
That's just not, not true. If you have to shut down a mine because of the commodity prices, you know, you're stretching the, the definition there a bit. Maybe it maybe it's true if you've got the contracts at some Rio Tinto type iron ore projects and they're not going to shut down in in an iron ore bear market. But when you know you've got the contracts at high cost operations, can you really say that they're completely unlinked to the commodity price?
I think it's saying the revenue is unlinked because it's just per tonne. Yeah, it doesn't matter what that Tonne's being sold at. It's. No, they they describe it as it. I mean the the quote is. Politically, they describe earnings of mining services business, Yeah. The, the, the quote here is predictable earnings unlinked to commodity prices. Predictable earnings, yeah. And the way they, they are steady while everything operates. But there is still, there is still the risk.
So yeah, you can see see sort of both sides with it. Just to round out on the the kind of incentive price that we touched on along with the the four to six week restart and all that. You can kind of back out from the break even price mining service business and all that that you're kind of looking at US 12 to 1300 ish is the incentive price they would need to get back in, back in business here and flick it back on. So given where we are, sort of. Casual 50% increase. Yeah, yeah.
Which wow, it doesn't make it, you know, it frankly makes it look like a pretty disastrous transaction to buy this thing one year ago. You're going to be completely blunt about it. They spent a fair bit of money, spent a fair bit of money on CapEx to get it up to shape again. And you know, you do the MPV from from when you got it and it's going to be while I mean the sort of consensus on the street seems to be FY20 8.
That's when it kind of, you know, you plug in your supply and demand across the lithium market and that's when this can piece in. Who knows what actually happens in reality. But every day longer you're not earning positive cash flow, that MPV equation looks more and more out of whack. And, you know, worse. Do you think, do you think with everything going on with Min Res that that Bald Hill transaction number will one day come out?
I think some people are are are comfortable that they know the number based on what's been disclosed in the annual, annual reports. I seem to personally think there's a bit extra that's sort of being massaged around and the real numbers a little bit higher than that. What? What are they? What is the consensus on the real number at the moment? Think consensus on the real number is like 600 ish Aussie
all in yeah. But yeah, I, I probably would, would think, you know, there's, there's an, an Ato kind of payment that is being marked sort of below the 200 issue. It's required, it's being marked at 75 on the balance sheet. Yeah, the the truth is somewhere in the vicinity of that. Yeah, safe to say it's not the 200 and a bit that they quoted a year ago, OK. Yeah. So except that they're to pay to write the offtake as well that
came with the asset, yeah. Yes, I think to, to kind of round out more broadly on the lithium market, some very interesting gossip that we've kind of heard in in the past few, few weeks, various people going to China, seeing what's going on, you know, analysing the market in a different light. And yeah, I think I'd be interested in doing a segment on what's happening with lithium miners in China, you know, the vertical integration that we've been hearing about and these
these sorts of things. It's a, it's a fascinating market. It's, it's a young market, you know, dynamic and moving bloody, bloody quickly. So that is, yeah, that's something I think we should do when the time is right. What about a bloody YJ map Fernley combo? That'd be a bloody. That would be good. Two lithium gurus in the one room via computer screens. That could be That's God. If you want it, let us know. We'll make it happen. Well said Maddie. Why wouldn't you do that?
I was speaking to a trader last night on, on the, in the lithium market and yeah, he had, I came in from a pretty bearish perspective and yeah, he, he was a bit more sombre or any sort of thought like, you know, there's still, there's plenty of demand for spod at the moment right now.
He actually, he told me something that like some of the converters, they actually it's like 75% carbonate and then and then 25% SPOD might actually give them the optimum results when they're actually converting. So there's yeah, it might, it might not be terminal broadly for spot. But I think like the thing that you know, ASX investors are reckoning with is that WA spot in general is the marginal supply at the moment.
So you're saying, so you're saying that's not saying that if bronze go freaking huge like and DLA is a thing, that spod will become completely redundant. There will always be a place for it in the downstream optimization. It's an evolving, it's an evolving market, right like that. Yeah. The, the I came to learn more about just the cost you have to, you got to evaluate on an all in lithium unit cost, right.
And just the, the efficiencies that are happening kind of over and over and over again from the vertical integration in China or in, in, in other parts of the world too where the Chinese can secure sufficient supply. It's, yeah, pretty interesting. Super, super interesting. Well, yeah, as we said, thoughts going out to everyone at Bald Hill, but care and maintenance is obviously a horrible thing, horrible thing for Kalgoorlie.
It's like it's just it's more pressure on Kadrul usually, usually to keep defining more deposits in the region to keep the industry going. Just keep delivering for those exploration companies out there. Like the pressure on Kadrul to keep Kalgoorlie, Boulder, Coolgardi, that whole Gold Fields district afloat is, yeah, it's pretty much like Batman and Gotham. You're talking about a team that thrives under pressure. That many?
Yeah. I think I always say for the goldfields, knowing that K Drill is going to be punching Arsene diamond holes in and bloody, that's hey, that's the responsibility that Drew Harvey and Ron O'Sullivan have taken on because I know they're duty to Australia, keep the economy afloat. You know what he's called the Goldfields after all. And and the Goldies, mate, they're having a sniff again. They're drilling everywhere,
they're finding deposits. And the first people they want to speak to about doing just that is K Drill, because K is in the bloody name. That's it. What other? What other drilling companies start with K? None. Just call K. Drill call K drill the 1st and the last call. All right, the regal of drilling. Oh mate, this side drama, drama, drama is brewing for something we thought was just going to get over the line. The bright star Alto scheme of arrangement. The last piece of the three way
deal for the sandstone. But holy snap and duck shit some friends of the show have got involved. An 11th hour. Yeah, like wedge is what is what I describe it as JD, the Deutsche Ballot and Delphi. They've done The Dirty on another WA gold dealer it appears, and I'm going to use the word Delphi to describe Deutsche Ballot and slash Delphi slash Petronas.
It's all the same shit because they've what they've done here is is in conjunction with the listed company Patronus that used to be Kin mining until it tied up with another Delphi company which was PNX Metals. For all intents and purposes, Patronus is controlled by Delphi who owns 42% of that company. And Delphi are the the German sort of asset manager that have stakes in a whole bunch of stuff on the ASX and. I think I'll need to put on another fucking Nicobite patch
for this. I'm on the patches getting into the vibe. Or sure, this is going to get you get. That getting ready. Give me the shits, friends of the show. Anyway, right now we're yeah, there's, it's just not a simple one of all the bloody variations and permutations this could take. But we're we've been on the blower to experts in the field and yeah, oh jeez. I haven't even described what they've done yet, Maddie, but So
what? What Delphi and Petronas have now, they collectively hold 18.4% of Alto Metals and Alto Metals of course is is days away from a scheme vote to be acquired by Bright Star. To be explicit, the meeting for that vote is on Tuesday next week, 1:30 PM.
But shareholders of Alto, they basically need to have their, their proxy forms submitted by 1:30 PM this Sunday, which is in, you know, like a couple, three days time or whatever, unless you intend on actually rocking up in person and voting in person, which not many shareholders bothered to do. So there's three days for Alto shareholders here to, to, to kind of, you know, get their votes in.
And in a scheme, remember, you need 75% of the vote to be in favour of the deal in order for it to, to pass. You might be thinking, OK, well Patronus or Delphi, they've got, they've got 18.4% as we as we learned today, but 75% threshold is needed is a path forward, isn't there? And it's true there is a path forward, but you need at at least 75% of the shareholding that actually votes.
So it's of the shareholding that votes and there's you know, you, you, you never get 100% vote turn out, in fact you never even. Like it to get 80 or 90?
Never, never, never get 80 like so so in this in this instance you get you need massive voter turn out in order to offset that huge blocking stake that you know looks is looking like it's going to vote no. Just based on what we're kind of seeing pop up here on my math, if you, if you assume Delphi will vote no, and if you assume they are the only Alto shareholder that votes no, then you need a voter turn out of at least 73% of the, you know, Alto shares to, to vote on the, on
the scheme. That's so high. But you know, 73 percent is high enough. I actually think you'll see Delphi. It just makes sense for them to buy on market all the way up to 19.9% threshold. If they do that, you need, you need voter turn out of 80 percent, 80% of the money miners who are like listening, when have you ever fucking voted on anything? You haven't. I bet you, I bet you've bet. I bet you've never voted on anything. But people don't vote.
But you should vote on things because it's just what a shareholder should do. You've got the right to vote. So they're going to need crazy, crazy vote voter turn out here in order to get the deal over the line. Yeah. So Trev, you've spent a bit of time and Maddie thinking about this one. What is the rationale behind the delfy sort of groups decision here Petronas? Who's loading away?
I reckon normally, you know, we've both been thinking about this a lot and normally when a company wedges itself a stake, you know, the company wants, it often wants to bid for that. It's the company itself. It's, you know, it wedges itself. It when, when, when Gina wedged herself into Azure, it's actually one of the asset. You know, it's not that straightforward in this case. I'm not convinced it's that, you know, sometimes people want an uplift as well. So they were just taking up.
I'm not convinced it's that. I forgot did we say who they said that and and they actually purchased the IT was a off market trade between Horizon who are the other company in the sandstone which would you know probably might be part of that sandstone consolidation at some point. And that was the state that actually West Gold sold that they had in Alto back in the day. Yeah, so and West Gold bought it from Adam and I believe like
yeah, that stake has done it's. Done its rounds so it's plenty rare and it's ugly head again. Yeah, it's kind of funny. And you guys have? It was added into because obviously Delphi already had a stake in Alta and then they've got that then 60 million shares. Petronas has picked up an 8.4% line. Yeah. And so you add the two together and you're basically looking at 18.4% right now. They paid 8 and a half cents for it. And, you know, like we've seen
form from this group before. These, you know, friends of the show have have have, you know, wedged themselves into deals in the past. Plenty of people would remember the previous incarnation of Patronus, which was Kin Mining. They wedged itself for stake of Dacian after Genesis launched a takeover offer on that company in 2022. Because it was a takeover offer then. There wasn't. It's not like you have a
shareholder vote in a takeover. But Kin and Delphi's stake collectively meant it was impossible for Genesis to reach the 90% threshold required for the compulsory acquisition. As a result of that, you know, like the there was a, you know, Daisy and remained at a listed entity majority owned by, by Genesis for a really large period of time.
And at the time I thought Kin's intentions by getting that wedge were actually just to get gobbled up themselves by Genesis. That's just how I interpreted the events at the time. And the fastest way for Genesis to to handle that issue of the wedge would have been for the Genesis to to acquire kin and then, you know, follow on, you know, bid for bid for Dacian like after after that once you've got kin. But they never did that.
And I can understand why they they didn't do that because I don't think I would have wanted to set a precedent that yeah, you try to consolidate big M and a plan and all of a sudden if you did that, then anytime someone wedges, you know your bloody. I think almost had a principle. No bloody way. Yeah, exactly. And then it sets a precedent. You got to pay up, pay more than you want to for a bunch of stuff.
It'd be ugly. So they played the long game and instead of Kim kind of getting gobbled up, they accepted an uplift like about a year and a half later for the Daisy and shares and then and then, you know, Genesis made its way to get 100%. Of that, yeah, they paid a real, real big. I forget what it was, but it was a significant premium for that last.
Little bit yeah, Chunk, they got the uplift they did and and then a few months after that, you know, Genesis did another deal with Kin where they picked up some of their assets in the region in exchange for some cash and shares and. Again, notably, they didn't pick up the whole thing because they didn't want a bunch of it. They just picked up what they wanted. Yeah. And yeah. And you see the one they picked up, like Bruno Lewis was the main one.
It was and you look at the, you look at the mineral resource estimates. I'll bring up here like Bruno Lewis, it had the most answers, but it's the one gramme one and the other ones like the resources are higher grade, but they've obviously just wanted that and not wanted the rest of it for a reason. So I am, I would be trusting the DD of the Genesis team far ahead of yeah, yeah, the kin, the kin side of what the value of the other assets.
Are for as long as we're doing capital markets people at like we've we've heard the narrative forever that Cardinia doesn't string together. That's just what I've heard. That's the word on the street, right? Yeah, yeah. You'd say that bearing in mind that genocide, you know, had a bunch of assets so that a few things in their plate they would have, you know, obviously had that front and centre when thinking about what they wanted on the other side. Yeah, yeah, but so.
A Ding Ding, Ding as well. AJC Genesis. Oh, Genesis. Yeah. God, which one of the three? Yeah. And in this case it's like so if, if, if maybe the wedge isn't because they're actually really interested in Alta. You got to you got to try and think what are the intentions of Petronas slash Delphi in this? I don't, I don't know if anyone really knows. So you know, it's not like it's a strategic like game ploy from Delphi.
I actually just think they're, they're being reactive to an opportunity that presented itself. From from what I understand, the shares became available from the broker because Horizon wanted to sell the full line and the broker has has fished it out to a bunch of different people. Now in this case, it was Patronus that that gobbled up the entire line, but a bunch of different shareholders had the opportunity to to bid for, you know, some or all of the line.
And so because because that's how the thing that you know, the circumstances unfolded it, that's that's not how it would play out if if Delphi tapped Horizon on the shoulder and said, Hey, I want your shares. Why? Why is that? I don't understand that why? Because. You can execute an off market private sale transfer. You don't even have to go through Canaccord and pay 2% or whatever, whatever you pay. Yeah, so but what? What is it in Horizons interest?
But if Delphi did tap them on the shoulder wanting the shares, is it in Horizons interest to put it out to see if anyone else would pay more than Delphi was offering? Yeah. You want to auction it? Yeah, yeah, yeah. So it's not. Is it conclusive that Delphi haven't tapped Horizon on the shoulder as part of a bigger plan for that stock first? I think it's unlikely. But possible. Possible. I think.
It's I think. Canaccord would love to have on the record that you wouldn't pay 2% on a on a block rate. I don't know why, it's probably fair be less than yeah. So you guys have dug into this one way more than I have, Horizon being the seller. Matt, are you saying they want to tie themselves into this sooner or later? Patron Horizon. Horizon. Yeah. Well, what else are they going
to do? They've got the, you know, the bit up the up the north of, you know, I guess the, I guess the main deposit within the Alto that's got the most future is the the Alto within the sandstone is the Alto project. What my question would be is wouldn't it be in their interest for the deal to go through? In Petronas's interests. Horizons. Horizons. Horizon are irrelevant here. They've sold the shares, nothing
matters to them. I. I haven't followed Horizon closely, but Maddie, Maddie said they they might down the track, want to have themselves tied in. Well, now that may be like if something was to happen in that sandstone region, maybe that's part of future consolidation, but. Horizons is that's the Zeta entity, right? Yeah. And they've just, they've just, yeah, they've just sold their books I think and got doubled down on Panoramic and their privatised. Yeah.
So yeah. Might mightn't be a big big ticket item for them now. Mightn't. Need the cash like yeah. Yeah, possibly they got it. I think just thinking if it was in their interest to see the deal go through on it, do it in a couple of days time. Yeah, yeah. I don't know. I don't know about that. Maybe I haven't thought about Horizon too much. And maybe they just couldn't sell. Their shares, yeah. What they it wants kind of irrelevant now they don't have they don't own the shares anymore.
It's sort of like. Yeah, of course it is. After, I suppose. I suppose it doesn't matter if they what happens in the short term if eventually whatever happens, but Broadstar and bloody Patronus can fight each other. At some point someone will own that and then they'll come into whatever that vehicle is later. Of course wanted to. Get gobbled up. This could potentially be a delay that takes a long time to to play out, yeah. Yeah, yeah.
And and then you're trying to think, OK, so if if you're not convinced on what the ploy here is by Patronus, they want Alto. That's not that's not actually clear at all, given what, you know, bizarre stuff that friends of the show have done in the past. They want uplifting consideration. Not convinced, although, you know, who fucking knows? Do they want some collateral benefit? And that's risky territory.
I think we've got to kind of talk about all the things that could be on the cards here because it's so, yeah, it's, it's just making sense that Patronus's intentions in the 1st place is something that, you know, informs what could play out here. But making sense of that is kind of pretty damn tricky to think about. Yeah. No, they, OK.
So if you look at what Patronus has got, so you've got, they've got, as I said, they've got the Cardinian stuff which has been, which Genesis have taken what they want out of it already. So we can assume that Genesis don't want what the rest of it, otherwise they probably would have taken that as well. They've got and they've got tenements South of Leonora. So in and around Bright Stars stuff, they've got stuff in the NT as well. So it's like, I got it, they've
got this now. And they're like, how do we, I believe they think? And how do we get a corporate outcome or an uplifting value for what we've got? And the based on the fact that, well, doesn't appear Genesis want to buy it, how do we get someone like Broadstar to give us an uplift? Well, it's like, well, we want to be part of this consolidation as well. And we want an uplift on the EV of what we've got. I think they, because they've got, they're like a bloody cash
box. They've got, is it 66 million in cash? Yeah, 101 mil market caps on EV35. So they want an uplift on. The EV they want a bunch of. They'd earn a bunch of Genesis shares as well. I think Maddie too when they sold there. Oh yeah. Yeah, so the EVs look like less. Yeah. I think most of it was, yeah, there's about 2/3 group or something for that 50. I got the where is it? It was Let Me Bloody Live demo for the 53 and a half million consideration. It was 15 mil cash and 21
million Genesis shares. So yeah, it's a cashbox. Yeah. So they're thinking right. Can we if they yeah wedge themselves in here, are they going to again get the uplift lock that did in the dice in thing? All right. But let's talk, let's talk about what collateral benefit is. And that's the thing that can be the, I guess the determining factor in these, these schemes and how they, how they vote as
well. It's it's effectively saying that a collateral benefit is when Patronus get something in return for in a way they vote or being in a deal that other shareholders don't get. Perfect. Pretty much, Yeah, pretty much. So, and this is when we get venture into the territory of a side deal. Well, that, that's, that's the thing I can't quite piece
together. Do they want, are they trying to like get pesky because they actually want they have a different mode if they want access to different assets or they want to be scooped up in a different way? Or is it is it actually about Alto? Is it about a broader thing? And if it is, that's very
fucking risky territory. Yeah. I think my first pass of what they want before we get into what's actually possible, what they want Broad Star as part of this consolidation to either buy them or buy the tenements of them in the Leonora Laverton region and get some value for it right now. That's what that's what I believe the intention is of of this to disrupt it. They want an uplift on the value of those tenements. So, and the only way to do that now because just aren't going to be. Sure.
Because like, yeah, Are you sure? Because like, if I think of the ownership 43% owned by the Germans, how do they ever get liquidity, even if it's a cash box, you know what I mean? You only can how they, how can they ever sell those shares? Maybe they could distribute the, they could potentially distribute the, the cash. But this tax leakage probably in doing, in doing that.
So they might actually just want to be acquired at a corporate level themselves in the most tax advantage advantage way for for for Deutsche Ballotin to get a liquidity event by by a major like a Genesis or something like that.
Yeah. And but I think we can, I don't, we can't see Genesis doing it. I think what if, what if, what if Broadstar as part of this consolidation, which would be, you know, whether that's a solid deal and they have to have a different class of shares that they have to like effectively abstain from voting in this game. But if I get then acquired by Brightstar for script, doesn't that give them rollover relief and that's a tax advantage? Advented Tigers way of doing it. Sure.
Yeah, yeah, they've got they've. Still got the the shares? You know you've got the cash. Yeah, but. The rollover relief would be not having to pay tax specifically on that win. Yeah, but you're still having shares in your hands, not cash. Yeah, but then can't they sell them lighter it? Could, but they could sell their shares in, yeah. Now there's no that that that you can't. There's no liquidity for. Yeah, I mean, you can't sell that Broadstar is not the most.
No, the plan. But Genesis is liquid. That's the only thing you can sell. Yeah. Yeah, but I was talking to Maddie's point there, yeah. Yeah. So then well, is it part right if they say they get all Broadstar script and then that combined consolidated entity might be either more amenable to whether it's Genesis or someone else. Yeah. To acquire that vehicle, which, yeah, that gives them the liquidity to maybe get out. It's I don't know if they're
thinking that far right. All of this, all of this conjecture, like one thing's for sure, we don't really know what Petronas intentions are. We're kind of speculating and we're a bit, you know, we don't really fucking know. But you know, if they, if, if there's a collateral benefit in mind, they've got to be very careful in, in, in that front because it's a, it's a scheme. The it's tricky.
If you know, if, if a side deal is carved and you know, that's got to be disclosed, you probably have to postpone the vote. There's got to be a different class of of shares for the purposes devoted. Kind of goes through the independent experts got to, you know, say that it's at arm's length. Yeah. All that sort of stuff. Yeah. So it it it becomes complicated. You send the timeline, you add deal completion risk in the process. Or, or, or Brightstar have a few
options up their sleeve too. They could they could swap to a takeover offer and just be like, you know, stuff, you know, I'm happy to I'm happy to get 80% right. That's fine, You know, squeeze them and play the long game that way. Or or Brightstar could just rally the troops as hard as they possibly can. Good pan there without rally. Oh, so I can pick up that and try and get 80% of shareholders to vote? Without soliciting. Sorry, sorry, I say Bright Star
could rally the troops. What I really mean is, is Alto because it's yeah. I'm sure Bright Star would. Be working. Bright Star wouldn't argue with that. Because it's, it's, it's, it's Alto shareholders that have to rock up and and vote here. And they do have a relatively concentrated register. You've got, you know, I think Terry Wheeler is a director and you know, he has to vote for it. Like you've got a pretty concentrated register of people like Gold C is blown. Yeah, yeah. ACORN.
Like, you know, they're all presumably going to vote for it. So. But you've got to get sufficient mass of the the lengthy tail to vote for it. And if they can do that, it would be a. A truly impressive feat to accomplish people when you ask for precedence of when there's been like a a 19.9% no blocking stake and they've voted no and they've actually still gotten the scheme over the line. Everyone only ever points to 1 precedent and that was just like TAG.
M Com yeah, M Com got acquired and TPG bought a 20% blocking stake and it's still got over. So worth making a quick comment on what the motivations or the incentives might be for auto then, because they're the ones that have to pick up the phone, you know, as it kind of is, well, their share. Price is going to crater if this doesn't get over the line because they've got no cash. They've been come rise forever and they're going to they've just off market traded for eight
cents. I think they'll bloody what, 3 or 433 and something before the deal. Bull price but ASX. Company juniors rallied in in that space, yeah. Yeah. So that you'd think that that would easily have like the but. Don't know. But their salaries? Might keep their job you. Guys have a way of just I, I. Think like, I think there's a lot of forces implied for them to have enough incentive to get the deal done like this.
You've done all this work. You're up to this point, you know, people are offered in some advised to get a deal done. There'll be, you know, all sorts of things vest in that process and all that sort of jazz. And you know, yeah, all, all the advisors are incentivized for deal completion. So everyone will be wanting to get the deal over the line. Don't think Alto would be particularly resistant.
I wouldn't have thought I would. That would be wanting I'd be getting on the phone to their shareholders or their advisors will be getting on the phone to their shareholders and encouraging them to to, you know, plug a couple numbers into their phone and then click the button and vote for for, you know, for like submit their proxy, whatever, whatever it is that you got to do. It's the deadline for that is 1:30 on Sunday. And yeah, otherwise if, and that
will have a good idea, right? Also we'll have a good idea by then what the, what the actual like results going to be with or without Patrona slash Delphi's, you know, involvement in the case. Because you know, your proxies. And it'll be really interesting to see if they then, you know, if they, if they actually choose to extend their scam vote, if there's a restructure, if, if things are, you know, thrown out from a timeline perspective because maybe they just don't
quite get there. I reckon they're so they're either gonna, so they either could extend it, they could roll the dice and still hold the vote and rally like fuck right now, which I'm assuming they're doing. How how easy it is to put your proxy thing. Do they have to like register for a autonomic account or something? Very, very easy. Super easy. No one does it, but it's super
easy. Yeah. Can you like do it as you said, plug it on your phone or you actually got to register an account first you. Can do it on your phone. You just have to Chuck in your your holder identification number or your SRN, Chuck it in and your post code and you just click yes or no. Yeah. Very easy. Yeah, yeah, people should vote. Stop not fighting people. Yeah, because if you don't fight, people pull on this stuff, Yeah, get an outcome for themselves. Yeah. Well, that's it.
And that's the uncertainty. Uncertainty for yeah, Alto shareholders is like what what actually happens if if the deal doesn't go ahead? It's a yeah, bit of a more like challenging proposition then and I. Could I could I could, I could put my fucking cock on the block and say the share price is going to go down significantly if it doesn't go ahead for Alta. Yeah, absent. Absent like a takeover offer from from the Interlock guy, you know. Yeah, but that, that depends if
that's. Yeah, yeah. Yeah, Yeah. I don't know now that well, because I guess another guarantee is that, you know, the this Patronus entity like that now they're looking for, they're looking for corporate outcomes, they're looking for money to make off just chairs and stuff like that. I don't seem bloody mind actually wanting to mine anything. No, the liquidity that, you know, Dolphy's made in the market is Spartan and Azure, the
two big wins they've had, yeah. And then they've torched shit loads of money in other parts of the market. But that those two big wins have offset a lot of it. Yeah, yeah, I don't say I'm ever like making the call to Tim Taylor and cross boundary energy for a hybrid power station. Well, they're never going to need it. They're they're not mining anything like yeah, So Tim, if don't call them, don't call Patron.
It's probably called Broad Star. Well, I think they're they're setting some like intentions to possibly mine something in the future. Yeah, to consolidate. They've been mining, been mining a second fortune bit of pit mining out in the Bloody Menzies region, right. I think a hybrid power station supplied by a cross boundary energy might be on the cards there. Power purchase agreement 0 CapEx straight to the sandstone once all this shit bloody gets sorted.
Yeah, I've seen the state of some of the sandstone infrastructure. I think Tim's going to have to sort that. Out, I think a little. A little nice bright and shiny 0 CapEx cross boundary energy hybrid power plant to go good up there. Right, build and operate. What a great model. Good on you, Tim. Thanks for thanks you and cross boundary energy for powering the Samsung region. Potential sense and not powering for trainers. What? OK, let's do some predictions
bets. What do we think is going to happen? Roll the dice I reckon. I do think they'll get to 19.9 but. Yep. Just give it a go, I reckon they might get it over the line. You think 80%'s 80% turn out's gettable? It's bloody hard, but super hard. Surely you can make 100. I don't know how many showers there are, as you said, like 100 calls and walk them through bloody voting on the phone or you're not allowed to do that. I you can only. I don't know exactly what the rules are there, but.
Can't record the phone conversations. Private conversation. What do you recommend? I, I think, I think there will be a side deal cut which will possibly need to be reviewed by the independent expert and the scheme vote will be delayed. But it will be and they'll get in a different share class and go down that road and abstain and that'll get the deal over the lawn. I think that's the, because if you, if they do, if they roll
the dice. And as I said, there's been one precedent for it. I'm not sure if there's been others. Mine one main precedent because you it's just such a risky play to then have to go redo the whole scheme again. Redo the court. Be a nightmare. I don't. I have to look to the register. I don't know. How I think, I think it's doable. I think it's doable, but the late the the lower risk play or delight because it's been going for a while already.
Yes, delighted a bit longer try and appease these interlopers just to try and get the deal done. Is is a lower risk play? Yeah, way lower risk. What do you reckon, Trev? My yeah, we haven't talked about this scenario, but I actually think the most likely thing is that Petronas votes for the deal. Oh, OK. So, OK, so if they if they did vote yes and they're because they're already a shareholder of Broadstar I. Think they own a little bit of
Broadstar? And then this 20 of the outside, the smaller chunk, I think that'd be possibly still less than 10%. Like, yeah. Or maybe I'm not sure what that number would be, but that. The reason I say the most likely thing for them to his vote for is mostly because I've got no fucking idea what their actual intentions are. So for all I know, this is just the cheaper way to own more Broadstar shares.
Here's an idea. Maybe this is just a ploy with that shareholding in the pro forma that Hans and Rowan can get on another board. Maybe put it to a shower to vote. Oh fucking hell, this will be a bit of a bloody They're going to be hustling their ass until Sunday trying to rally And I suppose like whether what happened, whether they there's a risk you've done after voting yes or not, you're still going to be rallying the bloody all the registry up until that Bloody Sunday.
Get every proxy vote because it is possible. You have to fuck. I'd love to see this get up. This would be good for Australia. This is good for the gambling nature of Australia is if they roll the dice and get the votes over the line. And even with the Delphi mods voting against, that'd be huge. Be massive. Go Australia. This could be the next fucking men's 4 by 100 relay from the Sydney Olympics. This could be a YouTube video when this happens. This could.
This could be 2 million views. If this happens, this would be a great Australian moment. It's the Stephen Bradbury, yeah. Oh gal, Australia, come on, come on. Can't tell you how to vote, but. Jesus Christ. Just vote for a great Australian moment. Oh fucking hell. Oh this is this would be a good Monday's going to be good. When's the vote? Tuesday. The vote's Tuesday, 1:30 PM. Yeah, unless it gets perfect. Yeah, but showing us the standard? Time. Oh, should we go? Yeah, we.
Should. Yeah, we could do live from the live from the boat they. Might, they might lock us out. I got last time I went to a shower vote. They fucking didn't let me in there. I reckon we'll get into this 100% we go. Let's do it. Right. God, what a bloody what a set of names to follow. Mineral Mining services. They'll be doing a bit of work in this pro forma. Not for Patronus, but probably for someone else that wants to mine mate. Grounded in the bloody. Oh no, we didn't talk about them
today. They're just frigging awesome. Love you, love you Paul, Natalie crossbound your energy we did talk about. Sandy Ground Support also got to thank them. Oh good old CRA insurance. Hey, Drill and Dysat. Hoodoo money minors. Hoodoo information contained in this episode of Money of Mine is of general nature only and does not take into account the objectives, financial situation or needs of any particular
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