The different styles of resource investing

I, I, yeah, I've got an open-ended question for you guys. How do you make money in resources investing? Incidentally, there's a lot of a lot more like a much larger list of ways you can lose money investing in resources stuffs in there is to to make money. But yeah, the four categories that I have is.

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What do we got there? We got bloody Genesis Quarterly out yesterday. You got Aurelia? Yeah. We're going to talk about Aurelia, mate. And we're going to. Talk about CRE in orange. Yep, and. We're going to talk about gold fields a bit going on there. Is it bloody? Have you have you sniffed it out or is it public? It's pretty public. It's pretty public, although it it's not as widely reported as maybe it should be. Yeah, right. I'll start with. Left myself in suspense, right?

Genesis, Genesis. Jesus Christ, look at the bloody she's flying 4 bucks 40 Ding Ding Ding for the Alley GC gold fund, which by rights should be gone off based on the last year. I hope it is unless she's trimmed too early. So cash holding increases by 111 million to four 348 and they produce just below 60,000 oz. But now I'm pretty sure the cash and bullion increased by 99 million Aussie quarter on quarter to 321. But it's the the they got the

liquid investments of 28 mil. So 'cause remember, they hold 7.3% of Gorilla Gold, which has a 300 mil market cap now. Wow. So that's worth about 22 mil in itself. And quarter on quarter, it's gone from $0.26 to $0.48 based on March 31. So that's where a bit a bit of extra money's come in from the value of that liquid investment. Maddie, I can see in in the show notes here you've written in about size 36 font. Are you extra excited about the the cash?

Building. I don't know why I did that, it must have just been the way my computer screen was. 100 bucks added for the quarter. It's not not bad. It's something to get excited. Yeah, no, they've done done bloody well. So average sales price of 4496, they did have some Fords to deliver into, but they're relatively so that four and a half thousand were delivered in at 3649. So pretty much they've only got 4 1/2 thousand 1/4 for the next two at 3700.

So they're pretty much pretty close to fully exposed about 7% of production and they do have some small amount of 0 cost collars to deliver into at 4235 from December 25 onwards, 4 1/2 thousand so, but it's a small amount of production. So you'd say 90 odd percent unhedged, so isn't. It funny you put those collars in kind of thinking, oh, the gold price won't surpass that and then. Yeah, I know it does. Yeah, 40, yeah, 42 like 4200

collars. They're like, of course you bloody would have back then to get a downside of 3500, but it's just changed so quickly. So yeah, again, they've reiterated their guidance 19210. You can see the growth profile that is ahead of them with the Lavenham mill getting turned back on. And I'll go through what sort of coming up and what is potentially not two to three years as initially anticipated. So Gualia that was they got a lot of this was flagged in the previous quarter.

So they still got they got 25 and a bit 1000 oz at 6.2g mined there. So the the ore delivered was 129,000 down from 182 but they were progressing through a selective portion of the mine which was flagged in the previous quarter. So but grades bloody positively reconciled Ulysses. So ramp up soapings continued there. So that's they've got they've got about 4000 oz at 3.4g from there. You do say their their reserve grade at Ulysses is 3.7g.

So the previous two quarters have been below that. But I would looking at the like it was the highest amount of jumbo development made is in the past year for this quarter. So I would anticipate there'd be a higher percentage of development or to stopping or hence the reserve grade might be a bit lower. But yeah, like Admiral and Hub, like bloody, yeah, good little pits, like Admiral's 1.8g, Hub 3.8g out of that open pit. So it's a good little bloody

sugar hit there. And their studies are actually planned to go look at underground at Hub. So unless there's some bloody super gene thing that cuts it off, you think if you get 3.8 in the pit, yeah, underground might be all right. So we'll keep posted there. Leonora Mill a bit underfed, probably because of Gwalia. A bit less dirt coming out of Gwalia and everything. So 300 and 304,000 tons. I remember it's a 1.4 million ton per annum mil. They did say there was a

microburst. Storm Microburst. I've never heard that word. Microburst, it's a new one. It's in bloody quotation marks so that there was a couple of days power loss and a bit of damage to infrastructure. But they've got the flexibility now that they can just track the ship to Laverton and send it to the Mount Morgan's mill. So that's where the flexibility of those two mills can really come in handy because they can just divert trucks straight

away. Like having that they can send them both directions kind of come in handy for like your shutdowns and everything because you can just throw everything up the other end. And so I live it in. Most of that was the existing stockpiles process there. 784,000 tonne .9. They have got a bit of third party or coming from Bright Star and Kumarina. So you can see here on the for the live of the mill, the restart. What what's it say? Live of the mill form is temporary, class is permanent.

Doesn't that sound like a Nike? App. I just read that. Form is temporary, class is permanent. That's quality I could. I could What is a good Australian brand that needs my voice on TV? Form is temporary, class is permanent. It's a hell of a caption for a for a figure in a in a mining quarterly. So now Tower Hill, it's progressing to plan.

So it says they've got the section heritage, section 19 approval received environmental wise, they've got the clearing permit application for stage one that's submitted. There's then you've obviously got stage 2 as well, the day watering it, the rail shortening. So it's not a diversion anymore. They're shortening it that targeting that agreement for June quarter 2025, delivering first or FY20 8 and development in FY20 7.

But joys of having multiple assets because if you look back 4th of April 2023, the like it said Tower Hill approvals and development timeline will be two to three years. Same in the Diggers Prezile 2023, two to three years. Well, we're at two years now and the rail shortening agreement

hasn't been signed yet. So the the two to three years approvals development that they said that wasn't for first all that was approvals development that's probably going to end up as anticipated by most probably four years if that goes to plan. So but when you've got multiple assets, multiple plans, you're the focus isn't on that sole asset as much.

So that's where it gets a bit you're, you're protected in that sense a bit so. You also reckon those guys are pretty good at underweighting expectations as well. They don't want to get people too pumped up about it and beat those expectations. Well, and look at evolution Mangari, what with that commissioning was 10 months ahead. Yeah. Schedule and on the budget. Nine to six, yeah, but it was they got lucky on the timing of a few things.

Kind of, you know, a few things kind of got in before certain holiday periods. The long lead things all just lined up and it all it all came together cheaper and. Faster, Yeah, yeah. So look, there is, there is potential, but it's looking that that would have been blown out. It was a bit probably bullish initially. I thought you can see why they paid 53 mil at the time. They paid for that Bruno Lewis and Rayside projects.

They've just done some reserve, a bit of infill drilling there for, for the reserve and like 5 metres at 27.8 grams, 15 1/2 eight at 15. Like that's a, that's an open pit. So there's some and that because remember, that's the one they got out of Kin where they just took that one right in the middle. And just like, Nah, we don't want any of the rest of it. We just want that one. So you can probably say why.

So yeah, they're bearing the fruit of their growth plan at the moment, I'd say with getting that live in the mill turned back on. Yeah, I think Jupiter that's scheduled to start mining in FY20 6. So that'll be a good chunk of the feed for Mount Morgan's. But I'll be I'll be interested to see if they're going to need more or. Did you hear 50's comments, you know JD's? No, I didn't.

He said, he said, yeah, like, you know, kind of he he played down the potential of a tie up with with vault at the moment. But he sort of said, look, I think, I think where what they where they could use a deal is to to add high grade ounces to to Labourton. And he specifically listed Focus Magnetic and Bright Star. Yeah. Now Focus is Labourton projected publicly for sale that's out there. They could buy that. Yeah, Vault is publicly for sale.

That's out there. Magnetic publicly has a data room. Yes, yeah. It what about tons? Was it was it was he more focused on getting high grade? Yeah, just high grade. I mean, you've got you've got Jupiter and all that sort of stuff. It's just like, can you add some sugar to make that grade go go north, you know? Yeah, yeah, yeah. I don't think you guys are concerned about the free cash flow in this gold price, but it's just, you know, a bit of sugar can really move the dial

there. Yeah, and I think between like Bruno Lewis coming on Jupiter, like, yeah, you'd think it's just trying to make sure they got 3,000,000 tonne to put through it. And I think 'cause they can, they, I think they'll get to, if it's all open pit, they'll probably get 4 out of it. Like there's a lot of potential there as long as they've got enough, enough feed. So hence the oil purchase agreements, they will find out, they'll say all the stuff that brought stars up to up that end

with. I know there's like undergrounds going in and stuff like it'll be bloody all gone there. I think they'll be taking every bit of dirt they can. And and that's the other thing. I mean, they could like Bright Star now that they've got, you know, sandstone and that's a priority focus and all that sort of stuff. They could recycle capital by selling that Bright Star project to to if if that was of use, Terry. But all of those things are kind of on the table.

I think if, if, if I agree to answers really do move the dial a bit. And yeah, yeah, if Genesis kind of want to do something that's not Vault, that's what they do. Yeah, it doesn't look like it's gonna. Yeah, who knows? Then I'll say I'll fucking merely Spartan. Happened a week after I said that wasn't going to happen, so I didn't listen to me anyway.

Right, let's go. Let's go over Race to God's Country, NSW. Oh, really? I, I, yeah, I've got an open-ended question for you guys before I before I kind of talk about really the companies for me. Just keen to get your unprepared responses to the question too. How do you make money in resources investing? Are you kind of referring to the different styles that you can play in the arena? Inter Interpret how you. Are as in as in buying the stocks? Yeah, how do you make money?

Find, find which one's going to be a self fulfilling prophecy that it'll just go up because you got good management and what, Yeah. Back management, pick the commodity cycle nice and early, get on like a sort of tier one or a big discovery nice and early. Some people can pick catalysts that's that's a bit harder, whether that's M&A or, or you know, other other types of deals

and things like that. Probably look at, look at, look at the ones that are the most bombed out, less susceptible to missing guidance, the most like the least riskiest to actually hit it and the ones that have some some upside somewhere in whether it's exploration or something to give you a statistical chance. The ones that are completely bombed out like a, like a Spartan where there's a recapitalisation and all these sorts of things.

And maybe there's a a a part of the story that was underweighted, whether that's new management coming in, whether that's a discovery where the the futures can kind of change I. Think I think you do all of them. You'll make fuck. All the way easier on paper than in reality.

Yeah, I think you touched on all the categories there that, that, that I, that I come up. Incidentally, there's a lot, a lot more like a a much larger list of ways you can lose money investing in resources, stocks in there is to to make money. But yeah, the four categories that I have is being early in a world class ore body. So you ride the less on curve to a take out or production. Now this is the GO alpha kind of

style of investing. A lot of that cohort, they sift through the discovery announcements, you know, every morning. Yeah. Like looking for, looking for the next big thing #2 be early to a commodity cycle. Buy the stuff that is out of flavour, like gold stocks were two years ago, for example. And you'd be patient. You let cycles run their course. This is, you know, the contrarian investment style, which works really well in cyclical industries #3 reading

the M&A tea leaves. Yeah. If you, if you know a company needs to buy a certain deposit for it's nearby mill, they're probably going to have to pay a premium for the ability to do that. This sounds easy in practice, but it's much harder to actually make money from because timing matters a lot #4 picking turnarounds. I have a lot of respect for the people that are good at this. It's it's very hard and it takes

like real skill. Like, what's a turnaround play like we see all the time in our industry. Mining companies can find themselves in dire situations. They're, you know, royally cooked. And sentiment about them couldn't be any worse. And what causes them to be royally cooked? Could be It could be that sometimes I've got too much debt. It could be that there's a bad hedge book. Sometimes poor operational decisions by the management team in place.

Sometimes the rocks you thought were there aren't as good when you actually start mining them. Sometimes it's out of your control too, like a weather event or a, you know, government regime shift. If the reason the mining company is cooked is the rocks, then you're screwed. But if the rocks are good and there's potential for it to turn around with better management or recapitalised capital structure, you know those are those are turn around opportunities.

You can think of a couple of like successful turn around examples. I've put our Bander in that category. I've called Metro mining in that category. You know, think of like the stories like investing in Saint Barbara at $0.04 in 2014. As long as it's old. Yeah. Like resolute up until you know, she'd hit the fan recently there. You know, I'd argue Oz minerals at one point was a a bit of a turn around it. It certainly helps if you if you get I think.

Well, I actually don't put Spartan in the category purely because like having a discovery isn't a, a, a catalyst. You could have controlled, you know, they, they, they did change strategy. They turned off the meal. There was a management change all those things. But like you couldn't have, you could and you could have bought it cheap, but you couldn't have predicted that catalyst because it was a discovery in some ways. But yeah, that maybe they

disagree. I'd put Pilbara in the category and you know, Pilbara had a had a commodity tail cycle on their side and that you know, that's another kind of form of catalyst too, but. I was going to say your your second point, the commodity cycle and four have a lot of overlap in the behaviour of companies. Totally, totally. Those are those are the, yeah, the broad categories. Some, some other people probably have a few other strategies of ways to to make money and

resources investing too. And if you do like it and it's a different one, then leave a comment. Let me know what what I've missed. But buy this. Buy the promote Yeah, so.

I take it you can to talk about turnarounds. I do. To be a successful turn around, you need the catalyst that turns things around, right? Sometimes that's the a recap to pay out all of the the debt that is overburdening the company. Sometimes that's a change of management. Sometimes it's an expansion project to lower unit cost rate production into a commodity

tailwind. What's more interesting in turnarounds, they're usually small caps, They're usually like sub $200 million market caps and maybe maybe have one or two assets. You know, they're they're in that kind of unloved territory. And and so they don't have a particularly institutional following. But if they turn it around, they graduate to a size that gets some, you know, gets institutions looking at them and all of a sudden they're in the indexes and you can you can sell

your bags to the instos. Happy days, right? Aurelia metals came up in J DS interview with Fisty and which went up on Friday since Friday, the stock is literally now 35% more expensive. So well done Fisty and a really fits the the turn around category perfectly. We've, we've hashed out the reasons why Aurelia got itself into a predicament, you know, a dozen times on the show before buying dogs for 200 million bucks in December 2020, largely debt funded was it's, was it's undoing.

And you can see in that share price chart there, 84% of it's equity value just eroded over the following years after after doing that. But over that time they did keep moving their federation project forward and that was their development growth project, which is actually a good project. The management of board of the, you know, were there when the Dogs deal got done.

They got the boot. There's a whole new board, new MD, new executive team that largely got put in place around the rock bottom of end of 2022, start of 2023. In fact, with the new management team in place, they then put to bed the balance sheet concerns too, with a $40 million capital raise at $0.09 in May 2023. It's low was $0.09. It's now trading at $0.29. That was the turn around catalyst. You know, there, there, there

were three at once, right? New team, better balance sheet, proximal development of federation. Yeah, so. So why I guess why is federation the is that their that's going to be their flagship effectively? This will be their core. It is their core asset. It's a polymetallic VMS, kind of classic cobar style deposit. It has, you know, a vertical

orientation. I'll flash up its, its reserve, you know, 2.4 million tons containing 8.7% zinc, 5.1% lead, 0.3% copper, 1.4g per ton gold and a little bit of silver too. Federation is entering its first full year of commercial production now I think, you know, initial, initial kind of kicked off around July last year. So it's, you know, it's, it's, it's moving forward, it's ramping up. But interestingly, they are mining it from the top of the ore body.

You can see where development is as as at this month here just in that you know, you can actually see the the the development underground development there on the on the on the section. That they and that 1.4g gold like say they're getting half of it into concentrate. That's bloody. It's worth a bit of coin these days, like. All the other metals too. I mean, I think it's like a 5.5 gold equivalent. Yeah, yeah.

But I mean these polymetallics you should you should think of it in like a dollar per tonne net smell to return. Yeah, which is pretty, pretty attractive here. The decision to to you know, mine from the top down meant that all gets to the mill sooner lower, lower front capital, faster pay back and it and it meant that they could keep their capital structure of the company intact since that May 2023

capital raise. And underpinning the low CapEx start up is also the fact that a really has an under underutilised processing facility just 80 kilometres down the road at their peak mine. So they can just hold it there. They didn't have to build it, build it, build a mill. And they actually just got approval to start holding 600,000 tonnes per annum on the on the roads from Federation to to peak instead of the 200,000 tonne per annum limit before.

The thing that Fisty spoke to in your interview JD was the cash generation that the company is on the verge of having from from FY20 6. They basically they transition into thicker higher grade Stopes at depth which carry the strongest margins and underpin the mines free cash flow generation. And you can kind of even see it just on the on the section there, right? Like all of a sudden you, you know, your mining shapes.

Yeah, which I mean you can just think of the the benefit that that that has from a, a free cash flow generation potential. SO50's estimate was $100 million of free cash flow per annum on an EV, like an enterprise value of $250 million. Unfortunately, the market has clued on a bit more now and the EV is no longer 250 million, it's closer to $400 million. But I, I really do love appreciating a turn around.

And I think, you know, there's a, there's a lot to be admired about, you know, a company that can turn, turn things around and, and yeah, you know, really, really move the dial like, you know, you've got an operational plan that works and create shareholder value. I think there's a lot to be admired about about that when it's pulled off and you know, I really is, is frankly, they're on the on the cusp of really reaping the reward from its turn around.

You know, whether or not it's still cheap or not, you have to make your own mind up. But regardless, it's embarked on this path of of of a turn around. And today it's, it's been, it's been an impressive thing to watch. I'll have to, I have to write it up on it. Are they obviously go on top down now? Will they? Do they talk about paste or anything?

Or yeah, they, they, they basically got to experiment with the pace early and kind of, you know, like, like, yeah, the, the, the pay system's been tested and all that sort of stuff. Yeah. All right. So they're obviously I think because I think before they were going to go like bottom, like not when they say bottom up, you don't go to the bottom. It's just like you go, you work on top of the paste and and

everything. So it's it it's because you can do a lot of work in the other Stopes drilling them out while you're backfilling. Yeah. But for top down like that's the best way to manage stress because you always got a stress shadow top year because it's being excavated. Gotcha.

Gotcha. And it's yeah, as you said, it's quicker because you just start because you've got to develop 3 levels down before you mine and start whereas you just start taking or as you go. Yeah, but it can be can be a bit slower because you've got to wait for that pace to cure before you mine under it and stuff like that. So there's pros and pros and cons. It's. A trade off. And in this case, they made the trade off based on the, you know, the the reduced upfront cash.

Yeah, yeah, yeah, yeah. Shout out to young fella Lucas. He wrote this excellent note that he posted on LinkedIn together with Fisty's comments. Inspired me to take a look at a really again, Luke says no. He he, he writes this, he says it really is transitioning from a complex story into a cash machine and the market is yet to reprice it accordingly. Unfortunately for the punters and they're reading Luke's note, the market is repriced at 35% higher already since then.

So I. Reckon Lucas has made some cash? Hope so, yeah, you deserve. Lucas moving the market. Yeah, yeah. Oh, it's, I think one thing we didn't mention about turnarounds. Oh, we sort of did about like you mentioned, because they sort of, you know, new management team and and everything like, even though they're not publicly listed, like Kaydrill were the same when Ron O'Sullivan rocked up. Like he's he's a turn around man.

Yeah, like they just injected him like the obviously the sample management friggin standards went through the roof, like just company morale and look at how many Arsene Diamond I was they're drilling these days, but just punching him in the gold. Fields in all sorts of directions, mate and rhino he just when you when you in his presence, you kind of just fall into line. I've learned like this. I don't know, you just want to say yes to him no matter what. Like he's just that kind of

figure. Yeah, and you, like you will say yes to everything because you trust him that he won't make you do anything stupid. No, like because he'll just never tell you to jump off a Cliff. No, like it's that you get into his the Ron O'Sullivan vortex of

trust. If you haven't met him, I think you need to make it your mission to meet him and just understand what we're talking about with this vortex, because the net effect of it is more drill meters, faster drill meters, bit like better workers who are on those rigs getting the performance you need and. I never quit. Never quit the the quality of that sample management elite. Yeah, yeah, you just love him. Just reliable. Try reliable when you get in the vortex, just try not to kiss

him. Everyone tries because they fall in love with him. Go okay drill. Go Ryan O'Sullivan JD, what have you bloody found out with

Goldfields and it's not Gold Rd. related. Not gold Rd. related. We are going to Ghana for this story guys. Go to Ghana. And then the story sort of expands from there. But goldfields have had to hand over the keys to their domain goldmine to the Ghanaian government. And oh, just a quick by the way, Goldfields are now AUS $22 billion company. Their market cap has nearly doubled since January. So they're on a a tear. That's a talk to the gold price. Yeah, right.

Even amongst the majors, that is. I gather it wasn't like they just didn't voluntarily rock up our look, we're thinking we might give this back to you. I assume it was forcefully requested. Yeah, you're quite astute Matthew. Doesn't tend to play out that way. I'll give a bit of background to to the mine to to sort of start this story. So Goldfields have majority owned demand for over 20 odd years now. Government has a 10% free carried interest. The mine on 100% basis did 135,000 oz.

So it's it's pretty small. It's a bit over 5% of goldfields total output. Mining ceased through the year of 2024 last year and they moved to trading stockpiles there, but still did pretty decent cash flow as you'd expect with with mining costs turned off. Free cash flow of $140 million. Did it did it stop because it the orbity, the orbity was extinguished or what it. So there's a bit to it and it's

it's kind of complicated. I guess I'll get there in a second because there's still 3,000,000 odd ounces in resources, but no reserves. Given situation, they don't have the confidence to put things into reserves. But essentially this was this. And in the broader area was mined for a long time from the from the 19th century through to the kind of 1950s. But modern mining restarted here in 1997 with a mining lease, the license being granted just

before that. Now production through the 20 tens kind of waned a little bit and then gold fields came out with this big reinvestment plan favorite a kind of eight-year outlook, which is more or less where we're kind of at from 2016 to about now and then in the early twenty 20s. So 2122 they start talking about studies to try and extend the life as well as maybe looking at selling the project.

Now production had been on sort of queue to end this year, but like, like I said, you, you look at the the resources and in measured and indicated there's 2.2 million oz still at 1.8g. So it's decent. It was a sort of a bigger mine with a few satellite pits kind of feeding into it. Now the company added that they tried all these exploration targets. None of them turned out to be

kind of too fruitful. They hadn't really spent much last year and not an awful lot the year before either on, on exploration. But if you do go back on the goldfields website, which hasn't been granted, you know, updated in, in too long. I, I take it this is from the sort of 2018 time frame they talk about mineral reserves being depleted by 2031. So there, there's answers there.

And I dare say they knew that this mining lease was wrapping up in 2025. Hence they haven't invested heaps of capital because they had some sort of inklings that something like this would happen. So it's not black and white as to what the future of this would actually look like, but there's clearly gold in and around the area. So what what was the, I guess the background on they thought this was going to happen? There must have been must have been some lease dramas for a

while. Yeah, yeah, absolutely. So December 2024, last year they submit an application to re extend it. They had like I said, received a 30 year lease almost 30 years ago. It's due to expire April 25, where we are today. In that annual report from last year, there was a couple of interesting comments. So they say that they'd, you know, they sort of discussed that they're pursuing or would look to pursue all avenues to extend the lease as you'd kind

of expect. And they actually specifically mentioned international arbitration if necessary. Now this week, the, the Minerals Commission, the sort of applicable body that looks over this stuff in, in Ghana, rejected the application. They told Goldfields stop all your mining, you need to be by tomorrow off the site needs to be vacant. And the company said that complied with that orders, they won't be there as of tomorrow. So then kind of what next is, is the question to ask.

And the government hasn't specifically said why they didn't accept the mining lease. And you know, it's kind of par for the course you if the company meets all the necessary requirements, you extend it. That's how things normally work and Ghana by and large is held in high esteem than a lot of it's sort of neighboring countries. People are sort of called it a, you know, by African standards, a good jurisdiction to to operate in. So it's, it's pretty interesting on that front.

The government wants to take the reins of this mine. It's very clear. You can go on YouTube and there's these sort of videos with a couple 100 views where CEO of the Minerals Commission and other videos with the deputy CEO of the Minerals Commission specifically talking about this. Mind, they're saying they're going to honor all the existing contracts. Nobody's going to lose their jobs, but processing will continue. And there's a sort of strong focus on Ghanaians being the one

that's benefits from this. And they push back on what Goldfield said in one comment that said they said Goldfields didn't meet all the requirements, but they didn't go into any great detail on what kind of requirements other than saying there's no reserve. But that kind of goes hand in hand. Why would Goldfields put a reserve if they don't have confidence that they're actually

going to mine it? That doesn't really makes sense, but that was the only real specific point that the government pushed back on. They did add that they want a better deal for the Ghanaian people. As you kind of expect right now, there's there's a bit more going on on Ghana. So I'll, I'll take a step back for a moment now, because there is much, much broader action happening. And Ghana's not some like tiny little gold producer. It's the sixth biggest gold

producer on the planet. They produce a tremendous amount of gold by global standards. And they just created this body called Goldbod, which is now going to be the sole authority to buy, sell, assay, export any gold from small sale gold miners, right? So this isn't including your purchases of the world and your Anglo golds and others, but they want to organize artisanal mining in the area and they were

pretty punchy about this. They said any foreign nationals tied up in small scale artisanal mining are going to be booted out the country. They lifted the growth and sustainability levy for major mining companies as well. So that is the big guys. That's lifted from 1% to 3% of gross production and so. Like a royalty, effectively. More or less, yeah. And the finance minister said in Parliament that the government must leverage rising gold prices to boost revenue for national development.

So interestingly, the what we would call the opposition leader pushed back on this and said this is going to have an adverse effect on the resources industry in our country. So it's getting, it's getting a bit punchy over there. They sold as a country over 11 billion U.S. dollars of gold last year. Half of that came from artisanal

mining. Wow. That is a huge, huge amount which the government isn't getting a clip on. So that is why they're getting pretty, pretty punchy and they want their share, as you'd kind of expect. And that the story as it relates to Goldfields gets a bit more complicated because as you guys might remember, they own the Taqwa mine in Ghana as well. This is a beast. This pumps out over half a million oz per annum. And they want to form this into a joint venture with Anglo Gold's idea Prem.

So this this was mentioned back in 2023. And clearly the Ghanaian government have this as leverage. They need government approval to join up these two minds and to to press on with the expansion at this operation. That alone has 11 years of life at half a million oz, right? This is huge. So I would imagine Goldfields are just viewing this having to give up the the license for the upper other operation domain as the cost of doing business, right?

Because this is really the the golden goose that you don't want to give away. You want to stay on the right side of the government. Yeah, right. That's it's interesting that they're going after the mining companies and the locals as well for the clip.

Yeah, yeah, absolutely. I think that, I mean, that really leads me to, to my final thoughts on, on why I find this super, super interesting because, you know, some, some people might not be all that bothered by this small mine, relatively small mine owned by a South African company in, in Ghana. That's, that's fair enough. But I feel there's a lot more to this story because nothing

happens in a vacuum. And as an investor, you need to be reading the tea leaves about what's going on because we've seen it in Mali, You're seeing it now in Ghana in a jurisdiction that people thought was was safer. And these things, they don't happen in isolation. Just like companies look at what their neighbors are doing next

door, governments do the same. And with the gold price going through the roof, there's horrific youth unemployment in Ghana. Artisanal mining has damaged more than half the the rivers in the country. There's a lot of reasons for why they want to get a hold of this, get the cash in the door and look after their people as well as look after themselves. Kind of no surprise on that

front, but. There are the unintended consequences along the way of just like, yeah, other companies who are thinking about investing in in the country all of a sudden think twice. Yeah, absolutely. And clearly domain isn't a world class asset. It's not going to be a massive blow to to goldfields cash flows. There would have still been

value. I mean just processing the stockpiles, imagine if it's even if it's 50,000 ounces of all that's already been mind like we're we're talking 100 million U.S. dollars in in cash flow. So that alone not to mention what you'd sell a 5 million tonne per annum plant for with with gold in and around the area that there is value that they're foregoing here. But it was very, very noteworthy that Gold Fields in their announcement yesterday, made no mention of international arbitration, but.

Trying to keep it. They want to keep it cordial. They want to keep the relationship with the government all kosher because they know that taqwa is way more important for them. And they don't want to build up any animosity with the I mean, this is my assumption. And I think it's the most kind of obvious assumption, right? They want to stay on on side with the Ghanaian government and make sure that the the big one they've got is in good hands.

And they're going to have to forego a little bit. But yeah, with gold prices doing what they've done, I'm not going to be surprised if we start seeing more things like this all around the world. It's it's just par for the

course. And yeah, in a in a sort of environment of like resource nationalism, you just see more and more of this when countries are doing it hard, when they've got yet that they owe the the IMF or the World Banker, all this sort of stuff, they're going to twist the levers that they. Can well, I think resource nationalism was already happening a lot in Africa before the gold price started RIP. And so it's probably going to be even more heightened now, yeah, A. 100% it's happening in in

South America as well. You look at what what Chile did to the lithium sector, it's all around the world. The, the, the, the tricky thing, I say tricky thing, but it's like the, the thing to be cognizant of is like when, when regimes change based on the good times, then you're really into that industry in the, in the normal times, think of Queensland and the coal royalty change, right? So the good times came making super profits.

Oh, we're going to Jack up these royalties to absolutely onerous levels, which progressively get higher and higher as you make more money. And now, like, as coal prices moderate, it becomes really hard to have just free cash flow. So you don't want that to happen just because it's good times right now in the gold sector. Yeah. Definitely. Yeah, mate. I reckon your bloody your prediction is your analysis. Spot on Jada. That is definitely what they do.

Thank you man. Catchy in the corporate team. It's, I mean, it's, it's one to watch for minors all around the world, I reckon. Yeah, yeah, love it. Should we? You could create J DS Bond map of international relationships. I'm sure they'd. Be they've already done M and IL as one, that could be your next project. We met some cracking folks in in South Africa who who do this, but they they keep it on the very hush hush and they maintain those relationships. I. Want to give you trade so you

could serve. By No No. Well, you get it for free here. Why? Not all my dartboard predictions. Love it righto. Thanks to all the bloody partners. GRX tickets mate. Use the code, come to Brisbane with me and we'll bloody have a beer and talk tech and innovation because that's what I do. I talk tech. I talk tech and innovation with people. I'm a trusted source of it. JRX conference, Brisbane, May 2020 Second discount code in the show notes. Great partners these people are sensational.

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