The Mining Giant That Has Outperformed Every Major

I've even adjusted, you know, for currency to be fair, this is like for like basis total shareholder return. So it accounts for dividends, those sorts of things. Over the last 10 years, Z gin plus 679% like years away from the entire pack. And in second place, this is how far away 2nd place is. Farley lost 372.

Percent rhino money waters we're going to we're going to China, we're going to North America today we're going to you boys are covering a couple of big dogs that are big and warrant of discussion. Behemoth. Behemoth in the mining world that we just haven't haven't really unpacked until today. But we're gonna be the wiser for it. Thank God for you too, because I'd never look at those two in detail. It's just I'll just assume they're good, but we're not.

Look forward. To this we're not gonna neglect the WA mining community either. Oh, mate, there's made a, there's made a share price plummet and we're gonna go in to see what the Hell's going on. Oh, let's do it. Of course I'll freaking own it too. So tell you what mate, tell you what's going to bloody lift me spirits from a share price decline?

The GRX Conference, the Global Resources Innovation Expo, It is coming up 20th to 22nd of May in Brisbane at the Convention Centre. It's hosted by Osman in partnership with OSIM. What is it? It is the absolute nucleus of mining tech innovation. What the future of the mining industry is going to look like. You're going to have 150 exhibitors showing you everything and it is going to look cool. Have a look at this is this is look at those photos, look at those tech discussions in action.

You are going to see shit loads of these. Look at these two. That is a highly engaged discussion about the future of the mining industry. And mate, tell you what? Conference is a portal to the future of mining. Oh mate. Good pun there. Good pun. It gets better though, Maddie. Why does it get better?

For money mind listeners. Mate I love saying the word exclusive. Exclusive discount via US 190 bucks off. The standard rate for members. 160 bucks off if you're not a member, which means look, it's worth the extra 30 bucks discount to become a member. Follow the links in the show notes. This conference is bloody going to be unreal. You got to get there. Go to Bruce Vegas, see what the future of mining is going to look like and oh, just. I'm up. What's it?

Like Rusty and Bryce should go, yeah. Yeah, yeah, I'm. Sure they will. They will. Probably keynotes. Bryce is probably gone. Keynote speakers, yeah. 100%. I reckon if we could get the JRX logo on Rusty's nails, that'd be the guy. That'd be the perfect marketing material. All right, let's get into it. What do we got? Take it away, Trev. Which Chinese company are we talking about today?

The mighty Zigin. Mighty not not BYD, not BYD, no. Yeah, I would call him a miner, but we do talk about him a bit. But mate, Zigin is a massive mining company and it and it you know, it, it takes a bit for us to understand that, I think.

And yeah, upfront I think I'm admitting that that I'm probably going to be be be wrong or a little bit, a little bit off on some of my takes about decision because up until today, frankly, I haven't done the work to try and understand this company, but it absolutely warrants that it's massive. They have growing influence literally fucking everywhere in all the commodities that that matter.

And it's a company that has grown enormously over the last decade to kind of conceptualize just how rapidly this mining company has grown. In 2014, they produce 1.1 million ounces of gold, 10 years later, 20242.35 million ounces of gold, so more than double the gold production. In 2014, they produced 138,000 tonnes of copper. 2024 they produced 1.08 million tonnes of copper.

Like that is just enormous copper growth when yeah, when every, every, every, everyone's been trying to grow copper. They've just excited that. Far out. I think I'll I'll let you get to it, but I'll assume where a lot of that's come from. Kamala. Yeah, yeah. Amongst others, yeah, No other major has, has, has come close to generating the sort of shareholder returns along that same growth journey at that XI

Jin has over the last decade. Keep in mind this is a Chinese company listed on the Hong Kong Stock Exchange in a, in a, in a decade where capital markets have been very punitive towards Chinese equities, they've been, if you look at any performance of Chinese equities over the last decade versus Western

equities like atrocious returns. So, you know, but what I've done here, I, I'm actually comparing XI Jin, who, who is amid that kind of capital pool, compare their 10 year total shareholder returns with the majors, BHP, Rio Tinto, Glencore, Anglo American Valet. I've even adjusted, you know, for currency to be fair, this is like for like basis total shareholder return. So it accounts for dividends,

those sorts of things. Over the last 10 years, Z gin plus 679% like he is away from the entire pack and in second place. This is how far away. 2nd place is Valet plus 372%. It's not a time frame thing right? I I haven't just cherry picked a time frame. Here's the last five years. See Gin plus 592%. Second place is Glencore Miles Away plus 192%. Oh, and that's bloody considering Glencore in the last month or two, it's like 280 last night. Yeah. It's like they're just, yeah, yeah.

Here's the last three years, right, a different time frame, CGN plus 51% in first place. Second place, BHP miles away down 1% is that, you know, coming off the back of elevated commodity prices back in 2022. Here's the last one year, CGN plus 11%. Second place is Anglo, who keep in mind in that last 12 months received a buddy, a bid from BHP up 8%. So on every single time frame, no matter which one you use, the relative performance of the

others, the pack always changes. It's a different company in second place. But the constant on every single one of those time frames, Z Gin has outperformed the rest. And well, I just find that utterly fascinating. So I, you know, I've tried to spend some time today to to understand how Z Gin has such an edge over the Western incumbents that has seen it compounding at a vastly higher rate on every

single time frame. And that and that total return that takes it for BHP Raya, that takes into account the dividends as well. Exactly, exactly. Reinvest dividends. Yeah, yeah. Yeah, let's let's crack into to why. Mate, this is super, super interesting. I think you framed it well and there's some really, really important reasons why to understand like and put it into

context, I reckon. I got secret sauce and I I think I can pin it down to, to to 55 areas that, you know, Z gin, but that gives it gives Z gin a like a massive edge that like honestly, I don't think is it's an egg, an edge that is not replicable by, by any western mind. And those reasons are number one.

Zijin has a cost structure that is vastly lower than its Western peers #2 Zijin's cost of capital is so much lower than any of its peers thanks to its access to China state owned bank debt at, you know, very low cost #3 Zijin has an envious track record of aggressive, shrewd and bold acquisitions while remaining tremendously disciplined on the price that they pay #4 Zijin's geopolitical positioning has enabled it to go where Western miners hesitate to conduct business, and they do it in a

way that Western miners probably can't. And #5 capital allocation of Zigene has really prioritized reinvesting for more production growth as opposed to capital returns to shareholders that we've seen other Western miners participate in. Yeah, for sure. Let's unpack that cost structure one, because that's maybe the most important. I mean, they're all, they're all pretty important, but that one's like kind of, you know, once you kind of see it, you can't Unsee it in a way.

There's so much to, to, to this. And, and, but if you, if you think about a mining company, just like conceptually think of a mining company, they can't control the commodity price, right? They're, they're, they're price takers. They can't control commodity price. They, they can to an extent control their production units. And you know, it requires expectations and skill to do that. And they absolutely can control their costs.

So I can't emphasize enough how important it is for a for a major mining company to manage their costs. In the case of Zijin, I think their cost structure is a, is a true competitive advantage enabled by the fact that A, they have their own in house engineering team to design, build and expand projects. They avoid, you know, third party ABC contractors and then the margins that come with it clearly, you know, like like disappear. So they, they can move much faster as a result of that as

well. B, they have access to the entire Chinese supply chain. They source most equipment, material services primarily from domestic suppliers who are right on their doorstep, doorstep. C, lean overhead, unlike Rio Tinto or BHP or Anglo, etcetera, all the rest. But they all have enormous corporate overheads, right? Teams on teams on teams that do nothing productive. Z jeans lean right. They run a flatter structure with centralized control and lower corporate costs.

In fact, it's it's it's got it's major shareholder is the provincial government and they really discourage corporate

bloat. D this is a big one project location arbitrage Sijin has prioritised countries with low wage costs and permissive regulatory regimes, think DRC, Serbia, Colombia. Western peers have been, you know, constrained by the ESG investors or, you know, or the permitting dynamics in Tier 1 jurisdictions and they face longer timelines with higher community and environmental costs, both be it both value and timing. And those locations have much much higher wages like these

FIFO workforces are not cheap. JD we were in the the the DRC we visited at the Chinese on mine, not as a gene one, but they they weren't there was no FIFO rosters there. They were flying back to China once every six months, like. Completely, completely different, right? It's yeah, it's, it's mind blowing. And like it can only kind of be done some of these things from a kind of Chinese perspective or other kind of similar countries. Like you say, you just can't compete on a lot of those

numbers. And the cost discipline it, it runs through the company in a way that I don't think others come close to. Just when you hear the rhetoric out of out of management, I'll just play an excerpt from the latest results call that shows you how obsessed with cost discipline this company is. This is this is English translation audio over the over the top of the the call that

I'll play. So we have operations in five continents and what we do is that we build a comprehensive logistic and procurement network for our project across the world in order to reduce our costs. And we have two concrete measures. For example, we use open price negotiation to buy some frequently used equipments, which also help us to reduce procurement costs. And we also take measures to control investment in construction. We set up an overseas cost

settlement centre. It is responsible for managing our prices and expenses early in the process overseas. And we through this settlement center, we had put forward some feasible plans which is quite helpful for us to improve our construction investment management. So we are we have managed to involve our management in overseas construction investments early in the process and we also continue to optimize our designs and engineering.

So basically, we have formed a very conducive cycle for cost control. And we also have this kind of full chain cost control measures. We also look into some abnormal prices in our contracts. Through this kind of management, we identify problems and lower them. And 4th, we step up our performance assessments regarding cost control. We set clear targets and we also break them down into specific tasks. And for major operations, we also customize plans for their cost control.

And we also introduce a sharing system to in order to share our best cost control prices among our operations. And also we will be able to improve our performance in all on all fronts. And we also introduce a reward and panel gear system to ensure accountability and improve our cost control results. So basically these effective measures will be continued to roll out across our entire group in order to further improve our cost control performance. And also and also and also and also.

There were so many things there, right? It sounds exciting. Yeah. Yeah. It was a female show I show you. Yeah, translator was pumped. Yes, yeah, yeah. Yeah, that, that was fascinating, mate. And that and that flies in the face of the the other ones, right? Because this is something Western companies can compete on. And I just love that dedication to cost competitiveness. That is, you know, that that's what really stands out in in any sector, right? And mining's obviously no

different. It's perhaps even more amplified because you're you're a price taker. What A So what about their, I guess their M and A track record and their, and you speak of geopolitical appetite. We mentioned the Congo. They were obviously very heavily involved in the AVZ saga, which was fascinating. So yeah, yeah. Give us a rundown of that.

The two the 2GO hand in hand and you know, M and a geopolitical appetite Zijin, they've undoubtedly leveraged global diplomatic and financial reach to facilitate their expansion, right. Many, many of its projects aligned with China's belt and Rd. initiative or or national resource security goals. They're their largest shareholder is a provincial government effectively, in my mind making Zeigen an extension of state policy.

This government alignment I think has provided access to to State Bank funding support when investing abroad think host countries often welcome Zijin's investment due to China's ties or infrastructure deals in other parts of the country and government backing. It also helps Zijin weather risks in these jurisdictions in in developing countries, it can

negotiate like favourable tax or partnership terms and it often partners, you know, with government owned enterprises or or offers host government's equity stakes to to align those interests. Just think about the deal of the century. Zejin paid US $412 million for half of Kamoa Kakula from Ivanhoe in 2015. Friedland himself has literally called this the best deal ever in mining. And you know, he was on the selling side of that deal, right? He's no mug in negotiations either.

So, you know, if it was more value to be had, I'm sure he would have found a way to to get it. But but Ivanhoe needed a gin and they they brought not only the in house engineering capability, but also a pathway to finance the mine too, but also a counterparty that has hasn't managed to actually, you know, deal and negotiate and get things moving in the DRC in a period of time when no western miner was going anywhere near the DRC.

And that's probably the one of the most things that's misunderstood about Z June and I'll acknowledge my ignorance is that engineering capability that they're a a project builder, which is and they don't think would be as well known. And they can do it cheaper than anyone like you know, yeah, they'll run their own numbers over, over an undeveloped project and come up with their own CapEx, which is way lower than the study of the the Western mind and put out for the

Western project. And and that can you know, kind of support a case to pay, pay X dollars or or whatnot. It's it's totally not appreciated. Yeah, I, I think now a lot of people would be quite critical of Zegin in the way their geopolitical influence may have, you know, let them achieve outcomes that are unobtainable to, to Western minors. And those critics probably have a damn good reason for their criticism, too. Just ask any AVZ shareholder what they think of Zegin mining.

You'll be, you'll be, you'll be having that conversation for 15 minutes and not one positive word will be said. And I've no doubt that Zegins, you know, achievements in some of the spicy jurisdictions have been facilitated in part by are doing things that no Western company can do. And yeah, also I wanted to convey how Zegin is also tremendously disciplined though, when it when it comes to deal

making. Can you can you guys think of a single deal where Zegin has been known to have overpaid for an asset or a company? Can't think of one, right? How many, how many, how many major miners can you? Can you say that about like you just can't every like at some point in time in some companies history, some management team and it happens relatively often, they get very excited or too

excited about 1 certain opportunity. They pay too much and it's a disaster. But I can't, I can't say I can't think of that as it relates to to Zijin and I just to capture, you know, that part of the DNAI did just want to play a snippet from Chairman Chen talking about MNA in the current environment. This is a quote from less than two weeks ago. Want to say is that even with such high prices, there are also there are still some good offers

available. So for a company if it does not has any increase, then it won't be able to for the company to achieve growth. So we will definitely continue with our M and A strategy. The Zune has this feature which is that we won't go for very expensive project, we won't bet on just one projects at all costs. For example, when we decided to enter the lithium markets, that time lithium prices has been quite high, but we still evaluate projects at the cost of 100,000 per tonne.

So this is our benchmark price internally. Basically, it means that we will still remain prudent in our investment strategy. So we have some considerations, for example, in terms of the selection of minerals, we will go with go for minerals that is optimistic in the future. In in recent years, we prioritized copper because it's

critical to renewable energy. And also artificial intelligence, the application of AI also consumes a lot of electricity and geopolitical factors are having greater impacts. Almost all central banks across the world are printing money. So money is cheap and that is why we are seeing rising gold prices. So GOAT is a very important target for us in our future M&A activities. Gotta get Jim and Shannon the translator on the show. That'll be a bloody.

Wouldn't it, wouldn't it, it would be a very, very interesting, very interesting conversation I reckon, Maddie Yeah, but like you can, you can hear the discipline there, right? Like how many how many companies were were running 100,000 CNY per ton lithium carbonate in their long term price assumptions when when it got to six times that, you know, Oh no, I certainly didn't. What, what do you, what do you think is going to be some of

their next moves? Like if you're going to throw some darts around, what are they? Is it going to be heavily focused around copper? They had a massive swing in, in lithium, yeah, relatively massive, almost 2 billion U.S. dollar deal. Yeah, Chinese lithium for for zangay. Yeah, they've got that. He, he spoke after that quote. You know how he's pretty happy with the, the quantity of, of lithium resources that they have.

And I'm sure that, you know, they're, yeah, you know, they've got a view on the, the extent of the Monono deposit they'll be able to bring online. They've also got Argentinian brine which they're bringing online as well. So there's, you know, they're, they're, they're quite comfortable with their lithium deposits, but they're happy to look at more gold said was a big priority. I think gold is actually like high priority that copper based on my interpretation of the translation.

I also think where they are going to like look for they just, they just bought Newmontchem mining in, in Ghana, by the way, paying a billion dollars for that. And but I think they'll they'll find a lot of opportunities in, in South America, you know, places like again, spicy jurisdiction of Colombia, those those sorts of locations. You know, I wouldn't be surprised to see, you know, a lot more activity from from the likes of the gym in those parts of the world. What about Ecuador?

It's. Entirely possible. Yeah, Yeah, yeah, yeah, Absolutely. Yeah. Mate, that's fascinating. That is super, super interesting. Obviously that with the the MNA aspect of it, they haven't been around as as long in, in such scales, so very keen to see how they do through the next cycles in in staying to that discipline. But the track record is super impressive. Yeah, it is. And I mean they're, they're even in in Australia in like fire.

It's mostly owned subsidiary Norton Goldfields, which yeah is, is a is a funny one, a bit of a head scratcher. I think they've got a pretty high kind of cost, cost basis that they, they run things out there. But you know, have also shown a willingness to, to divest for the first time in a, in a long time by way of selling bullet bullying recently to to MI 6. So just, I'm paying more attention to the gin. Yeah, paying a lot more

attention. And I I'm kind of convinced that they do have a competitive advantage that Western miners can't imitate based on, based on all the factors that I talked about, for better or for worse. Very bloody good, very good, JD, we're going. We're going international again. We're heading to North America for you. But before we do this, I have a bit of an itch to scratch that I have not done. Please. Done for a while check this out. ITSITSITS more ITS flying out

the door for KCI. It's bloody good to have them back. And tell you what these IT numbers have just grown since we've had them. Where are they going to 38? IT 3-8 more coming in six months and that is going to compliment the fricking underground AG coming in the next month and the bloody underground charge wagon coming in the next month mate. All available for hire. A new grader on the way, mate, they're going to be an underground operators. I cannot wait to see him.

It's great to have him back and they've even just amplified the recruitment team. All your blue collar workers for underground open pit civil construction, they're just mate. Whenever in doubt in your life, what do you do? Just call KCA. Yeah, call KCA. Very simple. Great to have the team back. How good is that? He's flying out the door, right, JD? Where we go, North America. This is a big humdinger of A use. Love this company. Use love it. Oh no use. Love it.

I do I've got I've got to sort of turn the volume up after you've just done the ad again. So normal very good. We're we're talking about Franco Nevada. So they just had an investor day. I'm not sure if you guys saw this one, but I thought it'd be worthwhile just tuning in and trying to learn a bit from the, the royalty behemoth that they are. So I think everyone kind of knows their returns a first

rate, they're pretty stellar. Their share price performance since since the IPO kind of knocks it out the park. And I was, I was kind of curious to hear how they're thinking in like a, a frothy precious metals market and some of the other perspectives on, on debt on the market and sort of funding structure more broadly from from juniors to to developers. And yeah, I thought it'd be good just to chat with you lads about about the big takeaways. I'm very curious mate, where

should we start? I've, I've sort of jotted down a few points and it's actually interesting to, to look afterwards. There's, there's a, a sort of relation between all these points, which I think the money miners will kind of notice as we go through. But I'll start with how royalty funding has its sort of place versus your, your traditional debt and equity sources. And what you kind of take away from this is the, the time frames when Franco in certain commodities will get really

active. So I'll play a snippet from the CEO to to start us off. That we can provide capital to the industry at a consistent cost. There'll be times when debt is very cheap and then we can't compete and, and, and we're happy not to compete on that level. There are other times when when debt is far more expensive and then we can compete. So we prefer to think, you know, both when we're competing with debt and and also with the equity markets that we're a

consistent cost of capital. The equity markets probably even more open and shut than than the debt markets. There. There there's some periods where they they're wildly undervaluing assets and the other periods where they're overvaluing it. So my, my interpretation came to hear what you guys think, but that was just speaking to discipline, like discipline, discipline, discipline through the cycle. You've got to, you've got to stick to it. You can't change your strategy

kind of halfway through. And he, he ended up following up that bit there by sort of saying when people really need our capital is when we get deals done. And I just, I found that fascinating. You guys can kind of chime in if you've got thoughts or we can jump to the next one. I totally like that, that you know what comes to mind when he said when people really need us?

I think I think of Sabanya late last year when they they did the the stream, which was like, yeah, pretty, pretty onerous. But it just kind of speaks to the value of a royalty company. AB AB absolutely. And it's, it's, it's going to tie and I've got, I've got more thoughts that I'll I'll sort of piece into what you said as as we go, but I'll I'll speak to their view on debt. And in simple terms, they avoid it. It's, it's as simple as that.

The, the goal is to be the one with capital when you're in those cycle troughs and some of the best deals that these guys have done when other companies are distressed. So thinking like Glencore 2015 sixteen, those sorts of deals that they do stand out and they make your money for years and years and years afterwards. So they view not holding debt as a competitive advantage in the business.

And it's, it's Berkshire esque and that is a, you know, kind of the, the utmost compliment in my mind, but it's really how they view the world. And they got asked this question pretty early on or they actually spoke to it actually without being asked because debt must be such a such a tantalizing prospect for a business like them, right?

And the idea that you could just spruce up your returns ever so slightly year in, year out is, you know, super, super appealing given that the profile of this business. But they clearly acknowledge we are in one of the most cyclical

industries that exist. And they view that financial flexibility and the ability to move quickly when it really, really counts far exceeds the the ability or the the earnings in the long term that you're going to get from a few extra percentage points here and there. So I'll play another snippet now. The second is financial flexibility and it's how we think about our balance sheet. A lot of folks say to us when you lever up the company debt is a lower cost of capital, you can

get better returns that way. That's not our approach. We put more importance on financial flexibility than we do on cost of capital. What we found over time, the industry is highly cyclical. That points in the cycle where the industry really needs capital. That's where you get your best deals done. For us, that's happened twice. The first was 2008 financial crisis. We had the capital available. We made some super investments. Palmeria Guadalupe was one of

those. The second time it happened was 20/15/2016. Trying to slow down. Many of the diversifieds were caught off side with their balance sheets. We were able to get stakes in in terrific assets, Candelaria and Tamina and to Pakai. Right. That's, that's really interesting. I think it kind of it speaks to the, the optionality that that that cash has, but also, I mean, they're in a competitive industry where the ability to act fast in those moments of, of distressed opportunities matter

so much, right? You've got A and, and imagine if you've got a peer royalty company who doesn't have a debt covenant in place and they've got just, you know, like, you know, cash that could be deployed, but you've got a debt covenant. You've got to, you've got to get your lender to look over because you want to kind of, you know, maybe maybe allocate more than you, you thought you could for

all of those sorts of reasons. So yeah, it's, I think it's a function of, of their, their outlook and also the competitive nature of what they're doing. So that that flows on, you know, flowing on from that, you've got investment cycles. And I just underline what, what Paul said. They're investing opportunistically in the weaker parts of the cycles, in particular for non precious metals. They've got a slightly different

outlook for gold. But the, the Detour Lake deal, I just want to under score to put it in numbers for people to understand how good a deal this kind of was. They got a 2% NSR on it for US, $35 million. This mine did 670,000 oz last year. They they call that a 250X. It's, it's just kind of phenomenal. And then there's, you know, the, the Big South American copper assets that they, they spoke to goes well, which are kind of stellar.

And gold, like I said, is, is viewed a bit differently, which I'll get into in a moment. But the way they sort of talk about this is investing through the cycle and they always present their board 2 price decks, 1 is more or less the spot price and the other is consensus. So it's, it's a bit of a different take to the other commodities and to piece it together for people, they kind of want to maintain gold and precious as 70% of their portfolio and 30 as other commodities.

That's predominantly energy as well as as well as copper. So the 4th point is ignoring the rate of return and this one is super, super interesting. So the upfront investment will always seem to have a low rate of return is how they frame it. And adding to that, they say whatever you put in the spreadsheet is going to be wrong. So their process is kind of two step. Firstly, are you highly confident that you get your

money back? And secondly, have you picked a property that can be multiples of its current size in future? And they sort of say that in this business that's where you make all the returns. So I'll play it from from then. Key thing when we're looking at projects are we highly confident that the project is economic, that we will get our money back. The number one thing that we think about as a business as I said up front is it's not the rate of return that you see on

what's there today. It's investing in the right properties that can be a multiple of their size over time because if there are multiple of the size that ultimately is, is where you make your returns in this business there. You go don't fluff up your study too much if you want Franco to come in. If there's like one kind of word that describes how this company thinks best, I think it's optionality. That's what they that's what they prize over almost everything else.

And you know, you're, you're targeting projects, assets that will last multiple, multiple cycles. And it, it actually reminds me of this paper that I think we shared a little while ago from Kaepernick, this, this US fund on how many, many people out there have flawed valuation methods for, for mining companies. And they don't appropriately value the longevity and the optionality that you get in these top quality projects.

And I think it's just, it's something super interesting to, to hear and acknowledge from them. They've always sort of spoken about it, but to hear it is just reinforces it in my mind. I think if who who benefits from that optionality the most that come like it's, it's actually not the miner because their costs creep up as time goes on.

The royalty company captures so much of that in a in a non linear fashion of that optionality because as a matter it doesn't matter if mining costs go up. It doesn't matter if inflation, you know, happens on costs because royalty is percentage of top line. 100% mate. Is there? So if this is such a good business, how is it perceived? If a mining developer or company has financing from Franco and a royalty for them forever, is it? Or if it's so good for Franco, is it?

So this. Is bad for them. What's the? That's a really interesting question, Maddie, and it ties into my final point on, on gold versus other commodities. But to answer your question directly that they are trying to stamp projects these days and kind of have a bit of brand power, which I never thought we'd kind of speak about on a on a mining podcast.

But they want to like give projects that the Franco stamp of approval and they try and frame it as that having positive flow on effects for a company's cost of capital because Franco's done the work now, you know, take it with a bit of a pinch of salt. They're getting the better deals there. And the miner is going to pay in any case to get that stamp of approval, right. But yeah, it's, it's a double edged sword, right? It means that Franco's done the work.

And I think this project is going to be around for a long time. If they're, if they're buying a, a royalty directly, you know, if they're tearing one up with with the company, it goes both ways. So we go back kind of 20 years ago and they're one of very few royalty companies around. It's a less competitive space that is that has changed quite a bit. There's more royalty companies around today and the little royalty companies that are

around are even bigger. And then you've got also got more competition from the likes of sovereign wealth funds and like these alternate sorts of capital, your, your Orions of the world, your Appians of the world, those sorts of guys that are coming in to try and compete. But at the same time, you've got a dearth of gold funds. So the number of pureplay gold funds or mining funds that are around now is a much smaller number than it was 20, even 10

years ago. And the capital that they're managing is substantially smaller than it was. So the landscape has has changed quite a bit. But as these guys, Franco's position has grown, as they've become a bigger company, their cost of capital has sort of gone down, they've become even more competitive. So they can kind of do deals a little different.

But yeah, it's a it's a fascinating kind of landscape and you can just sort of view how how mining finance has changed as these guys have grown. Yeah, right. It's a It sounds that. Was that was a long answer to your question. But it sounds like a good marketing strategy to say, look, just attach us to it. It just looks better because we sound like we've done the DD on it, but we're going to make shit loads over the long term. Yeah, it's, it's fascinating,

isn't? It I don't think we'll ever look at a, you know, a royalty on a single asset developer royalty finance and be like, yeah, this was a great finance. You know, we're just like because of the way that it inhibits a project into perpetuity. But sometimes a single asset developer or even multi asset development. You think in the case of First Quantum bringing on copper Panama, like they had to put it be, you know, royalty stream, yada yada on that.

Thanks to Franco too. Sometimes you have to do it to get the deal done. Yeah, is it? Is it perceived Goes. To the first point, this goes to the first point. You know they do the deals when you know you need the capital, you being the minor. Yeah. Is it and is it possibly perceived a less risky option than conventional debt or dilutive? And that's so it's a short term benefit, but Franco gets the huge, huge long term benefit of it. How's it perceived from a

funding dynamic? There's a, it does have elements of that for sure like you don't have to to pay it back, right. So that's not going to come and sting you at the bottom of the cycle the same way high cost debt will, no doubt about that. Yeah, it's a fair comment. Yeah, in, in and in another perspective it it makes your corporate appeal a lot lower too, because it it might just going to be less less hungry to buy something because the world here out lives.

Yeah, the corporate outcome. You can always, you can always spin a narrative as well, mate. You can sort of say, oh, we're a, we're a copper miner. We weren't getting credit for our gold anyway, so we just streamed off the gold. That's, that's exactly how Savannah framed it. You know, they're saying nobody cares about the gold that we produce in, in the Bushveld. We're a, we're a PGM minor. That's how people think of us. So we'll stream off the, the

gold. So you can you can spin it a few ways. Yeah, yeah, that's bloody interesting. Very, very interesting. Good digging, Good digging as always. You want to know another bloody stamp of approval that's probably worth its weight in gold up at Franco levels. MMS stamp of approval. Tell me Maddie, but if haven't them associated with your project.

Look, Black Cat has cracked a dollar and that is either to do with one or both of MMS open pit mining expertise at Myri or the tech services arm that complements it, which is probably been a significant driver to why they've got to the ORSO early and they're just going to finish it that far ahead of schedule. So you're talking about stamp of approvals that are actually hold some merit in Australia. It's Bloody mineral Mining services doing your open pit

mining. It's amazing when you think about it because, yeah, like, I don't know, maybe even just only be focusing on Polsons. If it weren't for the innovation that came from MMS, help them kind of get that going. And then all of a sudden, like it's like, heck, we might actually buy a meal here because there's a, there's a fair bit of upside going on. The flow on effects like mate, that's like great decisions for perpetuity. It's like open pit mining royalty.

And look, they will acknowledge that MMS were instrumental in that process. So mate, just do if you want to follow a similar trajectory, get MMS doing your bloody open pit mining, mate. There's going to be, I don't know if they're going to be doing mining here or not. Oh, no, you got, Oh, you got a bit more final thoughts, JD or do you? Yeah, I I had a couple just to to wrap up on. Ripping me up mate.

On Franco, so real quick, I didn't speak about Cobra Panama because we touched on it, but that was 15% of the company's NAV not too long ago. You just go back a couple years and things are heading in the right direction there. So watch that space. And finally on on Franco, you know, their strategy has been superbly executed to date and they've outperformed almost every Goldie as well as the the

metal price since they listed. So came to see if they can maintain that discipline going forward. You know, you'll constantly have to kind of do do new deals here and there that knock it out the park. So we'll we'll see on that front. But the stock itself can be super, super pricey. Hence they pay dividends. They don't buy back their stock.

I think that's a bit of an acknowledgement in that there there are opportunities though in times where these guys have done deals like they said 2008 and 2015 sixteen, their share price has been pretty depressed as well. So you can here and there, you know, it's kind of once a decade

type thing get an opportunity. But in normal times, I think as an investor, if you are looking at kind of investing in Franco Nevada's stock, you are paying up quite handsomely for the optionality in their portfolio, which ironically I think it's something that Franco's management team themselves would would never do. So it's a kind of interesting paradox to to leave it on, I think. Very good God got us all thinking, JD. Nice work, right everyone's? Thinking let's talk exploration,

mate. Exploration. Jeez, everyone's thinking why the Hell's this going down bloody 30%? Oh, Caprice, one of the early gold exploration bolters as UN bolted a bit or sort of back to where it was before the assays. These assays come, let's go. There's a pretty interesting sequence of events here.

So they've got the ground up near Remelius's break a day up in the Murchison. So one now that gold gold's 5000 bucks an ounce today Aussie, which is fascinating that the gold prices, gold stocks haven't moved that much. So whether old Trumpies are the the fear of tariffs on the whole world is offsetting the increased gold price could be a reason. But it was yeah, it was

fascinating. Not so the the equities move as much so Caprice in the leader that a busiest a busy 28th of March. This was which was last week. They they put out a because I was sort of running. On no news pending assays, they got up to like 8 and a bit since and they they released this these incentive securities for the directors 2 and a half million performance rights each and half a mil to the cosec as well, I think.

And but on the same day the price was running, they went into trading halt pending price query and assay announcements. Everyone's thinking Jesus Christ, there are bloody issue on performance rights just before assays. Looks a bit airy gown. But then on the same day, the 28th of March, buddy. They then withdrew the proposed incentives. So they and those those incentives were based on the company shares trading above $0.10 for 15 days and at least one year's service.

So it was nearly approaching $0.10 so but but it has retraced today it's back down 30 odd percent on the release and when it come out of trading hole in the release of the assays. So you look at look at the first page and you think it oh, 11 metres at 6.7, that doesn't look too bad. 20 at 1 1/2, not as good 28 at 6.4. But that was the previously reported result. And then then they had a few other results at Baxter and everything 10 meters at 3G.

But if you look at I guess you bring up the cross sections and say, right, what's what's new, what's old and how's it all looking? So the, I guess the main one they were going off was this Vadrians Hill that that was where the 28th at 6.4 is. And you see the new results are coming out in the yellow. So you head north of there, it goes to well, I guess the the follow up hole of come back at 20 at 1 1/2. So looks a lot right. The grades dropped off there. They did a bit of drilling on

the surface in another spot. They all come back as Dusters 5 at .38 at .2. So and then that Baxter prospect, they again going deeper results of 7.46 and 3 meters at .4. So it's sort of just the results today didn't really match the I guess standard of the initial results that came out that sort of saw the share price triple. So it's just looking like that's, that's their phase one, phase two program complete of 5000 metres. They've got a phase three follow up of 5000 metres scheduled to

start next month. So there's obviously this is early stage the volatility of expiration. So there's plenty of ground there they're going to pepper holes into, but it just shows hype can quickly, very quickly turn into unhop when this gold exploration mania market. So I'll be interested to see if these performance rights, if they when they do get granted, if they're still on the exact same conditions. Yeah, because the share price is a fairway way now. Yeah, it's down 30%.

So you would hope they come back out at $0.10 as well. So very interesting. We will wait and see. So that's you. Saw the series of events and you thought oh there must be something good to come here but. Yeah, yeah, it's it was funny. Yeah, very interesting. So Nah. Anyway, see what they do in another 5000 meters on site. There we go. Go gold, go expiration. 5000 bucks an ounce. LGC is freaking off her head. She just can't sit still today. She's flying. It's gold coming out of her

ears. That's what the alley G is going to be. The G stands for gold. Now alley gold of Edis. Oh, right, that's where we'll. See where We'll see where Gold finishes the week on this insane run. You can tell I just whipped that up right at the end just to put something in the complimentary or extensive segments. Anyway, I got to give a bit of love to everyone, right? Hey, let's go through the bloody. The friggin Speaking of, it's flying out the door. We've got ticket discounts

flying out the door. We've got the JRX conference, which we mentioned at the show. 160 or 190 bucks off the future of mining innovation at Brisbane in May. Get your tickets to that, Oz. I'm in underground operators conference next week. I've got the bloody and the

gather round heading to that. The resource rise and sail one after that will be a bit hoarse apparently on bloody paddling A hosting a panel with Koshi. Well, me and it I'll be like, hey, but young corner of the days of sunrise. For a conference. Mate, you're in my world now, Koshi. I'll be doing the I'll be doing the Carl Koshy roll on that one. Touch him a thing or two. Yeah, right. I'll show him those boss in the mining industry. Right.

Who are those all these bloody bosses of the mining industry? Mineral Mining services, Grounded Samba, Groundsports, AR Insurance, WA Waterboards, Quattro, Project Engineering, KCI Site services, Black Diamond Drilling Services. Love that. That sounds Black Diamond and Cross Boundary Energy Rd. Rd. Rd. Road Rd. guys.

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