The Playbook Behind Evolution’s $20B Gold Success

Jonas Sterling gave us an appetizer, which was Northern Star. You've followed it up with a wonderful main meal that was Fortescue. And now you've come out with dessert Evolution Mining. You've done the history on the mining companies that have defined their last decade or two decades, and what have they done? They've gone from nothing to something incredibly substantial. Evolution is your focus today like. A $22 billion business, Can you can you just wrap your head

around that number for a moment? And the last sort of 6 to 12 months make that number look pretty astounding. But this is a 15 year story, bit by bit, trading their way out, stepping stones, as they, they like to call it, going from asset to asset from frankly, not the best assets in the world, just some pretty stunning assets. And even more remarkable, it has been a journey led by a guy called an accidental miner by himself, Jake Klein, and a very

entrepreneurial team. So I've been itching to do this episode for a long time. We've sort of heard along the way about deals like the Ernest Henry deal that they did, which was just remarkable, like awesome, awesome stuff. And we, we analyze a lot of deals here. We, we talk a lot about deal making in the mining space. So why not learn? Learn from some of the best in the business. I, I can't wait, mate.

I mean, the, the feedback that that we've had from the amount of work and research that you've put into studying both Northern Star and, and Fortescue has been extraordinary. And I know that that today is no exception. In fact, I actually think you've probably done more research into evolution than any of the two, but. I'm keen to get it done. You're building, you're building. And again, the characters are important. Again, the the the company's

strategy is important. Fortescue a story that execution Northern Star a story of of, of of deals and and and execution. But this one, a story of deals, right? Totally, this is this is all about the the deals and to put it in the context as well, right, because there are cycles, we're in a very cyclical business and there are multiple cycles in the company we're going to analyse today. We're clearly at one of the the higher ebbs of the gold cycle

today. And evolution is a company that's had a draw down over 80% in its time. So I think it's really important as commodity investors as well to to try and take this on board and understand what can what can happen when, when the cycle kind of turns. And I think Jake Klein would be the first person to to say something like that. There's a couple other reasons to do an episode like this as well. Speaking of Jake, he has just moved to non exec chair.

So it feels like a bit of a passing of the the the guard there. And you remember in the Northern Star episode, we kind of brought that one to a close kind of when when Bill moved on. So I think that changing in the nature of the business makes sense. And just to to touch on that point once more that that you made, it's all about the deals here. This is the ultimate investor slash capital allocator mining company. And I think it's so fascinating.

It's not just the deals that they did, it's the assets that they sold along the way, not just the buyers as well as the assets they, you know, passed on and perhaps most important, the timing of those deals. And you know, you can, you can only kind of think back about it years afterwards. But when you, when you do look back on evolution, the timing's been pretty good, hasn't it? It's been been been great to have commodity tailwinds. It makes or breaks a mining

company, there's no doubt. I'm extremely excited for your story on the evolution of evolution. JD Where does the evolution of evolution begin?

That we're going to kick this one off in the 90s. So I want to give you a brief bit of background on the on 2 individuals, firstly Jake Klein and then Nick Curtis. So Jake Klein, South African born, joined Macquarie in late 1991. He was in his late 20s at that point in time. Joins the internal audit division and he moves through the bank gets a flavor for all the all the divisions that a a much younger and smaller Macquarie has at that point in time.

But he gets a bit of a flavour for gold working in the bullion division. And they were, they were doing a whole bunch of fascinating things, which I'll, I'll sort of try not to digress into, but he meets Nick Curtis there. Nick had first tried his hand as an art dealer of of all things. And he is running the most profitable division of the bank, the bullion division. And to flash forward a bit for people that don't know, Nick would found Linus later on in

the, in the early to mid 2000s. And he would, he would lead that company as well as serving on the board with Evolution and playing a big role in Sino gold, which we're going to get into. But they get their first taste for China pretty early on. It's, it's the mid kind of 1990s here. And they are actually approached by a Chinese SOA.

And Jake is tasked with showing this guy Zhu Hengjing around the bank for a couple weeks in Macquarie's office in, in Sydney. Nick had already met this guy and he, he spoke super, super highly of him. He, he said he was one of the most interesting men he'd come across in a long, long time. And Zhu becomes very influential in the Sino gold stories. We'll we'll touch on later on. But he he helps open doors and give local insight to the company and and helps them on their kind of way.

This is the mid 90s like, like what is the political yeah atmosphere of China at the time? Were they trying to incentivize foreign investment into China? That they were in small parts. I mean, the, the opening up had really started in the in the late 70s with Deng Xiaoping and that had taken a long time because China was extremely poor and it's still very poor at this

point in time in the 90s. But as these guys kind of show, they are pretty adept at, at reading the tailies and they're going to China 10 years before others are kind of doing that. But more importantly, from China's perspective, they want to learn. And that is why they sought out Macquarie because they wanted to learn about, about deal making and, and all sorts of kind of things.

Hence sending Zhu over over to China and then inviting the Aussie team back to China. And they get an experience going to a whole bunch of different mines in kind of in the northwest of China and some provinces that back in in those days took a long, long time to to get to and over the Sino Gold. And firstly, the Macquarie journey, they were seeing first hand how things were changing on the ground in China. Jake gave some some awesome sort

of anecdotes about how long it would take to get to places and roll forward a few years that the trip is, you know, dropped 2030 forty 50% in time because highways are being built across valleys and all these sorts of things to just remarkable to kind of think about. So Nick and Jake are invited to to China. And what does that? What does that experience evolve into? So eventually Macquarie learns that they're not going to get the fees that they want to get from the Chinese.

I'm laughing. Anyone that's working in investment banking will have a good laugh at that. No surprises there. So in that sort of second part of the 90s they they leave Macquarie, a SOA essentially puts money into an offshore vehicle, a came in vehicle called Sino Mining International and this is run from Sydney. It starts with 30 million U.S. dollars and they look for a

whole bunch of different things. They pick up Illumina assets, they pick up undeveloped gold projects, they pick up developed

gold projects. So they pick up a whole collection of assets. And then around the year 2000, the Chinese premier puts the foot down and says we are reforming all the SOAS. A lot of these assets get pushed back out to the provinces, but it leaves Sino Mining

International in a bit of limbo. Sino gets swooped up by a company called Min Metals. Might be familiar to a lot of people because they're the parent company of MMG today, one of the biggest businesses in in in China, mining businesses. And Min Metals is an enormous commodity trader. Right, yes, they're, they're a behemoth in in China still to

this day. But Long story short, for 18 months, they don't have a a shareholder, so they get swooped up and they end up negotiating to take on this unprofitable gold mine that's called Zhang Chaling, plus a few undeveloped projects. Jin Feng was one of them, which would go on to become a mine and the second biggest gold mine in in China. The Chinese state still owns a stake in that entity, Sino. And sooner or later, come 2002,

we get a public listing. So the company Sino Mining lists on the ASX, the Chinese interest in that is, is way, way down. They raise $100 million. This is sort of corner stoned by 4 investors taking $10 million stakes. And you got Jake, a CEO, Nick Curtis chair later on. Jim Askew becomes chair in 2005. And if we Fast forward all the way to 2009, they're a company with two mines. A third one is on the way. One of them is, like I said, the second biggest gold mine in in China.

These guys are the largest foreign gold miner in China. Jewel listed Hong Kong and on the ASX and that is getting to the end of their 15 odd year journey in China. You fast forwarded 7 years of of Sino Gold's life there mate. But but those those seven years would have been filled with some

pretty important lessons. There, there would have been a bunch of important lessons, but the the one that sticks out to me that they take forward and this is a lesson actually I think they learned at Macquarie, this was hammered into the guys at Macquarie is that you need to understand what your competitive advantage is. You need to know what your edge is. And in China that was abundantly clear for these guys, at least early on, costs were a fraction

of what they were in Australia. These guys brought in the expertise of the Australian mining industry and they brought that to an underexplored area like the the average gold mine in China at the time was doing less than 20,000 oz. And Despite that it was the biggest gold producer in the world. It, it, it, there was so much for the Chinese to learn and the Chinese did a great job learning that. Everything is done in a joint

venture. The Chinese, they would never give Sino or any other foreigner access to their tier one mines that they're working with the the lower kind of quality mines. And a lot of what these guys brought to China is still embedded, as I've sort of read it to this day, in the Chinese mining culture, if you like. I remember Jake sharing an anecdote, I think it was when we had him on the podcast about like, you know, one of the operations.

It wasn't ingrained into the the operators to to effectively like just do your development level by by level. That would do all of the development and then start stopping. And they're like, we're we're 12 years ahead or something. Like that. Yeah. Which which it's kind of, you know, we, we chuckle about it now because your, your latter point is so important. The Chinese did a phenomenal job

at learning. In fact, like the innovations, the technology advancements and everything in the mining industry today, we're, we're, we're learning from China now. Yeah, it, it, it's remarkable. I mean, what what you first say there that's, that's straight out of the the USSR, like it's a, a complete shift in, in how they think about these things. And yeah, where we are today is, is worlds away from that. But 2009, these guys knew the opportunity wouldn't remain

forever. And, and the writing was kind of on the wall. Specifically, I'm talking about how the Chinese viewed foreign ownership of mines and there was a few kind of hair raising incidents that that start to happen. And they they make a call. And this is where Zhu Hongjing, who'd who'd been, you know, running BD and done a bunch of things for the company.

He really gave the advice to to Jake who, who did well in in heating it, saying things are changing here on the ground in, in China and it's time to go. And for that you need to find someone to buy you. And for that they found Eldorado. So Goldfields had been a big shareholder in Sino Gold, but for a bunch of kind of reasons, South African companies weren't trading at rich multiples.

Aussies were kind of middle of the pack and at that time the North Americans were trading at much richer valuations. So Eldorado buys that 20% stake in the company from gold fields and a month after we have a deal Aussie $2.2 billion to buy out Sino Gold at. This point Sino Gold. They were an ASX 100 company, or 201 hundred. They were an ASX 100 company. It's.

Kind of remarkable that yeah, Sonic Gold had grown from, again, very, very humble beginnings into an ASX 100 company at the time was taken out by Eldorado. From what from what like I'd heard about that deal around the fringes was Eldorado with a type of company that thought that they had specializations working in, you know, exotic locations and and as as evolution. Read the writing on the wall to get out of China. Eldorado foolishly went in.

Maybe maybe a bit too exotic. Yeah, you're dead right. That operated in in Turkey and, you know, a bunch of countries of of that sort of similar ilk. But yeah, by 2018, they don't own any of the assets anymore. I mean, they've got a bit of money for it, but not what they paid for. To think about it all. Like there's not too many foreigners that go to China and make a bunch of money and sort of just walk away kind of like that there. You know, it's, it's fascinating to think about.

And more broadly, the 1995 period to the 2010 period, I mean, that captures the whole Fortescue story. That would have been like outstanding to just witness what was happening in in China. That would have been one of the most fascinating times in modern history that I can kind of think of to see the development of a country and see the hundreds of millions of people that have come out of poverty. But that's a bit of a digression from the the evolution story

we're going to get into. Which brings us to the evolution chapter, the beginning of evolution. I mean, you wrap up the sinus story. Jake's looking for a new job. He is. They've sold themselves out of a job now. This is 2010. We're in. Jake is 45 years old and hunting.

Look, it does he? Good. He is hunting for the next, next challenge. And as the story kind of goes, I think this one's pretty well told. There's a Sydney broker, Richard Granger. He's sort of yells at Jake from over the street and tells him he's got this, this great opportunity to show him. That opportunity is called Conquest. Project wise, they've got the Mount Carlton project up in North Queensland and that had ADFS on the way or arguably already kind of done.

So Jake took it on to to review the project with with his sort of connections, Aaron Culler and Tommy Mckeith, Ross Jenkins, a few other individuals that sort of pop up consistently throughout the story and and a kind of pivotal in it. Some of those characters had been involved with Jake and the sign. I got story as well, right?

Yeah, exactly. And after this period of diligence, Aaron gives the advice that, you know, he, he wasn't totally convinced by the project, but they sort of differed sort of slightly on the opportunity that was at hand because Jake saw the cashbox that the company was 58,000,000 bucks in cash is a key asset that the company did have. Regardless of what you thought of Mount Carlton at the time. And at its sort of lower ebb, that was an enterprise value of

25 ish $1,000,000. So the company's cashed up, but it's got non economic study on it. Why was it uneconomic? So the project is a refractory

gold, silver, copper project. It's a a high sulfidation epithermal deposit as a lot of those ones tend tend to be in in that neck of the woods a bit different to the the gold mines that we have out here in, in WA. But what appealed to them if anything was that the the similarities they saw with this asset and that first mine that I mentioned in in China and as that sort of relates to why the the feasibility could be

improved upon. They thought they could cut a portion of the CapEx and sell a concentrate. So if you simple it down that that is what they were looking to do and they thought they could sell that concentrate to the context that they built in their in their time in China. So the study says that concentrate's not saleable. You need to build extra CapEx to actually refine this con.

Yeah, I mean that, that is what the the the study had just assume they were going to go all the way down and then later they backtracking that they start looking at that but. These guys know that the con is saleable because of their experience in China dealing with these smelters. Exactly selling sort of 2% arsenic concentrates in in parts

of China there. So Jake is actually mentioned before he comes into the company in one of the releases and the board commissions him to to run this review. And hang on. So the company puts out a release saying Jake Klein is running a review. Yes, So we're in Feb 2010, Jake has come in to to do this review. The stock has halved on the back of this and Jake is using the expertise of him and his team to to look at what they can do with this.

And in March, another announcement comes out also worth noting as well that Goldfields was on the Register here to through a kind of weird confluence of events, they were the major shareholder and AJV partner in the land surrounding Mount Carlton. The CEO of Conquest had reportedly held sort of stock through Opus Prime, which was a kind of awful bankruptcy that happened here in Australia in 2008. One way or another, the the stock gets put up for for tender and Goldfields get their hands

on roughly 20% of the company. By the time Jake's there, it's 15% of the company and the Conquest Goldfields relationship had soured quite a bit as well. Isn't that interesting? But Tommy Mckeith is a common link there as well, because he'd worked at Goldfields and he would be a yeah, Jake had got to know him from that time, Sino Goldfields. And he joins the board and has a long relationship with with evolution, so. So.

So at this point, Jake, looking into the economics, but the market thinks this is a Dodd because they've told the market it's a Dodd. Meanwhile, the stocks now trading What is it about about cash backing? It's, it's a bit over cash backing, right? But it's, it's a long way down from what it was. And essentially the team from Sydney flies over to Perth to, to tell them the facts, what they think.

And when I say the team, I'm talking about Jake as well as Nick Curtis and, and and Jim Askew, who were brought onto the board in March of 2010. And shortly after that as well. You've got Aaron Coleraine, Ross Jenkins, Dave Hewitt and Charles Wang, three of whom had worked at Sino, joining the the team in in quick succession. And to the board's credit, they didn't fight it massively. They knew it was flawed in in it's current sort of shape and form and the company was going

nowhere. And this was ultimately better for shareholders. So what did they what did they they convince the board to just effectively change management. Let let Jake and the crew run this company. Honestly, I know it's like West Perth, I just scratched my head a bunch of times to to wrap my head around the fact they would just walk away, but having spoken with a number of people that that is more or less how things played out. Isn't that, isn't that fascinating?

You just, Yeah. A win for shareholders. You don't, you don't you don't get such a polite a polite yeah, I'd be happy to hand over the keys. Yeah, these days, but it's there was also an opportunity in doing that, I mean. Totally. And the, the stock rebounds a little bit. It sort of trades in that $0.30 kind of range for a while.

It's a, it's a bit of a far cry from 10 years later where you'd see the likes of Bill and Rao jump into a company and the stock price would more than double the next day. But the company had a lot to kind of work through here. But they they get get, they get to it pretty quickly and we start to see the strategy. Which becomes the the evolution strategy in time, which never really wavers from its sort of

core roots before that. Interesting you mentioned team from Sino coming with Jake like that's a that's a a difference to the story of of Twiggy Anaconda. I mean, it's kind of gold to gold. So I can't understand the parallels.

Whereas before you go on from complex met, which was Anaconda to to simple logistics for excuse and maybe there's those parallels, but I do think it speaks volumes to type of individual when people that they'd worked with previously will, will will go along for the for the next ride. Couldn't agree more. And it's something we're seeing again with federation slash endura. It's a trend that just continues. Are there, are they carry over people at at federation?

At least five that I can count already. Wow, yeah. No, it's a, it's a, it's a pretty glowing kind of statement. You know, if you like that, you would do it not once, not twice, but maybe in three times in some cases with with someone. So, yeah, but that that rings loud and clear in this story.

And the strategy is something else that is super important and, and crystal clear from from pretty early on, they outline that there is a dearth of Aussie midcap companies with 75% of Australian gold production being owned by foreign companies and that they want to build a midcap with a portfolio of Australian

assets at this point in time. And the reason they say like midcap or mid tier quite specifically is that the mid tiers are the ones that outperform, they outperform juniors and they outperform the major mining companies. And we're going to continue to speak through this this strategy during the story. The strategy is this is again, another reflection I feel like we'll get to at the end. But evolution, just one of those companies, they said what they were going to do from the beginning.

They articulated it and the strategy was consistent. They achieved it right. Totally, totally. Before we get there, mate, we've got a, we've got a deal to talk about in less than 8 weeks from that takeover of of the company. You've got a very, very juicy deal, a $58 million deal to buy North QLD Metals. So 20 million in cash, the rest

in paper. Now NQM, they were the 60% owners and the operators of the Pigingo Gold mine, a pretty old mine up near Charters Towers. It was doing about 50,000 ounces at the time. And for context, the gold price is 1400. So they have one over the major shareholder, a guy called Don Walker here who's also a director. So it's a three person board. They've won over one director and a 20% shareholder of the company. Now North QLD Metals has also purchased the old Twin Hills mine in the area.

So they're talking up this being a satellite operation, but really that they're running this as a, as a bit of a cash cow. And Despite that, despite having, you know, a third of the board on side the, the North Queensland board say no thank you, your, your offers inadequate.

And by July, so a month after these guys have a fight in their hands because this other little company called Hemskirk, who owns the other 40% of the mine, have come in with a competing offer, which was colorfully described as a toilet paper bid to us. So conquest come out and say, you know, that's clearly inferior. It's got no cash. The the buyer has con notes in

its structure. The premium is not really what it seems if you if you back out the actual numbers and you don't even have major shareholder support. But in any case, they upped their offer and they sort of amend the the conditionality of their offer. Pesky Interlopus getting pesky, getting in the way. But you know, I think it's it shows the the, the difference when you do a friendly deal versus a hostile one, your probability of success is so much more enhanced.

These guys had the major shareholder on side and and then you get the pesky into low bar getting in the mix. Well, you don't really want to do a deal with the pesky person, do you? Well, it it takes a while, so Hemsgot, you know, as they would continue to maintain that their offer is superior and North Queensland agree they encourage shareholders to reject the Conquest offer. So lo and behold, the takeovers panel gets involved.

Conquest just sort of calling out a bunch of the the strategies that Hemskirk were using. But by September Conquest have solved it. They go on by Hemskirk and then shortly after that they gobble up North Queensland with the major shareholders caving kind of in quick succession there. People like Acorn and Line Selection were involved in this one. They had to buy Hemskirk in order to. $37,000,000 to buy Hemsgirt 27 in cash. That's juicy.

Yeah, so hard fought M and a battle that took a good few months to to chew through is done and dusted. And they're a mining company now like they they have a producing asset. The I think internally the the team would debate whether it was all worth it for for Pagingo. Not the greatest mine in the world, but they're well on their

way. You know, they've got Mount Carlton that they're, they're working through doing the optimizations and whatnot and this 50,000 oz producing asset is on its way to do 70,000 oz next year. Jingo while it might not have been the world's best asset, it maybe gave them sufficient scale to do subsequent deals right. Yeah, yeah, totally. And this is a, a kind of frothy environment in the gold in the gold space 20, you know, back end of 2010 into 2011 that we're talking about now.

So deals, you know, cheap dealers aren't throwing themselves at you. You have to kind of get creative and you have to keep developing the, the development project you have Mount Carlton. So whilst this deal is going on, they secure this concentrate off cake and I, I love this. So they get this, they get interest from a bunch of Chinese smelters, as we sort of hinted at before, given the team's previous experience. And Ross Jenkins, who's that?

The met and Charles Wang, I think are the people that deserve a bunch of credit for their their expertise and the can do attitude here. So the story is that Charles just flew with a bunch of buckets with him on the airline full of concentrate to try and sell. It just goes to a bunch of of the smelters in in the area in China and one way or another comes back with a deal

phenomenally. And this is firmed up in time to A1, you know, quote UN quote $1 billion off take agreement with Shandong Guoda. They are a large smelter, gold smelter in in China and it's for the life of mine offtake for the V2 deposit, one of the two key deposits at at Mount Carlton.

And yeah, decent payment terms kind of you know, yet 90% of the payments being made prior to the shipment going over which is, you know in terms of working capital where a decent thing the alternative can be can be pretty gnarly and. Can't understand just how wild this is, by the way, like, like the this was in a in a period of time when all you could really get out of China was a, a non binding Mou of some description. And you know, that's intertwined in the Fortescue story that you

told. But Charles goes over there armed with a an an effective. It was a it was, it was a, it was the type of off take agreement that I think Rio Tinto used. They had like some lawyer who it was, you know, the same kind of same template thing and managed to get signatures on it from from Chinese smelter like yeah, just phenomenal, remarkable a binding off take comes back with

company. Yeah, after taking on the plane, some, some concentrated, you know, I don't know about the the disclosure of the of the material. Don't worry about it, Don't worry about it. It's it's truly, yeah, it's wicked. Yeah, that that's sort of entrepreneurialism I just love and you know, simultaneous to that, they keep working on the

the optimization studies. They're sort of focusing on the, the recovery, the grind size, trying to assess whether they can use a, a course, a grind, the sort of thinking maybe not 75 microns, maybe 106 microns will still do the job. So reducing OpEx and CapEx at the same time. They also buy a, a meal second hand from Hill Grove Canmantu in, in SA about 7:00-ish million dollars for, for that one.

So things are things are happening for the company and it's it's late 2010 and I'll just give a bit of a recap to, to make sure we're all on the same page about what this kind of company looks like. So they have a run up in the share price near the back end of that year. Still called conquest, by the way. Not even evolution. Yep. Still called Conquest, they do a $45 million placement. So after that the market cap is about 270,000,230 AV.

They've all but confirmed ownership of Pojingo, the sort of mining these very, very narrow veins down there. And the stock is trading in the mid kind of $0.30 range. A year ago, all this team had still been in China. It's all still been well, not all, but the majority of them had still been running a predominantly Chinese mining company. So they've now done this tough

takeover battle. They got their work cut out for them in an asset in in Mount Carlton and they're they're running this junior in a kind of frothy Aussie gold environment. So a big change in a year. Huge, huge change that that placement, that 45,000,000 bucks. Was that to fund the development of Mount Carlton? When did that come later? It was just a staged, staged race. So not too far down the road that would raise another bunch of money in the next deal that

we're going to talk about. And that deal would be ultimately 18 odd months, a bit more than 18 months before Mount Carton starts producing. At that time the debt financing is coming together as well. So it's it's not quite fully funded to to do Mount Carlton just yet. I follow. I follow what are the what? What is the actual like landscape of of gold producers like on the ASX at this point in time? It's a good question actually, because that that plays into the

strategy. The the strategy that they spoke to so often is that like you've got new Crest on the one hand, a big, big, big company and then you've kind of got this, this dearth. So they, they circle out the 750 million to a bit over a billion dollar range. And I mean, it's fascinating to read about the companies at this point in time. You've got Perseus, Medusa, Kingsgate, CGA, Avoca, St. Barbara, Oceana, so some kind of familiar names there. But a lot has changed kind of

since that point in time. But there is a bit of a, a dearth in that midcap space. Now, granted, some of these companies are still big. What we're coming to the tail end of a 10 year bull market in the gold price and things are going to change quite, quite soon here. I am intrigued looking at that list of peers. Hey, it's it's fascinating. I mean, some of them disappear from deals, some of them merge, some of them implode from poor operations. Some implode and come back.

That's. That's that's a staggering, staggering slide. It is. It is what? Happens to me at Carlton. So the, the refined numbers that they come up with when they rework the, the CapEx and all these sorts of things is about 1:30 CapEx and the MPV is only a bit higher than that for 12 year mine life. The the cash flows if you sort of flush through the, the spot price are, you know, they give you a bit more room for, for encouragement.

But the company's got $40 million and like I sort of said, it's sorting out the debt, finding funding at this point in time, we're talking April, May into June of, of 2011. But then we've got a big, big deal that preoccupies the company for a little while. This this deal needs context, right? Because when I think of like, yeah, a deal that epitomizes the formation of evolution, I don't

even think of the back story you've told today. I think of this deal, just the the absurdity of this coming together. Yeah, you've taken a a good while to actually get to evolution, but this is the creation of evolution itself and it is a fascinating deal, right?

So June 2011, Conquest agreed this all script deal with Katawpa whilst concurrently buying Krakow and Mount Rorden from New Crest. So if you can wrap your head all around that, they're also going to do a capital raising, a $150 million capital raising at the same point in time, so 2. Companies merging with each other to acquire these non core assets from new Crest. Everything pay for. In with a with a. Yeah, and and a placement.

Yeah, Snarly. So New Crest is going to become the roughly 1/3 owner of this joint company, which they dub Evolution. Now the pro forma market cap $1.2 billion EV is about about a billion dollars.

And you know, like you've kind of said that these guys pride themselves on, on handling deal complexity, but it almost feels as if you've gone out of your way to to make this one more complicated than it needs to be. But as we get into this pretty good reason for for this, if we look at the assets very quickly, Kataupa are bringing in Edna May, so nine year mine life,

100,000 oz per annum roughly. They're also bringing in a 30% interest in Krakow. I know I said Krakow before coming in from Eucharist. They are the other 70% owners of this one that's doing about 100,000 oz as well. But it's only got five years proven out. Then you've got Mount Rorden, as I mentioned, that's going to do 90,000 ounces in, in due course, single kind of open pit mine, eight years left there. And then rounding out the assets, you've got Bajingo and Mount Carlton.

Now Mount Carton is due to come online in about 18 months at this point in time. So for producing assets and a development project, if you look back a year, what the Proform entity would have done, it would have been a bit under 300,000 oz, but on the way up. I feel like the I've heard Jake tell the story of this deal and it doesn't kind of come together necessarily just by pure desire to put the two companies

together. It it comes from the pre emptive right that could help had over the other 70% of Krakow. Yeah. You, you got to make this deal happen. It's not going to fall on your lap. So Catalpa, were they, they weren't even single, you know, at the time they had to break off talks with St. Barbara, who they were reluctantly in in talks with who just, you know, in the month prior proposed A merger with Catalpa that wasn't really

friendly at all. But that pre emptive right is, is super, super important that you you talk about. So the Conquest team had seen that new Crest led by Greg Robinson had just acquired Lahir, which we've spoken about in in a previous podcast. And they concluded that Krakow and Mount Rawdon couldn't be central to the plans of new Crest going forward. So they make an approach new Crest actually quite receptive to this. Now you have that pre emptive right.

New Crest had actually previously tried to sell Krakow. So Evo's approach new Crest directly. That's right, right. Yeah, Conquest. So to the CEO Greg's frustration, CEO of new Crest, this group called KET Helper had a, a pre emptive right? And they wouldn't let this one go. So he just pretty much said that you go create some sort of arrangement with them and we'll be happy to kind of do a deal.

And as was relayed in other channels to us, the Evolution BD team gets in touch with the New Crest team got this great idea. New Crest is sort of nodding, nodding along. They're, you know, receptive. They're thinking, yeah, yeah, yeah, this is great. This, you know, we've already

thought of this. You know, they're given the whole pitch evolution on why it makes sense for you to offload these assets to us. And then they kind of get to the point we've got a problem though, you know, you've got this, this pre emptive, right? And and new crests say, hang on, you've got a problem, you need to sort this out. And then it dawns on them, ah, we do have a problem. So hence the complex deal they need to. Spell that out right. So so why, why, why?

If I say you, you've got a problem that's pre emptive, right? Because they they're actually pitching to buy new Crest steak in Krakow 1st and then EUCRIS flips it on them and says sort out, sort out the other side of the equation. Exactly. And then it all solves itself. Yeah, pre emptive. Right. So Conquest get in touch with Kitapa and lo and behold, we have the the deal that we have. So yeah, it, yeah, it, it took a while to get there.

As for the merger itself, that's a 5050 merger that the two companies are doing. Conquest get a, a bit of a bump on on their last clothes and you have this eight person board as you tend to when these sort of companies come together. Lori Conway joins the board because he's one of two new

Crest nominees. So, you know, it'd be still a few years before Laurie becomes a full time employee at Evolution. And that raising that I mentioned $150 million, that was a bit of a spanner in the works and they needed a commitment from from BlackRock and Baker Steel to get that one over the line.

This, this comes from the fact that, yeah, it's a new Crest is feeling, feeling a bit of a squeeze after fumbling the footy with Lahia. So they're, they're needing to shore up their own balance sheet and they didn't want to become a big shareholder in a pro forma evolution that was underfunded. So they like they as I understand it was pressure from from new Crest in in the midst of this deal to actually ensure a a placement happen concurrently with it all.

Yeah. They wanted confidence because financing had been one of the problems to a deal getting done previously to to a sale of of an asset. So they wanted confidence that there wasn't going to be any problems on that front and that they weren't.

Funded so they didn't get a a call up for for a pro rata share of of capital down the track as well. Yeah, they weren't having problems with Lahir just yet. This is the, the gold price is still very strong in 2011, right? So it's yet to sort of fall through, right. But they have, you know, refocused on, on Africa and, and, you know, PNG and and the like. So they, they don't need these assets that made-up 4% of of their kind of value. So got you. Hence they came to get that one

done. But yeah, it it left a deal, you know, that was already complicated being even more complicated for the evolution team to do. This is this is this is a gnarly deal still like you just don't

see deals like this today. It's the coordination like required to bring all of these disparate parties together aligned on on value and seeing the upside of what could be created as opposed to getting kind of caught up in the in the waves of of a bit ask spread in the moment, backing a, you know, a management team in to to to lead things forward from there. It's it's pretty cool. It's a very cool deal like this.

Just this is one of those deals that stands out when you study mining deals that that a because of what created more evolution, and B it's just gnarly like. No better way to put it. It's super, super gnarly. And yeah, I mean, they do a few more creative deals, but nothing is is kind of mind bending as as this one. But they are now a, you know, once this deal is bedded down, a multi asset mining company with a pretty decent sized market cap.

They're a decent sized business coming out of this one in, in 2011, they sought out the financing for, for Mount Carlton. They can in pretty short order turn that one into more, you know, commercial type funding rather than it being a project financing because they have the, the spread of assets to, to get that one done. And the, the terms sort of come in. They're guiding to 350,000 oz at this point in time.

It's not long after the deal that the, the MD and exec share role gets combined under Jake. They they March on into the ISEX 200 and whilst everything sort of is seemingly going great the the floor falls out of the gold price. From mid 2012 it would be 4 years until the share price breaks even again. All years is a long time when

you're running a company. It's a long time when you've just financed a new mine, you know we've got a AA10 year gold bull market that has just fallen through and you've just put together this fantastic big kind of deal. But also on the positive side, it would create the opportunities that built the company we know today. Was there was there debt involved in their cap structure at this point in time? There, there sure was.

Yeah. So for for a number of years from this call at 2012 to 2015, early 2015, they're in a net debt position of 100 to $150 million. And that was to fund Mount Carlton, yeah. That was that was funding Mount Carlton. Yeah. So like I said, the gold price fell away, but you don't get these 4 sellers straight away. It it takes time and a lot of patience is kind of required. Evolutions have to do a $385 million write down in 2013 first, which is never a a good thing for shareholders to to

swallow. They're never too eager to see that. And they start stripping costs out of the business at the corporate office, numerous contracts close, they go owner operator at Krakow. They flatten the org structure. The, you know, by 2013, by 2013, the merger's almost two years in the rearview mirror. And like you comment on the balance sheet just there, it's not as healthy as it kind of could be. A bit over $100 million in in, in net debt.

The share price looking back just 12 months is -57% and that only puts the middle of the pack when you look around the field of what the other Goldies have done. But they still actually pay a dividend at this point in time, believe it or not, they pay a 1 cent dividend, which, you know, might not sound like the biggest thing in the world, but they have remained super dedicated and that, you know, instills capital discipline, paying a dividend every half year.

I think they're going on 25 or 26 dividends now paid that that is kind of remarkable to do it at this point in time. Yeah, production is. Is confronting when you just look at it like 427,000 ounces in in FY14 like that is that is that is a formidable production profile but they're. And they don't make money. They're not washing their face. They're no, I mean no one, no one's doing, no one's doing well, but they've got the production and they just need

the commodity tailwinds. They do they, they're a leverage play without doubt at this point in time. The yeah, that's a big, big number for a company not to make money. And they, they know more than most that the, the assets aren't the best in the world that they have. But it is been a very tough year going around. And I say not making money from a kind of cash flow perspective. They had been bringing on Mount Carlton, you know, online through this period as well.

But the real concern is that reserves are depleting. These assets don't have massive mine lives like Jake would later always talk about having an 8 year plus mine life on on your projects across the portfolio, Pagingo, you know, these sorts of assets, they don't have that and they need to get on the stepping stones to to get to the better assets at this point in time. On the positive side, again, the the four Stellars at this point in time are starting to emerge.

We're now mid 2014. You know, looking around the field, Northern Stars done some of their deals, they've done 3 sort of around the, the new year period coming into 2014. So you're starting to see transactions that reshape the Australian gold landscape for a for a long time to come. One of those forced sellers becomes a new Crest of their evolution stock over time. Or does that happen later?

That happens in 2015. So before we get there, you know, as these things tend to be the, the stock price continues to to bomb out late 2014 shares trade below $0.50. So the market cap is South of 400 million and that merger was down and said $1.2 billion. So the the company's fallen a long way from that, and so was everyone else in in the arena they. Probably raised more like nearly more capital than that at that point in time.

I know, right? So, you know, these things sort of grip the markets and these these kind of trends and the trend here is profitability and they don't have too much profitability to show. So they're talking about reusing mill mill balls. They're talking about smarter drilling blasting. They're talking about going owner operator at every site they can. They're talking about pulling in employee turnover.

You go through the slide decks of companies at the time and more than half is just cost saving initiatives like you're really tightening the belt here and it starts to work in bits and pieces at Evolution. They start to make a bit of money quarter after quarter and then they get hit with, you know, the QLD floods a lot of their assets up in Queensland. So they're copying it from all sides. And it's very, you know, quick and easy to say in retrospect.

But when you're living through it, I can only sort of imagine when it's kind of year after year and you're copying it and you're just waiting for the the times to turn. But like you say, we have the the new Crest sell down. They're 32% stake. They sell in two parts. So they sell at the beginning of 2015 and then at the end of the kind of at the end of ish of 2015, in the second-half, they take a big haircut on on that compared to what the value was

when the deal was done. And it's a very unhelpful time for the company for this to happen. And, you know, when something like that happens at the point in time, you kind of might question evolution. History shows that they were just trying to look after themselves. And, you know, I don't think it would have taken a genius at the time to realize New Crest themselves needed the cash. It wasn't a fundamental flaw in

evolution. Isn't it, isn't it a staggering kind of reflection that a 32% shareholder at the formation of what we know today to be evolution lost money like. That's crazy. It really is crazy. And like all, all the same, it's a trend you see with some of these phenomenal success stories in any industry, there are multi year periods where the company doesn't go up. The stock doesn't just go up linearly. Like you need to bear through the bad times to enjoy the good

times. So, yeah, it, it is kind of funny to, to take out a, you know, a four year piece in time and they took a, a big haircut that it's kind of remarkable to, to round out on the personnel side of things. You've got more familiar names. I know we spoke about this before, but Cobb Johnson and Tommy Mckeith, they joined through that 2014 period. And Jake has finally worn down. Laurie, who joins the company full time, becomes the CFO in 2014. So again, familiar faces showing

up throughout this story. This entire time Jake is exec chair as well right? Like. MD and exec. Chair MD and Exec Chair, Yeah, yeah. Interesting. Controls the company and the board. Yeah, yeah. Interesting. And no accident as well. Yeah. So coming into 2015 there's a bit of health in the Aussie gold price, which is, which is good for evolution obviously. And they they make a bit of a voluntary play, pay down of

debt. And then come April 2015, we have the the first real kind of bear market deal, which is a a cracker. This is this is the period where like Evo's assets actually start making good money, right? They've got like 3 core minds that all make about 100 million bucks in that one year each. Yeah, that would be the next year, more so like going from 2015 to 16.

You think, hey, these projects can actually make a bit of money when the gold price ticks up a good few 100 bucks and sentiment changes like it always does, but they they need to get through a couple deals actually, but before they get there.

Gotcha. So the La Mancha deal juicy, super juicy. I know you've, you've actually studied this one a little bit. And we've spoken with La Mancha in in the past a couple years ago now, but La Mancha is a private mining investment vehicle for the the Super wealthy Egyptian Sawari's family. So Nagib predominantly and they owned frogs legs. It's an underground mine, white foil open pit mine and the brand new Mangari mill. 1.5 million tonne per annum milk which had

just been built one year prior. Najib was a yeah, an Egyptian billionaire who made his his fortune in the telecommunications industry and. Yeah, from a very wealthy family. Somehow got the the gold bug and found himself yeah, like owning, owning these these, yeah, these mines in, in Kalrauli. Yeah, and and all through Africa as well, which would become a focus later on for him. But he's got these assets in the East Kalgoorlie region and they want to find someone to really help them grow.

They want a vehicle to kind of put this in so that somebody can kind of do the growing for them in a way. And that ends up being evolution. So Evos pay for this deal in script. La Mancha ends up being a 31% shareholder and at this point in time Mucrest has sold their first half of first half of their their block doing the other half later. Evos actually have to take on $115 million in in net debt at

this point in time. But we're back to a billion dollar market camp market cap with this share issue. And super importantly, La Mancha Nagib commits $100 million to future growth. The assets themselves had done 150,000 oz at a bit under $1000 all in sustaining costs. So that's, you know that's a more than 10% improvement on the all in sustaining cost of the asset portfolio that the company

had at that point in time. Evolutions just had the overhang of a of a 30 ish percent shareholder who's reducing their stake and a bit of an overhang on the share price. They finally, they finally see our new Crest and now they welcome another 31% shareholder. There's a bit of a bit of an anecdote on how they agreed that 31% I because you're trying to, you're trying to figure out like how, what, what pro forma, like what are they bringing to the table versus yours?

And isn't there an article in the AFR about how they exactly landed on 31? There, there is. So I mean, some of the stories are, are very funny, but one of the details we heard is that a half a percentage point difference is negotiated via sort of screaming matches in the in the office. And it's a kind of arbitrary

number. They, they, they're negotiating it head to head on a kind of like for like basis where they say, you know, you use reserves or this much, you know, reserves, we'll use this much percentage of reserves. You use a bit of resources, yada, yada, yada. And at the end of the day, they, they, they knuckle down and

they, they come to an agreement. And like you do in Sydney, you go to rock pool to, to celebrate that one and, and drink it all the way in inexpensive champagne with the, the Frenchman from La Mancha. But yeah, it was a, it was an expensive kind of deal to get done, but a super important deal in, in the, the stepping stones of evolution and their kind of journey. There's another detail actually, which I, I want to mention because I find so fascinating.

They didn't even evolution didn't even use investment bankers for this deal at all LED through, you know, Aaron Colleron and and Kieran Schmidt there as well with the the BD team that they had internally just sort of powered through this one, which is a pretty cool little, little detail.

Is that's a common theme and especially I think this year is, is chock a block with deals you don't like, You can't actually get that many deals done if you have like teams and teams of advisors because they slow you down, You're not nimble enough. You, you add complexity, there's more meetings in the calendar. You're, you're talking about things that don't actually

matter. But if you back yourself your own capability to to do what's required, like yeah it is possible to do 3 deals in a month, which they did. Totally, and that that comes down to the MO of the company, you know, deal making. If that's your expertise, you you got to be able to do it in house, don't you? I say it's possible, but it's still like genuinely, truly

impressive. Like, yeah, like having, having having worked in banking, mate, like I've been crushed from just one, like just, you know, one on the plate, like absolutely crushed. And the fact there were three enormous ones simultaneously is is stupidly impressive. Yeah, totally, totally. So if we, if we analyze this deal for a moment before we jump on to, to the next one, the assets are better. You you're paying a big price for it, but you're pulling down your, your all in sustaining

cost. You're providing more cash generation, you're pushing out the average my life of your, your portfolio doing it with cash that, that wasn't an option here given the, the strategy that NGIB and Lamancha had. The gold price, like we've always sort of said rises throughout. So you get kind of nitpicky deciding who's a winner, but at the end of the day, both the sides here are winners. They had equity upside in this and both would do do very well in, in due course.

I think the, the Evolution team at at the time and perhaps some of the the shareholders out there didn't wait how important that La Mancha alliance would be that $100 million, which we're going to talk about. Because having that support you through the next deal kind of means you need to take both deals into account at the same time because you can't do like the other one wouldn't have got done. And the other deal we're talking about is, is cow huge.

And that is a phenomenal deal, a a remarkable asset to to scoop up from from a major and yeah, in an environment where gold prices are down a long way from what they would have been many years ago. So let's talk about that deal, mate. Cal is Cal is the cash cow. It is. It is and it wasn't. It wasn't so apparently clear at the time. Even shortly after the deal there was criticism about this deal, a lot of people saying oh, you've overpaid for this one and that is clearly not been the case.

This was a this was a sale process, right? And only the actual like announcement of the deal only comes a month after La Muncha deals announced. But these things are kind of in the works. Like, yeah. Yeah, absolutely. And the same day that IGO bought serious and wow the. Two big deals on the same day. Two big deals on the same day and IGO Independence Group, as they were called at the time, were rumoured to be hunting around looking at at cow as

well. And they're a gold miner before before serious, so it totally makes sense that they were in and about that sale process. So they're buying COW for US, 550 million from Barrick, undoubtedly better asset and bigger price tag. With stamp duty, we're talking about 750 million Aussie dollars that is bigger than their market cap. This is a big deal for the

company. At the time Cow's doing about 250,000 oz and all in sustaining cost over 15% lower than the, the portfolio for those that aren't familiar with the assets sort of big at the time sort of open cut project in kind of central NSW, 7 and a half million tonne per annum meal. So it's a, it's a large scale lower grade goldmine. And the mine life of the project at the time was only out till 2024. We're in 2015.

So it's, it's not a long mine life and there's I think about 800,000 ounces sitting on the stockpiles. So mining was only actually going to stop in like 2020 roughly. And they were just going to process the stockpiles for the few years after that, which is the downside of the massive upside if you can prove it out and prove that there is a longer life here. Well, that's there's a difference between like limited mine life because yeah, mineralization actually ends.

And then there's these type of assets which have much, much, much longer mine lives than then you're paying for in reserves at any point in time. Because yeah, you do another cutback or, or, or or the likes and you've got, you've got mineralisation extending a depth. Like let's, let's underline that, let's pull that forward right now from like one of the talking points later on. Optionality and mine life are underrated in in MPV studies. This asset is now going to live on to 2042.

It is doing over 300,000 oz per annum and it's doing it at an all in sustaining cost of I think about 1400 Aussie. The optionality really rings true when commodity prices shoot through the roof like they do every so often. It's not a common thing, but that is a point in time we're living at right now. And had you sort of modelled at the time 2024 you're not getting that 2025 fantastic gold price.

But now the the amount of money it's going to make this year is going to outdo many of many of those years put together, right. And that is something that Jake would say, that is something that a lot of the smart investors in in our arena have sort of said for a while that optionality is underrated. And we see it more and more with the people that think super long term about deal making in the resource space.

It's, it's a, it's a true like this is this is a, an asset that really just transforms the company. This is like a corner. This is a, this is a tier, tier one asset. I know it's not 500,000 oz but you know, big reliable production profile, long life, low cost. Tier 1 jurisdiction. Far better than everything else in their portfolio up until this point in time. And it moves evolution to be on Oz, which is not how they'd look at it. But the second largest producer in Australia.

Decent bit of debt they've brought on board to to get this deal done. How did this deal get done? Matt, this is a great story. So like you mentioned, competitive process, gold fields, Z gin, they were rumoured to be in and around it. The Finn wrote after the deal that an insider told Jake it'd be a Bradbury if they won.

So for for non Aussies, you have to search that one up on on YouTube. But when straight talk came out and wrote about the deal in the months prior, you've also got Northern star independence, like I mentioned, Regis Oz minerals in and around the hoop there, but the pieces fell into place very late here. So essentially before the Friday when the bids are due, there is a board meeting and there's a lot of written about the price. Is it, you know, 485?

Is it 500? Is it 525 that we're going to have to pay? And they're wanting a bit of guidance from, you know, perhaps the senior people in the within the board. And as we kind of heard it was Jim Askew who inverted the question and a great, great insight here is how do you feel or what would be the outcome if we didn't win this? And that kind of sick feeling in their in their stomach at the thought of losing out by fifteen $20 million is what spurred them on.

And they actually bid an extra 50 million U.S. dollars on what they'd previously planned. So they go from 500 to 550 million. These numbers are 10 years old, but that's that's how it's sort of remembered. When, when you're confronted with what does My Portfolio look like if I don't have this and there's some, there's some harsh realities about that, then it actually encouraged them to to pay what was considered overs. Right. And what's what's 50 million bucks if it goes right?

Hey, so on the Saturday, Barrett give Evos the call, say let's catch up Sunday. And they're worried, Jake's worried, they're thinking they might get the treatment. The other guys are in the the room over there, the other ones are just over there. And this is an open auction. Now, what's your best, you know, you're close, but what's your best offer? But lo and behold, the asset was theirs, 550 million U.S. dollars.

Got it done. And you know, we've, we've said it a bunch of times, but this is a undoubted portfolio improver. The they would always sort of show this this great chart, simple but great that effectively shows the the margin on your Y axis, the the mine life on your axis and you know things are going up and to the right, which is always a kind of good sign. But in the months afterwards, Jake is seriously concerned that he materially overpaid people are. There's criticism, There's Yep,

the. Yeah, the analysts are, are, are saying that they've overpaid. I mean you you run an NPV at consensus gold price. They overpaid. And to your point on the the analysts, we had a great quip the the analysts don't know what to value the thing at you just tell them what the what the asset is worth it's. Worth what you paid? Made made me chuckle. You, you mentioned something earlier as well, Trev, which I think is super important with the, the context of the asset

and how it kind of been treated. There were quality ideas within the people on site, but Barrick hadn't been investing for 3/3 long years. They hadn't really been

investing in the asset. So the, the, the group that ran the asset there, which would be coming on to, to Evolution, they had ideas, they, they had stuff they wanted to do, they had leads they wanted to chase up, you know, and on the back of that, the asset goes from having 1.6 million ounces to nearly doubling in, in less than a year. Like they're just given the capital to chase up these things more recently, like I said, out to 2042.

So they've been sort of kicking goal after goal there. And it's, it's kind of remarkable. If you'd gone into the $250 million raise that they did to get this deal done, which the La Mancha group took half of, you would have compounded your money at 30% per annum. And I know that's, that's a bit skewed by the last 6 or so months, but that is a a great, great return on a long time period, 10 years since that deal was done, more than 10 years

since that deal was done. And this is also looking at all the deals that have done. This is the one that management most commonly sites, you know, this is the, the go to deal, the asset that stood head and shoulders above the other ones. And yeah, I mean, we're, we're looking at a a mine that analysts call roughly $6 billion of net asset value within the portfolio today. That's that's pretty remarkable.

But it yeah, it goes to net asset value of of 6 billion today versus what would have been would have been US 500 back then thanks to my life extensions, but but also thanks to thanks to gold price bull market that that makes that makes these deals look look phenomenal. You know, you can't understand the fact that the the gold price has has been a huge tailwind for for evolutions growth. 100% it's been a phenomenal tailwind and I want to talk a little bit about

this talk that that Jake gave. He gave it a a bit after the time period he gave it in 2016 at the Melbourne Mining Club. A phenomenal talk to to listen to on the gold price. It's really interesting because that speech when he, you know, the snippets he talks about the gold price could have been given today, talking about government debts around the world and all these sorts of things. It's very interesting.

So it's not as if they didn't, you know, I don't think they would have forecast the gold price being where it is today, but they knew they the, the game they were playing. Beyond that, he spoke about the five attributes that make a top gold miner. And I want to highlight these because I thought it was such a, such a, a stellar talk and understanding of what makes a good gold miner. So point #1 efficient, high quality assets that operate at a low cost with at least one cornerstone asset.

That cornerstone asset has the lowest quartile costs in a long mine life. 2, Consistently discovering more answers at your operations. 3, financially disciplined with strong, uncomplicated balance sheets. 4, having resilience based upon a strong people culture. And five, investing smartly. And I like this for a bunch of reasons. Firstly, you know, he's, he's clearly studied the, the great gold mining companies that came before them like he would, he would reference Randgold in the talk.

He's previously mentioned Normandy and others. But he he understands that the, the history, the cyclicality of the business and, and what makes a company which I which I really kind of like. Would have banked plenty of them at at Macquarie in, in the bullion days. And yeah, I do think, I don't think that's a reflection of Jake. He's like he's, he's often been a big thinker about the yeah, what, what creates great gold

miners. I've, I've, I've seen that in more recent times when he would, when he would talk about, you know, again, tying it back to China. And he talks about he's, he's talked, he's talked thoroughly about it by that Nico. He's talked about Sejin many times in in the modern era. Absolutely. So Next up to round out 2015, we've got a bidding war with of all companies, Zizhen over Phoenix Gold.

They end up paying 50 million bucks for the land around Mangari. And here's where the cash flow that you mentioned before kicks in, $400 million in net mine cash flow in FY16. They rapidly start paying down the debt. They had roughly $600 million and pay more than half down in one year. And if you look at the answers, they're doing that rate that they're going out there, they produce less oz today.

So goes to show that they've actually lived up to the, the ounces of the margin kind of mantra and continue to to tweak the portfolio on the way through. And coming into 2016, sentiment really shifts all of a sudden very quickly. Goldie's are out of the Symbian and they're, they're in Fuego again. People are loving them the the stock prices jumping up Evolution stock price more than double s in in a year and they're they're well on their way.

And that brings us to August of 2016 where they divest their first asset for jingo that had it in the portfolio. We started the the story just about there for 5 odd years and it's time to offload the asset. They get 42,000,000 bucks for this one but it's. They sell it to Ninja.

They sell it to Ninja. Yeah, I think it's really important to show because they've spoken about it for this at this point in time for, for over 5 years, you improve the portfolio quality by both divesting as well as investing. And now they're finally walking the walk on that one. And they've divested their, their first asset. And then the Ernest Henry deal. This is the deal that made me

want to do this episode. This is an unbelievable deal. It's interesting for so many reasons. And I'm I'm excited to to RIP into it just one week after the sale of Pijingo in between which the full year results came out and there was an interesting sort of. Who's full year results, evolutions, evolutions, OK.

There was an interesting interaction played through the media here where Jake said we are continuing to look at deals, We are continually looking at deals and one of the big shareholders, Ellen Gray just said calm down, focus on your portfolio, you know, but they didn't listen to that. They were. They were, yeah, they were aggressive at the right times. $880 million purchase of an economic interest in Ernest Henry. This is economic interest. Economic interest.

This is a fast. This is just like anyone that's ever looked at A at a an all in sustaining cost or cost curve chart for Australian gold producers would just be scratching their head. Why is there this big block at the beginning that goes steeply negative? And it's always earnest Henry and you're like, what the like something doesn't produce at a negative all in sustaining cost

doesn't make any sense. Yeah, maybe we'll clear that one up right now for for anyone that's gone this far that doesn't look at mining companies like we do. When when you look at the the revenues of a mine that produces multiple commodities, you take the the byproducts, the the lesser commodity if you like and you subtract it from the costs. So the all in sustaining costs can look remarkable. And evolution understood this, no accident here.

They understood what the marketing of gold miner looks like. They understood what generalist investors will look at when they come into the space, you know, tier one assets, you know, in Australia, very low cost, all these things. They got it. And Ernest Henry just checked a lot of those boxes. But I had to pay $900 million if you take into account the transaction costs. And obviously they're going to pay 30% of the future costs for this economic interest.

They would be getting all of the gold produced here and 30% of the copper and silver within that life of mine area, which was to a sort of certain RL. They would do a roughly $400 million entitlement offer at over 2 bucks. So like I said, more than a doubling of the share price from when they did the cow raise. Partially debt funding and equity then. Half a billion dollar term loan to get this one done as well and a pre emptive right, Another pre

emptive right. They get the pre emptive right in this case. Nice, nice. The, The vendor made Glencore. Now, why is this? Why is this like an important and interesting point? Because Glencore's got a reputation for always having the hooks in deals that they do. They kind of, you always have have one over or they, they, they sneak something in there.

But you know, this is this is a tremendous deal because Evolution got the last laugh and they've they've done, they've done a great deal and they did that deal with Glencore. Totally. So I mean, why, why do Evolution want this? Obviously there's the marketing that we've we've spoken about, but Ernest Henry is also a decent scale long life copper gold project with plenty of growth potential. It's had plenty of capital invested in it. So it's not going to be super

capital hungry. They also had Mark Lemegia, the, the CEO at Evolution who knew the asset inside out. He'd he'd worked there and they knew with that pre emptive right they'd be in the box seat to to collect it down the track. And they had a, a forced seller. They knew, I mean Glencore had gone and said we are deleveraging, we are in a lot of strife. Everyone knew it. And we are not wanting to sell copper units of production, but

we want cash in the door. Hence, if you could come to them with a a creative solution, they'd be willing to listen. They were, they were actively running sale processes in various parts of their portfolio. I mean, they're, they weren't a real pickle. People were writing articles about the demise of Clancor and the likes. There was a lot of debt there and they had to they had to deliver imminently ahead of their own reporting period dates.

Yeah. So, so a quick sort of synopsis of the the sales process is that in late 2015, they kick off a sales process for CSA in Cobar. They also start having a bit of interactions with evolution on, on Ernest Henry and they toy with the idea. But then it takes until about April until things start to look a bit more serious because evolution is still chewing down cow at that point in time.

They are still chewing down the, the Mangari, you know, assets there and they've done that Phoenix takeover. But the bankers at RBC, they pitch this deal again in March, April 2016, this time as a joint venture. And come April, they sort of formulate a plan. End of that month, they present this plan to to Glencore. And there's a bit of back and forth for some time, but it takes until July and August for things to really start to heat up because that CSA sales process has crashed out.

Glencore needs the cash. And by this point, you know, late July Evo's table a take it or leave it type of offer. And they have met, they've met with the copper king Telus, Mr. Kiddies, the, you know, one of the, the billionaires that came out of, out of Glencore, very famous copper trader and he's sort of running copper there. And they have a, an agreement in principle, essentially $880 million is acceptable with a

bunch of conditions. But we need this deal done by August 24, which is an outrageously quick turn around time for a deal of this kind of complexity. I mean, they need to, amongst a whole bunch of other things, locking bank financing. They need to get 5 banks to commit $100 million each for a deal they don't even have recourse over. They're not even going to own the asset that. Is an economic interest.

An economic interest, yeah. And on the evolution side, they're also selling Pijingo at this point in time, they're doing their full year numbers as well. So it's a busy, busy period Glencore to hate the stress on have the sale process for lawless bias fall through in early August as well. So they're becoming increasingly needy and the deal starts to sort of happen. A lot of these, these processes in getting a deal done, which are meant to happen in a series, have to happen in parallel to

get a deal done. To, to sort of emphasize the point, Glencore's share price is down nearly 70% from their IPO 5 odd years earlier. So they start caving on these conditions, like you say, that they're so famous for, for hooking into a deal. And lo and behold, on August

24th, the deal is announced. They went from, you know, within about four months from just a concept to having a final bidding deal with a company that many in the industry would call the best negotiators there are just remarkable. I, I think, I think it's, it's wicked. I think there's like there's a lot of reflections to be had on the actual, you know, deal structure and how it got to where it did and what that actually like meant for the look

of evolution. Right, because because Evo's Evo's yeah, toy the idea of all, well, you don't want to part with the, the copper. Can we get the gold? And so then some back and forth he's had with toying with with the gold interest. But what what actually ends up, you know, you have to you have to meet both parties interests.

So it was it was clearly critical for Evo's to get they still got 30% of the the copper interest as well, right in a in a certain designated area that copper critically important to the all in sustaining cost dynamic. You know, you need to have a by product in order to offset your, your like to, to be netted off of the, the, the, the gold price so that you can actually have a, a negative or in sustaining costs. I don't think they thought it

was going to be negative. I think they, they underestimated how much the copper would contribute here. So that was a positive surprise that actually became a negative number, which seems absurd. But then on the yeah, on, on the other hand, the way it was, the way it was accounted as well. So they, they structured the deal as an economic interest. It's equity accounted from day one now that that further has implications for your all in sustaining cost as well.

It it wasn't a coincidence the way that that this deal was structured, it gave it gave evolution a completely unfair advantage in marketing themselves as a low cost producer. Albeit it was a facade, but. It totally the I mean to to go on with the complexities you're talking about, you're going to share the numbers of a Glencore mine with the the Ato? Hell no you're not. Like all that negotiation needs to take place in such a confined period of time. It was.

Conditional on Ferb, it was conditional on there's, yeah, a whole bunch of stuff going on. Here, Yeah, they needed to raise a lot of money to get this deal done. And yeah, just just remarkable. What's your competitive advantage? Like we mentioned before, handling deal complexity check and check they've they've done that phenomenally here. And this was also interesting because a lot of the gold assets in Australia had started to trade, you know, at higher values.

So finding a seller who the timing worked for, they had to be creative. Like we just said, super, super creative in in doing a deal here to go back to your your marketing point all in sustaining cost by the next year. Evolution call themselves the lowest cost global mid and major mining company, gold mining company the lowest cost and Ernest Henry is a great contributor to that that low cost. Absolutely helps that you've got, you've got 100% of the gold and only 30% of the copper. Yeah.

Wow. What a what what what a remarkable asset to to call a a gold mine. I could, I could talk about that deal for hours, but we'll, we'll move on mate to fly over the next little period. Again, they just hammer down the debt payments. They start with about 600 million and they pay off more than half again in the space of the one year sort of following this deal, call it 10 months with Ernest Henry integrated.

They then sell Edna May. So another deal from the the foundational merger that's coming late in, in 2017 that sort of received several offers. No surprises here. Edna May was the the lowest quality asset in the portfolio. Just look at this chart here. You can see the the margins really struggling there. If you're, if you're listening into the the podcast, the EBITDA margins across most of the assets around 50% and Edna May is below 20%.

And as we heard from the team, we hated Edna May, so good to get that one off. They sell it to Remelius. They sell it to Remelius, paying up to 90 million, 40 million in cash upfront. The other 50 is contingent and you know perhaps marginally below what consensus thought the

asset was, was worth. But these are relatively insignificant sums here and good to to get that one off because the portfolio improves again, the mine life goes up the the average all in sustaining cost improves because it was a higher cost asset. And they are making their way on those stepping stones to being a company with a portfolio of assets that are much higher quality than they were just a few short years before an. Interesting.

Edna May served as a great stepping stone for Emilius too. Now we've got a period where they're scratching their heads a bit because there's not an abundance of opportunities out there. You don't have 4 sellers anymore. The gold price is starting to tick up, but operationally the company is just checking the boxes. 7th year in a row they achieve production guidance and cost guidance in in FY18 and by 20-19 about three years after the Ernest Henry deal, they're on the prowl again.

Balance sheet very healthy. They are a $4.5 billion market cap company and growing. And just a quick one, in Feb of 2019 actually they they spin up a bit of an unusual one. They take a 20% stake in Tribune. Now unfortunately, we don't talk about this one too much more as much as I'd love to, but Tribune of course with the JV partners with Northern Star in the EKJV, this one sort of goes quiet for a while because they weren't able to get too.

Far away, yeah, I mean it would it would it would later become very relevant again. But clearly the intentions are signalled that of course it makes sense for the for the OR at East Kendana to feed the Magari Mill as opposed to what Northern Star were having to which is which was whole it much, much further it. Makes it makes too much sense but sometimes take things take a little while to to work out. But we got a juicy deal before that, mate.

Before that, sorry mate. Why did Northern Star not do the deal with the Lamancho if the synergies are so obvious? I've asked that to so many people. Nobody has told me the answer. Yeah, maybe we should just give Northern Star a call. Yeah, it it just seems so obvious. And I mean, it would in in another incarnation happen down the track here, but not crystal clear to me why why that deal didn't happen. They preoccupied themselves. Yeah, I'm sure.

I'm sure like Lamont would have approached Norman Starr having said that, like, there was a view out there that that Evo's overpaid for. Like there was there was a view that they paid too much. So maybe, maybe, maybe there's no. Discrepancy. Yeah, the price is very different to what Norman Starr had done their deals for. There's a bit of a bit of a chapter change for for Evos in the in the next the next deal

mate, because they go overseas. They go to Canada, so November 2019 they do a deal to buy Red Lake. Now this is very different. So it ultimately becomes a expensive lesson that that many Aussie Goldies learnt the hard way in. In Canada, what they agree is in Aussie dollar terms, a $570 million deal upfront, including the fees to Newmont Gold Corp, plus another 100 million US contingent. This is 100% debt funded. So they're buying Red Lake with a healthy balance sheet.

So they take on the debt to do this like they've kind of done previously, No equity raised. This time though, $600 million loan comes on board and they label this as a, you know, an asset with significant turn around potential. Red Lake at the time, you know, very historic asset mining since the 40s over 25,000,000 oz had been produced in the area. The reserves were a bit below 3,000,000 oz.

Within a year that goes to 11,000,000 oz processing capacity a bit over 1,000,000 tons per annum there across 2 plants hadn't been operating anywhere near that for years and even evolutions plans went to get it to name play it for you know, for the foreseeable. If you look at the kind of maps here, it's you know, there's a bunch of complexes. This is a you know, gold everywhere type of thing.

There's an like an interconnected underground tram, very different to kind of what we mine here in Australia. There's development everywhere. It's big, it's complicated, it's historic. It is. And it's an asset that is not done well because as Evo's put it, the 2016 to 2019 has been a period characterized by underinvestment, underinvestment in development, in exploration. And that's going to need capital to fix it. But when it comes good, maybe it'll get to its glory days of

500,000 oz per annum. They weren't saying that at the time, but they were very confident they could get it over there. 200,000 oz per annum transition target and they also called it a beachhead in Canada, so there was an inkling to do a bit more. The, I mean, the asset had all of the hallmarks of, of a, of a, of a good deal at the time, right? It's, it's, it's being sold by a major. It's, you know, an unloved under undercapitalized asset in the portfolio of a major.

It's got big, it's got, it's got scale, it's got long life, etcetera, etcetera. So you could you could have wrapped a phenomenal story around this and the market believed the story that Evolution told at the time that it announced the acquisition. Yeah, the share price went from under 4 bucks at the time of the deal, at the time the deal was announced to over $6.50 in about half a year while the deal is getting finalized and that's through the start of COVID,

remember? And that's a tumultuous period for for the gold price and for mining companies trying to operate in the other side of the planet, no less. But we'll jump a bit forward before we analyse this deal because they do a bolt on deal in March 2021. Now they buy Battle N not quite 18 months after the the initial deal was announced. Canadian $343,000,000. So Evolution is a much bigger company at this point in time, but it's still a fair bit of cash to to chalk up.

Now Battle N. They were the underbidder on on Red Lake actually, so it made sense to consolidate that area. Their flagship asset is the Bateman project. So that's got reserves of about 600,000 oz and plenty of infrastructure there, a new mill, plenty of sunk capital had gone into to that one as well. So it makes a whole bunch of sense to combine these assets as you can see on the map and EVO say combined we're going to hit 350,000 oz per annum.

So they're, they're still telling the, the market in in 2021 that that this mine is, is going to be capable of of substantial production. But what we what we what we know and reflect on today is that yeah, but I don't know what they're trying. They're trying, you know, maybe backfill, backfill the promises already and and and red like did not live up to the to the to the story that was initially told to. No, it didn't. And and it wasn't for the lack of capital being spent.

I mean they outlined $500 million major capital plan pretty early on. But one of the big problems that it can comes down to was was a cultural type change there, you know, preconceived thoughts on the kind of change they could instigate at A at a personnel level just didn't match up with

reality. Analysts around the battle time are still forecasting 400,000 ounces of production every year for over a decade and at a, you know, at A, at a pretty compelling order and sustaining cost as well, so.

This is another one. If I just just tell the analysts what the value is, because I mean you you're looking at EVO share price and you've got to have a target price that's above where the share price is. So you've probably got to have some pretty rosy assumptions about about this assay. You do, for those wondering right now, what guidance for the next year is from this point in time. So FY20 6, it's 140,000 oz. So it's a long way off.

Of course, margins is what really matters and the asset did $74,000,000 in in cash flow in the financial year just gone that. Might have been the first financial year where it. That was a record the year before it lost $115 million. I mean, with, with investment, you know, going into the ground, but Evos, I love some of the charts that Evos have shown throughout the years have shown some great ones from an investor's kind of perspective.

And they, they would show this fantastic one, which they've kind of brought back in various incarnations where they show how much an asset has has paid back versus the acquisition cost and the amount of money that's sunk into it. Quite clearly the, the ROI on, on Red Lake is nowhere near what it has been on, on other assets. But as is the case with all of these things, a a flying gold price does does help a lot

there. There was, there was immediate scepticism, you know, going going back to the, the deal and the analysis of the deal and trying to think about like what do people think of at the time? What do they think of today? The North American shareholders were sceptical kind of from the

beginning. And you know, perhaps they were the ones that had seen this asset a bit closer because down here in Australia, we're pretty unfamiliar with the asset Evo's targeted many areas of improvement, you know, mining, processing, exploration. But again, to to go back to that point, I think there was just an an overestimation of their ability to to effect a change and get the asset kind of humming again. It can't just be a cultural like I mean the, the, the reserve gets downgraded like

consistently. In fact, even, I think even even this year's reserve was downgraded by like 2G per ton. So like consistent reserve downgrades from I know they upgraded it massively and like immediately after the deal, but their their geological DD was was was clearly not reality as well. Yeah. So to to put numbers to that point, in the most recent numbers, they chalked off 4 and a half million oz from the resource. That's a staggering number.

And the grade dropped from 7g per ton to 4 1/2 grams per ton. So that's the most recent R&R statement that we're seeing. They are huge drops. So completely, completely right. The ore body has not shaped up with what they kind of previously thought and how they kind of framed that.

Now taking a fresh glance at what things are going to look like going forward, they just sort of say the asset needs to consistently deliver if it's to be worthy of, of any new capital going in, whether it actually is like again, to, to compare with the analysts value. This thing, is it a 2 or $3 billion NIV asset? Like there's no way in hell I'd be paying anywhere near that for the, for this asset.

But you know, perhaps that's the opportunity, like the gold price we're in now affords it a lot of opportunity to to make money. It's a big endowment, there's no doubt, but a big complex mine. And that comes with high, high costs. And there's always the allure of spending more capital to make those costs come, come lower, But more and more capital kind of keeps becoming more and more capital.

I think they've learned well. They they always know they're great capital allocators, but you're always competing for capital, you know, to the most worthy parts of the business.

And and to your point, like what is the return on capital to Red Lake versus the other assets when, when it's returned so far it's been pretty, pretty de minimis I. Mean it's it's no coincidence either that every Aussie Goldie went to Canada and struggled like it's not as if there's there's not the gold there at every single one. There's there's a few too many cases in which that's happened for it to just be a fluke. You know the relative.

Value at that period of time was was was severe, right? Yeah, yeah. Like like things would bid up to extreme over over in Australia and there was everything just looked cheap in in Canada. So you thought, well, heck, I'm going to get outsides returns by going there, but it didn't quite

work out. I sound like I'm very critical of this, but you know, I, I think, I think like on the whole, you have to evaluate evos for the phenomenal like like value creation story it is. And this, this is, this is a blemish that they had to deal with. Yeah. And and if you go back to like 2019 again and and you look at this opportunity again, like, yeah, I mean, I'd be curious to know what they'd say about that, whether they do the deal again because it just looks so

compelling. So if we, if we keep going in between those 2 deals that I mentioned, firstly, Red Lake and Battle N, they divest Krakow, another asset from, from early days, 60 million bucks in the door upfront with a a total price tag of $125 million. So again choking off one of the

the weaker assets. And shortly after the Battle N deal, they wrap up the AKJV. It's a $400 million deal with Northern Star getting in 100% of Kendana, 51% of the AKJV, a bunch of other assets in the Eastern Goldfields kind of area and they're elevating Mangari to a cornerstone asset in their portfolio. All cash deal. The the edge of the competitive advantage here is, is pretty straightforward. Like you mentioned earlier, you can just chop that haulage distance down by nearly 90%.

So it's it's super kind of compelling why this deal makes sense and why you can pay more for it than than anyone else can because the returns are going to be great and they raise nearly $470 million to to finance this deal. You can see again on the asset portfolio chart here that things are things are looking better and that is a conservative chart because it doesn't show the margin improvement just yet that we'd see in time when they expand the asset.

But a smart deal that that just sort of makes sense and the, the, the benefits that come from it far outweigh the, the cost of this one. The returns have been been great. And you know, add to that the, the expansion that they have done kind of remarkably, they've done that nine months before schedule and under budget as well. That was quoted to be a $230 million investment to get the asset over 200,000 oz. And what a time to, to do that sort of expansion act.

It's going to help the the payback look very, very good for that asset. It it, I find it, yeah. I think your reflections are right about this deal. But I do remember it at the time. Again, now they've they're like they've licensed to M&A to do M&A is a little bit in doubt. This one, like this one, what did they do? I think at the time the gold

price was much lower. I think they paid about like full NPV of like, you know, like, like for Northern Star to be a willing seller and, and Evo used to be a willing buyer. Northern Star thought they'll get a pretty good price. And I think evos are effectively paying full NPV, including the synergies that they were benefiting from.

So like, yes, like both parties like, like win, but, but there was, there was certainly like I remember conversations with peers thinking, I mean, he, he was paid top dollar for this with the fullness of time and, and what coal prices done in, in the intermediate period and the additional benefits they've had from the other like East Cal assets, the mill expansion, etcetera. It, it, it looks a good deal.

But, but, but I think this is a common theme with Evos is they don't always look a good deal on the outset. In fact, the one that looked a good deal on the outset, being red light, turned out to be the dot. Yeah. And I mean to think about the seller in this case. So Northern Star had just done the deal with Saracen as well. So they've become a much bigger company all of a sudden. This is clearly a lower quality

asset in their portfolio. And like you say, with the with the upgrade in mind that you can unlock more value through it that way. Yeah, they might be taking their pound of flesh for the synergies that you're going to experience as well. But I think, you know, time and time again that that view that MPV is different to, to what most people might think it is because, you know, maybe they're curtailed by the reserves or whatever it might be having that

long term time for you. And I know it's, it's, it's hard because the gold price makes, makes it look so, so good. But. It was necessary to make mangari, what they call a cornerstone. Exactly. Their portfolio was improving on the back of this deal and not just by a little margin. They continue continue to rationalize non core late life assets to improve the the overall portfolio.

They finally part ways with with Mount Carlton after after being a pretty important contributor for for for quite some time and having its hallmarks from the very early days. It had it's time, Yeah, $90,000,000 deal, 40 upfront they're getting for this one, selling it to Navarre. So a year before evolution into that to impair the asset by $100 million. So it started to to have a few problems getting a bit creaky and old.

And yeah, I mean, some, some assets had this one, some analysts rather had this as a negative MPV on the books. So good to get a bit of cash and again improve the asset, improve the portfolio by divesting and then they consolidate. Ernest Henry So November 2021, a big deal again, $1 billion, you

know, 800 upfront and 200 just being paid a year later. So the stock bounced 7% on the day. So the market liked this one quite, quite early. And to finance this, they sign up US $200 million in debt at 3%. We're in the zero interest rate era here, so you can finance these things quite cheap. They end up going to a net debt position of $1.3 billion and in time you'd kind of see because they go into a very heavy period

of investment. So the balance sheet is a bit extended, but it always kind of extends once they do a deal because they tend to sign up that debt but. This is the fruits of their labor from from the first deal kind of coming to fruition, right? Fruits of their labor, fruits of their, you know, smarts to get this one done. Absolutely. We know they're not getting any more gold here because they're

already taking all the gold. So they're getting 70% of the the copper and and the silver as well. So EVNS Group all in sustaining costs would improve by nearly $200.00 an ounce in two years time. Isn't this remarkable? I know with the, I know the precedent had been set globally. And yeah, new Crest was a, a leader in, in, in having a, a reported loyal in sustaining costs because they had like phenomenal kind of copper credits in with several assets in their portfolio, Katia being

a big, a big run of those. And I think like, you know, to your point on, on, on Jake studying the what made great gold miners. Well, the, the unspoken rule that he didn't list in that speech is make sure you've got a low all in sustaining cost because you've got copper

credits. And it, it like, it tricks, it tricks people, it tricks generalists, it tricks not even just generalists, but but resource specialists, who I mean, the, the, the all in sustaining costs, which was just adopted by the entire industry and popularized by the World Gold Council. It has, it has its pitfalls.

And but when you just look at that and you try and think of well, who's a, who's a low cost producer come up with with evos with these big cup of credits despite cash flow not necessarily being reflective of that. Yeah, the rules are the same for everyone. They're just, they're just using them to their advantage, I think. So we've touched on pre emptive rights, super important. They did the groundwork, Yeah. Still it was a fairly steep price that they paid.

But again, people analyzing the deal at the time were a bit restrained in how they thought about this deal because of the relatively shorter reserve life that was left, which in in due course evolution prove out and extend the mine life quite substantially. This is a great asset. This is a really, really great asset. It's a truly great asset. They've also, you know, taken ownership then they're now the operator of this one, which is a

an important detail. You know you control your own destiny by all the cancer Glencorp joint venture went relatively smoothly, but. Was it a JV mate? Economic interest. Economic interest, call it what you like, they in time validate that that price and financing

things in that period 3% debt. That's, you know, I mean, we're getting to an era now today where where interest rates are going down again and we'll see what what miners do with it, but very, very smart to to get that over over the line.

So that that wraps up the the kind of history. Obviously they do N parks, but that's too close to where we are today to analyze thoroughly, but well. I find that interesting too. N parks because, because we, I remember doing a potty when they announced N parks and you and I, you and I are doing like the numbers and being like, Oh my God, look at the crazy EBITDA multiple. They've paid for this, they've overpaid, blah, blah, blah.

The balance sheet was yeah, like like looking a little bit shaky. They, they did a raise to, to fund part of it, I remember. And then and the share price quickly kind of dips to below what the raise price was in the, in the months afterwards as, as, as markets looked a bit, a bit fragile gold as well. And we were critical, but again, like N parks has the hallmarks of a of a, it's a very long life asset.

And in the fullness of time, if you have, if you have the commodity tailwinds, which, which you know, we've been lucky enough to have over Evo's journey today, then it just rubs over those, those facts and the people who maybe like people like us who called North Parks like paying too much at the time. I mean, I can totally imagine having the exact same reflection about our comments then as as

we've heard about like. Certain deals that Evos have done, like historically as well-being being Cal, ever paying for Cal, Do they ever pay for Cal? You know, this is a common theme. Do they do they ever pay for for La mantra? Do they ever pay? Like, yeah. 30 plus year mine life like you kind of get some very good years in that time. You finally didn't have just a crazy stream, but that's OK. Yeah, yeah, I think, yeah, I think you're spot on.

So since the Ernest Henry deal, the EV of the company has gone from $6 billion to $22 billion. That is despite years of actually poor operational performance. They they miss guidance on several occasions over the past few years, very heavy periods of capital investment and again papered over by a phenomenal appreciation in in the gold price. But where we are today, they are they are Australia's 25th largest public company. And Laurie Conway from Jan 23 became the CEO and managing

director. Jake became just the exec chair at that point in time. And as of July of 2025, Jake is the the non exec chair. So I think that that puts a wrap on on the history. It's a great history of that,

like the evolution of evolution and I know we're capturing it a snapshot in time, but it is like it is a, it's a tremendous growth story from deals and commodity tailwinds and like savviness and seeing opportunity where it isn't. And for that reason, mate, we need to dive just quickly into their thinking behind deal making. So they have a three pillared approach to creating shareholder value, operations, discovery and M&A. But as it was put to us now this is a tongue and cheek comment,

but I loved it nonetheless. Operations are where Evos tease shareholders about the prospect of creating value. Discovery is where they torture shareholders and M&A is where they really create value. Now that's the type of comment that could only come from the corporate team and I think it actually speaks very highly to the culture knowing the context in which that comment came internally there. But I think it's worth talking about.

I mean, Evolution have proven themselves to be competent managers over the long run of the assets that they've gone. The geos on the discovery component have gone above and beyond replacing depletion, adding to the mine life of many of their assets. They've put themselves in the right post codes to do that. That's coming from the M&A. So there's a whole bunch of things that are lining up there. Operations are kind of limited by your geology.

You need to be playing in, in the right areas to, to have the the work cut out easily enough for the operationers team. That in turn, you know, allows Brownfield's exploration to, to kind of be successful and, you know, allows the the geos to, to do their work effectively. And we've seen that in abundance at Cal and Ernest Henry with the mine life extensions. But looking at the management team here, M&A is, is the culture, M&A is the the the focus.

They are deal makers through and through. They're deal makers, but thoughtful deal makers. They're not deal junkies like where you are, you do deals because you just deal hungry. There's discipline to the deal making. It's knowing when to be like very aggressive and knowing when to be reserved. Like this isn't just a scattergun strategy where they

got lucky. This was a it was a it was a deliberate strategy about yeah, like knowing the time, the cycle to be aggressive and knowing, knowing the times to to peel back. And like this was articulated from the very beginning. There was a deliberate decision about like having stepping stone assets starting with, with a not so good portfolio, but using those assets to acquire better assets with longer life, lower costs over time.

And they bootstrapped their way via not so good assets to having like a pretty formidable like, you know, portfolio. There, there's a comment that also really stuck out to me to add to what you've just said there, Jake said that people too often have inertia and they don't do deals because they think they're undervalued, that that didn't hold them back because they did deals when their share price was in the in the gutter as well. They were proactive about doing

deals. They were incredibly thoughtful about the deals that they did and to to put a bow kind of on on what you've said about the timing of deals. There's a time to do deals and there's a time to make money as as they've always kind of said and. Why do you think evolution didn't have the inertia that other companies might be plagued with? I I think that just comes down to the culture of the team. I think they, they had a culture within the corporate team that

made them proactive about that. They, they wanted to be a mining company from, from day dot and they, they just kind of got after it. The fact Jake was exec chair, do you think that made a difference as well? Like you've got a supportive board of being bold. There's no there's not necessarily pushback from a board perspective because like your exec chair. There's phenomenal alignment. Yeah, great alignment, great

capital markets backing as well. Like nothing was impossible to finance because you're dealing with someone and like a team which has done it before together. No accidents either. Like they, they nurture the relationship with having a major shareholder, which a lot of people would look as a negative, having someone sit on your register with 30 plus percent. If we quickly look, there's this matrix I want to show in how they think about the deals.

And I think it's a, it's a really cool one to understand, you know, a bit of a guiding light in, in how they think about deals. And it differs for every company depending on you, you know, your expertise, your size, your, your balance sheet, all these sorts of things. But essentially for those listening, it's a, it's a kind of circle and it has 10 different boxes to check and you

can kind of rate them. When you think about a specific asset, we're talking about things like the mine life, the transaction complexity, social license, commodities, these sorts of things. And I think there's a couple points here that need inspection because they make transaction complexity look like something hard, but that is an edge for

evolution. Another one, if we're going to be nitpicky on commodities, I'd almost put copper, gold above gold there in how they actually think about things. And then lastly, annual production there, annual production and evolution of showing this only matters so much as in like how much it impacts your margin.

That's what really matters because some of their, you know, like Ernest Henry for instance, that's not, you know, a massive gold producer produces a lot of copper as well, obviously, but margin is what really matters. Which year did you first see this in their in their public materials in? The late twenty 10s Wow internally used before that. Before that. This is this like this one image. This is the evolution playbook.

Yeah, like your, your, your sweet spot is becoming a company full of assets that have that that green circle. But the only way you get there is incrementally. On the deal making, there's, there's one more fantastic slide we have to show they break this out. I think they showed this one in 2017 or so and they show that 17% of M&A deals add value. So if M&A is where you create value in your business and only 17% do you have to be bloody

good at doing deals? Backed themselves didn't they? The only thing I don't like about this slide mate is the source for that stat is a management consultant. KPMG now talk about things that don't add value. Can't I do that? But no. But yeah, like, yeah, these were deal makers. They backed themselves to create value because because some deals do create an enormous amount of value, but you have to pay an appropriate price and get the like the timing right in the

cycle. And those things are very, very hard to do. And, and Evos did it, albeit with with commodity tailwinds, but I don't, it didn't, it didn't take a lack of like these, these, these, this was a team in the right place at the right time with the right skills and the right amount of confidence and they saw the opportunity. And like, what do I mean by

that? Like no other mining team, in my opinion, I don't think could have enacted as nimbly as evolution were to the opportunities in front of them and being so like being so thoughtful about even seeking the bilateral deals that they did do out.

They, they, they, they minimally used advisors like you mentioned that they, they trusted their own internal team and a small number of people to, to take a view and deliver like the, the, these were, these were rapid succession deals that were done. And it takes an enormous amount of effort to achieve that. And the only way in my opinion that you do achieve that is with the capability like the confidence and also not using

advisors. I couldn't agree more and I think it's a great segue into what what are the guiding principles to the evolution way. So firstly, the strategy Jake would always say, I'm not convinced that gold companies are scalable, hence may just aren't the ones that create the best returns. Sorry. The strategy Aussie mid tier 6 to 8 assets, 8 year plus mine lives, Tier 1 jurisdictions. Improving the portfolio means investing as well as divesting all these sorts of things.

They they just sort of ring true and they didn't change from from day one. Remarkable that strategy has stayed the same. It's consistently said that over the last decade plus, this is the this is what we want to be when we're now it and and. Yeah, add to that knowing your competitive advantage, you know from from the experience selling gold concentrate with Mount Carlton to the complex deal making, they knew their competitive advantage. Another part of the evolution way is marketing.

We've joked about the marketing, but it works, it's effective and the rules are the same, like I said, for everyone. Do you think just on the marketing, like not just marketing the own sustaining cost like Evos, Evos is such a popular name amongst the Sydney like generalist funds management community, even international, yeah, international investors

being acquainted with. Do you think, you know, and I know there's stories like parallel with with Northern Star, but like you couldn't juxtapose to very different, like leaders of those businesses in Bill and Jake, like, you know, Bill, the country guy who who's like, you know, experienced minor and, and speaks in like a like a speaks like a minor. And Jake the polished like Macquarie banker. He's he's so like schmick corporate flair, like, you know, endorsed by maybe the fund

manager community. Do you think there's anything about their images and like characteristics as people that also like you know was a, was it was a marketing advantage or do you think I'm reading too much into it? No, I think you're 100% right. I mean, for one, it shows you there's multiple ways to to get to a fantastic outcome, but there's no, there's no accidents.

We we've just, you know, spent hours looking about how thoughtful they are about everything you think their, their appearance and reputation is, is an accident. Absolutely not. I know you're a big believer that that companies culture is a reflection of their founders. And in the case of of Jaycar, do you think yeah, evolutions culture is is what it is as a result of? You know, we spoke about the dynamic of the team coming back

on board. I think a little less spoken about dynamic is just like getting the job done. Like that shines through when we talk about doing all those deals in kind of quick succession just to a can do attitude to get the job done in a very quick turnover time period, relying on everyone. You know. You got Laurie doing the the cultivating with the the banks. You've got Aaron and and Karen doing the the more kind of deal making aspects. Jake would be doing the roadshow

side of things. All those and a whole bunch more people that we haven't met there. But there's that sort of accountability that that rings through and and people having their responsibilities throughout the organization and just delivering up to them. They would, they could make, they could make things happen and fill in the void to back solve just to get to the

opportunity. That's yeah, that's, that's, that's a great trait of an organization to to lean into the complexity, even though it's harder work, but you need the just get it done attitude in order to get it done in the 1st place when it's hard. Yeah, and and it pays off. It pays off big time if we rattle through the other kind of parts of the evolution way, making your people with like owners like massive cliche, but they pay everyone with stock.

And that's something that Mcquarrie did as well that the Jake experience from when he was a, you know, a young employee there. They buy from majors and not just in the sense that people think about, oh, you'll get a good deal out of a major, but they just put themselves in the areas, you know, in the best positions geologically and otherwise. So that rings true as well for all the deal making now organic growth is best. So if you are in those great regions, the the geos can find

the prize brownfields wise. And lastly, they paid a dividend. They paid a dividend consistently because that forces capital discipline. It makes you think more about the dollars that you have and how competitively they need to be used and invested or returned to the owners of the business. The alignment, The alignment is striking in in all three stories that all three big value creation stories that you've told. And yeah, Evo's no different. Alignment makes such a

difference. 100% we have obviously spoken about how positive the gold price has been as well. And, and maybe just to, to add to that, you have the, the opportunity there for everyone, but it was there for, for everyone. The outcome is where execution meets opportunity that leads to success. And that's, that's what they did. So maybe for a moment, we can sort of patent them on the back after, after saying the gold prices treated them so well.

So some takeaways, mate. I'm kind of keen to, to hear some from you, what you, what you kind of think and reflect on. But I'll, I'll start with a couple, as you mentioned before, the the alignment.

So Jake shaped that board and in a different way to what we've seen with many other companies with that exact chair role from very early on. And you know, maybe if you're listening this and thinking as somebody who wants to build a gold company or any sort of mining business or any business at all for that matter, in the future, that is an interesting way to to think about it, which is not the most common kind of

route. You know, maybe it's, it's different from a governance kind of perspective, but it's worth noting. I can't think enough about like how many of the people came back like that. That just sounds, that's just such a, a glowing endorsement to have people come back and do it. One company, maybe a second company, maybe sometimes even a third company together is just such a, a glowing recommendation that you sort of love, love working with with the people. And it's a it's a really cool

thing to say. That that is, that's not to be like, yeah, I think I'm understandably spent so much of our our life with the people that we're working with. It's a big choice and it's a huge vote of confidence to even though like it would have been at a, at a, at a substantial intensity, I'm sure like to, to, to have the continuity of of of personnel. Like that's, that's, that's that's, that's huge. A fun one to to think about in the takeaways, the deals that didn't happen.

So I'm just going to rattle a few off here, but the Super Pit with Newmont before that. Dundee like they were they were trying to be troublemakers when when Northern star were were finalizing, you know, everything and and to had agreed something with crazy like like, you know, evos were I think it's public knowledge. They were that would really try to put forward a a more compelling deal for crazy and

they were willing to pay more. But but but crazy didn't renege on his on his word with with with Norman star. Another one that could have been Kara Sudan. This is an interesting 1 to reflect upon because they were fractionally the underbidder here in a a deal that Saracen would win and they were relieved that they didn't win this one.

But that led to the emergence of a a pretty a pretty mighty competitor in in Saracen. They were relieved because they they it reminded them of Edna May and they already had Edna May and they had a bunch of problems and issues and they didn't want any more headaches similar to Edna May. But as it turns out, like not not when Kara Sudan, yeah, created, created Saracen. Like that's the gold landscape would look very different. Sure would.

Kingsgate as well. This is one we heard the presentation was even done and I cannot verify at what point in time this happened so I'm just going to leave it there. But Kingsgate and the Chat tree mine in Thailand, that would have been different. That would have been so different. And then there was also Detour when they looked in Canada and they looked in North America for a long time. So Detour is another one that

might have been. Yeah. So there's like opportunity cost in the deals you didn't do. There's also opportunity cost obviously in the deals you did do. Do you think Redblake is a deal that they shouldn't have done? I think it's just too hard to say if you're there at that point in time, your balance sheet is healthy. These things are trading super compellingly and you know, come at it from from a finance kind of perspective. Oh, these guys have just under

invested. Oh, there's a lot of low hanging fruit there. Sure, you think you can do it better so. Is the risk of like leaving your backyard so substantial and maybe maybe underrated in some respects? Because I think Red Lake was was announced, was announced, it was announced before the Super like the Super pit halves kind of sold in rapid succession in between the two, in between the two. Wow. So like that, that was the opportunity cost in some respects.

Like I know the upfront price maybe wasn't as comparable, but like in the fullness of time, the amount of capital that they've they've put in and the additional bolt on acquisition, they've put more capital to work than they would have been required for for half of the Super pit. I think that's that's the opportunity cost that that may have been missed. And I'm sure they're awake to

that. And it's rich of me to to say and be critical of. But but yeah, like, you know, we're not, we're not perfect even if we've got like many, many runs on the board from a capital allocation perspective. I think that's like a reflection I have. Yeah, I would totally agree. And my last two, it might be a bit sort of philosophical, but I think that thinking about like the the toughest time for the business is also the best time.

So 2014 to 2015 you, you know, you heard all the the costs they were cutting out of the business and all these sorts of things, but the deals they did led to the growth of the company. There's there's something kind of in that. And lastly, good things just take a long, long time. We spoke about the amount of times you could look and take a multi year snapshot of the share price and it would be down or it

would be flattish. But if you zoom out long enough, it's an incredible value creation story and. I think that just hammers home the fact that, you know, you keep compounding, you keep working at things over a long, long time and it sort of pays off. But you need to be patient. Takes a lot of patience. Yeah, it's, it's a story of deals.

There's like a point there on like, you know, you bring up the that slide with all of the peers and a lot of those peers like disappeared or fell over from like far, far, far more erroneous capital allocation than than than red, red, like proved to be the fullness of time. Like like, I don't think like I can understate how, how appreciative I am of like of capital allocation of gold miners. This is the thing that differentiates gold miners from each other is how you allocate

capital. And I think like what is evolution as a company? Like they get capital allocation right 9099% of the time. Like these are these are remarkably good capital allocators. They're like thoughtful, nimble deal makers and they take the responsibility like serious. It's a it's a safe set of hands. They're they're they're just they're they're they're insanely backable. I wonder if you like, if you you thought much about that perception of them as you've

like put this work together. JD I. Think like a safe pair of hands is a, is a kind of great way that what you mentioned before the institutional investors in particular perhaps the the generalists would kind of call them a safe pair of hands. They're reliable. And again, a bit of a cliche, but like we say, we do deliver. We deliver that type of thing which they've said for a long, long time. And the consistency comes back to the strategy as well, which hasn't changed throughout.

And yeah, you can't say the same for, for a heap of miners out there. So I, I couldn't agree more with with what you kind of put together and the bar you kind of put it on there. It is a remarkable story to, to think about, to learn about, to, to understand. And yeah, hopefully there's there's more than a few sort of Nuggets in there for for people to glean. From I've got some more questions for you unprompted

mate. How do you think? How do you think evolution differed from Northern Star? I mean, firstly, the stories kind of track themselves in particular once the story gets going at Northern Star, Evolution took an asset that was more mature. They took a producing asset that wasn't going to shut down in seven months time like Paulson's was. So once that quick share price appreciation is done at Northern Star, there's a lot more of a closer tracking between the two.

Jundee may be the best deal ever like that. That is one of the the the takeaways. You kind of got to have like 82 and a half million bucks for that. It's just astounding. As good as all these deals that we've spoken about. We've just spent two hours talking about the deal making the House of Evolution, but Jundee is still a far better deal than you guys could pull off. I still kind of scratch my head at at that one.

And yeah, I mean, I I coming into it had always thought, you know, evolution like the deal makers Northern Star, particularly because of that early period with, with the the G OS and what they had to do to kick out the life. But you know, these these two stories are far more alike than they are different. Balance sheet do you think like yeah, I know, I know evos have have a you know, their own target net debt range or gearing range and the likes.

At times, their share price has been quite volatile because of debt in the cap structure. Do you have any reflections or thoughts about about gearing? Super good question. Like today talk about that 15% gearing and I've reflected like a bunch on this because I've always come from a position that like it's kind of terrifying. And we saw on the other hand with with the Fortescue story, yeah, when it goes well, boy

does it go well. But if you have a portfolio of 6 to 8 assets that operate in the, the better half of the cost curve, then I think 15% is, is pretty prudent. I, I'm a fan of the, the strategy of taking on a bit of a debt if you have the confidence that within like 2 years you can hammer that down. Like there, there is a bit of risk to it, but that, that amplifies the return quite a bit. And I think they're very, they're very sort of thoughtful with that.

But again, you know, they, they'll often say like single asset producers are far too risky. They they will say that and they will after you know, almost all I think all their deals they would hedge in, they would lock in a bit to to minimize the, the gold price falling away risk.

So I think there is there is room for that and we see that more at the bigger end of minus which we don't speak quite of quite often about being a bit more sort of thoughtful given where they sit in the cost curve with their assets. The, the part of that marketing pace is the like the dividend predictability as well. Even in the bad years, they'll pay a pretty, pretty marginal dividend. But the marketing pace, like, I wonder what impact that actually

has to their multiple. I think it's, I think it's a bit, I think they get a fair bit of, of a multiple rewrite purely based on how marketable they are. Like I've spoken to a bunch of different people over over many years. I always like ask people like Evolution's valuation makes sense, right?

And yes, gold price keeps going up and so evolution share price keeps going up. But everyone always says no, a lot of people, a lot of people think that, you know, Evo's commands a premium in the market that is not at all not not that is that is that is like sufficiently larger than what the, you know, the, the real value of, of what their assets might be, especially compared to other people, other, other other

comparable companies. And part of that, it's like just that, that that marketing factor and now this company is, is so large that it is in enormous indexes. Yeah. I've always thought the same. I've always thought the same more so in the last few years. And that has been tainted by that period of heavy investment.

So like, you know, a lot of money was spent in in 2223 into 24 and obviously like the the change in cash on on, on the, on the books didn't look that great through that period because they were investing so heavily in the assets. So very kind to see what that looks like in in the next few years. I want to put like a couple of questions to you as well, mate, just in relation to, I suppose, like firstly evolution the company, like what, Like what do

you think is next for them? In some in some ways I, I ask you that because the story that Jake tells with Sino gold is sign it like you know, the next phase of growth for Sino gold was not actually was not actually them embarking on more growth. It was to to to combine with another company. Sometimes the deal is is the phase of growth like Jake's stepping stepping down from an executive position into a non exec and and and embarking on a new adventure in a smaller company.

Yeah, yeah. I mean, from Jake sort of stepping down, I think growing a smaller company is just more exciting. But the bigger question about where does evolution go from here is a really interesting one because where do you kind of go? Obviously, you can continue to improve the portfolio On paper, that makes a whole lot of sense.

How do you actually do that? The best answer I've kind of got is like looking back in time, looking 10 years back, you wait for your opposition to trip themselves up. Like if you can make good cash when times are really, really good and just wait for the bad times, you don't know what opportunities are going to present themselves. But as we sit here today when everything looks very expensive, it's pretty hard to think like, where do they go from here?

So remember how different that landscape looked 12 years ago when we looked at all the companies around? What's it going to look like in 10 years? Like that comes down to how you manage yourself in the good times. You, you know, you set the table in the good times to what's going to follow. We've spoken about this with companies taking measly amounts of debt when things are really good. And all of a sudden that amount of debt looks enormous when when

the tide turns very quickly. So who knows what opportunities will present themselves if you just remain disciplined in the good times. What do you think? I think like even though yeah, transitions happening with Jake, Evo still has great consistency of personnel. There's, you know, like Laurie has been there for a very long time and has like tremendous buy in from from his employees. Yeah, you've still got Kieran and the BD team.

There's like there has been some, some change, but like there's still like, you know, great, great consistency there. I don't think you'll have like massive deviation from the strategy. And I think like the party line has been in the good times, we're more likely to be sellers than we are buyers. Like I should believe them on that. Like I wouldn't be surprised to see them potentially rationalize certain assets in these good

times. Like I think of the likes of, yeah, if you get if you get a great offer for red light, do you sell it? Or if you get a great offer for mangari, do you sell it? You know, I think the answer to that is is you probably do. I wouldn't be surprised to see them like incrementally continue to add more like copper.

And why do I say that? Because in what worked, like if the next phase of growth for for Evos is, is is unclear, because they've already got the right number of, of mines that they've always said that would, that would have. And they, and they trade at such a like, they trade at such a premium that like it never makes sense for them to get acquired at a premium. Do you know what I mean?

Like if you traded at a premium to everyone else, no one's doing a deal to buy you at a premium because it's not in a creative deal. You can't sell that to shareholders. So but adding more copper kind of does every everyone, everyone wants more copper. Everyone wants like, yeah, I think you attract a high, a high premium and you can backfill that with with more copper in the very long run. I think they I think it's a merger of equals with a, with a PRI.

Think like one of the Canadian miners, yeah. Where where scale becomes increasingly important, Agnico's become like enormous, like as, as they already are, you know, maybe, maybe, maybe Barrick and and you might merge. So where does that leave the, the tier below that? I think you might have yeah, a merger vehicles. That's my prediction completely unfounded and not substantiated by by anyone other than my own like, like thoughts.

But yeah, I think the next phase of gross growth is actually it's actually similar to what Sign of Gold was when when they actually had to to sell themselves to El Dorado. I think that's a good take. What do you think of like Jake's? Yeah, like so he's now he's now new vehicle is, is Federation mining Endura Endura renamed. This is a an Aussie super kind of back back vehicle.

I'm sure it'll make its way to public markets at some point, but do you just apply cookie cutter evolution playbook to that vehicle and expect that's what will happen next? Well, it's kind of funny, right? Because Conquest, it was also started in a period of a bull gold market, which we're clearly in today. You're going to have to be a bit patient if you want to find kind of four sellers around there.

But they've got a bunch of work to do in in the meantime and they're going to have no shortage of people giving them money. So let's let's kind of say, are they going to do something massively different to what's what Jake has kind of done in the past? I find that hard to to believe, but yeah, it's, it's all about the timing and how these things sort of present themselves, the deals that present themselves. Are there maybe slightly different jurisdictions they could play in perhaps?

I mean, New Zealand already is is slightly different, although evolution did look there a bit of exploration there back in the day. But it's it's a tough one. How do you think about that? I think it's, I think it's the same playbook that'll will pan out in time. What what you have is like a serially successful person, nominal access to capital is an opportunity. And that's like that's one, one common theme is like they can, yeah, evolution conceive the opportunity.

I think it'll be a story of deals to come there. I'm excited to see what deals can kind of be manufactured in a in a new vehicle. But I've got no doubt that that that's where that's what will happen. Commodities are cyclical and I've no doubt we're going to see another cycle in the gold market sooner or later. Another cycle? What do you mean mate? You're predicting the end of this one.

It's right when things are so good that you don't think they're going to go bad when things turn, so let's see what happens there. 100% mate. Well, thank you for for your research and thanks for, for telling the story. I, I love it. I know a lot of other people love it get some great feedback from from the work you've done on these mate. It's. Mate, appreciate you putting out with it.

It was a long sort of story to tell, but yeah, hopefully the listeners got a bit of value out of it because the the research was super fun to do and I think it's a story worth telling A. 100% hoodoo Hoodoo. And a huge thanks to our great, great partners, Mate, Sandy Ground Support, Focus Platform by Market Tech and Intralinks. Check them out. Hoodoo, hoodoo. Now remember, I'm an idiot.

JD is an idiot. If you thought any of this was anything other than entertainment, you're an idiot and you need to read out a disclaimer.