Uranium Goes Vertical. Overblown or Only the Beginning?

If you're an insto investor in the space and you sort of catch wind that they're going to do like a decent raise 100. Million for spot for spot. You know it's on like it's, it's so on when you catch wind that there's, you know, the equities are just going to RIP you dogs. Uranium, JD uranium, it just had its biggest one day spike in years and it all started with spotlighting the fuse.

A surprise $100 million raise for the financial reactor has been upsized to $200 million and it sent the uranium equities flying. Why we dive into this? Plus, copper juniors get even hotter. The takeover of newer resources is getting competitive. Please be a bidding war and should gold companies hold the

gold or generate cash? We're going to share some thoughts on this. Let's dive in JD, what the hell is going on in the uranium market, mate? Let's. RIP in, we've got some awesome stuff to talk about. So uranium first up, I'm sure that's what a lot of people are keen to here.

So sort of seeing news come out over late Sunday and then into early this week all centered around Spot, the Mighty spot, spot Physical, Uranium Trust. So that is the unit that just holds £66 million plus of uranium. They get cash, they buy more. So like you said, 100 million US raising upsize to 200 and we're going to talk about that dynamic a bit also very interesting. And you mentioned the word sort

of surprise raising there. It was right because they raised money it over $25 million just in May. So a bit going on there. And and obviously the the stocks just rocketed for Monday, Tuesday like deep yellow on Monday was up 20% plus Boss 16 and Paladin about 15% all in on the Monday that was. And then if you look at the Sprott Uranium Miners ETF, so the basket of all these names that trades in the North American markets, that was up about 7%. So spot itself has settled a

bit. It it jumped up from kind of 17 ish to to about 18 bucks and then has come back down to the low seventeens. But yeah, it's been super volatile the last few months. We've had that sort of narrative of or maybe spot has to sell some pounds to finance itself. That's sort of washed away and it's just, it's just turned like that, right? It's turned probably because of some opportunism from the financial sector. JD, let's start with Spot itself, because this is the the

trust of the vehicle. It's a Sprott unit trust, which is effectively accumulating pounds of uranium. Yeah, typically this this vehicle can only add more pounds when it trades above NAV, which it hasn't done in quite some time. However, this placement and the last one have have been able to get over the line. Yeah. I mean, if you, you look at the chart right and you can see it, it kind of flattens off in terms of how many pounds they've added to their their total

inventories, if you like. So that dynamic with trading at a discount, training to premium kind of guides it's buying action. So now prior to this raise, like if we look at Friday's close on a per share, per share basis was 17 bucks and four cents, they last traded at 1698. So really close like we're we're we're talking, you know a couple decimals of a percent and it had been closer to 10% not too long ago. So it had been a while since they'd got that close and we knew the company had been

itching to do a raise although. The company? Well, Sprott. It is a company of sorts, right? The the management team of the trust. Yeah, and. Sporting Ku Klux fees, a lot of fees on this this vehicle. Yeah, exactly. So they needed to back in May like quell the sort of fees in the market that they were going to sell pounds because that had been pressing the market down been a bit of an overhang if you

like. And we thought that first, if you like had been quenched by doing this May raising 25,000,000 bucks meant they had over 30 which would at kind of current rates funded for a bit over a year. And that was done pretty impressively because that was done at a 9% premium. So they were trading at a steep discount to NIV and you can't raise at a discount because it's dilutive and yadda, yadda, yadda.

So they. Don't I think it's explicitly like a rule of this trust is, you know, there there can be no, no buying of pounds unless it trades above NAB. So this money had to come into that vehicle above NAB I believe. And they got it done, which was, yeah, it, it, it was well done on their part. It, it like relaxed the market, if you like. We didn't seem the the same kick up that we we saw today, which

is kind of interesting. But it meant they could finance themselves for for a while and they wouldn't have to sell these pounds. And I mean. Well, think of the rationale, right? Why do you like, why are hedge funds or whatever tipping in to buy spot above NAV doesn't quite make a lot of sense when there's like there's a fair bit of carrying costs associated withholding holding spot like all of the fees that go go at this process. Why are you willing to pay above

NAV? What's your actual position here? It's actually in EU equities which were which had high short interest if you get set in them and what the flow and implications could be. Yeah, I mean, and in the wider uranium market it it's bizarre. There's a lot of bizarre things about uranium and the the dynamics we currently see with financial players in this

market. It's kind of bizarre to think that the overhang over a commodity market would be the thinking that a physical trust like it's a, it's a dynamic that only is kind of possible right now in uranium. You're not going to see it in in many other markets when the physical trust is big on in the scale of things, right? It's AUS 5:00-ish billion dollar vehicle. So yeah, you, you put that aside because we thought in May they raised this money, it's all good.

But now mid June, we see $100 million raising kind of hit the boards Sunday into Monday and then it's upsized and being done at a premium to NAV as well as to the last close, a narrow one, but still a premium. And the uranium spot for us flew. So it's the biggest run in like years, like one day jump that we'd seen and it's kind of an obvious outcome, right when spot, you know, is going to use this cash to go into the spot market.

The spot market we know is by and large financial players and traders and these sorts they're trying to get in front of the train and and buy it before spot can do it. So but but. Brought themselves a disciplined like in buying the pounds they're not going to they're not going to exercise the yeah, the amount of I suppose I'll discipline that we saw on in that single day on the in the spot market on the spot price. So that was.

Hard to be disciplined right because this is a thinly traded you know you see lots of 100,000 lbs here and there a few trades a week type of thing. Like they they did buying back in 23 over like a 5 month period and they bought like 1 1/2 ish £1,000,000 and that helped drive the uranium price from 60 ish bucks a pound up to like 90 bucks a pound. So completely agree like that they are not the same as like the traders in the market. They're not as kind of short

termed in a sense. They're they're putting it in a pile and they kind of think about the way they go about it. But but that. Money is earmarked 2 by pounds. Now that 200 million bucks? Yeah, earmarked 2 by pounds. And yeah, that that gets you excited if you're a trader. I suppose there's another way of looking at it.

And to go back to the the narrative framing, the narrative has quickly flipped from being quite a like a depressive narrative in the space to like spot is good to buy pounds. You've got these RFPs, these requests for proposals coming on the back of the European summer. I know what you're thinking, but that is what people are saying out there. You got big tech bullish, supportive of the whole thing.

You've got all these new reactor announcements from India to the Czech Republic to all over the world. You've got the uncertainty around Liberation Day kind of waning supply still not coming online. Like you can bend all the facts and and figures and all of a sudden you've got a awesome narrative to wrap around it and. Narrative always follows Price, right? They work in tandem, they work hand in hand and a kind of good sales pitch goes goes a long way right.

So all of a sudden spot is trading at a discount because for for a couple of reasons, they haven't actually issued the the new shares. So if you're looking on the spot website, you you'll see that hasn't actually changed just yet. That'll happen on the 20th of June and the spot price jumps. So it it looks like they're in

A5 six 7% discount. Already, I think I think that discount is structural like even when they did the $25 million placement, they didn't then trade above NAV post doing that and you know here here again, I don't I don't think you're going to see. And they're they're always, always like ish going to trade at a discount structural to your

point because of the fees. Embedded in the yeah, there's, well, there's certainly been periods in the past historically when there's enough like retail sentiment that has facilitated a spot to trade at A at a premium. And that's why they've accumulated the amount of pounds that they they have over time. Yeah, that stopped a while ago. This this upsizing daily thoughts? Right, A lot of thoughts on

this, right. So if if you're an Instore investor in the space and you sort of catch wind that they're going to do like a a decent raising 100 million. A spot. A spot. Particularly if you're an Instore who's long uranium equities, you know, it's on like it's, it's so on when you catch wind of this. This was done through through Canaccord as people would have read. And you know, the equities are just going to RIP and the sentiment is going to change if you you catch wind of this.

And you also think, you know, particularly in Australia here where there's such high short interests currently in the name. So those come off a little bit. But boss still at 18% plus Paladin like 1516% short interest there. There is an opportunity. Here isn't that crazy. So the uranium juniors like I, I look at the equities and they are undoubtedly like trade as high beta to the uranium spot price. Explain high beta just real quick for. Yeah, high beta.

It's just like you know what a 1% move in the in the uranium spot price, you will get a larger than 1% move on average in the in the uranium junior equities to the spot price, right, Not the not the term price, the juniors trade is high beta to the spot price and the spot price is such a thin market. So the financial players can squeeze that spot price by a spot, but they're getting paid in the equities, right? That's the trade.

That's in fact, the trade was to be set in the equities before spot launched that placement. And if you're paying attention, those equities ripped a day before spot launched that

placement. That news almost certainly, you know, fizzled out there and drifted out into the, into the, yeah, the, the financial world and, and funds got set in the equities and then and then they then they bid like crazy into the spot placement knowing knowing that you get the the high beta RIP that comes because spot prices, yeah, certainly go higher. This is this is like a textbook squeeze executed to perfection when you've got high short

interest in those equities. And and it's the difference between the retail component and the installs as well that can beat into big time mechanical and they can really push that. You know, they they call their good friends at Canical and they say, can we get a good bit of this and hence upsize from 100 million to 200 million. The thing just flies. Well, that's that's. The interesting thing right this this the winners of this trade are the are the instos, not not

retail, but those instos. They need to to like to lock in their lock in their wins. What do they need? They need to do? They need to sell eventually their equities and and they probably need retail mania to return to to to lock in those gains. So I, you know, I think if, if retail kind of wraps around this and gets excited and buys EU equities like that's yeah, you're looking in the games for the guys that got set on the

race. The the retail guys, we still feel like they've had an awesome win and might be back to to previous levels for for some. But if you look back over the last year, most of these most of these charts have gone up into the right now after or perhaps even less than that after having a bit of a brutal year before that. Well, so isn't that kind of curious, right?

Because, you know, you talked to all the positive like market thematic stuff and the narrative kind of I think gets wrapped around spot price and spot price is thin and manipulated, yada yada. But without. Spot without spot without spot, Yeah. Where is where is like where? Where's uranium right now? Where's the uranium? Like I said, it's a bizarre market. It's it's a truly wacky and kind

of perplexing market. And so much of this news just relies on a physical trust which is not related to the the fundamentals. Like it tries to piggyback off the fundamentals but it doesn't. So what do you, what do you think of this $200 million? What's going to what's going to like impact is this going to have in the spot market? I. Mean just looking at what you can kind of buy with it is interesting. Like you can get about two and a half million pounds ish.

Like we said before, they've got a bit over 66 for for context. And if you look at 2024 in the spot market, we saw a bit under £50 million trade. Now this is the spot market again. So this could be the same pounds gone back and forth a couple times between various traders and and the like. So it's, it's hard to get a, a

grasp. But yeah, we we saw the spot price jump up. So it'll be interesting to see over what time horizon spot use the cash and and invest it if we see sort of bigger volumes start to go through. But yeah, like, like we sort of said that that earlier time frame in 2023, the numbers we gave to what pushed the spot price up quite dramatically. Yeah, I'm sure that's what a lot of brokers were kind of pushed to now and say, hey, look what happened last time, get on board.

Here's a good trading opportunity. But I don't know how you can with any real confidence wrap numbers around it. Like, yeah, you've got a a buyer, a buyer who looks by all accounts like they they will go and buy pounds. But people that make predictions of it's going to be here by the end of the year kind of.

I scratched my head. We what we saw are similar sort of thing play out like not all that long ago, to be fair, Like Remember, Remember the start of 2024 and uranium was flying and you know, spot was buying pounds and and then all of the hype kind of fizzled out over. It's short term stuff, right? Well, that's because that's because the real demand has taken longer. Things take time, right?

This is this is financial demand that's yeah, moving, moving in the traded spot market that that that gets the equities to respond pretty sharply. And you know, people are making very handsome like profits out of this trade. Is it is it a true reflection of like future earnings growth? That's the question mark. Yeah, Yeah. I mean, and you'd ask a sort of person that makes the pitch saying look at what happened last time, what happened after spots stopped by the pounds, it just peeled off.

So it depends what your time horizon is when when you look at this. And your point on the, the earnings potential of the companies is really interesting because if you look at some of the names in the ISX now and you try and back out a uranium price and you use kind of middle of the, the, the sort of Rd. numbers on mining assumptions and these sorts of things. And you, you let the, the sensitivity be or the, the variable that moves be the

uranium price. Like I feel like you're, you're getting a, a price backed out that's well over 100 bucks. Like it's you, you look at the market caps of some of these businesses and the mine lives that they've produced and the mining costs that they've kind of indicated to and all these

sorts of things. And you try and back solve like, yeah, you might have expectations on them perhaps being able to extend the mine life or find new pockets and yeah, at a higher grade and all these sorts of things. But there still needs to be a bit a bit of back solving to be done or you're just you. Still use DCFS to value these companies, right you're living. In the multiples multiples. You're living in the old world. We don't need those things anymore. They're ancient.

Yeah no, I see what you mean. And like, and that's the yeah the overarching question especially like if if a lot of the price actually is different by short squeeze. That's not, not a reflection of fundamentals, although like, you know, yeah, we we get a second hand that the the term pricing is, you know, is, is, is is notching up like pretty steadily at a decent, decent tick. So like that's the that's the reflection of of earnings growth is that's what's.

Turning to some term price. But the yeah, this, this the at the end of the day, these equities move to the tune spot. Yeah. And spot. Spot is an influencing spot. Yeah, if you're in it for the long term, keep a keep a good eye on what those sort of term contract numbers. You start to see anything kind of come out after the European summer like we always hear, mate. Which European summer this this one coming up, or the one before that, or the one before that?

I'll get too skeptical. Yeah, OK mate. Well, talking about uranium has got me thinking about how mines are powered, and most importantly, how they should be powered. So you're thinking about how mines are powered today and how they might be powered in the future. Maybe I am and every time I end up thinking about cross boundary energy. Cross boundary energy. OK, tell me why. They are the first name that comes to mind when I think of de

risk financing solutions. JD Hybrid Power stations you can rely on solutions that can save the miners cash. OK, mate, you, you've got me interested. It's it's pretty amazing as well. So not just power supply, we're talking fully financed turnkey energy solutions. Zero CapEx, JD, zero CapEx, cheaper OpEx, less stress while you build your project. Where do I sign? What about? What about? Does it matter where my project is? It does not matter. It doesn't matter. It doesn't matter, mate.

You could be in, you'd be in WA if you if you wanted to, but you could also be in Madagascar, you could be in Sierra Leone. It it truly does not matter. Cross boundary energy will go anywhere, all right. Mate I'm I'm on board if you are after a hybrid power station that they risky project and saves you money. Sounds like I should just call cross boundary energy. Reliable, affordable, clean energy customized for your mind. Go cross boundary energy all

righty. Be honest, New world resources. We've got to talk a bit about these ones, mate. There's been some drama. There has been indeed. I'm, I'm, I've been, I've been getting in the weeds a little bit the last few minutes. M and AI thought you might have

been mate. May 21st New World enters A scheme with Central Asian Metals, who will also call CAML Now that came out with an agreement for CMACAML Camel Camel Mighty Camel to buy New World at $0.05 a share, giving them a a rough valuation at $185 million. I think that things like a 96% premium to to last. They've been trading in the twos before. That big, big, big, big premium, Yeah, great, great outcome for

New World shareholders. And on top of that, New World's currently in a trading halt right now. That trading halt references a bump in consideration on its way for shareholders, those lucky shareholders. But why the increase? Wasn't it already a giant premium? They are licking their lips,

right. So we see that announcement and then we see a change in substantial come out, right Canterra Capital. So these guys have emerged as a 12% shareholder and they've paid up at a bit over $0.05 a share on average. They've been, yeah, they've bought in the high fours and you can see that the highest price they've paid so far, 5.1 cents a share. Yeah. And and the quick one O 1 on Quintero, these are Canada based private equity groups.

So they've got a mandate for critical minerals projects as well as kind of related infrastructure. They previously actually wrapped up Southwest Critical Minerals, and this one's particularly interesting because they were the owners of the Pumpkin Hollow project in Nevada as well, Copper project, US $128 million. So it's a very similar style of project in a sense, you know? I can try and piece together what, what's going on here and what's happened. So Camel, Camel has a matching, right.

So if Quintera was buying stock on on market all the way up to 5.1 cents, then maybe Quintera's prepared to, to lob a, a bid for 100% of, of New World themselves for say call it 5.2 cents or higher. You can't make a takeover offer at a lower price than you've bought shares in the last four months. So you know when the offer is going to be, you know, north of north of that last price they've paid. And Camel, they've signed this scheme implementation deed with that matching right now.

I don't actually think Quintero has submitted a bid yet. I, I think the flagged increase in consideration from camel is actually just pre emptive. They're, they're trying to, you know, get on top of this before they, before there's actually a competing bid in place. But this is, this is still awesome. You know, there's live bidding effectively happening out here in the open, all to the benefit of the New World shareholders. That 12% stake to Quintera right

now is very strategic. I hear that they're trying to get their hands on 19.9% and the fact that Quintera is freely buying shares on market here tells me a very important piece of information. JD.

What's that mate? I want to draw your attention first to this this quote in the New World announcement, the day the deal with Camel was announced, it says the Board of New World has entered into this transaction following the completion of a highly competitive financing and strategic partnering process during which the company attracted strong interest from multiple Tier 1 counterparties, including precious metal streamers, specialist mine financiers and strategic partners.

Notwithstanding the compelling proposals received as part of that process, the Board, in consultation with its advisers carefully assessed the valuation, funding, timing and execution certainty of the transaction compared with all available alternatives. Now that there tells me two things. One, a process has clearly been run. 2, the word from that wording, I get the impression the bid from Camel wasn't the highest bid in that process. They're they're saying they weighed up all of these

different things. So to me, it comes across as the most certain, like the most execution certainty, but I don't think it was the highest price that they received. And, and so now, now we know that New World ran a competitive process because they, they tell, they tell that, well, when you run a process, what you do is you have the participants in that process that want access to your data room, They've got to sign a confidentiality agreement or ACA.

Those CAS include customary standstill agreements. If you're a public company and the standstill agreement prevents the, you know, the the participant from buying any stock in New World on market for a period of time, you know, call it 12 to 24 months is is kind of standard, but you, you know that buy any more shares, it stands still. You're stuck at whatever you're on at that point in time.

And you can see in the scheme implementation date that Camel executed that was signed on the 20th of December. So that process is being run CA sign 20th of December. It's a Christmas present. Nasty DD over the Christmas period, but but OK, so, so this, you know, that's, that's when the strategic process is being run. We can introduce that. So if Quintero is freely buying stock on market, what that tells me is that they weren't a part of that formal process. They didn't sign ACA.

Importantly, there's no standstill preventing them from buying stock right now. They're buying stock without having done due diligence. They haven't been in the data room. They're coming in hot. This is a This is a rare sight. That's that's pretty fascinating. And we know that they they're a relatively recent PE group and the second fund hadn't even been

finalized yet. Obviously that they had their first fund which was finalized late 23, but they hadn't put the final touches on fund 2, which is what they have bought the stock in at that date yet either. So it's. So interesting, right? Like you've got, I mean, they're, they're, they're prepared to write this cheque well, for at least 2019.9% not having done, not having had access to the data.

And maybe they've got synergies. And so that's letting them kind of bid up confidently on the publicly available information. But, and already you're getting the, the camel kind of just lifting consideration in preparation to be like, hey, hey, we're gonna wait. This is ours, not yours. Go away. So I, I just, I hope it gets juicy. I hope it gets interesting. I hope shareholders just have a have a tremendous win here because yeah, that like that's this stuff just gets gets

excited. It's awesome, Yeah. I think there's more to be kind of said, maybe even like a whole episode needs to be had on mining private equity. I know we've sort of spoken about it a bunch, but yeah, not totally convinced it's the right approach.

But we see, we, we do keep seeing a lot of these funds pop up, particularly like North American oriented because the endowments and stuff understand private equity, not mining, but they understand private equity and it's something they can allocate to. So, yeah, these guys, like I said, just wrapped up another US $1 billion. They they came from another mining private equity Canadian group as well and started this just recently.

So yeah, there's something more to be said there, as well as the fact that the copper names are just disappearing off the ASX. The juniors in particular, yeah. There's not that many seniors either. So yeah, Black Underbeard Xanadu, who we've spoken about recently, New world here. This breaks last year. We a bunch of them. It's. And yet the the there's there's new entrants coming on too. I don't know if you've noticed it. Marry Marker debuted.

Yeah. And. They they did a raising too and obviously we saw capstone coming list a bit down here. Well marry marker might be disappearing soon too. See, I think it's attack over targets. Yeah, I think there's a a bit to be seen there. Yeah. All right, mate. Underground mining commodities like copper, zinc, silver, all vital for our future. That's the type of project in this case at New World that is only made possible by ground support.

And when I think ground support, I think Sandvik ground support. And I want to share some more wise words from the man who has LED Sandvik ground support in nearly 20 years. Here is Derek heard money miners had. Four years in Mount Isa with work, it was that company called A and I back then I started as the R&D engineer, yeah, back then. This is what ultimately became Sandy Ground Support. Yeah, correct.

So, yeah, the A and I business got bought by the DSI business and the that that time the DSI business was Divvy DAG and that's DVDAC Systems International. That's what the DSI. Yeah, exactly What a. Name. So DSI actually goes back to like the the mid 1800s, yeah. Absolutely back. In German firm as well. Exactly strong lineage. Yeah, so like 1865 I think it. Was and so you studied engineering and mechanical engineering before.

Correct. So I'm a mechanical engineer, so through Newcastle University, but pretty quickly realized there's not too many people that stay true engineers and went off and did a business degree as well. So I had a career through the business that started as an RNA engineer, moved into a sales role and then sort of a bigger sales role and went to Mount Isa and lived up there for four

years and managed that region. And then came back and started managing the export business and then sort of the national business, then became sort of what they called a business unit manager and then progressed into the CEO role. Go Sandvik grant support. All right mate.

Last bit of last bit of chatter for today. This is an interesting one. Tell me, Cat. Tell me. Tell me what you tell me what you uncovered. So black cat have come up with these strategy names in past and they crack me up. I I love them no knock on them they're they're hilarious, but they are, you know, to the point they get your attention. So the previous one they had was all gold sooner. It's effective, you know, there's no confusion about it.

You know what they want, but they came out with an announcement earlier this week and they've added to it. So more gold sooner to be held longer is the new strategy name. And I don't think you need a marketing professional to tell you that doesn't roll off the tongue as perhaps easy as it could have, but. That's no, no man, I reckon you couldn't have asked that deputy for a more succinct like like more goals to be held long. I get your strategy in six words. Like, yeah, that's it.

They vowed it. Don't have to read it as little words as possible. So credit to them for that. And we're talking about it. We're talking about it because the strategy itself is interesting, so. What are they doing? Goldie's wanting to hold more of their liquid assets in the form of gold bullion as opposed to cash and. That's what Blackout's saying. They're they're they're came to, Yeah. And they've already got $24 million worth of bullion.

Yeah. They want to keep as much bullion as as possible and only sell what they need to. Yeah. And in their case, they've sort of given it a, a buffer like a a #20 million equivalent. But I think it's worth discussing. I think it's a really interesting strategy that that they're doing and there's a few different features of it that

need to be discussed, right. So there's something to be said for the taps tax implications of this because gold, when you're a gold miner that you haven't yet sold is unrealized revenue, right? Yeah, yeah, yeah. In many jurisdictions, income tax is only triggered when the revenue is realized. In Australia, that unsold gold is inventory, not not revenue on your balance sheet.

Therefore, no assessable income is is recognized until that sale actually occurs, which means a natural deferral of your Income Tax Act that has an impact on your on your cash flow. Metrics as well. So the gold that stays on the minus balance sheet, here's a bit of a catch though. It'll be valued typically at the at the lower of cost price and

market value. And because the, the market value of gold typically tends to go up over time, in reality, it's it's held on your balance sheet at cost price. And so in a rising gold market like these miners that choose to do this from time to time, they will avoid recognizing a, a high, a high book profit on that. They just keep keep it on their balance sheet of cost. One for the accountants out there. I don't mind it though. Like I don't mind the strategy.

I don't, I don't mind it at all, right. I, I think if you're of the philosophy that that gold is money, which clearly a lot of your investor base will be kind of partial to given you're investing in a gold mining company. And I think it's too much of A stretch to, to think that then it, it makes perfect sense. It's kind of interesting yet, yet your market in, in dollars, but you kind of got a market in something right.

But I it, it, it makes total sense if if you are wanting to compete against inflation and all these sorts of things. I kind of like it. The market would hate you for just like accrue like building up cash only on your balance sheet and having no plans to to distribute that to shareholders or no way to reinvest it or organically.

Like, I do think, you know, the market would prefer to see reinvestment for growth with the proceeds of the profits of a Gold Bond for sure, or or distributions to shareholders for sure. But you've got something leftover at the end of that and you decide to keep it in gold or you've got your available liquidity in gold. I don't hate it. I don't think the market is going to love it or value it in general, though. And there's a couple of like, there's one big precedent I can

point to that it's a very peculiar case and maybe not the best precedent to talk about. JD, please, you know, do you know who I'm talking about? I do. One of our favorite companies. Yeah, it's, it's actually two companies Tribune and Rand. So these are the JV partners E Kendana joint venture to, to Evolution mining previously was it was Northern star of the JV partners.

Now, now Tribune if you look at their books, they equity account Rand. So all you've got to look at is the inventories on the balance sheet of of of Tribune as it's 31 December in their accounts. You can you can see gold on hand at cost 177 million of gold bullion, but it's valued at cost JD and neither Tribune nor Rand will tell you anywhere how many ounces they actually have bullion. You you're just left with that number trying to figure it out. But if you do your homework and Perth.

Means it's just their fault. Mate, if you. If you can't trust it. I haven't done this homework myself, but I trust the people that that did do this homework. Go through the history and you can deduce what's been produced and what's been sold over time and you can back out. The Tribune and Rand collectively have about 130,000

ounces of gold in the accounts. At the Perth Mint, 130,000 ounces of gold, while it might be be valued on the books at $177 million, is actually worth $680 million a current process. That's a staggering amount of of bullion and I I'm pretty sure that that this is the single largest account of gold on hand at the Perth Mint. Crazy. And what gets weirder, mate, if you just add the market caps of Rand and Tribune together, you'll get $370 million.

Now that is, that's like half the value of the, the gold alone that they have on hand, not least of which they still clearly have an, an economic interest in a joint venture that is still producing a lot more gold that should be worth a fair bit of money. So this is like as negative EV

as they get. Granted, you can't quite figure out when you're going to get paid here because because there's, you know, kind of a, a complicating share shareholder dynamic and structure and a few obstacles in the way to A, to A, to an outcome if you were an activist. One or two. One or two, One or two. Fascinating example nonetheless, but really it's a ballsy strategy. Kind of admire the strategy to to do it and to not really give a crap about what people think

and just just a cream like gold. I hope the Mint still has that gold. Yeah, I'd, I'd probably diversify the mints that I hold the the the bars with it's a lot. Of faith in the Mint. Is a tremendous amount of faith in the in the Perth Mint. So, yeah, I, I think it's really interesting if we go back to the the strategy again, looking at like parallels, we've seen this in uranium, but it's kind of weird.

Like you don't see it in any other and it just wouldn't really be OK in any other commodities. So yeah. Why is that? It's because it's because like obviously the dollar is clearly. Yeah, and. The value that arose over time and gold is seen as like a a clear and proven way of circumnavigating that, whereas other commodities aren't as inflation resistant. Yeah. I mean, a lot of people point to commodities being the good inflation hedge, but not all commodities are equal, right?

So yeah, it wouldn't be chuffed if like a zinc producer is going to start doing this, but gold, maybe it's OK given the many thousand year track record. So yeah, I think they could have put a slightly better chart than just going back 20 years to to prove their point. But I think the the strategy is interesting nevertheless and I don't mind it. What? Do you think money minus let us know Ford gold or what cash or none of you above. Or what else? All righty mate.

Let's thank our wicked partners for today's episode. Mineral Mining Services, Grounded Sand, Vic Ground Support, Adriel and Boss Boundary Energy, Buduru. Buduru. 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.