Why Tether’s Gold Mining Royalty Play is a Massive Deal

Over 5 billion in physical gold bars on the balance sheet, Tether has been pouring their profits into gold. Like a small country. Yeah, and enormous they are. They're buying a lot of gold. These guys are gold bulls. JD, you thought that Franco Nevada had the most beautiful business model in the world. And it is. It is up there, I assure you. I'm going to tell you why There's an even better one than that and it's Tether. Stay with me here. And they've just done a deal to

buy a mining royalties business. I'm going to talk all about it today. Mate, we're also going to talk about coal, one of the most fascinating names in the game at the moment, Coronado. They're getting battered from all ends. They need a saviour though, and we're going to dive into whether they will find that. Saviour talking about coal and crypto. I don't know if our yeah, the people that that love Bunny mum will be paying attention to this journey, but they're they're

riveting stories. I can't wait. You know what else I can't wait for? Before we talk about the latest and the greatest in the mining world, we need to talk about a certain GC grounded construction. I know you're a you're a keen reader of the Financial Review AFR. I am indeed. And you might have caught this. I saw this headline just this week. Lavish food and luxury FIFO workers just want a good night's

sleep. That's the finding of the most comprehensive study of workers in mining camps, which researchers hope will help resource giants keep staff. Happy. Do you know what that sounds like to me mate? That is more confirmation for anyone out there that if you're going to build a mining camp, you need grounded. That should be your first call. Make 170 projects completed, $1800 delivered and work across nearly 300 assets. Enormous.

Goes beyond that as well, mate. They've worked with FMG, they've worked with Rio, they've worked with Goldfields, just to name a couple of their great partners out there. Look. Here's the thing, the FIN survey is probably the best insight we've seen into what workers actually value. And we know if workers are happy, they're more productive, but what are those top points that they care about, mate? These are the points that your

miners really care about. They care about noise insulation, they care about room size. They care about the ability to personalise their room, room aesthetics as well as the overall camp design. That just to me, it's like I know the solution, you've ratted off the problem, but I already know the solution. So but it's kind of it all makes sense, right? You kind of insulation. Yeah, well, you don't want to be

awake from the noise near the camp like you need sleep. 100% mate if you want to keep the campers doing the hard yards out there, the guys and girls working in the mine happy, just give grounded construction a call mate. I will indeed. I look forward to calling Paul Natalie. OK, you probably didn't see this

coming because the world's largest stable coin issuer, Tether, yes, the same Tether behind USDT has taken a meaningful stake in a in a gold and copper mining royalty company, elemental Altus royalties. And I don't think it's a side bet. I think this is a signal. Yeah, I I wanted to like, underline and highlight what you said there. Like this is so fascinating. It's it's so interesting.

So why don't you start us off by just saying first who tether, tether investments are and then secondly about elemental out as the the royalty group? Yeah, well, Tether investments like think of them as a assistant entity of of Tether. The stable coin issue up. They've acquired this 34% stake in Elemental Otis Royalties. That stake came by paying 122,000,000 Canadian dollars to Lamancha. You remember Lamancha? JD had him on the show.

Mate had had, Yeah, we did. We had groom groom on the Greek. A lot of time. To be on the show, yeah, but but that's of course the the resource fund of the Egyptian billionaire, the grip size. But Tether didn't stop with the 34% stake and now simultaneously with the deal, they got this option to buy another 14% of Elemental from A1 for another 53,000,000 Canadian dollars, which if they exercise the option that would leave Tether with a 48% stake in in Elemental

alters. And on Elementals side, they're one of the smaller listed royalty companies out there with just a a couple of producing royalties and and a lot of development ones in their portfolio. A couple in our backyard mate. Yeah, indeed, their, their like portfolio is, is gold dominant and, and the flagship royalty there is, is Karla Window. That's a 2% NSR over Capricorn's color window. But they've also got this 0.5% NSR over Lundin's Casarones. And yeah, but a very gold

dominant portfolio. OK, so so dive into what what

makes you so interested about this deal and what things could look like going forward. This is Tether, like a lot of people have probably heard of Tether and a lot of people are suspicious of Tether and a lot of people, you know, like there was a lot of a lot of a lot of kind of like negative thoughts and views out there about, about Tether. But I just want to pause all of that for a moment.

And so I don't think many people are actually aware of just how phenomenal the business model of, of Tether is. It's utterly insane how good of a business this is.

And it's so simple. Tether popularized the tokenized stable coin U.S. dollars is of course the the flagship product there, which they wrap into USD T And it turns out there's a huge amount of demand for crypto native U.S. dollar, mainly because people want to use that in the many online casinos that are crypto exchanges and associated products of that ecosystem. You give Tether $1.00, you receive 1 USD T just Tether stable coin in return, right?

You can use that USD T in crypto markets, think DFI apps, etcetera. Now Tether, what they do is they keep your $1.00 instead of putting it in a vault. They invested mostly in short term U.S. Treasuries which are yielding like 5% plus per year. Tether earns interest on your dollar JD. They don't pay you any interest though. So you hold a digital IOU which is a USDT not a deposit. Tether keeps 100% of that yield, which is attractive at the

moment. They have issued over 150 billion USD T That is a staggering number to sort of conceptualize. Now even if only 80% of that is backed by treasuries, that's 120 billion U.S. dollars earning 5% annually. That's over 6 billion in annual profit from the treasury interest alone, with a tiny team to the House of like 125 staff and like effectively negligible operating costs. Phenomenal. There's not too much more to be to be set on it.

It's just it's incredible. It's it's good business if you can get it. Crazy. It's yeah. Like they print digital dollars, they earn interest on real dollars, and they give holders none of it. That's like why it's the most kind of profitable company you've never heard of and never

seen audited. But you know, irrespective, you kind of have to just respect the operational efficiency of that business model, which is experience like tremendous tailwinds, but just tremendous like market dominance, tremendous growth in all, in all aspects. It's a truly phenomenal business. And in the mining industry, we have our own truly glorious business models being the royalty companies. You only need a handful of of staff, right?

You collect a check every month from your royalties and it scales so well. You never need a big team as your revenue grows in theory, right? So Franco Nevada being kind of the industry leader for for a very long time and I always find it astonishing to learn the, the profit of that business for, for so few employees. Like take the 2024 numbers of Franco, their net income is $552,000,000 and a head count of 45 people. That's $12.3 million in profit per employee at Franco Nevada.

Like there is not a mining company in the world that could, could achieve that, but a royalty company can because of the beautiful, the beautiful model that a royalty is. It's a staggering number, and you would have a tremendously hard time finding a business that comes kind of close to that in any industry, except I happened to know one, JD.

Let. Me guess in 2024, get this profit, an astonishing 13 billion U.S. dollars on an employee headcount of like 125, right, That's 104 million profit per employee that yeah, the operational efficiency is just,

yeah, unparalleled. That's eight times Franco Nevada is profit per employee who I thought would be impossible to be. So whatever your opinion of of crypto is, Tether is just a truly tremendous business and both Tether and royalty companies operate with lean teams and high margin business models. All right, pulling it back to the deal now. I I really want to point out a couple of lines from the announcement out of out of tether right now.

I'll read these quotes Out says. The acquisition was made as part of Tether investments growing commitment, tangible assets and precious metals as part of its broader vision to enhance the transparency, utility and accessibility of digital assets backed by real world value. This investment reflects our long term confidence in the fundamentals of gold and its critical role in financial markets. Elementals royalty model provides diversified exposure to

gold production around the world, aligning strategically with our vision or Tether gold and future commodity backed digital asset infrastructure. It's a bit to take in there, right? But to start with, I want to hone in on that last sentence where Tether's CEO mentions Tether Gold specifically. And you know that glorious business model I described of Tethers as it related to USD T?

Well, Tether has another product, a much more nascent one called XAUT or to the Gold and the concept is similar. You know, it's this gold backed digital tokenized asset. At the moment there's 150 billion USDT in circulation yet to the gold or XAUT only has about 0.5% the the the size in in circulation of 246,000 ounces of gold you can think of that's like U.S. Dollar terms like just less than 600 million at our current market value. But there's a big difference with the business model.

There is like the economics aren't the same at all. This is an asset backed token, so the gold that's backing that asset is stored in a Swiss vault. And unlike U.S. Treasuries, that gold earns no yield. Right? So XAUT is a far less lucrative product for Tether than USDT. Yeah, there's demand for this product, right? Because many crypto natives would would rather their spare capital be sitting in the thing that tracks the gold price, not

the US dollar, right? So is Tether investing in mining royalties as a means of backing their product then? Tether gold I was. Trying to figure this out JD, because they mentioned Tether Gold explicitly in that that announcement. But here's a few other things you need to know about Tether. That company, like private, still still a private company. They have not paid many dividends historically. So they reinvest.

They reinvest the profits. And I already told you like how phenomenal the profits are in recent history. And if you look at the they do release like a balance sheet as a thirty 30th of of October, I could find one. And on that balance sheet, what you can see sitting on there over 5 billion in physical gold bars on the balance sheet. That's that at the time 10 times the value of the the tether gold, you know, gold tether on on on on issue.

So it's best I can tell Tether has been pouring their profits that I get from their cash printer into gold. Like a small country. Yeah, it's, it's right and and enormous they are they're buying a lot of gold even when it's not needed to back their gold Tether product. These guys are gold bulls and Bitcoin bulls because on that balance sheet, there's also over $5 billion in Bitcoin, not altcoins, not Ethereum, not any crypto note, not NFTS. This is it's Bitcoin and gold and U.S.

Treasuries like is there's, there's none of the other crap, right? This, this is a hard money crowd. Whatever you, whether you agree with their definition of hard money or not, that's what's like, that's the the view of the the people behind Teller. Fascinating mate. So what does it all mean?

There's a few things here like #1 if you just think of Elemental Altus as a, as a royalty company, like if you're willing to pay 48, if you're willing to buy 48% of the company, you could ensure a bet they'd be willing to buy 100%. Now, the way the initial deal is structured here, it bypassed in Canada's like annoying laws. So if, if, if they embarked on a full change of control, like, it could be a different story for

actually getting a deal done. But yeah, I dare say they'd they'd want to wrap the whole thing up #2 Tether's business model at its core is profiting off the devaluation of the dollar. Like that 5% yield, thanks to like that, that interest rate is there thanks to inflation.

That's profit for for Tether. And paradoxically, even though they're profiting from dollar devaluation, they're phenomenally important in the context of the US financial system because they've become one of the largest buyers of U.S. Treasuries. You know, like when people are depositing dollars at Tether, what is Tether doing? They're buying U.S. Treasuries to ensure that that that USD TS is is at least backed. Now they're not. And what are they doing? Their profits.

They're not. They're not putting them into more treasuries. Their profits. They're putting into Bitcoin, into gold and now into gold royalties. This is yeah, like, like I said, this is a really, a really hard money crowd and they've got more weight than most central banks and they know that royalties are like, I suppose the superior hard asset when it comes to exposure to the, to the, you know, to gold equities.

You you much prefer the royalty company, you know, over the long term as opposed to being exposed to the capital allocation dilemmas of of of most of the miners over over the duration. And if you just think of Tether, right, the available powder that that entity has to deploy here is next level. They if, if they're motivated enough to do this deal with Elemental, you've got to ask what's next.

Like Elemental was a neat deal where they could get 48% exposure in a single announcement or a single deal. Like there's not too many royalty companies where you could do that. Like, in fact, I can only think of one other one where you could get a meaningful stake in one announcement. And that's like triple flag, right? You've got Elliott owning 67% of that company, a $6.6 billion company.

And it might seem crazy, but I genuinely could envisage a world where Taylor bought Elliott steak and triple flag. Like that's just the amount of profit that this, this company kind of produces annually. It could, it could, it could reasonably be be distributed to something crazy like that. You know, I would, I'd love to see, I'd love to see like how much of Franco Taylor already owns or how much of Wheaton or Royal Gold or Cisco royalties that Taylor already owns.

Because I imagine they've got investments and stakes in these royalty companies already if they're pretty familiar with the asset class. Yeah, you have to think that they've picked up stakes across a raft of them. Anything else would have come to mind diving into this one. I've seen like some some people talking about this deal and kind of reflecting and thinking that maybe it's a prelude to a potential launch of a tokenized royalty stream.

That's kind of interesting. And if you can acquire a decent enough like portfolio of royalties, which Tether can because they've got the cash to, to do that, that is a much faster way to get a product to market than like the myriad of sort of start-ups that are are trying to do a similar thing. Like a lot of there are start-ups out there trying to tokenize royalties and they kind of have to finance them into existence sometimes or do some quirky thing.

And you've got to wait 20 years for hopefully that royalty to now be producing to be worth something. And you face a lot of liquidity constraints. But Tether can just buy decent royalties and maybe build, yeah, some some infrastructure or product around a tokenized role with your stream. I think it's a bit to play out there, but. To sling one more question on you mate, can you envisage your world?

I'd imagine some money miners want to hear this question where these players would finance some of the bigger gold mining companies directly. I don't think so, yeah. I don't like. I just don't like.

I think there's like a lot of expertise that comes with, with writing royalties and I don't think like an industry outsider could, could actually acquire like 100% stake in like a in one of those companies and, and, and replicate that, that discipline and that skill and that knowledge you have to. Money goes a long way to to solving those problems. But who? Cares if you get the royalties at like the world's best royalties, then you know, but.

When you when you've got the people running those companies that aren't the ones that put those royalties in place anymore and they don't have all the upside from from what the earlier people at the companies did in doing those deals, then perhaps as Wiggle Run to incentivize them, yeah, who knows. Yeah, you probably, Yeah, that is an an interesting point like I could see Ted to be. Without a team of just like a list royalty riding.

Yeah. I could see, I could see where we're like, yeah, Tethers cash was capital that could be tapped into by, you know, a partially tethered owned royalty Co and used to used to finance like I could see that yeah. And Taylor was a company that was really on the fringes of like acceptable, but has been like completely endorsed from a credibility perspective in and a few. Wobbles along the way, but yeah. Yeah. Yeah. Oh, awesome, mate.

Before we jump into Coronado, I want to share a snippet from a recent conversation we had with none other than Derek Heard Sandwich Ground Sport boss. So this is a man who knows more about ground support than almost anyone in the business. Hear it from him now. What's the biggest misconception about ground support? But it is that simple. It's a consumable. That's the biggest thing, that

it's a simple, simple thing. I could just buy from anyone, you know, and it's, you know, traded product at the end of the day. What's the risk of thinking that way? That's the the quality and safety aspects. You know, it's it's a safety product. Yes, we're consumable in nature.

We're a volume business and we do get put into the consumable category, but we're a safety product and that's why that quality assurance and the the after sales backup is so critical and that's what we really focus on. Thanks, Derek. Go Samic ground support.

All right, mate. What is going on with Coronado? All right Coronado, there's a there's a few questions to try and answer here Firstly, is New Hope going to come and try and save the day? Is 7 that kind of elusive family office of a Czech billionaire lurking in the background, who mind you would be counting their lucky stars they didn't buy these massive stake some 12 months to 18 months ago. You've also got distressed debt players out there swirling

around. And to make the story even more fascinating, you've got a stock that's down 90%. So this might be a bit better for a lot of equity holders. But we are going to try and flesh out some potential Silver Linings in this story as well and see if there is anything left or in any case if there's any learnings from other people who are keen on the coal space. I'm tremendously interested.

I mean, when you see volatility like that in a share price and liquidity concerns, you've got me interested. Why are you interested, Janie? I am interested for a bunch of reasons mate, probably lining up with why you're interested as well, but it falls in that area of like a a potentially interesting opportunity for some of the obvious reasons. Massively depressed commodity price potential recapitalisation event, a a equity where the market hasn't given it too much

hope of survival. You know, see the, the share price for that one. And I thought regardless, given the state of where coal markets are at, given the state of how some of the other players are trading, it'd be worthwhile just refreshing ourselves on on the space to to see what we can kind of do here going forward. What is like, yeah, like, I don't know if I've ever done a deep dive on Coronado, and I probably should have, but like, what's the 101?

I think funnily enough, I'm in the same boat as you and it's because of the, the problems now facing them. They were just too much of A turn off to do the deep dive. But the, the one-on-one is that Coronado is a predominantly met coal producer operations in Australia and USA sort of 2/3 Aussie, 1/3 USA split by revenue. Cara is the the asset we we talk about here in Australia, 90% of the revenue is is met coal, but that kind of comes on the back

of this deal. They signed with the Queensland government, well it was related to the tenements and then signed with the the Queensland government, which I only mentioned because it becomes relevant to some of their financing discussions now. But that that is the thermal coal that gets sold to the Queensland Government to fire the coal-fired power plants there. So there's a strategic importance of supply.

There is because an agreement is coming or is changing in 2027 and it gives them new material to market and they've just signed an agreement to to sell it to the Queensland government again. So that that is in a nutshell. A couple of points on Coronado mate. What's and what's going on with the the latest sheet? So to, to capture it in like 1 line, you've got high cost operations, you've got plummeting commodity price and you've got debt and that equals a very troubled outlook and the

company's sell. The recipe first disaster in our world yeah, exactly. Financial leverage operational leverage. Yeah. Back body prosper. Oh, but it's beautiful. There's nothing going for you. It's. Beautiful when it goes well, but it doesn't always go well. So these guys have been actually investing heaps in their assets, which is interesting given 2223 was a you know, a really rich vein of profit years for the coal miners.

They've now been investing a lot of cash in their assets, but they've remained indebted through throughout. So they, you know, having had that combination of being unprofitable and all that debt are are now coming unstuck because coal prices have peeled off so much. And if you just look at the last quarter, the March quarter like these guys report on a calendar year basis, but March quarter saw cash drop US $110 million in quarter.

Now a good chunk of that was investing cash flows, but that kind of tells you to an extent what you need to know. Yeah, and the debt? So the debt is, as of last reporting before these latest negotiations come into account, about 200 million U.S. dollars in net debt. Now. Yeah, it's likely a bit. There's been changes given they're bringing cash in the door, but it's given their loss making been expanding out the

other way as well. That's greater than their market cap now, which in Aussie dollar terms is below 300 million dollars. So the the key piece of debt they've got $400 million bond, which is a tradable bond pays a bit over 9%. Now that costs them on a yearly basis about US $40 million. So just making that payment alone is is a bit hard Yaki, given they're not making any profit and the bond cents have traded off to $0.70 on the

dollar, which means they're yielding like 18%. And I'm sure there'll be a bunch of people out there who aren't so financially inclined and, and don't care about how bonds trade and all that stuff. So what it means in a nutshell is that lenders or people that play in the, the bond market, I'm not certain they're going to get back every dollar that has been lent to the company. And given that debt comes before equity in, in the stack, it's a, it's a pretty ominous warning or

sign for shareholders out there. And it's no surprise that you've seen the stock right massively down as well as you know on the back of seeing that the bonds trade down massively in the past couple months. Yeah, man, $0.70 on the dollar fee bonds, not a not a good sign, no. No, it's not at all. So what can they do in this situation so. They've got, they've got a couple levers to pull and you know, I trust they are looking

at every single one of them. But firstly they're negotiating with the the Queensland Government. So this is their agreement with Stanwell coal-fired power stations as I sort of mentioned. So who's behind Stanwell? That's the that's the government. That's the Queensland government. So these guys have been selling a bit over 3,000,000 tons per

annum thermal coal. And firstly they've been paying these massive rebates, which ties into the tenements, goes back to the the asset, the history there. And secondly, they've been selling that at essentially massively discounted prices, but that was going down to 2.2 million tons being forced to be sold to the government in 2027 onwards, which essentially means they are negotiating a, a prepayment for those tons that they're going to produce from

those years onwards. So what they're saying to the Queensland government is we'll continue to give you the amount that we've been giving you today, but we need cash upfront, we need it now. And you're incentivized because you want us to be around to deliver the tons to you. So that explains the US $150.00 agreement with the, the state government there. It's a, it's a kind of split 75 of that is a temporary waiver on this rebate, which is not

insignificant. That rebates cost them over $100 million in in a given year and then 75 is prepayment for coal that they're going to deliver. So if you step back and try and value the business, this is not good for the overall like NPV of the the project or the sort of DCF for the business like your your foregoing future profits to get cash in the door right now, but you have to do it. They can solve a liquidity issue. Then exactly. Yeah, if it keeps you in the game, you've just got to do

these. Things and sometimes your share price like falls off because the market's pricing in a cap raise. You can solve that with a prepayment instead. Then you might get some short term repriv on that front which you know might make an eventual cap raise. Yeah, exactly. And cap raise and Speaking of other negotiations that there are a few on the table. So firstly, you've got this deal with oak tree.

They came out with a great deal with oak tree binding, they called it. Although both parties can still back out the deal. So it's not completely binding I mean. Oak trees. These are distressed debt experts, right? Yeah, yeah, they, they absolutely are. The stock ripped 50% on the news that they'd signed this deal. So it was an asset backed lending facility, 150 million U.S. dollars to keep the lights on essentially that's on the

table now. Then you've got rumors that New Hope, the thermal coal producer who plays in both NSW and Queensland, is potentially going to come in with refinancing or to acquire Coronado. It's super interesting. And I mean it gets more interesting for New Hope as

well. I think because they've been held back to an extent by potential M and AA lot of people thought they were going to take over Maliba, which they own 22 ish percent in. And you know, for for a number of reasons, this has held them out because that was going to be a rumoured billion dollar transaction. Yeah, you compare it with this now. And if they were to take over Coronado, yeah, they would be getting 3X the amount of volume and they would be paying a much

smaller price tag. But a lot of asterisks is there. Shooting the debt, Yeah, They've also got a. Yeah. And that doesn't even take unit costs into account and everything and the CapEx? It might still have to be dark, yeah. But New Hope have a much healthier balance sheet and they're backed by Sol Pats as well. So if we're going to dive in deeper into potential acquisitions, we've got to talk about EMG.

These are the private equity. This is the private equity group that listed Coronado in 2017 at a 3 1/2 billion dollar valuation. They still own 51% of the company. So no deal gets done without their say. So super hard to get a read into them. They're an American group, do a lot in the oil kind of space as well. Yeah. We don't know how much sort of cash they have, how much they would want to tip in, but they

have final say off essentially. They they certainly wanted wanted an exit like 18 months ago when that was supposedly a done deal with 7, but never that, you know, that never actually eventuated. Yeah, it it. It would be tough not to to ponder that one every time you wake up and you look at what Coronado is currently trading at. But times have changed quite a

bit. And given where natural resource PE has been in that, the sort of state they've been in lately, it's hard to get a gauge on how much liquid cash these guys would actually have, what they can actually do. So we'll, we'll, we'll talk about a few other options. You've also got 7 like you mentioned there. They were rumored to be buying the debt of Coronado just recently buying buying a Porsche. On market, yeah. On market $40 million was the the rumor there. Yeah.

Now we know they're interested. They're trying to buy a big stake in the company not too long ago. They have bought numerous assets in in Australia in the past. That's a that's a big question mark. Like you, you need deep pockets to take on this operation in Coronado because you are buying loss making mines. So even if you can stump up the money to buy the company out, you need to be able to stomach potential losses for a number of years to come as CapEx is being spent.

Like CapEx has been pulled all the way down to just critical stuff. Yeah, So they've got big expansions, Buchanan and here here in Australia as well, going underground at Cara. It's been winding down, but you still need to spend a lot of money on the assets. So you need to be pretty deep pocketed to do a deal here.

Well, if they're buying the, the, the listed bonds on market at whatever $0.70, then like the bigger risk when you get a distressed situation like this and you've got stressed that guys like floating around is that you get primed and there's some new debt that enters the cap structure, which is, you know, seeing you secured and ranks high than you and yours like you rank even lower than that because you bought the listed bonds, which may be unsecured. Are they unsecured or? Secured.

I believe they are secured. Well, yeah, regardless. Like you could still theoretically get primed, but maybe they just want like they want to sit at the table. Maybe they're buying secure deck because they want to sit at the table. Maybe they have interest in Australian asset, so all the US ones but not both. Like I'd be very curious what the ambitions of Seven Group

are. Yeah, You'd have to be doing your homework and potentially like you say there, you could buy it. If you do want to buy it, split it out and try and sell. I mean, even in this environment, you're not going to get a great price for the US assets. But if it goes under like and you've got secured debt, even if you do get primed, you've got a pretty meaningful like seat at that table as opposed to it.

Things get messy. And that oak tree facility, there is a refinancing of an, an already existing facility. So they're in and around there. And these guys, yeah, they breached covenants already and they didn't report that for a number of months after it happened. So there's a, there's a fair bit going on. And then, you know, an equity raising is also potential on the table. I mean, it's essentially A

recapitalization at this price. And then we know there's other groups that like financing coal players, Farallon is the name that comes to mind areas as well. Given the the profitability again of the assets, I'm not sure how much more they could actually stomach. So it's it's a tough question to answer, but potential that they're floating around too. It doesn't. It kind of all come down to can can the assets turn around or

not? Well, here's the thing going back to the point that I made earlier mate on them investing in in the assets so that they have been putting a lot of money in. They are expanding the profile. Overall output is going to be 3,000,000 tons higher. As you said, Cara. This is a cross. So they have been Buchanan is the is the expansion in the States and Mammoth is the underground at Cara. So unit cost across both operations should be coming down

that they will come down. It's just what shape Coronado is in by that course those rebates they are coming off. So you know that that agreement with Stanwell will happen and the you know, come 2027 unit costs will be lower. It just depends what state the company is in. CapEx is coming down, although it's still pretty hefty. It's going to be about 70 ish, $1,000,000 going forward and you've got others, you know potential levers you could pull.

There is marketing rights they could sell again, kind of selling a bit of your future upside for cash in the door today. So there there's a few options on the table and I mean we need to talk a bit about the coal price, right, because there's not many players in the market that are so unbelievably talked to the coal price right now like this stock is so beaten up. If there were to be some sort of incident or disruption, supply disruption or something like met

coal prices is very weak. Demand has been weak at the moment for a number of factors. But if there was to be an uptick in that, the thing would thing would RIP higher because the the dynamic would completely change. Yeah. Now you, you can't sit around hoping that'll happen, but it's something you got to keep in mind. Yeah. Whether we see a capital raise as well is another potential catalyst.

If you're someone on the outside looking in, if you're, if you're there right now, it's maybe not what you're you're hoping for, but everything needs to kind of be on the table to to save the business. Yeah, and you're also making an equation or an estimate on the like the the state government's like propensity to actually, yeah, provide more generosity as things like could, could look worse more and more diet you have you have the state government putting their hand

out more. It's kind of interesting that they they had asked for royalty relief again and they were sort of rejected on that front. But maybe if the thing the situation gets even worse, the the state government changes their tune a bit more on that one. I wouldn't hold my breath because. Well. Yeah, Carl, you need to see that happen before you're turning the lights off. You know, you need the line of sight on that.

So yeah, yeah, there's there's there's a bit to to Stew on there, but there's certainly players interested in giving cash and making sure this this operation, this company survives. So yeah, we'll see if it's too little too late or if a few parties can come together and make something happen. You. Can make and lose a lot of money by like yeah, doubling in these sort of situations like just as easily have like a double as you could lose all your money I'm taking.

Yeah. But I mean imagine there is the recapitalization and you get a bit more clarity on on on unit costs and all those sorts of things. You could be in a interesting position if you've you've got a three or four year time horizon looking forward because coal prices at a low ebb talk like we mentioned, but you need to kind of get there first. Any other takeaways, JD? Mate, there, there. There's a sort of couple, right? The, the like way in which we're seeing commodity cycles and

capital cycles play out. I find fascinating because we've spoken heaps about it over the, the, the past couple years, but I feel like we're actually seeing it in, in real time now. It's, it's pretty exciting. Like it's unfortunate here in Coronado situation, but if you look around the market at this point in time, like Platinum's another one in the PGM space, we've seen it like these things take years to sort of play out. Coal was booming when we started the potty, right?

Like the guys were making money hand over fist. And how the companies invest that money in the good times is like an indicator of how they're going to perform in the long term. If they are, you know, building a solid cash ball and going to take advantage of the the weak and lower sort of cost environment times is a super, super, super important indicator. And these guys didn't necessarily do the wrong thing. They're like in they've invested in their assets, but they still

held debt. And maybe they did a little bit too late if you're going to be cynical, but that that is something that really kind of comes to mind here. And yeah, I'm just thinking about that heap lately.

I've got one more for you actually as well. These guys had their AGM just recently and it was a completely virtual AGM. Don't like it, don't like it. Also like. I remember looking at their notice of meeting by the way and giant board across yeah, multiple jurisdictions with an absolutely bizarre peer comp for the for the R.E.M. Benchmarking and unfathomable amount of GNA going towards yeah the yeah, the overheads department to to the board which couldn't fathom for the size of

the company. Yeah, there's, there's a few sort of question marks there. I think with with virtual Agms like the preferences, it's got to be virtual and in person. Yeah, it's just, yeah, it's got to be in this day and age and like, yeah, you can't just silence shareholders like that. But anyway, I think that's enough on on Coronado and a good bit to to think about there for the punters out there. Absolutely mate, we've got some partners to thank.

We do have a couple partners to thank mate. A massive thank you to Mineral Mining Services, grounded sandwich ground support, cage rule and cross boundary energy. Now remember, I'm an idiot. JD is an idiot. Thought any of this was anything other than entertainment. You're an idiot and you need to read out a disclaimer.