Why the World’s Biggest Funds Get Mining Wrong (David Sparks)

Do you think those are money markets? Are. More inefficient. More inefficient. You know, it's interesting. These names always just follow what the commodities do, and then you get periods where that just stops working. We talk about what it takes to make a good commodity investor all the time and namely you've got to ride volatility through

the cycle. We know that you've got to be patient, but there are these big huge institutions, multi Strat hedge funds, which by definition a very short term oriented. And thankfully today we've got just a guess to to tease out why multi Strat hedge funds or pod shops are the worst way to invest in the sector. This is a a super exciting chat and it's one we actually wanted to to have for quite a while.

I think we're going to to a large extent try and demystify what is pretty foreign to a lot of the punters around here, right? So you might hear the words pod shop, multi Strat firm, you know, these big hedge funds like Citadel, like Millennium, like .72.

And we're going to speak with David Sparks and he's going to try and help us answer this question and sort of share thoughts and share ideas around why they have such a tough time investing in commodity players, in mining companies, in natural resource companies because of that vicious commodity cycle that a lot of the other investors we speak with try and

make a winning from, right? And, and David Sparks is, yeah, one of the, one of the, the wonderful few people out there who has worked in one of these institutions. He's worked at Millennium, but it's not the only the only one that like he's he's working this, this kind of hedge fund, more multi Strat model, multi manager model. Like several times he actually started his career like, you know, working for a hedge fund for the for the Bass family.

Yeah, famous, famous oil family. And these days he's, yeah, he works for First New York and he's got a more kind of discretionary strategy that he runs, but still investing in our favorite sector being and metals and mining. And I think he covers some energy too. That's right mate, I'm excited to share this conversation.

David Sparks, thank you so much for joining Money of Mine. With a lot of that, you're willing to have the conversation. So peeling back the curtain on the mysterious multi manager hedge fund, world pod shops, multi Strat funds, they've got a variety of different names, but they have kind of taken over where capital is, what's moving markets, where a lot of the flow is. So we have to talk about it. There's an intersection in metals and mining. You've worked at multi Strat

hedge funds. You spent three years with Millennium and that wasn't your only visit in that world, but you've seen the lot and you're now obviously working prop shop instead with a lot more discretion. What is a multi Strat hedge fund? What is a pod shop? The the rise of the multi Strat it has been 20 years in the making. I think a lot of people know the big names being Millennium Citadel in 2072 or not, but it's a grouping of a lot of different

types of strategies. The idea being if we put a lot of smart people together that run money differently, we can approach the efficient frontier of returns and offer the best risk reward to our investors. That's the idea. And how did you find yourself Dave, in one of these with a meadows and mining lands? Because we always hear that meadows and mining is a credibly small market and you're in the States. So you found your way to investing a bit of money in this specific sector for a multi

strap fund? Yes. So they're always on the lookout for talent and you know, their assets have been growing very steadily for a very long time. I had been working for a portfolio manager for a wealthy family for the first seven years of my career. And then he got interest from Millennium and they kind of made him an offer. And we went over and they throw a bunch of money at you. You take what you were doing before and you say, OK, I can do that there.

And then that's how that whole thing happens. With the model of these multi Strat funds is it's so different to what you can be used to anywhere else right? Like the risk overlay, the way that capital scales in accordance with performance, but that model has enabled them to accrue so much funds under management and now there's such

a force in our markets. But when you're going from a more discretionary strategy to and then applying it in a multi Strat world with like how did, how did that, how did that, how did that pan out? How'd that go? It is not entirely different from what you know you would do with a traditional longshore, but you know, there's a lot more emphasis placed on risk controls. I mean they have a prescriptive formula that they try to provide to management teams and that really isn't it.

How to say this, you're kind of fitting, you're fitting A desired volatility construct into a portfolio. So the with the technology or consumer or utilities, it's pretty easy to fit into like what exposures you're taking, how do you find, how do you define your idiosyncratic risk?

Where it gets trickier, I think to the point of your question with mining or energy or something with commodity risk is how do you define what idiosyncratic risk you're taking and do it in a kind of neutral way? That's not going to put them at risk, right? Because I mean, their whole game is growing assets, generating fees off those assets. And what they're doing is putting a lot of leverage on that capital.

So think of it, for every dollar that they get from their investors, you know, you're probably putting 3 to $4.00 long and three to $4.00 short into the marketplace. So if you're a 10 billion fund, you might have 30 billion long, 30 billion short spread across a number of teams. If you lose money, you know, if if a couple of teams start losing money, that creates a huge problem for that asset base and and the returns to the investors.

But the idea is like, all right, if I have 20 smart teams and I can tell them all right, fit into this risk model. And as long as you stay within the this risk model, which we've figured out is what's going to keep your volatility down, then you're smart. You're going to have your alpha and we're going to be able to generate returns with a ton of leverage that's going to look amazing to our investors.

The issue with that is the incentive structure of the management team of a multi manager. Then you have the incentive structure of like the portfolio manager and what are they trying to achieve and your investing style may not necessarily align with wanting to fit perfectly into that structure. Where as you can be much more risk seeking, willing to ride out more volatility in what's happening with your positions and your theses because of the

leverage employed in the system. Dave, can you just expand on the

neutral component? Yeah. So there are a number of factors that these guys are looking at and it varies by firm, like how intense the factor models are, whether it's value or growth or momentum or just beta. Like some, some firms are very focused on having you like very factor neutral where your longs and shorts kind of cancel each other out. So your exposure to the value

factor would be 0 in essence. But if you build a portfolio where the positions you like the best you want to take create an imbalance, then they can either tell you you need to cut the positions or you start forcing in other positions that you don't necessarily want in your portfolio just to hedge out some

sort of factor risk. And I think that's where a lot of people tend to get frustrated with the system, if they are frustrated with the system, is that you can spend time forcing positions that you don't necessarily want in a portfolio, which can be often diluted to your process, your alpha, your time. That can be one of the significant frustrations. The whole model, it's looking to reward alpha, right? And you as a portfolio manager will have some insights to express them.

With certain longs and shorts, maybe they get hedged out. But if you're roughly kind of neutral in some respects, then that idiosyncratic insight should be rewarded as alpha and you get remunerated accordingly. Is that kind of a fair characterization? Yeah, that's basically the idea. And also your comp at the end of the year, you know there'll be a baseline percentages that you're paid, but that also scales generally with most firms based on how well you perform relative

to a risk model. So the model itself is fantastic

for endowments and all these sorts of big institutional allocators of capital because the risk parameters are so tightly controlled and all these sorts of things. So they can give money to it and they're happy when the model works. Sharp ratio, sharp ratio.

But if we look at it from the other lens of financing mining companies and financing assets to get them built and get them off the ground, there seems to be a bit of a disconnect because the duration that needs to go in and the volatility often inherent in financing mining projects is, you know, it's hugely volatile. So how do you marry those up and you sort of sitting in between making no way? You don't, I think this is it's one of the interesting things,

right? It's like the multi managers are so large and you're so active in the market trading that you generate tons of commissions that you pay to the street, which means you have world class access to management teams. So you end up getting to know management teams incredibly well and that is one of the largest benefits of working in a place

like this. However, because of the risk model, you are forced in largely into being a traitor, especially in a space like ours which is so volatile that you have to constantly be monetizing positions. And if you're talking about financing a mind and taking a long term view on something or writing something out through a period of volatility. I mean, I'm thinking about my own experience in 2015 trying to ride out Glencore through everyone thinking it was going bankrupt at the end of that

year. That is not viewed favorably. So to your question, very difficult to marry those two ideas. Management teams get amazing access to these investors and I think they tend to enjoy conversations because, you know, there's a lot of talent, there's a lot of very smart people that work at these places, but they are not your typical cornerstone long term shareholders. Talk me through this Glenn Core period. Oh, 2015, not a positive time in our markets.

One or two of the trading houses were going bankrupt. I think it was Noble groups that was having issues. If I recall, everyone then looked at Glencore and said, oh, Glencore's got a trading business. Glencore is going bankrupt. Glencore CDs was blowing out in the fall of 2015. Ivan's coming to town and this is great part of working at multi manager. You have access to Ivan, got to sit down a couple times. Hey, what is your trading business like?

From my understanding, you move cold from here to there and the duration is very short. You should not have a financing problem. That got reiterated a number of times. OK, Understand this like you're not actually going to go bankrupt. Trying to explain that when CVS markets are telling people otherwise became a difficult discussion to have.

How do you manage that volatility then in a 2015 is the ultimate kind of bear market the commodities where everything's like do you get forced out of a position early or? I mean, that's what happens. You get forced out. You really have to shrink, you force on bad hedges. Yeah, Anything that you shouldn't do or that you

wouldn't want to do. We see, we see this like justification about volatility in in markets these days when there's unexplainable volatility, like fingers get pointed to a pod shop blew up. And yeah, it kind of feels like an explanation just to just to explain something away. But it is a real phenomenon too, right? Like what? Does that mean, Well, think of it as a kind of like a cascading factor, right?

Where there's so much money and a Millennium might have 10 teams trading 1 sector and .72, I have a couple teams that will have a number of teams. So you have all this capital flowing into a sector and especially if the sector is small, you can get very crowded positions. If you look at the factors to watch on Bloomberg, if you look at a 10 year return profile, the best performing factor is earnings momentum, which makes a lot of sense.

What hedge fund analysts are trained to look for and invest in are positive earnings revisions and short negative earnings revisions. When you throw a lot of very smart people looking at the same set of data, you're going to get a lot of people that come to the same conclusion, which means that a lot of people are going to get stuck in the same trades.

And then if you have some exogenous factor happens and someone needs to gross down or someone's book of some size is getting hurt and now they're getting hit by the risk department saying, hey, you just triggered A drawdown limit, we'd like you to cut your book. All right, Now you have an indiscriminate seller, like they just have to sell. So someone starts selling and there's no fundamental reason why you'd sell that stock, but like, you just have to cut your

book. Well that may put pressure on a stock down 4 or 5%. And then someone else is looking and says why is this position down Now their performance is starting to drag and they're thinking, Oh well I can't take this pain anymore, now I have to sell. And that's how it kind of becomes a self fulfilling prophecy until the selling stops and it's exhausted. Like all the books are grossed down or someone with a bigger checkbook says I'm willing to take those out of this.

How do you think about it now, Dave, after having been in that side of the table and witnessed how things play out in your new role? Do you take a more patient lens and know, hey, this earnings momentum being the the sort of methods you mentioned there, like, hey, I can be a bit more patient. These guys are going to slam it.

But if I can take A2345 year view there's real money to be made while the kind of straighten or the multi Strat shots hate this stock for whatever reason in the short term. Yeah, I think, you know, when you're given freedom, you can take advantage of that. I mean, like now, having listened to Neil talk about Ivanhoe and listening to their web cast last week, Ivanhoe seems like a very mispriced story.

Obviously, this is something that's going to take a little time and for someone in a different seat, right? Like that's still messy. Like you don't know when, what the new mine plan looks like, what next year's production is ultimately going to look like. So you can't actually stay with comfort. Oh, I understand how this earnings trajectory is going to move. Whereas I'm sitting here and saying, well, Robert Friedland doesn't really trade at a discount ever.

And he's got Western Forland's and Zambia and Angola, like sitting there all waiting to get proved out. You're going to fix whatever this mine issue is, right? I mean, I would hope so for their sake. And you can, you know, in a world where every single mining company wants more copper, I'm sure there'd be tons of people wanting to buy. I even know 50% up from here. But Robert Freeland's not selling.

I even know 50% up from here. He's probably things were a lot more so. But yeah, I mean, being able to say this is the value disconnects and I can sit on this for a bit is nice. Now you could do that at a multi manager as well, right? But like you're just keeping that position size a lot smaller and it's not necessarily going to really move the needle for you. Why is it? Why is it smaller? Can you? Can you case that out is because the is so long dated and it's a gradual?

Thing you can't determine when it's going to work with any sort of confidence. So because of that, you just can't size it up. Gotcha, gotcha. And the whole kind of betting and position sizing around of events, it can be kind of drastic to the other side as well, right. If you have some unexpected volatile shock to in a big size position then that's where things can go pear shaped. Thanks. Beginning of April and Trump's tariff announcements.

I mean, that was just pure gross down behavior for two weeks.

Yeah, yeah. When you and I first connected Dave before you know we even jumped on a call, you sent me this message and I said I'm curious to learn more about the multi Strat like a New York hedge fund world and a pretty unfamiliar from it. And you replied and you said the worst way to make money in the sector. And that kind of stuck with me. It resonated for a lot of ways because you look around our sector and it's created some phenomenal wealth for many people.

But the people that got rich, they got rich by taking entrepreneurial risk. They were patient, they had the long term outlook. They may be back to geological alpha as a strategy. Maybe they had phenomenal kind of like long term patient stock picking ability. But the common theme amongst it all is you had to stick with it through the volatility and definitionally like a multi Strat hedge fund can't do that. Yeah. I think the other piece of that is concentration, right?

Like. Yeah. You make money by betting on something in a major way. You make money at a multi manager too. I'm not discounting the wealth generation there, but if we're talking wealth, you. Shouldn't you can be a millionaire at a multi chart hedge fund, but you're not going to be a billionaire like what some mining entrepreneurs can be? Yes, yeah.

I mean, if there is a difference, and I think it's a difference in your personality, make up your style of who you are and how you think and what you want. You know, there are a lot of merits to it. But again, if you want to swing and that's your personality type, then you can't fit a square peg into a rental. What are the other parts of the strategy which may be like useful or applicable to other sectors, but there are inherent limitations when you look at it with them.

You know, the mining or commodity lens. Yeah. So I think you know, when you go back to why these have been so successful, you go back to the early 2000s when these sorts of funds were really getting started, it was you actually had a lot of money getting made in utilities. So I mean, think about the market is really just every single day, who are you arbitraging, right? Like where is the information asymmetry and what are you taking advantage of?

And you go back to like early 2000s with utility hedge funds and they were arbitrage in like long only money that wanted a dividend and really wasn't doing a lot of work on what was going on with those companies. Then you throw a bunch of like really smart hedge fund people with a lot of time looking at fuel clauses and how CapEx was going to change rate base and change earnings trajectories of utility companies, which seems like, you know, very nuanced, but it made a huge difference.

And you would have these gaps on earnings days where people went, oh man, I didn't realize that was going to happen. So that's where you had true information asymmetry and where you saw a lot of alpha generation and why this became so attractive these days, right? Like you're who you're arbitraging has entirely changed.

You know, it, it's not the long only is really anymore like so much money has moved to the multi managers that you're kind of arbitraging each other and it's what what did you hear? Like what data point just took came out from that conference. The management team said what and and now I need to reconfigure what I was thinking for this quarter.

And you know, if if you talk to a management team, a, a complaint that they would have when they talk to some of these pod shop analysts and in meetings is the questions, you know, sometimes revolve around like what's going on with your business. But it's more like, how's this quarter looking? Like what's in my model? Like how do I fix this? And that's where the arbitrage has kind of moved to which it's just different. And you invested globally, right, Dave?

Yeah, that was exhausting. Did you notice this phenomenon was much more pronounced in the States than it was perhaps in other markets? Or by this point, is it pretty equally sane everywhere? Every market's different. the US is different from Europe is different from Australia. Australia always felt like you really needed to be there to know what people were getting excited about.

There would be days where I would not understand why Fortescue was moving the way it was, and it was just like, wow, everyone's really excited about iron ore right now. But yeah, I think still, every geography is kind of its own animal. I want to talk about the the shorting component as well, because we've we've talking

about the difficulties in, in staying long and being long and sizing that. But shorting is this kind of dark art and it's. Yeah, I think it's kind of simplified a bit. Yeah, I think the nuances and just how difficult it is, is a bit underappreciated. Can you sort of give a bit of color on just how difficult it is to sort of stay short, the various costs you have to pay to just have a position on short and what the difficulty it is in staying on that side of the trade?

Yeah, I think it depends what you're shorting. If you're shorting something where everyone else is short, that's where the cost and the risk is like shorting lithium stocks. Now, if you have a bunch of people short, you tend to pay more in borrow rate, which means you are paying to think that it's going to go down. And that's where that can kind of create a problem. And that's kind of where your your cost is.

The painful side of that is you may be looking at Albemarle and say like Albemarle has no cash flow right now and everyone is at this fast markets conference falling over themselves to say lithium's oversupplied until 2030. No, it's 2033, you know, like and lo and behold, Albemarle is up 7 1/2% at one point today and it's gone up 15% in like 4 days. So that is a function of the fact that probably a lot of

people are short. You can't take the pain because you start losing money and now you're like worried about that drawdown limit and having your capital cut. So one person starts to buy and cover their position and then that becomes reinforcing and you get the short spans. So that's kind of where you have your cost is you have that risk of a short squeeze on a crowded name.

And if it is a crowded name, you can tend to have to pay for the right to borrow it. But otherwise, I mean, if you want a short BHP, it's not going to cost you anything. It's not going to hurt you, It's not really going to move like that. That tends to be a very like dummy type placeholder short that people would use. When you you're borrowing shit, it's too short. Sometimes the party that you borrowed them from can demand them back as well. Right, they can pull them.

Back. They can pull them back. Yeah, that's, that's a, that's a dynamic that I didn't understand until recently. Yeah. So I mean that you can have shenanigans like that if you're trying to be cute and short something with $500 million market cap. Yeah, well, someone decides to pull the borrow on a small company that can have a very meaningful impact. Shorting something that is small tends to not be the best idea in the world.

I'm curious to tease out, so how do you get, how do you get like you know for every dollar invested like 4-4 dollars long and $4.00 short, like how does that work? That's set up with prime brokers, so they'll let them borrow against that and up against your asset base, and they're working under the assumption that because the lack of risk that they're taking, they're very comfortable lending out a lot of money. Lack of risk, it's a funny word,

right? There's like this, this I guess inherent assumption that yeah, like a lot of these different risks are being hedged out and all of the the various pods are all in, in independent views. There's not the the like, yes, the, the it's diversified portfolio risk as opposed to magnified and amplified. But do you also think that there's like a big cascade kind of risk that that can enhance a lot of market volatility as a result of? I mean a huge hidden risk, right?

I think the mobile T managers had a huge issue during the COVID. I think March 2020 was very scary for a lot of funds. You had a lot of PMS losing money. You're looking at returns doing negative and wondering if you're levered. How are we paying this back? Given the amount of leverage in the system, there's an inherent risk that's sitting there every single day. You spoke as well before about having potentially a number of teams or number of pods looking

at certain sectors. How did you always feel sitting within a metals and mining kind of team? Within a bigger shop? I'm sure tech would have had way more pods kind of allocated to it. How much attention was paid to the metals and mining space in these New York fans? You get some. I mean, look, it's niche. There generally is not a ton of interest for people looking for mining.

And I think it's also changed a bit in that the space is not nearly as liquid as it used to be, which makes it a lot harder because they have vast amounts of capital, right? And they want you to put it to work. If you're not comfortable because of a lack of liquidity to have a $30 million position on and something, then you're kind of constrained. So that's kind of the governing factor. I guess what is the market cap of your space relative to the overall market?

That tends to be how teams are constructed. You're obviously going to have way more tech than you will mining or energy, but there was a problem years ago where you were over represented in some of the smaller sectors like energy and you had many more teams than you should have had for the market cap, which then created that phenomenon of increased crowding and greater risk from everyone being on the same side

of a trade. The beauty is you get to meet with management teams, you get access. However, when you are at one of these bigger places, you often have to share meetings. So that can be fine. But if you're trying to work on a thesis and flush something out with a management team, you don't necessarily want to share the meeting because maybe you're educating someone who's a

competitor. Ultimately, even though you work at the same fund and you know you're trying to create this alpha in your head is like, OK, I think this is an idea and I want to work towards something. And then someone is getting a free ride on what you're working on. And that can create a bit of an issue where people get competitive with who gets meeting spaces.

The access to management is an interesting part, right? Like remarkable access to the CTS of these mining companies. But isn't it kind of like it's an odd thing because you're a hedge fund, you know, like you're going to buy one week, sell the next week. Why is Millennium afforded such phenomenal management proximity when they don't care about holding the stock for too long? It's just how much you pay. It's the sell side that is orchestrating all the access.

Yeah, and you pay. Fees. You're the one paying them all the money. Makes sense? Who are the management teams from your time working there that really left a impression. There are a few names that were running some of these big companies that you were kind of wowed by. On like mining management teams that I got access to. Ivan was very impressive. The whole Glencore team was was great. Mark, Bonnie was was very

impressive. Obviously the koala just wrote something about what he thinks might happen there. So that'll be interesting to see if that plays out, yeah. I reckon low probability on that one, but yeah, maybe the koala. Knows. Yeah, well, Rio's such a mess at the moment, as you know. Like that would be quite the turn of events. Yeah, but that was top of my head. Those would be the names that I went with. Yeah.

If you had no constraints on like investing in the sector, let's say you had $100 million of Personal Capital, how would you deploy your own Personal Capital without any institutional constraints? How would your strategies be different from? What I'm doing right now? Not different at all really. It's kind of blending a medium term thought process and monetizing as necessary on the trades. I mean, I've been in first Quantum since March of last year and thinking that Panama has to

come to the table. It's coming back, coming back. Yeah, well, Chiquita just left Panama, so that might become I traded in and out of that a ton. I think when you can blend it, but this is my style. But when I'm able to blend a longer term thesis with short term monetization and and not have to worry about, oh, my copper length is is too long here. Well, that's the risk that I want. That's fine.

You know, if I want to hedge out copper, I'll short a copper contracts, which you may not be able to do at a multi manager. Maybe you have to, you know, force a copper like company short and you know, all the copper companies are cheap then like that's not what you want to do. So yeah, it's really just having the flexibility to take the actual risks that you want and not forcing risks that you don't want. You mentioned a change in

liquidity over time. How else have you seen markets change over your time participating? The crowdedness aspect has entirely changed. I mean, when I entered the business in 2007, that was not really something that you even thought about. I would say really 20/13/2014 is kind of the first time that we really started to notice, Hey, you're getting like these weird gross down events where I don't know why this is happening, but positions that you like, I like, I mean, we all like those like,

why is this happening? And like so that, that I, I think is, has been one of the biggest changes. And that's just been a result of where the capital has gone and the different makeup of the investor base trading in the stocks in our world where things are not as liquid as they used to be 10 years ago. You throw in the fact that even more smart people are looking at the same ideas that creates dislocations. Do you think those and mining

markets are substantially more inefficient than other markets? More inefficient, yeah. You know what's interesting is that on a very simplistic basis, these names always like for most of a period of time, will always just follow what the commodities

doing. There's very little, unless you're talking about a developer where you're actually getting NAV accretion in it. Most of these things just follow what they should be following and then you get periods where that just stops working and you look at this and think, well this is going to correct itself. Like if a copper company hasn't done it, nothing bad has happened and it is dislocated from what has happened with the copper price times it's projected production. Why is this happened?

And yeah, you get periods where the market just misses things more, overreacts to things. I think about gold fields last year with Solaris Norte and their pipes rose in Chile, the stock was down like 15%, like 3 billion or something like that got taken off the market cap on something that was going to be a handful of months delay. Yeah. And you know, based on what they told you, like, OK, you lost a couple months, you got to lose a couple $100 million in gold

sales. Well, the market just took you down like $2 billion. Clearly we overreacted here. Like what, what are we doing? And, you know, within two weeks, stocks right back up 15%. So you tend to get periods where you get a lot of overreactions And, and it's it's really is this going to happen? You know, is it going to correct tomorrow? Or in the case of Ivan, is this going to take a couple months? You just don't know.

I can't let you go Dave, without asking you about maybe some of your more recent views you've been fleshing out lately. I spoke to you on the phone maybe like 3 weeks ago and Tommy Sigma was looking pretty cheap where it was and then within a week it had popped 20%. So I really just. Need a tip. The yeah, I mean first Quantum's working a little too well at the moment.

Sigma, I still think is interesting in how you structure the trade as what I was trying to do was sell a long dated put at $3, which was going to give me the right to buy it at like 260 a share, which is essentially going to be you're going to be buying it at 580 spot. And then taking the proceeds from selling those puts to buy calls at 10 thinking all right, if you go back to some sort of cost curve at 800, so it goes back to the 12.

So that to me was like an interesting way to just think about how you could maybe structure a bullish lithium that even though I'm not bullish on lithium. The name that I think is most interesting right now, which honestly I hope is kind of pay off before this podcast gets released, is Ramaco, which is a little met coal producer in West Virginia. But they're sitting on this rare earth project in Wyoming, which is in carbon or it's not in Hard Rock. They think it's a lot easier to

process. They are waiting to release a report from floor. It was a pretty good indication that the guy who was running critical minerals for Floor resigned and joined Ramako to run this project, so I'm assuming that the economics of the project are pretty good. He also left Australia to move to Wyoming to do that. Based on the resource base that we are put out for the project is you, you're pretty equivalent on size as MP now.

I did really enjoy the rare earth pod you guys did and talk about the trouble with the processing and what not. You are paying a very small amount. I mean the market cap for this company's gone from 500 when I got into it was probably like 650 now on an equivalent basis to MP right now because M PS valuation is absolutely absurd. This project is worth like $80 a share on a $12.00 stock. The base coal business is worth like 9 at the moment.

Highly asymmetric. It may not work at all, maybe a total dud, but they are going to be releasing that report. They're doing a ribbon cutting ceremony in a couple weeks with a bunch of federal officials. 2 months ago now, Joe Manchin, who was AUS senator, joined the board of the company. But it's an interesting idea. I don't know that's going to work, but. The only person that's pitched away, I'm in cold stock as a as a rare ass like asymmetric

trade. But it's kind of funny because these cold guys must get like rare FOIMO, like they want a sexy commodity because like Whitehaven was a top 20 shareholder in Brazilian rare earths IPO. Yeah, I don't know. These cold guys just want to be relevant and important to the politicians. You know, they got to do something.

Yeah, hopefully it works. Dave, this has been been fascinating and super insightful into a world we don't understand too much about, so thank you for sharing your time with us. Yeah, of course, that was helpful. Thanks so much mate. Awesome. How good was that mate? I was stoked to share that conversation and thanks again to Dave Sparks for joining us. A massive thank you also to Inter Mining Services, Rounded standard ground support and Cross boundary.

Energy 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.