Will depressed prices force a Lynas raising?

Friday money miners. We're giving hope to bag holders today. We're talking about stuff out out of flavour. Well, mostly rare earths, but it's coming back in flavour I reckon. Rare earth and rare earth applications I believe you're gonna go into. Mate and we've got bloody a bit of gold deals going on. Small for a big company, you'd say. Totally mate. There's it could be, could be, yes, a reason to be more excited about the juniors if the if the majors are getting active on a

deal front. I don't need a reason to be excited for Underground Operators Conference. No 'cause I am and everyone else should be excited to get 100 bucks off a ticket. Rapidly, these are the. Codes MONMOM 100 hundred bucks off a ticket like it. It is the only place in the world where you get that offer. So it's the greatest underground conference in the world and I am going to have a fat time in Adelaide April 7th tonight. Get your tickets now. It's going to be a sell out.

Is it? Underground is the conference underground. It should be, yeah. We're it's we're actually having it at an Olympic dam. There's an idea for you, Jimmy Masters.

Right. Let's get into it Linus. By the way lads, thank you for balance sheet tutorials today. I have much more appreciation for half yearly's. Probably should have learned it all before the half yearly started getting released. You can pay me back in mining knowledge, Maddie. Take it away, Linus. Let's talk about Linus, a super interesting company.

So half yearly results came out that actually interesting quarterly results with a bit going on between Mount Weld, Kalgoorlie, obviously trying to get up to speed and everything going on in Malaysia. So we're kind of put it all together because I think there's a lot of interesting forces moving this business at the moment, moving the the stock

price specifically. You've got all this drama about the US, Ukraine, Russia, rare earth, very tense geopolitical sort of moment in the face of very depressed rare earths prices. So there's a there's a lot going on for this 6 1/2 billion dollar mining company and I thought it'd be. Interesting, a rich 70 year old

lady. Yeah. Well, to you know, you can specifically mention her here because I was going to compare Linus and MP Materials of which that worthy woman is a substantial shareholder in both. So Linus has for a long time been a much bigger company than MP Materials, which sort of burst onto the scene through that 2020-2021 period. But right now, as you look at it in U.S. dollar terms, the market cap of Linus is 4 billion. The market cap of MP Materials is 3.9 billion.

So just an interesting 1. You can slot that in your your hedge fund as a bit of a pairs trade if you want, Maddie. Because wasn't Linus is due to produce about double the NDPR? Yeah, eventually. We're talking about. The mountain pass isn't it? Yeah, 10 1/2 six, yeah, kind of thing. So mountain passive. Have done a lot more work on actually the the the downstream like you've got magnet manufacturing going on now. Yeah, Where is it? In Texas, isn't it?

The miners in California. But the the downstream. They've done stuff, yeah. And I mean, liners to an extent is trying to do stuff at at sea drift in, in Texas as well with the with the heavies. But that's a a bit of ways away. And that came off the back of a bit of helpful funding as well. These these sorts of companies are pretty prone to getting favourable financing. Yeah. But the half year itself it wasn't a great result.

EBITDA was a 44% miss on consensus expectations that largely came off the back of higher unit costs and we're expected. So that's absolute terms because they are sort of ramping up and producing a bit more than they were if you look at the the previous sort of periods, but on a unit basis as well. And they kind of point to that being a result of a lot of one off payments, sort of FX movements, these these kind of things which they don't say will

be a constant kind of feature. But there's a lot of moving parts here. There's a lot of various bits of kit being commissioned that's happening at Mount Weld, that's happening at the new facility in Kalgoorlie and also in Malaysia. So they're in a bit of a moment of flux. They they call it, you know, they're still making money. EBITDA was $38 million. But if you look at the CapEx side of things, $267 million spent in this half year alone.

All up that means that the cash position has retreated over $200 million to about a $300 million cash position. So that's. Could be running running the Kitty pretty low by the end of this this half without a liquidity injection of some sort. Yeah, that's that's the crux of it, right? The the sustainability of this rarest price environment for everyone, including Linus at this moment in time is is very

tough and. So even in the low fifties, even like it's arisen from the low 40s, that's still still not cutting the mustard. Yeah, they'd, they'd love to see it, you know, another notch higher than where we are today to, to go beyond especially after this in, you know, really intense period of capital investment in the business. You want, you want a bit of a buffer, you know, you need, you

need a buffer in the business. And I think the, the question we'll kind of get to today is, is that buffer running a bit skinny? And are they going to have to you know, look at various ways of of topping that up and to having a bit more sort of support or insurance in the in the business? There's, there's, there's a few kind of cash drawers that have been at the company for a while. The expansion at Mount Well, which I think is, is complete

the concentrator expansion. But the, the Kalgoorlie cracking and leaching facility, which to the best of my knowledge, they're still, they're still capitalizing expenses there. So, yeah, even though they're the unit costs have gone up, that's not baking in any OpEx from from Kalgoorlie because that's still being capitalized. Yeah. And I think we should just put that in a nutshell real quickly for the for the mining folk, what we're kind of talking about. Do you want me to explain it,

Jada? Go for it. Are you confident it's, it's a, it's an accounting sort of practice right before you hit, you know, in very simple terms, before you hit commercial production, you can capitalize your cost. You're looking at them as investments in the business as opposed to thinking about them as just cost of goods sold and netting them off against the revenue that you're earning. Hence you can get an EBITDA number that is a positive number when your actual cash balance is

coming off substantially. And it's not totally clear here because I'm not saying that that whole CapEx number is just going to be an ongoing capitalized expense. A lot of that was a one off, you know, buying bits of massive equipment. But what is the actual loss or earnings on an ongoing basis of Kalgoorlie? That facility specifically is an open-ended question which we'll

we'll find out in in due course. They've now reported that they're at a period of continuous operations at Kalgoorlie. There's a lot of ironing out that needs to be done. In the December quarter, they had impurities from the EMREC material. These things sort of happened. I would love to see as DK brought up with us when we first spoke with him the the Mcnulty's chart just to see where they are on that, how they're actually tracking against nameplate capacity.

We know that's very telling how you're tracking in the in the first sort of half year and and beyond about what the plant is actually going to produce that in the long term. But, you know, they need to get to about 1/3 of their material coming from, from Cal, from Cal feed to hit the target run rate by the end of this financial year. So that's, that's kind of pretty soon, you know, that's, that's not too far away. So, you know, we hope they can

kind of get there. You've also got the acid problem, which we've spoken about in the past. They reckon there's a, there's a workaround. It just comes at a slightly higher cost. They said it's, you know, not not super material, but no specific numbers on that one yet. So we don't know what the actual cost is going to be that of course coming from nickel W being shut down, that's sort of.

One thing on acid that when we're in the DRC where we visited a couple of you know, copper copper oxide plants where they're producing the copper from mining the oxide and then putting it through a solvent extraction Electro winning all these mines. They had acid plants built at on site in some cases 2 acid plants on site to produce. I think that mine was doing 50,000 tons of of of of copper cathode per annum and the the capital required to just whip up

an acid plant. It seemed like it was, it was like AUSUS 40 million I had in my head and they could like turn it around pretty quickly. Which, yeah. Contextual costs probably costs a bit more in Australia. A lot more in Australia, but yeah, the the sulfuric acid constrain that we talked about with uranium a lot just felt contextualized in a different way after kind of seeing how how like abundant these plants were and how how like quick the turn around could have been to whip them up to.

Yeah. Absolutely. Because what? The whole uranium thing isn't it? Wasn't it the Italians are building the one in Kazakhstan or something? I don't know. They keep blaming the Italians or something, Italian or French or something. You've got to point the finger somewhere. Right. Or is it getting the sulfur is the? Well, you have to you have to import these massive bags to, to be a part of that chemical

process. So it's yeah, it's there's big logistics kind of involved in in making that kind of happen. We'll sort of say just just to round out on Cow and the the broader company in their production rate, 10 1/2 thousand ton per annum. NDPR oxide is what they want to get to the very steadfast. That's the goal to get to by mid

this year. But it's not totally clear what what they're going to do beyond that, whether they just keep keep that constant, what they look to expand, whether they dial back given the unfavorable market conditions, whether they have to. You know, they say that they haven't had any problems marketing their material and and selling it, but it always comes at a price. And as a as a relatively larger producer in this market, do they

kind of tinker with it a bit? Do they pull a bit of supply out of the market like we've seen lithium and other sort of producers do when the market is quite bearish? We'll we'll see. It's again another open-ended question in this opaque market. So Lioness, can you say that the Australia was there, they've got no incentive to acquire more to produce more rare earths at another operation? We do though. Well, would they, would they acquire something else in Australia ever or they just

don't need to, I think. They're. Be too dilutive not. In Australia, yeah, they, they like, let's say they're ironic clays, you think come in lower on the cost curve in the long run then yes, you do that. But they're they're by and large, the better deposits are not in Australia, Yeah. Yeah. And right now, you know, that would come with not too distant big CapEx, Bill, if you're gonna build the thing. And that's not really what the market wants to see right now.

I think they're quite content with what they can do in the they want to see them prove out the the capital investments that they've done and that they can produce at this higher rate. So I think, I think the market's sort of wanting to say that first and foremost. Well, it'd be like like talent, the Talison JV going to buy another lithium deposit. It's like you never find one as good as that because Mount Wells such a stand out. Yeah, that's sort of challenge.

I think we should make a couple of comments on the the railroad market in in general and probably look like an idiot when I say this because it's just such an opaque market. But there has been a bit of a a bit of upward sort of movement in the price. So just the end of December we're talking about 49 ish bucks and now we're looking at 54 excluding that. So roughly 10% increase in in the prices. So that's positive to start

with. You've then got some relatively big news coming out of China and you know, this is in the form of some draft documents that have come forward. The crux of it is that we could see more consolidation in the the Chinese market, which more or less is the railroads market. I'm talking about the likes of Northern railroads and China rare earths consolidating power hovering up some of those the smaller producers. That is a draft, as I said.

So that would need to become legislation in time, but that's, that's one to look out for as well. And the the last sort of comment on the, the market and the ramifications of this massive drawdown in price is just the state of the juniors. Trev, you mentioned, you know, the, the ionic sort of plays in Brazil, they're off 4050 sixty, 70% in some cases. It's it's similar across the board. No matter what type of rare earth project you are, it's it's pretty grim looking around.

So, you know, you could say that's an opportunity for for the likes of Linus if they want to look at that different style of of project or what have you, But it's not being the best 18 odd months or a bit longer now for a lot of these rare earth plays. And I think that sort of ties in with a weakening demand narrative. You know, the outlook for wind turbines isn't as bullish as it was in that to the early twenty 20s period.

There's concerns that these credits that you could get for buying an electric vehicle might be repealed that could hit the the demand side of things. There's new quotas coming out of China in the next week or so. So we'll see what that sort of does on the on the supply side. But I think everyone's a a bit cagey mixed in with the the geopolitical angle that I

mentioned at the start. Oh mate, it was getting bloody talked up down at RIU rehearses because obviously the Hastings deal coming up so everyone's bloody dreadnought's getting talked about for rare earths again like. It's not a goal play anymore. No, no, I think it reconverted back last week. I'm not sure I've lost track, but but that, that was a bit of a different change in sentiment

around that. But yeah, as I said, those close ones, you look at the charts, they they look like a lithium nickel chart. It's just that long, bloody, steady, steady descent. Yeah, there's a bit in common with them as well, right. The the end users have a lot of overlaps between, between lithium, you know, EV demand if we're talking about that or anything. So it's not a massive surprise, even though there are different supply side dynamics at play, you know, it's not.

Yeah, I'm not shocked to see that they're both in the in the gutter at the moment and maybe we'll see them in time. Both sort of ebb upwards at the same time as well. Well you think what Jane has got what, 8 and a bit percent of liner, so it's a bit over half a bill. Twiggy's now got 60% of Yanja banner potential to go to 70% with another 20 mil. So the the magnets are going to be fighting over rare. Earth magnets. Magnets. Yeah. Very good. Very good.

In fact, the yeah, the Twiggy 1 is interesting because what came with the Hastings deal were 20% of the shares in this company called Neo Performance Materials, which is a a magnet manufacturer, which is a really interesting business, one of the one of the few that exists ex ex China. Well, and that, but that was the wasn't the whole thing that Hastings was going to. They wanted to, really couldn't.

Yeah, yeah. Yeah, so something's getting built or or I can rearros are the only thing that S WIC hasn't drilled for. I could, I could like consider an underground like it's all surface stuff. Don't think there's any underground. What rarer? So out of that 17,000,000 drill meters probably getting closer to every time we say 17, it means we're getting closer to 18,000,001 slope closer to 18,000,000. But I don't think they've done rare earths. Can you imagine if they started

drilling for rare earths? What, like talk about a saturated market if Swick started finding rare earths underground? So flooded, oversupplied so. Any way to put? It an absolute foundation of underground exploration drill and boys and mate bloody and the foundation of drill and belong beyond 2000 meters with the DPX team. So mate, 2000 meters, 2000 meters mate just +2000. So just let your imagination run

wild. So mate, if you want a bloody drill on one of their 90 rigs, just get in touch with Swig or the Parenti team and mate go break some records. Go swig, go swig. Just on, just on rarest. Before we move on, Maddie, question for you JD. Do you think Clowners will raise money? So what I was tossing out is will they raise equity or will they get another sort of friendly package from the

government? Will they look at something like a prepayment given their their sort of stranglehold in that market? Would they consider some form of debt? They sell a stake in the project. Would they sell a stake? Yeah. Be really getting into yourself in the long term if you're if you're thinking about it that way, everything's on the table. I think equity is the the route that they'll go down. And I, I kind of do think, you know, I had a skim through some of these.

It's massive. It'd be a. Huge bloody God, imagine that fighting that ticket. Yeah, and it wouldn't even be massively dilutive. Yeah, right. This is a $6.4 billion company, I think. They're it's 400 in 2020, I want to say. Yeah, I think that's the the route they end up going down. I mean, you have a quick skim through a lot of these research reports and we're all forecasting a big tick up in rare earth prices to come in very soon. And of course they are.

Yeah, of course they are. Exactly. So I, yeah, I don't, I don't totally see it playing out that way. I just think that needs to happen way sooner than you kind of like. And you're just running, running a bit too. You're flying a bit too close to the sun, if you're, you're honest. Why not just pop up to the tune of a few $100 million? Top 20 shorter companies on a Sxi think I think that I think the reasons, yeah, combination, maybe the pairs trade, but more likely the funding.

Yeah, 9% short interest right now in in Linus and I think a few people are in anticipating that one and I mean a. Tie up with MP also, you know, if you if you agree a tie up, then there's an opportunity for a sort of interim facility to pop in there in the midst of the deal, which might tie tie any loose ends over until that deal completes too. Absolutely, although I think the the ratio is not not what it once was and Linus are a bit more put off at the moment on

that front. Who do you think benefits more, an Australian company or AUS company amidst all of the geopolitical dynamics? Well, I mean, yeah, I do agree. I think they're both relatively OK at the moment. But you know, it's a, it's a, it's a bit of pill to swallow at an individual level. If you've been, you know, such a stronger market cap for so long and then you have to do the deal, the big deal at A, at a real markdown.

There's there's another part that we didn't even get to and that's like the changing ore body at Mount Weld, which I've spoken to a bit in recent calls. Talking a lot about the heavies and these sorts of. Things they spin it in a, in a very positive way about having greater understanding of the, the, the bigger upsized mineral resource. But I, my, my layman's understanding is like a very high grade kind of weathered part.

He's sort of depleting. And now they're getting to like a different kind of section with a lot more, a lot of various all types. And maybe the unit costs are going up as a result of some of that too. Yeah. You can. You can spin that positively. But it's all just free dig isn't it? Like the year I'll support. It's like then. They're definitely not mining constrained, are they? Not mining constrained, but. Like the unit process cost of the.

The the grade of the carbon a tight is is super highly enriched at the top. Yeah, you get this like weathered zone and then and then the grade tape is massively I think, I think Fact Check this afterwards, but that you know they're they're getting to the lower grade part now. So they did have the technical people on the half yearly call to to speak through that. Yeah. That that those sort of specific questions that were being.

Asked which, if that's the case, then you know the relative value with MP makes complete sense and don't expect to, you know, be the be the the bigger company in that tie up.

Time will tell. Right here's buddy, you want to say on my just YouTube surfing check these bloody things out. This could be bloody talking about prices of rare earths rising. Have a watch it have a look at this. AI powered humanoid robots are officially here, and they're already being deployed at scale in Shenzhen, China, a city known for its rapid technological

advancements. Humanoids powered by Deep Seek AI and Engine AI robotics are now assisting in government operations, public service, and even law enforcement. Meanwhile, 70 AI powered digital employees have been deployed to handle government paperwork, making decisions, interacting with humans, and correcting errors with astonishing accuracy. Engine AI Robotics is offering the PM 01 at a starting price of just $13,700.

Wow 13,700 bucks USI assume to replace humans doing shit that humans don't want to do. I'm getting one at my house for for sure humanoid robots but like they. It's the bull case. Well, you're just thinking, so I I, I, I, I, I, I always reminded me of the.com bubble. Like it's just anything with IOI on it at the moment is just, but it's like friggin also, it's like bloody lithium.

It's that it's that many that abundant and it's all just a branding market share race to the bottom thing at the moment. And regarding that race to the bottom, I'll just show you another video of CNBC last night. Shortly after deep seek released its open source reasoning model, open AI made a free version of its most advanced O3 mini available from their products and features. Entire models, even from the likes of Google, Microsoft and XAI made available to users at no cost to them.

So essentially a land grab amid. This rapidly commoditizing landscape. So you can see like you, you talk to anyone that's building AI stuff. It's all, it's like it's all open source central models. It's all, they're all shared models. It's all, it just seems like a lot of branding front end changes and everything, but all lot the AI is there. So it's, but and it's like, what is it all going to be used for?

So we've talked about data centres to death with the, you know, uranium to potentially power them, the copper wire and tin soldering bloody what else? All that chips, all the chips in it and everything. So that's, that's the power to power the IO. But then what's it going into?

So you look at these like, if this is potentially one thing that could, we're looking at in the future that these humanoid robots are going to be frigging replacing all the mundane shit that we don't want to do and we essentially become redundant. I'll be the first one become redundant, but what goes into these friggin things can Can you imagine one of these in every like in all the houses around the world eventually like manufacturing, like mining? Yeah, yeah, a whole bunch of

applications could. Well, they're like the police for imagine taking, putting. These in robot. Well, that's what they're doing in in China. They're using it for law enforcement. So you imagine you haven't got a person there that if you shoot a robot, who cares? Like, yeah, like it's like it totally changes the risk to putting humans in enforcement. Like going to be fucking intimidating. Now you're going up to a robot. You're like, what's this thing

going to do to me? Like you can't reason with it. It'll just fuck, just knock you out with a titanium fist. But I thought, what goes into this, like the mining materials, if this is where AI is heading, like, how's it going to affect commodities? So if you look at what these things are made of aluminium alloys and titanium for the body. So I'm not sure how much aluminium these will take compared to massive things of

aluminium. So what that'll do for bauxite, aluminium and that, but like titanium. So that's like, you know, the Ilmenot and Rotol industries, that's that's where the titanium comes from. Shit load of internal wiring and chips, obviously copper for the wine, but then all these chips use the rare earths. So like NDPR, like gallium, cerium, that's all comes from monocytes. So that's great for rare earths,

the power and charging. So they're all going to have a lithium ion battery, you would assume. So that's like this. That could be a rebound for lithium. All the motors, sensors, actuators for the robotic limbs, that's all rare earth magnets, so NDPR mainly. But then you know, like the the heavy rare earths, the DYTB, that's what the temperature, temperature tolerance for the magnets. So that's what gets added, added into those. So very, very interesting looking at that.

You're always thinking right, what's what's the next bubble? What's the next thing to pop and what's the next thing we're not thinking about? Looking at that last night, it's like, fuck is this if that's already getting deployed in China, flat out I'm getting I'm 100% getting one to clean the ass and fucking cook me shit saved me getting Uber eats and because I hate changing bed sheets, kids school lunches right the. Possibilities are endless. But yeah, it was fascinating, I thought.

And just just thinking of where this, the whole AI thing first looks like a bubble, like not a bubble, the concept, but a bubble of everyone trying to tack on using AI doing this. But it just looks like it's so it's just going to get market shared by obviously your deep sake, your Meta, you Google, your Microsoft, your Alphabet and Microsoft and that and they're just looking to do it for nothing at the moment. What are your boys thoughts on all that?

Tech Tech advances wonderfully bring productivity improvements and those productivity improvements might help us, you know, in the ways that we use AI to help us already or, or they can come in the physical world too. I'm excited to see some of the physical world development stimulus productivity improvements. It'll be a wonderful application of the tech advancements that we've had and a great thesis. If if the I'd love to know when the first electric vehicle was actually kind of made.

What was the time between that and when you had kind of a lithium market shortage, right? Because these things take a lot of time to get real traction and adoption. It's not just sort of like subsidized kind of adoption and sometimes there's a, an app or a, you know, a specific use case of people like, fuck, I need it for that reason, next reason, And maybe it's a bit clunky until then, it gets a bit better. But I'd love to know, you know,

how long can you expect? But these are pretty new. I saw the first one when Tesla had their investor day last year. So it's not, they're not like it's not like they've been around for a long time yet. But I'd love to to know what's the real time expectation before you might be able to see some constraints in some of these

markets based on current supply? I think I, I keep going back to the nickel boom, but it's when, when you're physical the last one recent the boom that didn't really do anything. Except the short squeeze. No, no, just the just the hype around all these nickel mines getting developed, but the actual nickel price just did not go to where they were predicting. And that was all on a a thesis.

This this global thesis that was out there is like, we need more nickel for long range batteries and that's it. Like the the actual, the demand wasn't there yet, but everyone started building mines because nickel was going to 16 bucks a pound. So with this sort of stuff, it's like we're interested to know once if there's just once the global thesis changes, if that does similar to what nickel did.

And like prices start going up because everyone just wants it before they actually need it. Yeah. So. It's really interesting. I always think about this, this, this like prologue to a book that I read ages ago called, I think it's called Capital Cycles by Marathon Asset Management. And they spoke, they speak about capital cycles in heaps of different industries and they highlight that they're very pronounced in natural resources.

They always think about it from two sides, demand and supply. And they never put too much weight in the, the demand side because they, they find that very hard to quantify. They always look at the supply side. So that's much easier to, to put into numbers, not easy, but easier than the, the other side of, of the equation.

And I mean, these guys are sort of deep value investors, but the, the stories that get spun and they give so many different examples about the, the demand side, what's going to be the next thing, what's going to blow off. And most of them don't, don't kind of eventuate. It's all they have. They just come about in a very different form to what you might have thought earlier and it's an interesting way to think about it. But kind of investing with that support of of the cost curve.

And you know, when you're getting into say a commodity that has had very little CapEx sunk into it over a long period of time, then you've got a kind of stable foundation. You pick an asset in the the lower quartile or half of the cost curve going about it that way. And, you know, maybe somebody bits during the boom and they make 10 times their money in in half a year and they they make all the returns these guys would make over a number of years and

they get there much quicker. Everyone's got their own sort of style of investing. But yeah, it's it's very hard to actually forecast where these demand actually comes into the fore. When are you actually going to see it? When are we actually going to have these robots in our kitchen doing these things for us? But completely agree. It's endlessly like fascinating to watch these videos on YouTube to see the promos from Tesla or I think Boston Dynamics are another one that make this sort

of humanoid robot. It's so, so interesting, right? Yeah, and it's like, and there's one thing predicting when the demands kind of come in, but it's the the equity hype. Yeah. In the lead up to it, if you you get. And nickel was the example, like you could get on that train and get out. And nothing even happened to the underlying commodity price, except it went down afterwards. Yeah. So. Oh, that's the, I'll have a good punt. Yeah.

How good is it? Who's going to be the first mover for humanoid robots in Australia, do you think? Not an Australian? Company. What about Quattro What what based on everything they've invented for underground mining and what what I just didn't come to Jeremy Palmer's the first person that come to my mind of who's going to be doing party. I'm sure, I'm sure burn Cutter likes and robots underground because. It'd be cheaper. Like they they always turn up

for work. I reckon Quattro you're wanting people. Maybe if you want to work for Quattro, I'd get in quick because there's a good chance they're going to be first movers in humanoid robots and they're going to replace bloody They're going to be building pace plates, pump stations, installing pace diversion valves and everything with Quattro humanoid robots. If I'm a mining company, I can just hire these guys.

Is that easy? You can APC gurus light surface underground engineer design construct mate they've patented bloody everything so I just. Best in the biz? Don't jazz. Don't let these humanoid robots distract you from your foundations of APC and inventing great things for underground mines. There isn't open pits and sorry surface constructions.

As efficient as they get in the, you know, the engineering stuff mate, the APC sort of things and can see them just embracing the efficiency of of the humanoid robots. I'm excited. Go Quattro.

Go Quattro. All right, they're back on. Just to close off, it's amazing the people that educate me, the tailings dam chat about Lakewood and that. So just some great people out there. Just think Maddie just needs a nudge in the right direction. So you can actually, when we're speculating of how long this is approved for this Lakewood TSF tailing storage facility, you can actually go on to D word Department of Water environment

regulation or something. They just type in D word license, that's it, something D word license in the Google. And then you just type in Lakewood and you can find the actual licenses and approvals that have been granted for any sort of any tilings, any whatever relating to water and environment. So like here's the actual table showing that for Lakewood and we're talking about if it's five

years. So it says from August 2029, TSF 2 stage 5, which is the final stage approved under this works has a 7.3 month duration. So it goes out till a bit, you know, mid 2030. So it was five years. But, and I'll bring up the pictures here of like when we're talking about these, these lifts, where are these? Bloody hell, they're in there somewhere. So you can see how obviously each lift is built on top of the tails inside it and it starts concaving in.

So, and you can only pour tailings in or tailings to him at a certain rate of rise. So that's why you can see the durations like, you know, TSF stage 120 months. By the time you get down to stage five, it's seven months. So the decision you can get further lifts approved because like the original TSF one, that's potentially going to stage 10 if they get it approved. But for each lift, it's a CapEx versus how much tiles you can put in. So the rough number I got tiled

was about 2 bucks a tonne. So like if you got a 1,000,000 tonne plan, it's going to cost you roughly 2 capitalized over different periods. 2,000,000 bucks a year in in tailings lifts. So but if you once you get to the high bid, it's going to cost the same amount per or more to add a lot less tilings to the future. So that's where the whole balance comes in. But if you're charging a shit load for toltrating and you make it a better processing guard, you probably lift the tilings.

Damn. So that was bloody fascinating stuff. Thank you to the astute educators out there. Awesome man go D work right.

What's happening? So the I think we've talked about this Bob about are they going to leave Australia at all? But they're they're they're coming back in. Not big, but yeah, yeah, this is expanding. And like old Ashanti. They are indeed it it appears Maddie JD Angle got Ashanti. They've, they've come out today with mats of resources who have advertised that Anglo Gold Ashanti execute a $101 million deal to pick up the Lake Kerry

gold project. Now there's a bit of mail on that on that headline, which I'll, I'll tease out. Anglo, we, like you said, we don't put the spotlight on them too much, but we, we, we should, I mean, they're a big global gold miner that doesn't even have an ASX listing anymore. But that's in, you know, the other reason we maybe haven't talked about them too much is because their deal activity in Australia has been sweet fuck all.

And until today, really kind of it's it's it's emerged that that this deal that they're doing with with with MATSA, what they're going to do. It's an option agreement with a few conditions. And the crux of it is that angle gold Ashanti, they get the option to buy the Lake Kerry gold project for for 18 months. They can execute it within from the satisfaction of some conditions precedent.

The only real upfront cash is like 500,000 dollars, 8,000,000 bucks drips in so after the CPS are satisfied and the big chunky part only if Anglo exercises the option. The conditions I was talking about, they largely relate to roofers or consents or approvals. Nothing you really think will kill the deal but things you just got to get ticked. But because Anglo has 18 months to choose to pull the trigger or not, it sort of leaves some some

ambiguity here. Should should Anglo exercise the option that will pay 1.875% of the in situ value of the 936,000 oz gold resource at that time in cash? Let's say gold is four and a half $1000 and Angle will pay four and a half. 1000 * 1.875% * 936,000 equals roughly 75,000,000 bucks. So they're they're effectively paying a royalty upfront similar. They're just, they're just breaking down the, the calculation of how they get to the number, which, which is,

which is an informative thing. Like they're, they're, they're kind of giving us the investors an, an opportunity to understand what is the value of an in situ oz near a, near a mill of a major. Well, in Anglo's case they're saying it's, you know, 1.875%. Or less than you thought.

Well, I think, I think based on your royalty chat, the other way, it just shows like if they're paying 75 million based on that, yeah, imagine paying 75,000,000 for it and having a 1.8% royalty attached to it. Yeah, like it just shows the value. Interesting lens of A. Royalty, yeah, the, the there's also about 20 million bucks.

That is easy if there's more answers found, but I'm just going to kind of write that down to a very small number because it's deferred consideration that, you know, Anglo's in control of. So it's it's in the never, never. So I'll, I'll kind of put a picture in here. Here we have it. See Sunrise Dam, Matt. So they're, they're selling the red tenure there. They're keeping the blue. So there's a few sort of pits that that Matt just holding on to. They're selling all the red

there. And you can see right there, it's close proximity to Sunrise, Sunrise Dam. That's a lot of ground. It's a lot of ground and the ground is actually important, which I'll I'll get to for for all intents and purposes, you know, they're getting a fair bit of regional tenure. I thought the context on Sunrise Dam is, is important because you know, when a, when a major finally acts on some regional consolidation, it's why why do they need the feed or what's going on here?

Sunrise Dam produced 260,000 oz for Angler Gold last year, which was 10% of their total production. They they refer to it as a Tier 2 asset amongst their portfolio of tier one and two mines. So, you know, if context drops at tier one, this is at Tier 2. And there's a big focus for them lately has actually just been lifting the recovery at the

mine. One of the initiatives that they've pulled the trigger on is that a concentrated Leech project late last year that's going to take them 12 months to complete. But again, they're they're hoping to keep lifting recoveries, which averaged 85% in 2024. They want to get another 3% uplift from this concentrated Leech project. The last thing to keep in mind is Sunrise Dam. It's a combination of low grade open pit and underground ore feeding a 4.1 million ton per annum bill there.

I think 1/3 of the ore is coming from the open pit at 1.25g per ton and 2/3 is coming from the underground at 2.5g per ton. So, you know, if there's regional oz at at higher grade than that, you can see how there could be a, you know, a bit of a sugar hit for, for Anglo, especially at healthy gold prices and. I think it's got much left either Sunrise Dam underground, from what I hear. Yeah, I hear gay. I've heard less than two years.

Yeah, they, they still have a reserve on it of of 1,000,000 oz and it's been 1,000,000 oz for, you know, years. But yeah, yeah, you know, you've got better contacts for me and what, what's there but the the. They're pretty deep at the moment. Yeah, I think it's a very lateral like I think, I don't know how deep it is, but I know it's just a rabbit wire, very lateral. Gotcha. There's two ozones they're pulling from underground ones carry another one I've forgotten

the name of for now, but the. I won't, I'll, I'll caveat that. I've heard someone said, oh, look, it might finish up in two years, but I just said there's reserves there. It might be might finish up if they don't spend more capital to go to the rest of it. That's probably a better way to say it. Sorry. They, they, with those recoveries as well, keep in mind, so 85% the big focus on lifting recovery.

So I do wonder if part of this deal as well is like, can you, can you get a better blend to get better recoveries by kind of mixing and stuff that Max has got here as well? Is that part of part of the, the, the rationale for this deal? And, and an interesting thing that popped up to me when I was looking at Anglo's reserves. There's actually, they've got this nearby satellite deposit, which is 3G per ton, which Anglo mostly owns.

It's called butchers. Well, I've circled it here and you can see how close it is to, to Sunrise Dam. It's just on the other side of the lake there now. It's a 7030 JV with Northern Star of all companies And, and they just picked it up when by Saracen, it was Saracens back in the day. There's, there's not an enormous resource there like you know, it's like 320,000 oz at the moment, but it's higher grade than the current, you know, all

that they're pulling from the. From from either the underground or open pit at the moment, but Butcher's well is all open pitable. So I kind of my first thoughts here were that it'd be interesting to see if this this option agreement with Matzo is actually a bit of leverage to get Northern Star to come to the party faster with Butcher. Well, if they were, I don't know, dragging their feet in the JV, not entirely sure, but I got some late mail before we started

recording that. Part of the rationale involves Butcher's well here because the mats are tenure, which you saw before highlight. There's a, a, a huge part, part of that comes with a Causeway that kind of traverses across the lake. And for Anglo to get a new Causeway approved across the lake, it it, it, it need a federal approval process and it just would take them forever.

They'd never be able to do it. So a huge part of the value of this, this fair for Anglo is actually just, you know, getting the ability to to utilise the Causeway that is part of that's his, that's his tenure here. It kind of unlocks that Butcher Well deposit, which they can actively feed into Sunrise Dam, you know? Maybe Petronas are going to disrupt the deal. It's still got the. You're in favour. Still got the on market takeover? Yeah, well, doesn't that look

suspicious in hindsight? Hasn't. Hasn't sold a share or don't they? Yeah, no, especially when Max's stock is up like 40% at one point today. All of this is just like kind of, you know, contextual. But I think the theme, the theme is important because the dominant theme of the last six years in WA gold has has been of these major international gold miners. We've done fuck all except leave. Late last year we saw Gold Fields actually try to acquire Corolla, but they weren't

successful. That was revealed in the information circular. And now Anglo has made a move for a satellite deposit. I'm hopeful that these, you know, international major gold miners will will be a bit more receptive to deal activity and and and and look proactively to to do do deals to feed their, you know, maybe hungry meals or displace and lower grade sort of all with higher grade stuff nearby, because that's that's really healthy for the junior

gold market. And yeah, it just makes the investment rationale for for juniors that have a higher grade ounces in close proximity to meals a lot more a lot better if you're actually seeing the deal activity that's substantiate corporate outcome. Buddy, imagine, imagine if either of those two companies got active on M&A in Australia in the mid cap space. Jeez, that'd be exciting. Yeah, Gold fields take it over the Murchison.

I can say it just take them all. Oh, I. Wouldn't hold my breath, but we'll see it's. Recorded right, buddy? Hold your breath in. And there's no I got nothing. Get your tickets. Get your tickets. Hold hold your breath to an underground operator's conference. 100 bucks off. Don't sleep on that one. But you're like getting paid to

hold your breath pretty much. And our other great partners that keep the lights on. Mineral mining services, grounded, Sambit ground sport, CRE insurance, K drill, selfish contracting, Quattro project engineering, swig. See how I mixed them up there? Just keeping everyone guessing.

Cross Boundary Energy and Urdu Money Monitor information contained in this episode of Money of Mine is of general nature only and does not take into account the objectives, financial situation or needs of any particular person. Before making any investment decision, you should consult with your financial advisor and consider how appropriate the advice is to your objectives, financial situation and needs.