Insights on Mining Sector Developments

Righto Money Miners! It's Tuesday but holy hell it feels like Friday. And tell you what, if you want to give yourself, these companies I'm about to call out need to give themselves an early weekend and call MMS and bloody sort out a friggin'open pit mining contract or a gold meeker medals. Delta Lithium slash gold, Brightstar, Osgold Astral when they get gold, Maximus Labyrinth, whoever else needs to frickin'move dirt. Call MMS right now, those ones specifically. And if you don't call them, I'm going to hand them your number anyway. Couldn't have said it better myself, Matty. Boys, what have we got today? We've got three stories. I fucked up my way. You're still writing, yeah. Oh, very good. Starting with Pilbara, I reckon. Yeah. So Pilbara's upsized the debt facility. We've got uranium spectacular from you, Jane. He's addicted to copper in Mongolia. And I'm going to touch on a New Zealand gold M&A thing involving Aussie super. Sure, bro. I love your work. Righto, let's-Start us off, Pilbara. Oh, Pilbara debt. Yeah, mate. I can't give this story a bit of a whirl. I read it and I went down a rabbit hole and anyway, I ended up back at the beginning. But Pilbara Minerals basically announced that they've established this $1 billion debt facility. And I initially sort of read it and it seems like this relatively innocuous announcement, right? That wasn't even marked as sort of market sensitive on the ASX platform when it came up. But in reality- Like I sort of went through the process of thinking there could be something to this. You know, this is a big debt facility. It's more debt than they've got in place already. What are they going to do with it? Are they going to buy something? You know, that was the whole kind of rabbit hole I wanted to go down. Could we lose some fuck loads of money? Did you think of that one? They're a more mature company, Matty. That's the reason. That is true in this pricing environment probably. After CapEx. What other theories have you got, Matty? So to be fair to Pilbara, they did flag this at their full year results where they announced, Pilbara announces it's received credit, approved commitments from a banking group for a billion-dollar deficit. So it's not. It's actually not New News, fair enough. But it's to a banking syndicate of commercial lenders, BNP, CBA, NAB, HSBC, SockGen, and ING, which is kind of a similar-ish syndicate. If you remember the original Liontown syndicate, remember it was like, I think it was ANZ that got cog feed in that syndicate. So there's no ANZ here, but there's a couple of new ones. You add ING and BNP to that. So just kind of interesting to see which commercial lenders are willing to play in sort of, you know, with your finance, corporate finance. It's not project finance. It wouldn't. put it that way, but it's more a corporate facility because it's a revolving credit facility, this one. Every time I say ING, I just think of the barefoot investor. That's what set up the ING account. Very good. Grow in the mojo. So what did you sort of find out? Like you looked into the weeds, you tried to chase down obviously what they need the money for. I tried. What was the other sort of outcomes you came to, Matt? Like, you know, it's a lot of money. You know, they want to buy something. And the thing that immediately stood out to me was the fact that they were, in this announcement, they were repaying the concessional debt facilities that they have in place. So this is low-cost debt facility with NAIF, with Export Finance Australia, and they're basically paying that down. It was a condition of entering this new facility. But basically, in my head, I'm thinking, it doesn't make sense. Why would you pay down your cheap debt in order to pay a higher interest rate, you know, a more expensive loan? Obviously, they're in. increasing the quantum. So I'm thinking they must have a deal in mind. What was the quantum of the NAF and EFA? They basically, they had some senior secured as well, but all up they had about $400 million of joint debt. Oh, yeah, so they have a double on it. Jeez. Yeah. So, you know, spoiler though, it's not that juicy. You know, to kind of highlight my point, though, you can see here's the annual report, the interest rates that they'd been paying on those various existing facilities, which. added to $400 million were 6.7% to 8.7% on the various facilities there, which is pretty cheap. Like, you know, you can bet the interest rate at the commercial banks and the banking syndicate they announced today will be, and they're going to require higher than what NAIF and EFA require. So what's 6.8%, 8.7%? That's about what, SOFA plus one or two? Pretty low. It's pretty, it's SOFA plus a couple. It's low-ended for sure. And like, you know, NAIF and EFA, I think the tenors were enormous on them too. It was like. I could be wrong, but I'm pretty sure I saw like 10 plus year 10ers on something, which is pretty friendly. At this point, like when I'm seeing this and I'm reading this, I nearly convinced myself there must be a deal in mind, but I stupidly didn't realise that Pilbara had already told the market about the facility at this point. I only realised that later, which meant they, of course, got asked about it in the analyst call. So I'll save you the fine print of my own. Stupid stupidity this morning. I'll just play the question that they got asked months ago you picked up a particularly key point and that is that covenants on the existing facility and particularly the Leverage ratio will decline over FY 25 To gross debt to either da of two times, which is fairly restrictive This facility has a net debt to either da leverage ratio, which will take into account our significant cash balances. So it's significantly more flexible on that basis. Oh, at least you kept yourself busy this morning, Trav. Nothing wrong with that. So sure enough, there it is on the same page I grabbed the interest rates from in the annual report, the restrictive debt covenant that is referred to there. The gross leverage ratio is not greater than 2.0 to 1, sort of after 30 June 2025. And yes, it's, you know. Obviously, the covenants are a role here and, of course, also providing some optionality and flexibility with their liquidity going forward. And, you know, if you've got negative EBITDA, like you talk about, Matty, it kind of complicates things if you've got restrictive covenants as well when it comes to your debt facilities in place. But, you know, regardless, they've got more liquidity now, which allows more optionality, and that's the key point. Optionality could be like a cash-funded deal or it might not be. They do guide to CapEx of $615 to $685 million in FY25. So it's still very chunky CapEx this financial year. And assume that captures the bulk of P1000, which is supposed to be completed in FY25 as well. So I look at what the street is expecting for CapEx after FY25. And consensus is a lot. Like the street sort of thinks they're going to keep investing. a lot into CapEx. The consensus numbers are FY26, 492 million, FY27, 906 million, FY28, 647 million. So look. Is that an assumption of P2000 going ahead? Various assumptions. Like whatever the brokers have in their base case is whatever they want to model as their base case, but these are just consensus. So it'd be like spread between like P2000. I don't know if some are including Latin like pre-development. sort of work as well in their capex. But the point is there's more than enough internal competition for capital to warrant the debt facility when you've got those kind of growth options from your own capital at the same time. So I'm not going to rule out more inorganic growth at the right time too as a result of this debt facility. Just never know, Matty. Where would you put your finger on there, Trav? sticking like a sigmary thing in Brazil or? I think. What do you think of WA? I think base case, nothing for a long time. Sigma at the right time. But, yeah, I'm pretty sure Anna's got like just stars in her eyes on value there, so good luck. 90% premium. That'll do the job. To the all-time high for her. Yeah, that'll do the job for most people. Have you heard, I don't know if you're scouring through the announcements, is there anything in there detailing if Pilbara Minerals have contacted CRE Insurance yet to get to break the policies for the Latin assets? Glaringly absent, Matty. Really? Unfortunately so. That's so surprising. I thought they would have because that's your first call on any sort of M&A because you don't want a frigging insurance stitch-up. on something that you're buying. Not just M&A, Matty. Don't forget Pilgangura, right? Like have you seen the ore sorting machinery that they've just installed as part of that P680, I think? I reckon this is a photo of the ore sorting that they've installed there. It's monstrous, mate. Imagine if that bit of kit went down for a few days. That's business interruption. Mate, as we've seen, catastrophic failure is possible for processing infrastructure, as we mentioned yesterday for Pantora. You can insure against that. Yeah. Yeah. You need it. Mate, Steve, like, Tar is your CRE guy in Perth. And the best way to explain him is he's like one of those assets in the Jason Bourne movies. Like, he's sitting there and when he gets the call, it's on. Like, it is game time. And he's straight on. Like, mate, and Harrow's in town this week for the 80th conference. Mate, give the CRE boys a buzz. And, mate, they'll sort you out. I guarantee you that they'll tell you something you don't know. about insurance broking. Bloody, oh, it's as simple as that. I can't say it any more simple. Far out. Right, next up on the shopping list today, Xanadu. Xanadu. We spoke about Xanadu a couple of weeks ago now, I think, and yesterday. Last week. Is it last week? Yesterday? Time flies. So yesterday. What's tonight? Tuesday. I've had a big week. So we got the PFS that we were excited to see. Also got an updated reserve and resource statement. And why I think this is interesting, long story short, is I think something is going to happen here pretty soon. So let's just start quickly with the updated resources. They updated these not too long ago in August. And then again, yes, the key difference is just tweaking the cutoff. So from 0.2% copper equivalent down to 0.13% copper equivalent. Total resource, 2.2 billion tonnes at 0.29% copper equivalent. This is bloody low grade, huge sort of scale thing. 4.7 million tonnes of contained copper and 11 million ounces of gold. And that tweaking of the cutoff grade substantially increases the contained copper. up almost 25% just on that slight change of the number there. So you do have to blow most of it up anyway. You can't just like, oh, no, we've just got to leave that chunk there. It doesn't quite work like that, does it? That's bloody 0.18. Can't touch that shit. So let's get into the PFS, which is a bit more interesting. As a quick reminder, Xanadu own a bit over 38% of the economics of the project. The headline numbers are 21% IRR. US 930 million MPV using an 8% discount rate, four-year payback and a 29-year mine life. So this is... What base case throughput did they go with? This is big. For the first eight years, 26 million tonnes per annum. So they notched that up from the earlier initial 15 million tonnes per annum going up to 52 million tonnes per annum. So just huge. The numbers don't exactly scream knockout and they're kind of looking at the numbers, as they have played it so that they met... some of the conditions that needed to be met for the ZGIN agreement to stay in place. But I think there's a bit more to it that we should kind of chat about. It's big cap ex-low-grade copper deposit. But, you know, you can see in this cross-section, like that pit is tremendously deep in that PFS base case too. Like you kind of look and, yeah, that PFS pit base case is like 700 metres deep. Yeah, and it looks like the honeypot's what? Four, five. A depth. About 400 metres down she starts. Yeah. That really good bit is a bit deeper. They did sort of actually discuss potentially block caving, but they've kept it very, very simple with the PFS today and they'll look into a few other things. I don't imagine that would kind of change going forward, but we're talking about 75,000 tonnes per annum copper production and 165,000 ounces of gold every year. Yeah, geez, I assume they haven't got... Aussie $3,900 is the gold price in the study either. The gold price, the commodity price assumptions are pretty interesting. We'll chat through in a moment. But they use $2,100 US for gold and $4.10 for copper a pound. God, I can't believe we're talking about 0.2% copper deposits. 0.29. But then again, equivalent, equivalent. But then you wouldn't think frigging 10 years ago, you'd be talking about two gram gold undergrounds, how things change. Exactly. So a key, a key point of difference now going forward that the PFS is been released is that ZGN has taken over as the operator. That'll be the case through the final feasibility, although there'll be discussions ongoing as we kind of speak now. And. As we said a couple of weeks ago, I think there could be significant value uplift in Zegin doing it. As we said at the time, these are Western numbers. Zegin, they pretty much said it in the webinar, Xanadu. Zegin will be able to pull those numbers right down, but obviously that's not a case that Xanadu can base upon their numbers. So they've got to do it with their assumptions, their independent contractors and these sorts of things. But Zegin will be looking at it and they'll be running their complete own numbers on this one. They better have some bloody numbers in that study for a frigging grounded camp, J.D. Are they in there? Tell me about the grounded camps, mate. We'll see if they are. And you tell me if they're in there. Well, you know, these grounded camps, I don't know if yous know this, you know why they're so bloody good? I don't know. Because they're built by Paul Natoli, and Paul Natoli was voted the best builder in Sicily 10 years running. That is a true fact. It's actually quite a feat. There's some good builders in Sicily. Yeah, and that and... Don't underestimate. That is heavily competitive, that competition. Have a look at these Sicilian buildings I've got here. These were built in the late 1800s. Notice anything special about it? They're still up. They still look brand new after frigging 120 years. You know why? Because that's because Sicilians built them. And they're beautiful. Right. There's a new rule in the mining industry I'm announcing today. Anyone that wants to build bloody a mine camp or any infrastructure on site, the builder has to have Sicilian heritage. That is, and like the only Sicilian builder I know in Australia that services the mining industry is Paul Natoli from Grounded. So in honor. of this new rule for the mining industry, I suggest in true Sicilian style, we have some limoncello. I'm in. Let's do it. Let's get it. Ah, what a bloody, what a Tuesday we go. Salute! Salute. Ah, go grounded. Go grounded and go Sicily. You'll need a grounded camp to incentivise a workforce out there, mate. It is a harsh country. Oh, mate. Mongolia, harsh country. That's a bloody piece of piss for Paul. He'd do it in his sleep. Anyway, back to Xanadu. What else stood out, JG? We're pumped up now. Bloody blowing.02. So obviously there's a couple challenges, Matty, and this one's not even a spin for an ad, but water is one of the biggest ones they need to address. They're confident. There's heaps of water in the Gobi Desert. Just takes a bit of time, bit of... politics to sort it all out and get that one sorted. They need to come up with an investment agreement with the Mongolian government. This was a big dragging feature of OT, getting that going for Rio. A lot of negotiations, again, can take a while. But overall, I think there's quite a bit of risk as well as quite a bit of conservatism in the PFS. And I think it kind of balances out and by and large, they've taken a bit of a conservative approach. It's not like there's sort of... wild outreaching numbers that we're talking about that we have done in the past with scoping studies and PFSs and DFSs where perhaps the commodity price assumptions are just way out of the ballpark. One thing that stood out though was that recoveries came right off from scoping to PFS. They did. And they addressed that again, sort of speaking to conservatism, taking on the advice of the independent. contractors that they've pulled in to do those ones. We had spoken a couple of weeks ago about potentially treating some of the oxide or transition stuff, doing test work on that, putting that in a heat leach. They've completely ruled that out. There's optionality on that. Potential with silver, they've put a line through that. That might be something that eventuates in the BFS that they're doing. So there's a few things, but you're right, recoveries probably were a bit lighter on from the expectations. from the initial study that they'd done. What are they proposing to do with the oxide now if they're not heap leaching it? So they're putting it in a low-grade stockpile away from the waste essentially, and I think in time that will get addressed, but that's just not part of the economics. They're just not going to process it. Well, CJ might, but Xanadu's not going to put out a PFS saying that's the base case. Yeah, righto. Yeah. Yeah. Interesting. Right. So, buddy, what's next for them, JD? So one of the things we'd spoken about was potentially skipping the BFS and going straight through. They are now talking about doing it. So the PFS had talked about earlier construction run in parallel with engineering work, but they're now talking about doing a final study starting Q1 of next calendar year, running through to Q2 of calendar year 2026. And again, Colin in the webinar said Zegen are confident they can do it quicker. So I think already there's that gamesmanship and negotiations taking place. where Zijin want to get this thing going straight away. They want to get the mine in operation. And I'm sure Xanadu are thinking the same, they want to do the same, but maybe that's not the best negotiation strategy to go and say that aloud. Maybe they're starting to play those sorts of games. And this kind of ties in with the ultimate end game of how this goes, because the clock is ticking and the negotiations are well and truly on. Colin's flying up to China to speak with Zijin next week. But in a nutshell, there was three options. They could sell their interest for $50 million US to Zijin. They could sell half of their interest to Zijin for $25 million and get Zijin to finance their remaining construction costs with SOFA plus 5% debt that would be paid out from the dividends in time. Or they can fund their share of the construction costs, which they're not too inclined to do. They've spoken out against that. in the past already. So you've, you've got your options on the table there. There's also this, uh, six month, you know, shot clock running now for this, this put option, this right to sell to. Zijin, that started once the PFS was delivered. So as of yesterday, and I'll flash up some wording from the agreement they released to the market at the back end of 2022. So they've got six months to do this. That includes getting shareholder approvals. So we could see something quite soon on that front, given the shareholder approvals themselves could take a little while. You've also got the fact that Xanadu aren't flush with cash. They've got $5 million. Again, that's... gives them the incentive to kind of move quickly. And just listening to some of the wording again in the webinar, I'll read out a couple phrases that Colin, the MD of the company said, Comagtile would sit nicely in Zegen's portfolio. They're perfectly positioned to build and operate it. This is what they're running toward. These guys are pretty eager. They're talking about it being a long journey. We've had shareholders in here for quite a while. He's going up there next week. in my point of view, with the intention of negotiating a deal with Zijin to get this one done and dusted, sort of run through in the past, how they look at those three options. They spoke a bit about potentially having a third party come on. That just seems like very hard work with Zijin already owning almost 20% in Xanadu outside of the joint venture structure. And yeah, I mean, Xanadu also have Jefferies Engage Defense. I mean, it's not probably your stock standard name in. Australia, but they've got them, the American Investment Bank and Bacchus looking at debt. They sort of spoke about a $25 million number needed if they were to stump up for their portion of the feasibility studies. Maybe there's been a bit of a sell-off today. Maybe that's the market anticipating that they will need to raise a bit of cash. But again, that's not something that's really in their interests. So we'll kind of see where it goes, but I think it's kind of exciting because I don't think you're just going to see this drag on and on. I think that's a less likely outcome. I think more likely you're going to see something happen in the nearer term. With $5 in the bank, are they negotiating from a bit of a point of place of weakness, do you think? What do you think they're, obviously Zijin have got the power here or not, even though they've got the, Zanadu's got the ownership. I think it goes both ways, right? Because Zijin want to move so quickly, they want to get the copper online. So they can stall on their part with their interest in the project. To start the DFS, Xanadu has to approve the budget. So Xanadu has the ability to stall progress. However, their option lapses in six months. So ZGN could play hardball and just, you know, well, you want to stall the budget, let's just let the clock tick and then what happens if their option lapses too? And then they certainly come raised. There's leverage from both perspectives. You're trying to call blasters. They didn't want to bring this online faster than, you know, and just want an outcome where they offer a takeover for the company at a premium. But there might just be some go slow kind of tactics in the interim. It's kind of hard to read. There's certainly, you know, upside and downside depending on how you read that play, but there's gamesmanship. It's a special situation. This is like a special sense kind of thing here. So how would it go, like, when you say, like, I assume Zeejin can't take over Xanadu, but they can buy the project off them? They could do either. If they're listed? Either or. Yeah. They could. A takeover is very much one of the options on the table and might even be the top outcome that the Xanadu team is going to negotiate. Okay. So even if it's so dumb question, like Zeejin can take over an ASX listed company without any Ferb involvement? They got Ferb approval for the arrangement that is already in... which leads me to think Ferb approval would be attainable. Yeah, and because it's not in Australia, it shouldn't. It's not really Ferb's problem. Ferb has had some overreach in the past where they've blocked stuff like that in Africa, but, yeah, I wouldn't, like, my interpretation of where Ferb's at right now is you wouldn't expect them to get in the way of this. Yeah, interesting. Very interesting. Got the bloody, got the eyes peeled, boys. Absolutely, mate. I'm watching this one closely. It's come into the wheelhouse in the last couple of weeks, hasn't it? It has. And you've got your eyes peeled. I'm watching they didn't just discover it. Like it's been around for a bit. A long, long time ago. Yeah. Mate, buddy, a bit of nuclear news out last night, which is interesting. The old SMR is back in the news. So Google apparently are buying, signing a corporate agreement to buy nuclear power for their AI needs. So this, it's for the purchase of. 500 megawatts of power from six to seven small modular reactors from Kairos Power. So this Kairos Power is... It's like a nuclear engineering company that build these SMRs, but they're backed by the Department of Energy in the US. So all for like AI data centre needs, but it's no, yeah, so it's obviously no AP1000. It's about half the size of that this agreement's for. And they're saying that the first SMR will be aimed to be in operation by 2030 future and further deployments through to 2035. Big news. And there is. Yeah, because the SMRs thing, I think I saw one article saying there's three in operation globally. I've heard one. I've heard none. Like they're not prevalent yet. The word is prevalent, though. The word is prevalent. Oh, yeah, like data centres. I assume there's shitloads of data centres. Don't know. Not yet. But they're because the difference with these SMRs compared to the I get the conventional pressurised water reactors, like water being used as the coolant. These use molten fluoride salt. as the reactor coolant. So these SMRs, they're like, looks like the commercial plant that they go into offer. They've got only like these pilot demo plants now, but it's like two 75 megawatt modular things. So I assume three of those would give you 450. And molten fluoride salts, bit of chemistry education here, boys. It's used as a coolant because chemical stability. It transfers heat at very high temperatures and it actually retains some of the radioactive fission products that can be released from the fuel during the whole process. And because it's a low-pressure reactor, so when they say the pressurised water reactors, they're pressurised so the water doesn't boil, whereas these are low-pressure reactors. So apparently this is all off their website, which means it's all in their favour. So you don't need the bulky and high expensive, like the high pressure containment structures and all that. So it's like, I don't know if it's apparently safer. But as I said, that's from the Kairos website. So, and, but these ones are, these are one of the HALU reactors. So you can see from the table that the fuel required is to be enriched to 19.75%, which is the level of U235, which is high assay, low enrichment uranium. And then so. And there's always the questions been recently around enrichment capacity around the world that is, I guess, ex-Russia. Because as we know, as if you haven't heard, Russia's about a bit under half of global uranium enrichment capacity at the moment. But a few announcements in the last couple of months. So you had Iran, the French utility, early in September announcing plans to build a multi billion dollar enrichment facility in Tennessee. in the US. And mentioned in the article, it could be equipped to enrich to HALU as well. So not just your normal three to 5% low enrichment level. And then they're also doing a US $1.9 billion expansion of their enrichment facility in Southern France, which is going to lift that enrichment capacity by 30%. And then you've also got the other global staple, you'd say, URANCO. So they're the British German Dutch Consortium. They've also just expanded their enrichment capacity in New Mexico by 15%. So they added more centrifuges to the existing facility. So, and I think that capacity, extra capacity is going to come on by early 2025. So there's a, yeah, there's a bit of work in the mix and done and about to be done on enrichment expansion outside of Russia. So, which is going to be. extremely critical come you know your 2030 and all that to get the halo capacity uh for this these types of smrs because we have the smrs are sort of going to be probably in a two-phase thing the first ones will just use like a six percent enriched uranium um and then they'll sort of be using the halo which later on which obviously requires a shitload more spinning to get the u-235 level up to the 19%, 19 to 20%. So, yeah, mate, she's pretty cool. So as you go. And the one we haven't seen, I think Canadian markets were closed last night, but we haven't, like this announcement is, you look at this, how's this different to the Three Mile Island announcement timing? Yeah. So it's not near term pounds, whereas Three Mile Island was like, nah, where Microsoft did the deal. Three Mile Island's getting restarted, much shorter timeframe, so it's like, right, that is near-term pounds that are needed to put in those. bloody reactors whereas this is bigger as well yeah 20 yeah 20 yeah a bit bigger not huge but like that's like we're talking here 2030 2035 but it's like there any announcement that will come out in the nearer term saying we're restarting a reactor which say it's like one like two years for instance it's like right where you're going to find the pounds for that in the two years considering you know a lot of all the contracts in place out to 2030 already so yeah They're the really market-sensitive ones, and this one probably isn't as sensitive. More risk in this one as well, right? Not a proven technology. Yeah, yeah, yeah. But, you know, it's the theme of the major tech companies now becoming hyper-engaged in this whole, like, you know, nuclear thesis is sort of playing out. Yeah. I think kind of a big deal for a man. From just like a social acceptance perspective as well because the mining industry sucks at PR and comms, just bad at it, but the tech. Same with the nuclear industry themselves. Yeah, totally. It's terrible, isn't it? But the tech companies, they've got a halo around them. Everyone loves them. So the moment they start advocating for nuclear, happy days. Yeah, yeah. So it's pretty. And there was another article. I saw Amazon recently bought a data center somewhere that was actually fed from a nuclear power station. So, yeah, it's the big seven or the tech. parts of the big seven like that's that's where the like they're just they're on a whole different scale than we're talking about when we're talking about bhp and rio like they choose they can move a global needle and it's better than this is one of them so yes beautiful right trav what did you what did you come up with in the uh at the crack of dawn one more for me this is a bit happening with asx listed company called siren gold namely they received an unsolicited offer from federation mining now siren gold like you know it's a Small cap, they've got two undeveloped gold projects in New Zealand. One's called Reefton. The other one is Sam's Creek Federation Mining. They're a private gold developer. Aussie Super has actually tipped in almost $200 million into this company. Last year, I'm pretty sure that there was a process, a strategic review or a process run for Federation Mining to get sold, is how I interpreted it. But seemingly didn't go anywhere. Now, Federation are indicating that. So, you know, they're going to pull the trigger on a decision to mine this year. I found this presentation. The production profile from, you know, their proposed mine in New Zealand doesn't kind of knock the lights out. It's mere sort of 63,000 ounces per annum over like 10 to 12 years. It's not huge, right? They reckon first gold end of 2025. Yeah, God, she looks a bit bloody. I don't know if that's a deep bloody oil body or is it a bloody... Cut and fill, but yeah, it looks very flat. It looks similar to like a McRae's thing over there. Flat ore bodies over there. Plenty of pains in the arses. Anyway, it's 8 p.m. on Sunday night. Street talk. It's a late weekend-y one. Street talk. They rumoured that Federation Mining could be looking at Siren Gold. Chucked up this article. And then sure enough, Siren confirms they actually received an NBIO from Federation in an announcement they put up on Monday morning, so yesterday morning. In three and a half short hours later, they followed up by saying they've declined the NBIO. They did not consider their proposal from Federation to be superior, but the definitive agreement already in place with RUA Gold, R-U-A Gold. And this is where some context is needed. On the 15th of July, so a couple of months ago, SIREN basically said it had agreed to sell its Reefton project for $20 million Australian to RUA Gold, $2 million in cash and $18 million in shares. SIREN would then focus on its Sam's Creek project. So the board's position in this deal with Rua is that it's superior from a value perspective to shareholders to the federation offer, which would have seen Siren shareholders end up with 10% of that pro forma enlarged closer to production minor. So with federation, their asset is fully permitted to production. They say 10,000 metres of decline and ramp development is completed over 18,000 metres drilled. or development is underway on three levels already. So it's more advanced, but the shareholders of Sarum will get in a much less of the pie. Where it gets interesting though is that the Federation offer was conditional on the transaction with Ruah being terminated. So there might be some synergies if you bundle Reefton Project with Federation potentially. And the Ruah transaction isn't actually a done deal yet. It's conditional on shareholder approval. Shareholders are voting Thursday this week, but the deadline for proxy instructions was actually 3pm today. So regardless, I'm really interested to see how the siren shareholders vote on this one. There's kind of too much happening really late in the game from a voting perspective, I think, to really influence an outcome from a shareholder vote. But I'm still kind of interested to track that vote and just see is there a contingent of siren shareholders that vote against this deal because they actually reckon there's more value and potentially backdooring Federation mining to... to the ASX boards via this sort of reverse takeover, which was the pitch of Federation Mining. It's like it's even, it's like this is like a, it's like shell company behaviour, the reverse takeover. Yeah. Yeah. To publicly list a private asset. And that's bread and butter of West Perth. Oh, mate, Jesus. You know how much food's been put on the table from an RTO. I think there's like a read through there because this is like, it's basically an Aussie super private. company like you know the vast majority of money being tipped into it is from aussie super um and if they ran up if there was a process run and they didn't get an accessible outcome they've now determined that the way to get the best possible outcome is is a public listing so aussie super probably wants it to be public for a reason and they they um they you know they clearly uh you know uh thinking rto is the best way to best way to do that with with sarah and i think that's kind of it Aussie Super, who've put the vast majority of the money into Federation, they want to return on their money and they think they're going to get that via a public listing or an RTO here, which, yeah, if they didn't get the value that they wanted to get from a strategic review, maybe the public markets are the only acceptable place they're looking now. But they might have to find somewhere other than Siren to go if shareholders don't want that. Yeah, interesting. Oh, a bloody bit of action on the small end of town. Absolutely. IPO is not really an option at the moment either, so we'll see what happens. Well, there's still a decision to mine as well, so there's going to be more capital that needs to be raised, and Aussie Super probably wants to share the load there rather than, yeah, stump it all up themselves, the majority of it. This is true. Good stuff, Matt. I think we'll call it a day there. Oh, what a day it is. What a day it is. It's actually going to be a good day tomorrow. It will be. Mate, give yourself a good day. Give MMS an open pit mining contract, and every day after that, it'll be the best day of your life. Pretty much say the same for grounded, cross-boundary energy. Oh, mate, get a Sicilian mine in Camp India. ASAP. Mate, cross-boundary energy. Mate, Sandvik ground support. Oh. The list keeps on going, CRE Insurance, Greenlands Equipment, K-Drill, MMTS, Australian Earthworks and Haulage and holy snapping duck shit, get a spark chart India, oodaroo money miners. The 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.

Delta Lithium slash gold, Brightstar, Osgold Astral when they get gold, Maximus Labyrinth, whoever else needs to frickin'move dirt. Call MMS right now, those ones specifically. And if you don't call them, I'm going to hand them your number anyway.

Couldn't have said it better myself, Matty. Boys, what have we got today? We've got three stories.

I fucked up my way. You're still writing, yeah. Oh, very good.

Starting with Pilbara, I reckon. Yeah. So Pilbara's upsized the debt facility. We've got uranium spectacular from you, Jane.

He's addicted to copper in Mongolia. And I'm going to touch on a New Zealand gold M&A thing involving Aussie super. Sure, bro. I love your work. Righto, let's-Start us off, Pilbara.

Oh, Pilbara debt. Yeah, mate. I can't give this story a bit of a whirl.

I read it and I went down a rabbit hole and anyway, I ended up back at the beginning. But Pilbara Minerals basically announced that they've established this $1 billion debt facility. And I initially sort of read it and it seems like this relatively innocuous announcement, right? That wasn't even marked as sort of market sensitive on the ASX platform when it came up. But in reality- Like I sort of went through the process of thinking there could be something to this.

You know, this is a big debt facility. It's more debt than they've got in place already. What are they going to do with it? Are they going to buy something? You know, that was the whole kind of rabbit hole I wanted to go down.

Could we lose some fuck loads of money? Did you think of that one? They're a more mature company, Matty. That's the reason. That is true in this pricing environment probably.

After CapEx. What other theories have you got, Matty? So to be fair to Pilbara, they did flag this at their full year results where they announced, Pilbara announces it's received credit, approved commitments from a banking group for a billion-dollar deficit. So it's not.

It's actually not New News, fair enough. But it's to a banking syndicate of commercial lenders, BNP, CBA, NAB, HSBC, SockGen, and ING, which is kind of a similar-ish syndicate. If you remember the original Liontown syndicate, remember it was like, I think it was ANZ that got cog feed in that syndicate. So there's no ANZ here, but there's a couple of new ones. You add ING and BNP to that.

So just kind of interesting to see which commercial lenders are willing to play in sort of, you know, with your finance, corporate finance. It's not project finance. It wouldn't. put it that way, but it's more a corporate facility because it's a revolving credit facility, this one. Every time I say ING, I just think of the barefoot investor.

That's what set up the ING account. Very good. Grow in the mojo. So what did you sort of find out?

Like you looked into the weeds, you tried to chase down obviously what they need the money for. I tried. What was the other sort of outcomes you came to, Matt?

Like, you know, it's a lot of money. You know, they want to buy something. And the thing that immediately stood out to me was the fact that they were, in this announcement, they were repaying the concessional debt facilities that they have in place. So this is low-cost debt facility with NAIF, with Export Finance Australia, and they're basically paying that down.

It was a condition of entering this new facility. But basically, in my head, I'm thinking, it doesn't make sense. Why would you pay down your cheap debt in order to pay a higher interest rate, you know, a more expensive loan? Obviously, they're in.

increasing the quantum. So I'm thinking they must have a deal in mind. What was the quantum of the NAF and EFA? They basically, they had some senior secured as well, but all up they had about $400 million of joint debt.

Oh, yeah, so they have a double on it. Jeez. Yeah.

So, you know, spoiler though, it's not that juicy. You know, to kind of highlight my point, though, you can see here's the annual report, the interest rates that they'd been paying on those various existing facilities, which. added to $400 million were 6.7% to 8.7% on the various facilities there, which is pretty cheap.

Like, you know, you can bet the interest rate at the commercial banks and the banking syndicate they announced today will be, and they're going to require higher than what NAIF and EFA require. So what's 6.8%, 8.7%? That's about what, SOFA plus one or two?

Pretty low. It's pretty, it's SOFA plus a couple. It's low-ended for sure.

And like, you know, NAIF and EFA, I think the tenors were enormous on them too. It was like. I could be wrong, but I'm pretty sure I saw like 10 plus year 10ers on something, which is pretty friendly.

At this point, like when I'm seeing this and I'm reading this, I nearly convinced myself there must be a deal in mind, but I stupidly didn't realise that Pilbara had already told the market about the facility at this point. I only realised that later, which meant they, of course, got asked about it in the analyst call. So I'll save you the fine print of my own. Stupid stupidity this morning.

I'll just play the question that they got asked months ago you picked up a particularly key point and that is that covenants on the existing facility and particularly the Leverage ratio will decline over FY 25 To gross debt to either da of two times, which is fairly restrictive This facility has a net debt to either da leverage ratio, which will take into account our significant cash balances. So it's significantly more flexible on that basis. Oh, at least you kept yourself busy this morning, Trav.

Nothing wrong with that. So sure enough, there it is on the same page I grabbed the interest rates from in the annual report, the restrictive debt covenant that is referred to there. The gross leverage ratio is not greater than 2.0 to 1, sort of after 30 June 2025. And yes, it's, you know.

Obviously, the covenants are a role here and, of course, also providing some optionality and flexibility with their liquidity going forward. And, you know, if you've got negative EBITDA, like you talk about, Matty, it kind of complicates things if you've got restrictive covenants as well when it comes to your debt facilities in place. But, you know, regardless, they've got more liquidity now, which allows more optionality, and that's the key point. Optionality could be like a cash-funded deal or it might not be. They do guide to CapEx of $615 to $685 million in FY25.

So it's still very chunky CapEx this financial year. And assume that captures the bulk of P1000, which is supposed to be completed in FY25 as well. So I look at what the street is expecting for CapEx after FY25. And consensus is a lot. Like the street sort of thinks they're going to keep investing.

a lot into CapEx. The consensus numbers are FY26, 492 million, FY27, 906 million, FY28, 647 million. So look.

Is that an assumption of P2000 going ahead? Various assumptions. Like whatever the brokers have in their base case is whatever they want to model as their base case, but these are just consensus.

So it'd be like spread between like P2000. I don't know if some are including Latin like pre-development. sort of work as well in their capex. But the point is there's more than enough internal competition for capital to warrant the debt facility when you've got those kind of growth options from your own capital at the same time. So I'm not going to rule out more inorganic growth at the right time too as a result of this debt facility.

Just never know, Matty. Where would you put your finger on there, Trav? sticking like a sigmary thing in Brazil or? I think.

What do you think of WA? I think base case, nothing for a long time. Sigma at the right time. But, yeah, I'm pretty sure Anna's got like just stars in her eyes on value there, so good luck. 90% premium.

That'll do the job. To the all-time high for her. Yeah, that'll do the job for most people. Have you heard, I don't know if you're scouring through the announcements, is there anything in there detailing if Pilbara Minerals have contacted CRE Insurance yet to get to break the policies for the Latin assets?

Glaringly absent, Matty. Really? Unfortunately so.

That's so surprising. I thought they would have because that's your first call on any sort of M&A because you don't want a frigging insurance stitch-up. on something that you're buying.

Not just M&A, Matty. Don't forget Pilgangura, right? Like have you seen the ore sorting machinery that they've just installed as part of that P680, I think? I reckon this is a photo of the ore sorting that they've installed there. It's monstrous, mate.

Imagine if that bit of kit went down for a few days. That's business interruption. Mate, as we've seen, catastrophic failure is possible for processing infrastructure, as we mentioned yesterday for Pantora. You can insure against that.

Yeah. Yeah. You need it.

Mate, Steve, like, Tar is your CRE guy in Perth. And the best way to explain him is he's like one of those assets in the Jason Bourne movies. Like, he's sitting there and when he gets the call, it's on. Like, it is game time. And he's straight on.

Like, mate, and Harrow's in town this week for the 80th conference. Mate, give the CRE boys a buzz. And, mate, they'll sort you out. I guarantee you that they'll tell you something you don't know.

about insurance broking. Bloody, oh, it's as simple as that. I can't say it any more simple. Far out. Right, next up on the shopping list today, Xanadu.

Xanadu. We spoke about Xanadu a couple of weeks ago now, I think, and yesterday. Last week. Is it last week? Yesterday?

Time flies. So yesterday. What's tonight?

Tuesday. I've had a big week. So we got the PFS that we were excited to see.

Also got an updated reserve and resource statement. And why I think this is interesting, long story short, is I think something is going to happen here pretty soon. So let's just start quickly with the updated resources. They updated these not too long ago in August. And then again, yes, the key difference is just tweaking the cutoff.

So from 0.2% copper equivalent down to 0.13% copper equivalent. Total resource, 2.2 billion tonnes at 0.29% copper equivalent. This is bloody low grade, huge sort of scale thing. 4.7 million tonnes of contained copper and 11 million ounces of gold. And that tweaking of the cutoff grade substantially increases the contained copper.

up almost 25% just on that slight change of the number there. So you do have to blow most of it up anyway. You can't just like, oh, no, we've just got to leave that chunk there. It doesn't quite work like that, does it?

That's bloody 0.18. Can't touch that shit. So let's get into the PFS, which is a bit more interesting. As a quick reminder, Xanadu own a bit over 38% of the economics of the project.

The headline numbers are 21% IRR. US 930 million MPV using an 8% discount rate, four-year payback and a 29-year mine life. So this is...

What base case throughput did they go with? This is big. For the first eight years, 26 million tonnes per annum.

So they notched that up from the earlier initial 15 million tonnes per annum going up to 52 million tonnes per annum. So just huge. The numbers don't exactly scream knockout and they're kind of looking at the numbers, as they have played it so that they met...

some of the conditions that needed to be met for the ZGIN agreement to stay in place. But I think there's a bit more to it that we should kind of chat about. It's big cap ex-low-grade copper deposit. But, you know, you can see in this cross-section, like that pit is tremendously deep in that PFS base case too. Like you kind of look and, yeah, that PFS pit base case is like 700 metres deep.

Yeah, and it looks like the honeypot's what? Four, five. A depth. About 400 metres down she starts. Yeah.

That really good bit is a bit deeper. They did sort of actually discuss potentially block caving, but they've kept it very, very simple with the PFS today and they'll look into a few other things. I don't imagine that would kind of change going forward, but we're talking about 75,000 tonnes per annum copper production and 165,000 ounces of gold every year.

Yeah, geez, I assume they haven't got... Aussie $3,900 is the gold price in the study either. The gold price, the commodity price assumptions are pretty interesting. We'll chat through in a moment.

But they use $2,100 US for gold and $4.10 for copper a pound. God, I can't believe we're talking about 0.2% copper deposits. 0.29.

But then again, equivalent, equivalent. But then you wouldn't think frigging 10 years ago, you'd be talking about two gram gold undergrounds, how things change. Exactly.

So a key, a key point of difference now going forward that the PFS is been released is that ZGN has taken over as the operator. That'll be the case through the final feasibility, although there'll be discussions ongoing as we kind of speak now. And. As we said a couple of weeks ago, I think there could be significant value uplift in Zegin doing it.

As we said at the time, these are Western numbers. Zegin, they pretty much said it in the webinar, Xanadu. Zegin will be able to pull those numbers right down, but obviously that's not a case that Xanadu can base upon their numbers. So they've got to do it with their assumptions, their independent contractors and these sorts of things. But Zegin will be looking at it and they'll be running their complete own numbers on this one.

They better have some bloody numbers in that study for a frigging grounded camp, J.D. Are they in there? Tell me about the grounded camps, mate.

We'll see if they are. And you tell me if they're in there. Well, you know, these grounded camps, I don't know if yous know this, you know why they're so bloody good? I don't know.

Because they're built by Paul Natoli, and Paul Natoli was voted the best builder in Sicily 10 years running. That is a true fact. It's actually quite a feat. There's some good builders in Sicily.

Yeah, and that and... Don't underestimate. That is heavily competitive, that competition.

Have a look at these Sicilian buildings I've got here. These were built in the late 1800s. Notice anything special about it?

They're still up. They still look brand new after frigging 120 years. You know why? Because that's because Sicilians built them. And they're beautiful.

Right. There's a new rule in the mining industry I'm announcing today. Anyone that wants to build bloody a mine camp or any infrastructure on site, the builder has to have Sicilian heritage.

That is, and like the only Sicilian builder I know in Australia that services the mining industry is Paul Natoli from Grounded. So in honor. of this new rule for the mining industry, I suggest in true Sicilian style, we have some limoncello.

I'm in. Let's do it. Let's get it.

Ah, what a bloody, what a Tuesday we go. Salute! Salute.

Ah, go grounded. Go grounded and go Sicily. You'll need a grounded camp to incentivise a workforce out there, mate.

It is a harsh country. Oh, mate. Mongolia, harsh country.

That's a bloody piece of piss for Paul. He'd do it in his sleep. Anyway, back to Xanadu.

What else stood out, JG? We're pumped up now. Bloody blowing.02.

So obviously there's a couple challenges, Matty, and this one's not even a spin for an ad, but water is one of the biggest ones they need to address. They're confident. There's heaps of water in the Gobi Desert. Just takes a bit of time, bit of... politics to sort it all out and get that one sorted.

They need to come up with an investment agreement with the Mongolian government. This was a big dragging feature of OT, getting that going for Rio. A lot of negotiations, again, can take a while.

But overall, I think there's quite a bit of risk as well as quite a bit of conservatism in the PFS. And I think it kind of balances out and by and large, they've taken a bit of a conservative approach. It's not like there's sort of... wild outreaching numbers that we're talking about that we have done in the past with scoping studies and PFSs and DFSs where perhaps the commodity price assumptions are just way out of the ballpark.

One thing that stood out though was that recoveries came right off from scoping to PFS. They did. And they addressed that again, sort of speaking to conservatism, taking on the advice of the independent.

contractors that they've pulled in to do those ones. We had spoken a couple of weeks ago about potentially treating some of the oxide or transition stuff, doing test work on that, putting that in a heat leach. They've completely ruled that out. There's optionality on that. Potential with silver, they've put a line through that.

That might be something that eventuates in the BFS that they're doing. So there's a few things, but you're right, recoveries probably were a bit lighter on from the expectations. from the initial study that they'd done. What are they proposing to do with the oxide now if they're not heap leaching it? So they're putting it in a low-grade stockpile away from the waste essentially, and I think in time that will get addressed, but that's just not part of the economics.

They're just not going to process it. Well, CJ might, but Xanadu's not going to put out a PFS saying that's the base case. Yeah, righto. Yeah.

Yeah. Interesting. Right.

So, buddy, what's next for them, JD? So one of the things we'd spoken about was potentially skipping the BFS and going straight through. They are now talking about doing it.

So the PFS had talked about earlier construction run in parallel with engineering work, but they're now talking about doing a final study starting Q1 of next calendar year, running through to Q2 of calendar year 2026. And again, Colin in the webinar said Zegen are confident they can do it quicker. So I think already there's that gamesmanship and negotiations taking place. where Zijin want to get this thing going straight away. They want to get the mine in operation.

And I'm sure Xanadu are thinking the same, they want to do the same, but maybe that's not the best negotiation strategy to go and say that aloud. Maybe they're starting to play those sorts of games. And this kind of ties in with the ultimate end game of how this goes, because the clock is ticking and the negotiations are well and truly on.

Colin's flying up to China to speak with Zijin next week. But in a nutshell, there was three options. They could sell their interest for $50 million US to Zijin. They could sell half of their interest to Zijin for $25 million and get Zijin to finance their remaining construction costs with SOFA plus 5% debt that would be paid out from the dividends in time.

Or they can fund their share of the construction costs, which they're not too inclined to do. They've spoken out against that. in the past already. So you've, you've got your options on the table there.

There's also this, uh, six month, you know, shot clock running now for this, this put option, this right to sell to. Zijin, that started once the PFS was delivered. So as of yesterday, and I'll flash up some wording from the agreement they released to the market at the back end of 2022. So they've got six months to do this. That includes getting shareholder approvals.

So we could see something quite soon on that front, given the shareholder approvals themselves could take a little while. You've also got the fact that Xanadu aren't flush with cash. They've got $5 million.

Again, that's... gives them the incentive to kind of move quickly. And just listening to some of the wording again in the webinar, I'll read out a couple phrases that Colin, the MD of the company said, Comagtile would sit nicely in Zegen's portfolio. They're perfectly positioned to build and operate it. This is what they're running toward.

These guys are pretty eager. They're talking about it being a long journey. We've had shareholders in here for quite a while.

He's going up there next week. in my point of view, with the intention of negotiating a deal with Zijin to get this one done and dusted, sort of run through in the past, how they look at those three options. They spoke a bit about potentially having a third party come on.

That just seems like very hard work with Zijin already owning almost 20% in Xanadu outside of the joint venture structure. And yeah, I mean, Xanadu also have Jefferies Engage Defense. I mean, it's not probably your stock standard name in.

Australia, but they've got them, the American Investment Bank and Bacchus looking at debt. They sort of spoke about a $25 million number needed if they were to stump up for their portion of the feasibility studies. Maybe there's been a bit of a sell-off today. Maybe that's the market anticipating that they will need to raise a bit of cash.

But again, that's not something that's really in their interests. So we'll kind of see where it goes, but I think it's kind of exciting because I don't think you're just going to see this drag on and on. I think that's a less likely outcome.

I think more likely you're going to see something happen in the nearer term. With $5 in the bank, are they negotiating from a bit of a point of place of weakness, do you think? What do you think they're, obviously Zijin have got the power here or not, even though they've got the, Zanadu's got the ownership. I think it goes both ways, right?

Because Zijin want to move so quickly, they want to get the copper online. So they can stall on their part with their interest in the project. To start the DFS, Xanadu has to approve the budget.

So Xanadu has the ability to stall progress. However, their option lapses in six months. So ZGN could play hardball and just, you know, well, you want to stall the budget, let's just let the clock tick and then what happens if their option lapses too?

And then they certainly come raised. There's leverage from both perspectives. You're trying to call blasters.

They didn't want to bring this online faster than, you know, and just want an outcome where they offer a takeover for the company at a premium. But there might just be some go slow kind of tactics in the interim. It's kind of hard to read. There's certainly, you know, upside and downside depending on how you read that play, but there's gamesmanship.

It's a special situation. This is like a special sense kind of thing here. So how would it go, like, when you say, like, I assume Zeejin can't take over Xanadu, but they can buy the project off them?

They could do either. If they're listed? Either or. Yeah.

They could. A takeover is very much one of the options on the table and might even be the top outcome that the Xanadu team is going to negotiate. Okay.

So even if it's so dumb question, like Zeejin can take over an ASX listed company without any Ferb involvement? They got Ferb approval for the arrangement that is already in... which leads me to think Ferb approval would be attainable.

Yeah, and because it's not in Australia, it shouldn't. It's not really Ferb's problem. Ferb has had some overreach in the past where they've blocked stuff like that in Africa, but, yeah, I wouldn't, like, my interpretation of where Ferb's at right now is you wouldn't expect them to get in the way of this. Yeah, interesting. Very interesting.

Got the bloody, got the eyes peeled, boys. Absolutely, mate. I'm watching this one closely.

It's come into the wheelhouse in the last couple of weeks, hasn't it? It has. And you've got your eyes peeled.

I'm watching they didn't just discover it. Like it's been around for a bit. A long, long time ago.

Yeah. Mate, buddy, a bit of nuclear news out last night, which is interesting. The old SMR is back in the news. So Google apparently are buying, signing a corporate agreement to buy nuclear power for their AI needs. So this, it's for the purchase of.

500 megawatts of power from six to seven small modular reactors from Kairos Power. So this Kairos Power is... It's like a nuclear engineering company that build these SMRs, but they're backed by the Department of Energy in the US.

So all for like AI data centre needs, but it's no, yeah, so it's obviously no AP1000. It's about half the size of that this agreement's for. And they're saying that the first SMR will be aimed to be in operation by 2030 future and further deployments through to 2035. Big news. And there is.

Yeah, because the SMRs thing, I think I saw one article saying there's three in operation globally. I've heard one. I've heard none. Like they're not prevalent yet. The word is prevalent, though.

The word is prevalent. Oh, yeah, like data centres. I assume there's shitloads of data centres. Don't know.

Not yet. But they're because the difference with these SMRs compared to the I get the conventional pressurised water reactors, like water being used as the coolant. These use molten fluoride salt. as the reactor coolant.

So these SMRs, they're like, looks like the commercial plant that they go into offer. They've got only like these pilot demo plants now, but it's like two 75 megawatt modular things. So I assume three of those would give you 450. And molten fluoride salts, bit of chemistry education here, boys. It's used as a coolant because chemical stability. It transfers heat at very high temperatures and it actually retains some of the radioactive fission products that can be released from the fuel during the whole process.

And because it's a low-pressure reactor, so when they say the pressurised water reactors, they're pressurised so the water doesn't boil, whereas these are low-pressure reactors. So apparently this is all off their website, which means it's all in their favour. So you don't need the bulky and high expensive, like the high pressure containment structures and all that.

So it's like, I don't know if it's apparently safer. But as I said, that's from the Kairos website. So, and, but these ones are, these are one of the HALU reactors. So you can see from the table that the fuel required is to be enriched to 19.75%, which is the level of U235, which is high assay, low enrichment uranium. And then so.

And there's always the questions been recently around enrichment capacity around the world that is, I guess, ex-Russia. Because as we know, as if you haven't heard, Russia's about a bit under half of global uranium enrichment capacity at the moment. But a few announcements in the last couple of months. So you had Iran, the French utility, early in September announcing plans to build a multi billion dollar enrichment facility in Tennessee.

in the US. And mentioned in the article, it could be equipped to enrich to HALU as well. So not just your normal three to 5% low enrichment level. And then they're also doing a US $1.9 billion expansion of their enrichment facility in Southern France, which is going to lift that enrichment capacity by 30%. And then you've also got the other global staple, you'd say, URANCO.

So they're the British German Dutch Consortium. They've also just expanded their enrichment capacity in New Mexico by 15%. So they added more centrifuges to the existing facility. So, and I think that capacity, extra capacity is going to come on by early 2025. So there's a, yeah, there's a bit of work in the mix and done and about to be done on enrichment expansion outside of Russia. So, which is going to be.

extremely critical come you know your 2030 and all that to get the halo capacity uh for this these types of smrs because we have the smrs are sort of going to be probably in a two-phase thing the first ones will just use like a six percent enriched uranium um and then they'll sort of be using the halo which later on which obviously requires a shitload more spinning to get the u-235 level up to the 19%, 19 to 20%. So, yeah, mate, she's pretty cool. So as you go. And the one we haven't seen, I think Canadian markets were closed last night, but we haven't, like this announcement is, you look at this, how's this different to the Three Mile Island announcement timing? Yeah.

So it's not near term pounds, whereas Three Mile Island was like, nah, where Microsoft did the deal. Three Mile Island's getting restarted, much shorter timeframe, so it's like, right, that is near-term pounds that are needed to put in those. bloody reactors whereas this is bigger as well yeah 20 yeah 20 yeah a bit bigger not huge but like that's like we're talking here 2030 2035 but it's like there any announcement that will come out in the nearer term saying we're restarting a reactor which say it's like one like two years for instance it's like right where you're going to find the pounds for that in the two years considering you know a lot of all the contracts in place out to 2030 already so yeah They're the really market-sensitive ones, and this one probably isn't as sensitive.

More risk in this one as well, right? Not a proven technology. Yeah, yeah, yeah. But, you know, it's the theme of the major tech companies now becoming hyper-engaged in this whole, like, you know, nuclear thesis is sort of playing out.

Yeah. I think kind of a big deal for a man. From just like a social acceptance perspective as well because the mining industry sucks at PR and comms, just bad at it, but the tech.

Same with the nuclear industry themselves. Yeah, totally. It's terrible, isn't it? But the tech companies, they've got a halo around them. Everyone loves them.

So the moment they start advocating for nuclear, happy days. Yeah, yeah. So it's pretty. And there was another article.

I saw Amazon recently bought a data center somewhere that was actually fed from a nuclear power station. So, yeah, it's the big seven or the tech. parts of the big seven like that's that's where the like they're just they're on a whole different scale than we're talking about when we're talking about bhp and rio like they choose they can move a global needle and it's better than this is one of them so yes beautiful right trav what did you what did you come up with in the uh at the crack of dawn one more for me this is a bit happening with asx listed company called siren gold namely they received an unsolicited offer from federation mining now siren gold like you know it's a Small cap, they've got two undeveloped gold projects in New Zealand.

One's called Reefton. The other one is Sam's Creek Federation Mining. They're a private gold developer.

Aussie Super has actually tipped in almost $200 million into this company. Last year, I'm pretty sure that there was a process, a strategic review or a process run for Federation Mining to get sold, is how I interpreted it. But seemingly didn't go anywhere. Now, Federation are indicating that.

So, you know, they're going to pull the trigger on a decision to mine this year. I found this presentation. The production profile from, you know, their proposed mine in New Zealand doesn't kind of knock the lights out. It's mere sort of 63,000 ounces per annum over like 10 to 12 years. It's not huge, right?

They reckon first gold end of 2025. Yeah, God, she looks a bit bloody. I don't know if that's a deep bloody oil body or is it a bloody... Cut and fill, but yeah, it looks very flat.

It looks similar to like a McRae's thing over there. Flat ore bodies over there. Plenty of pains in the arses.

Anyway, it's 8 p.m. on Sunday night. Street talk.

It's a late weekend-y one. Street talk. They rumoured that Federation Mining could be looking at Siren Gold. Chucked up this article.

And then sure enough, Siren confirms they actually received an NBIO from Federation in an announcement they put up on Monday morning, so yesterday morning. In three and a half short hours later, they followed up by saying they've declined the NBIO. They did not consider their proposal from Federation to be superior, but the definitive agreement already in place with RUA Gold, R-U-A Gold. And this is where some context is needed. On the 15th of July, so a couple of months ago, SIREN basically said it had agreed to sell its Reefton project for $20 million Australian to RUA Gold, $2 million in cash and $18 million in shares.

SIREN would then focus on its Sam's Creek project. So the board's position in this deal with Rua is that it's superior from a value perspective to shareholders to the federation offer, which would have seen Siren shareholders end up with 10% of that pro forma enlarged closer to production minor. So with federation, their asset is fully permitted to production. They say 10,000 metres of decline and ramp development is completed over 18,000 metres drilled.

or development is underway on three levels already. So it's more advanced, but the shareholders of Sarum will get in a much less of the pie. Where it gets interesting though is that the Federation offer was conditional on the transaction with Ruah being terminated. So there might be some synergies if you bundle Reefton Project with Federation potentially.

And the Ruah transaction isn't actually a done deal yet. It's conditional on shareholder approval. Shareholders are voting Thursday this week, but the deadline for proxy instructions was actually 3pm today. So regardless, I'm really interested to see how the siren shareholders vote on this one.

There's kind of too much happening really late in the game from a voting perspective, I think, to really influence an outcome from a shareholder vote. But I'm still kind of interested to track that vote and just see is there a contingent of siren shareholders that vote against this deal because they actually reckon there's more value and potentially backdooring Federation mining to... to the ASX boards via this sort of reverse takeover, which was the pitch of Federation Mining. It's like it's even, it's like this is like a, it's like shell company behaviour, the reverse takeover. Yeah.

Yeah. To publicly list a private asset. And that's bread and butter of West Perth. Oh, mate, Jesus.

You know how much food's been put on the table from an RTO. I think there's like a read through there because this is like, it's basically an Aussie super private. company like you know the vast majority of money being tipped into it is from aussie super um and if they ran up if there was a process run and they didn't get an accessible outcome they've now determined that the way to get the best possible outcome is is a public listing so aussie super probably wants it to be public for a reason and they they um they you know they clearly uh you know uh thinking rto is the best way to best way to do that with with sarah and i think that's kind of it Aussie Super, who've put the vast majority of the money into Federation, they want to return on their money and they think they're going to get that via a public listing or an RTO here, which, yeah, if they didn't get the value that they wanted to get from a strategic review, maybe the public markets are the only acceptable place they're looking now. But they might have to find somewhere other than Siren to go if shareholders don't want that.

Yeah, interesting. Oh, a bloody bit of action on the small end of town. Absolutely.

IPO is not really an option at the moment either, so we'll see what happens. Well, there's still a decision to mine as well, so there's going to be more capital that needs to be raised, and Aussie Super probably wants to share the load there rather than, yeah, stump it all up themselves, the majority of it. This is true.

Good stuff, Matt. I think we'll call it a day there. Oh, what a day it is. What a day it is. It's actually going to be a good day tomorrow.

It will be. Mate, give yourself a good day. Give MMS an open pit mining contract, and every day after that, it'll be the best day of your life. Pretty much say the same for grounded, cross-boundary energy. Oh, mate, get a Sicilian mine in Camp India.

ASAP. Mate, cross-boundary energy. Mate, Sandvik ground support.

Oh. The list keeps on going, CRE Insurance, Greenlands Equipment, K-Drill, MMTS, Australian Earthworks and Haulage and holy snapping duck shit, get a spark chart India, oodaroo money miners. The 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.

Transcript for:Insights on Mining Sector Developments

Transcript for:
Insights on Mining Sector Developments