right money miners another day another bloody shitload of stories that we're about to rip out I'm pretty sure every one of these could use access mining technology I don't think there's any mining company that doesn't need them the trusted advisor mining development expiration everything but you look fresh m c oh I was going to sort of C the mullet but then I'm like I'll just take a bit more off I'm probably going a bit deep debuting the back of your neck today it makes you look skinnier I would just say m the bloody oh mate the women pulling me up in the street is it just being unbelievable God Zer to one oh it's just 100% increase that's not the only thing you got a new haircut stick on your goods Mar's giving us some stickers for me Mike how good's that mate Mary I was wanting to meet Mary and uh gc6 at diggers but on the last night having a kebab at 3:00 in the morning he rocks up a miles Contracting you and I'm like milesy he coming in to get a pizza after night shift and give me a lift home afterwards you both finished night shift oh what a bloody day right what do we got today we got uh JD I so fucking proud of you I thought I thought you might be M you've gone balls deep into insitu recovery over in Wyoming mate you might need to hold my hand through it but I'm excited to talk about uranium and then we've got another Rogue one which I'm Keen to hear about Metals Tech it's been a freaking fascinating story in the background I think we spoke about it maybe half a year ago or so right yeah mate there uh it's colorful colorful it's come to a bit of a head with sort of yesterday and stuff some some really interesting stuff and Alli Goldies Goldies of course merch and correspondent when we made Merchant and stuff we bringing J no make has got their big funding package to develop their merching project so we' touch on that a little bit over subscrib too bloody well done I think you're allowed to say those are you allowed to say over subscribed I remember I know yeah they don't like using the word oversubscribe so we used to swap it with well supported strongly supported basically means the same I've g into oh the the go Coast the resource RIS and stars is on at the moment so all the preos are coming out and I was just scrolling through develops and cuz I'm always bloody interested in them cuz he probably gave me my first job but yeah I've gone into an unnecessary EXL spreadsheet she session yeah I saw you giv XL good run for M mate I don't know where I've ended up but it's cool right JD take it away with the bloody yellow cake Sunshine all right like you said M moment we're going to Wyoming ISR project in the uh the US of so if you want to frame this one kind of uh positively you could say they might be the next uranium producer on the ASX if you want to frame it in a bit of a Different Light you could say they're the the second worst performing a uranium ASX stock over the past couple couple years or so ra obviously taken the cake there so have we said the company yet Peninsula Peninsula yeah yeah I don't know now we havea we're talking about so these guys are in the construction phase right now looking to start commissioning at the end of this calendar year but you know you get the the first drums out by Q2 of next calendar year they've had a few hiccups and we'll quickly run through what the uh the context around this one is because we spoke about it over a year ago now they had um ueec essenti um you know they terminated a contract Peninsula drew the Short Straw there they were essentially sending a you know intermediate kind of product which would be toll treated by ueec which meant that Peninsula then had to build the end of that processing um facility themselves so they could produce a dry yellow cake product that subsequently required a fair bit of capital to be raised MD you're pretty intricately familiar with the the ISR process why don't you give us a bit of a rundown quickly of how it relates to them and where they were kind of you know having to add on processing yeah it's it's actually quite you can draw so many parallels between these iron exchange columns and how it works to Gold processing believe it or not like the so the essentially what they were doing is selling a uranium concentrate you'd say it's like selling a gold concentrate without going through the final process so like with these ISR projects you have this they call the PLS the pregnant liquid solution the acid that goes through the Paleo Channel then goes into these ion exchange things the lixiviant and then those ion exchanges have the when they talk about the resin the resin is like you got the the pregnant liquid solution going one way and the resin going the other way exactly the same as a gold processing plant with uh your go gold going one way and the carbon the gold in cide going one way and the carbon going the other way so the resin is what takes the uranium out of the pregnant liquid solution and attaches onto the resin so what these guys were doing was going through that process and then s uh getting that uranium enriched resin then processed at another facility instead of like you know G have to go through the illusion Electro winning and then to produce the d a bar so they are effectively you know like selling loaded carbon effectively and then someone else processing it so um yeah that's yeah yeah you obviously need the extra Capital like and and to even go from is it u4 I think it is like what the the actual bright yellow cake that you see is not u308 u38 is actually I think it's like an olive color so like there's an EXT extra step to process that to actually get u308 which is what the converters prefer because they want just u308 given to them then they can convert it into uf6 they don't want to have to go from I think it's uo it's uo2 or uf4 or something um I'll be happily corrected by anyone not a UFO you something it's funny yeah so as you said Jody a lot of extra Capital to go in to get it to that stage exactly M so they raised in June 106 million and in January they completed a $60 million SP and placement the placement had been done a couple months prior to that so that kind of so two Rises since the yeah so that initially that rug pool happened in July of last year and then they came out with a restart plan and everything so today you're sitting with about 11 rigs on site these are the ones that are chucking in like you sort of spoke to there Maddie the the production and injection Wells that I guess the first step in the ISR process they say that's 76% um drilled and and cased at mine unit 3 so got a mine unit one mine unit two three and four being developed and they're pre they're preconditioning at the moment AR they exactly so they they're dropping the pH in one and two and in this quarter that we're now currently in they'll be doing the same at munit three yeah so that and I I think I haven't looked too much into this I know this is what boss had to do because of the because of the salt in the like salt is your enemy in I in bloody uranium processing salt having salt is like having copper with your gold because so they've got to they got to flush acid water through without like before they put the sulfuric acid in to actually by the sounds dissolve all the as much of the salts or the carbonates they can to condition the well so that when the pregnant liquid solutions coming out if there's shitload of salt in it when it the r the salt attaches to the res resin prefer preferentially ahead of the uranium same as how copper attaches to carbon preferentially than gold with the cyanid solution when it's cyanid soluble so that's why getting rid of they talk about the RO having Ro plant at these things and like preconditioning to get as much salt out so salt water is is the enemy and then when you take the when you take the uranium off the resin which is like the next step after what they were going to do you actually just add salt to it and it takes the resin off the uranium BL chemistry it is a freaking chemistry set it's like you need Walter White there bloody stop bloody cooking but if Walter White was a real person he would be the man for ISR cuz it is bloody an absolute chemistry set oh be fre you know it mate and that preconditioning that's a sort of two to three month process which is why they kind of have to start it pretty soon to get it all humming by the end of this calendar year there's a sort of interesting facet of um isi projects you might notice that they're not really they don't tend to be debt financed you know we noticed that with with boss they were cashed up they had obviously Uranium on hand as well and the same can be said for peninsula right now and it's kind of twofold you firstly need off take which these guys have and will'll get into in more detail later on but then you also need a proven reserve and this is kind of done through delineation drilling which is more or less what you're doing when you're building out the the wellfields so it's a it's kind of timing and costing at the end of the day you don't get to that point and essentially you're not giving the commercial Banks the the confidence that they need prior to doing it because you may as well do it all at the at the same time yeah they did say though that they now have a financial advisor on board to try and help them lock up a bit of debt so maybe you know come the first half of next year once they are actually producing a little bit they can get a bit of debt to sort of support working capital and and these sorts of things yeah I'm not I'm not sure how um cuz I think it's all like mud rodary in that but like yeah be interested to know like how operation works with these things cuz it sounds like there's no point drilling into it if you're not going to use it as a wellfield like obviously the most efficient ways to use it as a a like a an injection well or an extraction well to then delineate it um but yeah it's yeah it's interesting but your your time your time constrain because you you want to delineate it but then you want to get it established to start producing yeah yeah so to to give a bit more sort of round on the the whole project they've got Ross that's the area where the um the processing plant now sits and then they've got a whole bunch of land in a sort of long kind of rectangle around it so you've also got Kendrick which sort of plays into the um the mineral uh the measured and indicated Resource as well so that'll play in over that 10-year mind life that they've got so they talk about 58 million pounds in resource but like the vast vast majority of this over 40 million pounds sits in inferred in the The Wider kind of area so the actual amount that they're going to pull out over the 10 years is a bit under 15 million pounds so steady state 1.8 million pounds but it takes a while to kind of get there and in terms of grade they're talking high 400s or low 500s PPM now to give a bit context again boss is 620 at honeymoon 1,100 PPM at their Alesa project in in Texas and bof score is again a bit over 1100 in uh in Kazakhstan I think and I think like yeah those and those Kazakhstan ones are you know for like bossing that I think the channels like 3 m met thick you go over to kavan they reckon they're like 6 to 8 m thick like the channels are so much bigger yeah um and they just Fu and I don't I don't think CU Adam prom have limits on I know the ones over here you have limits on how much acid the rate at which you inject it into the ground like so it doesn't per like doesn't there's not yeah yeah so and it depends on where the water table is but I think is Adam prom I think they can just jam it in as quick as they can I think and that makes I'm exposing myself to get corrected on a fuckload of shit today it's like my first Metallurgy episode and Nathan sto us on the phone straight away yeah I mean you can see that production from Ross dials off right after 20126 in 2027 that's where their sort of initial grab comes from but then they got Kendrick which is the next one so you can see there's not too many years of life into that one yeah so to get into the the oft and more of the finance stuff where I feel a bit more at home you can see they've got six offtake contracts that covers roughly 40% of their planned production over the next 10 years so that total is6 million of production like I said I think it's 14.8 million that is the total in the mine plan currently so roughly 40% that we're working with there and it's based off a fixed base with escalation as well as Market linked pricing so it's a bit ambiguous you don't totally know what they're going to get paid for it but you can dig in a bit so they've got this 2023 restart study and there's some interesting stuff in there so they assumed an average $67 per pound price now that involves $73 assumption for the uncontracted material and they used a $55 assumption on the contracted material since that came out they did sign up another 1.2 million pounds in offtake yeah interesting did they they have to shuffle some of their their contracts as well when they so expected to be in production yeah so that that they spoke about in this would have been Late July of last year you know the oft parties being friendly they also did have Uranium on hand at the time which they no longer have so to deliver some yeah yeah I think I think from what I've heard like the offes it's like you don't owe it if you it's based on like name like steady state and name I don't I've heard some arrangement it's not like you have to deliver that this year some of them are like you have to deliver that once you hit steady state and commercial production and and things like that so I think contract own Depend and of shake yeah so what what you can tell from that 1.2 million that was signed up in March of this year is that they estimated a a maximum revenue of us 117 million which indicates a maximum potential price in that contract of a bit under us $98 a pound jeez oh so that would be the that would be the maximum there there was a lower bound of um you know $88 million in in Revenue off that one oh they won't be getting that now unless it bloody goes up yeah so there's a there's a sort of range within there that you kind of work they so like you kind of said Trev they um they did have some commitments to meet so they've got an inprocess inventory which is a pretty negligible negligible amount so it's safe to say that they don't have any on hand right now which plays into 2025 so in 2025 they've got to deliver about 470,000 of um you know contracted uranium and they've guided to 700,000 to 900,000 to be produced over that year now here's where it gets pretty interesting that was previously 1.1 million so they had a you know a pretty substantial drop down in what the first year 20125 production is going to be just a couple weeks ago and this was a classic you know this was an eight-page document and it was in the last page of the document where they said there's been an update to what we're going to do next year and you know they didn't put too much me on the bone there but it's not good that's that's potentially over like a 40% drop in what the production is going to be for the next year and that leaves a a heap of questions because they just said that about 2025 but we don't know if that's going to be you know have flow on effects for 20126 it's kind of like that and you said what 40% of steady state production was contracted but if you have like % of your steady state kind of exactly back a lot more contract so now all of a sudden you know on on that kind of lower bound it's well over 2third of next year's production is going to be contracted out that they they kind of have to meet and interestingly they they still said they anticipate to be cash flow positive by Q3 of next year they've maintained that date for you know the best part of the last year I find it you know very interesting that production could fall off so significantly and you're still going to be cash flow positive at the exact same point in time that you know that kind of leads me to have a few more questions and you know a lot of it kind of went unanswered it's just one paragraph that they Chuck in at the end of a project update so after learning a bit more about ISR it fucking sounds like the the moving parts and the ramp up to get the between the the luxian and the resin to make sure they're working together cuz one changing one affects the other and the lithology of the ground and and everything it is like fuck it sounds hard it sounds bloody hard like just a big chemistry set and the hydro geology of it like fuck and they they didn't provide any sort of reassuring language around it they weren't saying things like oh you know 2026 will be fine or we don't suspect that this will impact future production anything like that it was you know it left it sort of pretty pretty open-ended so I think that the kind of logical flow on to at least to where my mind went is how much cash do they have and are they going to be able to see this through they've got us 100 million on hand there's another 330 million options floating out there with a 10cent exercise price so a couple weeks ago they were around 10 cents they're now around 8 cents so none of them are in the money but if they can you know get up and stay up over that price that could potentially bring in 30 million Aussie bucks we'll kind of see at this moment in time it doesn't look like it's going to happen and they expire in March of next year so they said they needed us $100 million to see them through to steady state in April of this year since then they spent 20 so that leaves 80 to be spent like I said they've got 100 right now so that kind of implies a cushion of US 20 million but I'm not filled with confidence in around what's kind of you know happened in the past couple weeks although there is potential they could work out some sort of Deb Arrangement if it's if it's a more marginal amount of cash they need and they have mentioned in the past that they're working with the US government to try and get some sort of support in and around that but that's um cap facility or that over never know what convos are gonna happen at w this week because that's when the the fuel buyers and the Bloody producers are all in the one room yeah and a lot of you know people are incentivized to to see this one come good you know there's a lot of um a lot of contracted pounds out there and those utilities will want them to come online they yeah want it to happen so to get a bit of a feel for how much cash they are going to produce they did some you know very back of the envelope rough numbers and once costs have normalized say they have by 2026 and assume that they can still do that number which is a big assumption that they said 1.4 million pound assume the uranium spot price again a big assumption but us 80 bucks a pound 2third of that production will be contracted I'd say that's in and around the US 60 bucks 60 bucks a pound price um the rest in the spot Market that' get a higher price I think you could could estimate they'd get around us67 is per pound for that gone off their all-in cost of roughly us $51 a pound they would generate AIT D of US 22 million or roughly a bit over Aussie $30 million now again that is that is super rough but this is a company that's capped at 260 million Aussie right now it's it's not a crazy amount of cash flow with a lot of kind of risk attached to it so yeah it's definitely one to to look out for and you know the the EV looks you know relatively cheap right now given they've got such a substantial amount in cash but you know you can't look at that because that that needs to go into the asset I think it's a yeah it's a big um it's going to be an interesting back end of the year that's for sure because we're in the uh when they say the Northern Hemisphere um summer how it's notoriously quiet but it's also I think by the sounds the fuel bus just go on holidays for two months uh and so I think now's that point when it's like if something's going to happen you know it's going to happen like post September based on the historic lws so and these guys have just got to do the work right they've got to just get um get Ross up and humming so it's it's all kind of on their plate and then we'll see what happens in the broader uranium Market you know in and around that but Jesus Christ were we talking about it JD now I've got you on board how good is it proud mate M on the back of that like how as I said how freaking complicated these I are things are and especially with the lithology and like the mapping required and everything like why can't verify map the lithology of these paleo channels and and hear me out the AI that they've currently got so they know how to do AI using the AI for the fraking like injection pressures and the extraction and mapping the area of influence I can see a subsidiary verify uranium verify uranium AI I look Steve D jong's a busy man but he needs me to sort of just keep an eye on potential opportunities and I think I might have found one for him Steve if you're listening let's talk I might get some skin in this it's my idea verify uranium it's a new Revenue stream mate I see it yeah mate they're growing like a fraking toddler like bu that eats a lot like it's just just growing growing a lot growing a lot oh good work Vero happy to happy to do business with you right uh JC actually before my Exel uh rant yes I would like you to probably do yours first cuz mine doesn't really come to anything so I think it does but I don't want to take away I don't want to hold the bloody money miners from getting their ah their merchants and GC special oh very good do you hold this stock I don't we found one we found one oh so ma uh their funding package for uh developing merchison is been secured exciting stuff lots of money flowing their way so lot more than they originally um forecasted when they were go on debt only that's for sure yeah so the um the deal itself they've secured a $73 million funding package in total and that comprises a $26 million gold loan a $12 million gold stream and both of those are from oret and in addition to that they've also done a $35 million institutional placement at 5 cents uh which includes a 5 million Equity investment from oret Who provided the the loan and the stream um and I believe board and management also chucked in half a half a brick into that as well comes off the back of a pretty pretty big rally in the stock right kind of like 50% a month and then kind of you know raise the equity why wouldn't you H yeah no call it the Aon cin rise one was done the Perfection picking picking a good time to raise Equity that's for sure so no they certainly did uh well on that front uh with regards to their Equity so as far as the funds you know we uh what they're being used for we flash up a table from their preso today on the sources and uses but essentially the money will be used for the remaining development ramp up cost for merchon up until basically positive cash flow and they've also um in light of the sort of expanded processing capacity when they picked up that um larger ball mill a couple months ago they're accelerating access to uh some high grade underground areas to support that so putting some money into that and you know the usual exploration corporate cost all the that sort of a stuff which leaves a $22 million working capital buffer use of funds building a mine building a mine basically so by the time all that washes out they'll have a pro for a market cap of around just over $100 million at 55 cents which is where they're roughly trading is at now um once that placement is done and the formal docks for the Orit facilities is due to be all signed up this month and first gold is expected um sort of mid next year in the September quarter next year so you know just under a year away gold loan and Gold Stream ali um like in simple terms what what's going on here yes what's a difference so we'll step through each of them sort of to explain the mechanics how each of them uh works so in simple terms the gold loan ma receive $26 million from oret in exchange ma have to deliver 9,000 o or you know over over 12 month so say 750 ounces a month from September next year to August 2026 and that assumes a gold forward price of Just sh Aussie 3,900 an ounce so are they um are they getting paid like is it one of those they're getting 95% of the gold price sort of thing or that's more of how the stream of works yeah so this is essentially a gold denominated loan it's like a like a prepay in some ways right you kind of you get the money up front but you've got to deliver the physical over predefined in predefined quantities over time yeah so it's sort of like it's sort of like a hedging structure but you're getting given the money like it's out of you're chipping away your loan by delivering gold yeah you've locked in the price though yeah in in a sense yeah so the way this one works is so if the average forward price increases the number of oun they have to deliver decreases so like that total uh value uh that oret get is is sort of fixed and it just flexes depending on the gold price whether it's more ERS slightly lower price or higher price slightly lower ansers they sort of guaranteed themselves what they're going to get at the end of that sort of gold loan maturity yeah so essentially regardless of the gold price Ora M give ma 26 million bucks to get $35 million roughly worth of gold over a 12-month period so that's a 35% return in a Year ah for or for oret yeah and that's not including uh they've sold them some uh gold call options as well and they're also getting 25 million warrants from maker so that would sort of juice up their return Jes even more as well that's a good deal for R yes I want to tip into that one can we tip into that that's a bloody Noah's rule jobby fully understand that have you oh yeah oh jeez so then moving on to the go stream which we sort of touched on before Maddie so again trying to explain this in simple terms so make could get $12 million from oret in exchange they have to deliver 4.25% of the total gold that they produce uh to oret until 5,000 o in total is delivered to oret and AA me buy those at 20% of whatever the prevailing spot price is at that point in time then they've actually got sort of an additional stream on top of that once the 5,000 o from the main Gold Stream is delivered then there is a what's called a tail Stream So 1 and a half% of gold produced for whatever the remaining life of Mind production profile is they can purchase at the same uh price or 20% of the spot price uh ma actually have the option to buy back 80% of the tail Stream So that 1 and a half% component I spoke about for $5 million to reduce it to. 3% of gold production rather than one and a half as well so if you assume the same Ford gold price uh we spoke about forges shive 3,900 Aussie AR basically giving me at 12 million to get back 15.5 million you know sort of worth a goal that that that's the first 5,000 o yeah um you know which is like a 30% return over roughly the first you know 3 years of production that sort of based on the DFS production profile looks like it basically takes around 3 years to get that first 5,000 oun and then you've got the tail stream as well that 1 and a half% that continues sort of once that's been completed too so is it sort of like 10% perom return uh for those first three years for the first three years very roughly so similar to getting alone at 10% per effective like in a way yeah that's a simple way to think about it for sure I like simple no especially this stuff's a bit uh definitely bit confusing so but all but I suppose the all the all the thing about this these are I guess what shaie Russo was talking about these different ways of getting financing without having hedge books yeah no that's right and so you're still giving away some of the like the upside process like like in the in the loan they they've sold call options so they're kind of you know the counterparty kind of get some of the upsid as result of of Dynamics yeah but but there's probably is there a bit less risk than you know some of these historic hedge books we've seen that they go for so long and become that out of the money whereas there's less risk that this you you avoid getting in that situation a bit less I don't know if it's as simple as like there's less or more risk I think it just kind of depends on the terms of these instruments you know you could do kind of a bit of a at the time as well it's it's yeah you're definitely you're comparing a sort of a lot of variable factors at once to sort of figure out what's best but just to give a a sort of a broad brush summary all of that gold that or is getting from maker in the various forms through the gold loan and through the Gold Stream that represents less than 5% of basically the the production plan that they've got in the DFS and uh for the first year of production it's less than 25% um of of production so looking looking at other uh mobs that have had debt and where there's like literally you know 15 to 25% of production hedged and then it becomes out of the money you can that's when it sort of gets away from them whereas this looks a bit less exposed to if the spot price went flying this is yeah assuming ifes in place cuz the where where the hedging can sort of become problematic is sort of as we touched on a bit earlier with Peninsula as well you know if oh this has slowed down oh the production profile is going to be off 20% Then that you know hedging percentage is not 15 or 20 it's maybe you know 50% of your production profile and things like that so um all the sort of different things to we up there and if you just kick it down the road which isn't really applicable here no that's right so I mean why this alternative uh financing through the gold loan and the Gold Stream versus say a traditional you know stock standard project Finance um debt piece I mean it's pretty expensive money my very rough XL Cs on the gold loan and the Gold Stream inclusive of the tail stream based on the DFS production profile and that gold forward price we discussed earlier just show 3900 an oun um have oret generating at least a 30% IR over the life of mine and that does not include you know the call option and doesn't include the warrants cuz that was too hard for me to figure out so normally like these non-bank lenders Pro the the sort of project Finance RS they look to get be in and around that sort of and again this is a general of thumb you know 15 to 20% ir and Bank lenders would probably be even a bit lower than that and then they'd try and get it up a little bit more by providing hedging and things like that so um it appears on the expensive side however I feel that this to me represents almost a a a bet on the gold price because if the gold price runs particularly in the next two years as they're ramping up and they you know got that first year of production this funding package could potentially be a lot cheaper than raising Equity or you know Bank style debt but you know if it goes the other way become a whole lot more expensive so um okay so so Mak need the gold price to go up for logical reasons but in relation to the debt to make the debt more bang for buck well if you're viewing through you know what's the you know the most expensive to cheapest options for financing you want the gold price to be staying in and around where it is if not higher yeah to be sort of considered more favorable cost wise compared to sort of other potential funding options go gold go gold the other thing or at partici participating in the placement we've seen this before where financiers um will will chip into the sort of the equity component of a funding package so it certainly can be viewed as a you know as a vote of confidence uh in the project I mean certainly the company will tell you that any company will tell you that um depends what happens if it happens when they're like yeah like into ramp up and it's a distressed raise and then and then the lender tips into the equity raise it's because it's a different Theory then no that's right and so look they've already got some Equity exposure maker through the warrant so it's interesting to say that they've sort of added to that Equity exposure through $5 million in the placement um so which look it's certainly not a bad thing they've got some sort of extra alignment with the company for things to go well um but albe remember their their exposure with their facilities so the $26 million Gold Line 12 million stream is far more than the equity exposure as so just something to keep in mind there might it might have been back and forth going on terms and actually a request of of no makers or their advisor to throw in a commitment to the equity yeah and that that as well for sure so the other interesting thing uh if we look at the um debt or alternative financing versus Equity split um I mean this is practically a 50-50 split between between the two and um and we have to look back a few years to look at some recent sort of Australian asex examples um other sort of single asset gold Developers um and this is a fair bit lower than what we've seen back in you know so the Bell viw Capricorns and cadus examples which were around that you know say 2/3 debt 1/3 Equity funnily Enough by the time a lot of those companies did follow on raises from their sort of initial funding package announcements it kind of did work out 50/50 debt Equity um but I feel like makeer perhaps have taken some learnings from from recent history and um being a bit more conservative on that alternative financing to to equity um sort of split as well and as we sort of touched on before you know they've certainly um taken advantage of this sort of strong Equity price and you know rightfully so so ctis to them on timing that quite well yeah because I think um prior to that ra what they raised in the placement it was like you know by the time you pay off the debt and the M Life finishes what are you going to be sort of left with um Beyond expansion or finding something new whereas now they got that 35 bucks in the door at high price it's they got a bit of good buffer now 100% so the quantum will it be enough this could be very famous last words but I feel you know all things being equal it is and assuming the gold price stays you know roughly where it is um in their DFS they show Peak negative cash flow in you know year zero of you know -44 million they've currently got a $22 million working capat buffer the DFS was uh or one of the prices they showed in the DFS was at 3500 oun Aussie so you know with spot closer to 3700 there's another 200 bucks an ounce of extra rigle room they've got there uh they've also got a DFS update coming out in uh uh this year later this year in December um sort of showing a higher or they seem to be indicating a higher production profile to reflect that extra processing capacity was spoke about which is useful because then the the the percentage of production that's attributable to the gold loan and the stream is lower and they've got more exposure to the gold spot price which is hopefully where it is now or if not higher especially when that's what as you said over the life M what 95% of the production is going to be unhedged uh so that's that's where they'll make the money from the gold price yeah so the more exposure they can get to that the better and I mean getting that first year of production right which is basically you know the period where they're paying back that gold loan um as well as the stream is so critical um and they sort of seem if we flash up the this is from the DFS this the production profile from you know open pit uh versus underground mining and the sort of the various deposits it comes from pretty much all of it is from oxide open pits in the first 12 months which you know on paper is probably the least riskiest all Source you could you know get get your gold from and you can smash it through bloody quick yeah exactly hey J did they use I didn't read the docs um but did they use the famous last words fully funded or are you just putting the curse on them no no no no they did I think we've got on the uh where we the second bullet point merch and gold project is now fully funded by a 73 million package well they're confident too then so it sounds like they're pretty confident too as far as what's next um as we said you know they'll be prod you know first gold um Mid next year September quarter next year um I think they're constructing a Hall Road in between sort of San and tur to Andy well where they refurbing the um the plant there now um you know gr can TR drilling all of that that that that camp that they bought really cheap as well they're sort of um you know installing that setting that all up so it seems like you know all things going well they should be okay and I feel like that the quantum with the amount of working capital buffer they've got in the gold price environment should see them through but you you never know until that that the fat lady SS of course and the thing they got on their side the uh C he was ex underground manager at Andy well in the door either in the D in the Silver Lake days after Silver Lake took over dor so they've got a a lot of a knowledge of Andy well so it's not like they're going in blind so bloody yep I'm H small Goldies mate I'm fucking rooting for him EXA I hope it all bloody go well so but another truck of DSi bolts and mesh heading up to the merchants that's one of the most exciting things oh that I don't know why they haven't got that in their um sort of key key Milestones um the arrival of DSi bolts I want to see the first truck of DSi bolts of mesh bloody getting dropped off at Andy well right cuz they they're probably dropping them off on the way all through the merchants and they're already driving past they might have a warehouse there just just off the Great Northern highway just mate that Great Northern highway is just Bol to mesh hum up and down that freaking thing bloody M Derek her he's made he's a bol and mesh logistical expert servicing Australia in the world with the greatest Grand support I've ever seen it reminds me of the John news yeah just over the course way Victoria just over the Great Northern mer in open p Chuck them in there too Chuck them in there too just to be on the safe side you don't want that high anything happen to that high no you want to save cash and get them gold lines paid off sorry within reason right good old uh as we said the conference in goas everyone's doing a couple of priz at the moment develops I had to had to read through develop cuz it got me eyes peeled I'm waiting for bloody develop to drop the hammer on copper very very very small ding-ding for me on that one of course we had to have one today good on you Jay say do you just follow like right who's some good mining personalities around you I'm going to buy shares of them yeah do all the big dogs just call it the big dog ETF yeah so looking at the Pres like the interesting bits and like you know wood laor and Sal for Springs both fully permitted for operations so you know sitting there ready to go as we know Wood's you know develop I think they got about two years of production ready to go as in terms of the M development so set up traffic EUR funding for wood La set to be finalized this quarter so that was that $100 million prepayment loan facility 5 years concentrate off take for all the all concentrates produced but here's the interesting wording flexibility to give up to 20% off take to a minority party so traffic year don't get the whole thing they can still give 20% to someone else and on the next slide which we've um talked about and they've uh been fully open about strategic asset level investment process has commenced which I think has been word gone around that they're looking for for a project level investment from who knows could be a downstream could be anyone but says there's a small amount of parties so like whether that's a look look could be a posco could be like a you know some someone in bloody the rise of Japan and South Korea too zinc yeah one of those so now why I guess and the question always is like why would develop want to sell part of this project when they could you know get 100% of the bloody upside potentially so and look it's to do mostly I think with this remaining $70 million in contingent payments for the wood lawn acquisition that are ow to Ay from uh from when Heron went into into admin so now I'm pretty sure I can't confirm but I'm pretty sure all four of these conditions still have to be paid so including the reserve on so and because they I think they publicly said they want to they don't want to raise Capital they don't want dilution um but but they can they can issue these in shares as well so possib and you know they might want extra cash for Acquisitions and to get some money in the door for selling something at a project level um now I might be wrong about this lower bound Reserve but I've gone bloody deep I couldn't find anything saying that it was paid um so the payments are 12.5 million payable on definition of 550,000 tons of zinc equivalent underground Reserve then another 7 A5 million payable on 680,000 tons of zinc equivalent underground reserve and then 20 million payable on FID which has not been announced yet and then another 30 million payable on 18 months of continuous commercial production so obviously triggering the start of wood lach triggers some of like triggers the 20 triggers the 20 million anyway so there's a big balance thing going on I think now I couldn't definitively find if they have a zinc equivalent reserve of 550,000 ton yet or not because the latest Reserve they put out in April says 6 uh 6 million ton out 2.8% copper equivalent and so that's that's 168,000 ton of copper equivalent multiply them together copper today is 3.2 times the price of zinc so very roughly without recoveries and everything that's around 537,500 and I tried to ask other people but you couldn't help yourself I had to I had to go I went down a stupid XEL Rabbit Hole here and I thought I better follow the calculation method that they provided in that April when they disclosed the updated Reserve used in the deck so if you if you use and I'll show it up I'll even show me bloody XL thing on screen here using like the calculation method method for copper equivalent and zinc equivalent uh I got copper equivalent grade of 2.6% instead of 2.8 and 99.4% for the zinc equivalent grade but there's everything is rounded to the nearest 100,000 ton and grades rounded as well so I think uh the these that's why the the numbers probably come out a bit different so because if you go off 6 million ton which is the total Reserve tonnage times the 99.4% zinc equivalent I got gives $564,000 ton of zinc equivalent tons so that's just over the $12.5 million trigger payment but it's not exactly 6 million tons I don't think because I if you if you go convert the metal back to the tons using grade it ranges from 5.86 million tons to 6.4 million tons due to the rounding so fucking 5.86 million ton at 99.4% sync equivalent gives bang on 550,000 tons of zinc equivalent so after all this fuckery I reckon the zinc equivalent Reserve is possibly just below just slightly below that trigger point by pure luck yeah 550,000 ton and hence I don't think it it's triggered yet has been paid I think maybe when the annual rep I couldn't find any issue of Securities or any mention of it so I don't I think that all still owing it's so where did I come to with that I don't know no I think the takeway is your bush maths basically equals the actual math that's takeway Bush math Bush maths never let you down plus or minus 10% that's good yes I I don't so it' be interesting to see when yeah triggering a reserve increase will trigger that payment I I do find like these these contingent payments tied to Resource and Reserve Milestone is interesting because at the end of the day like you know you you who operate the project you you have you have control over that work stream and and kind of you know we we saw a few of these structured around like the minr farming agreements and stuff like that for lithium and all that sort of jazz but um yeah it's like at the end of the day you're you can kind of control some of the assumptions or variables in your in your reserve update that will be favorable and and heck who would blame you for for for timing that to Perfection for your few Milestones that's what I'd do but and I don't it wouldn't be live would it in terms of like that in there if like copper went up more in relation to zinc that I don't think be ringing up like hey we've just we've just redone the spreadsheet that mattye gave us you're at 552 th000 ton now C public what based on based on those and those prices they used in the deck is say like 10 half thousand I think it was copper like there what what's the future realterm prices what what's the word for it tra yeah longterm consensus real longm yeah so it's today's price um so yeah interesting cool I I'll just more just want to let the listeners know I'm just not juster bloody first in maths every year at school that's a fact one more this is a a rabbit hole um Team yeah I think JD mentioned the story briefly back in January this year and since then there've been some some peculiar development at Metals Tech and I'll give I'll give you guys the higher level synopsis um the asset I'm Keen to talk about with with respect to this company is the STK gold mine in Slovakia of of all places and and metaltech they picked up this gold mine in December 2019 it was was first by agreeing to an option and then exercising that option you can see here in um the ASX release they put out when they they first signed the option to acquire this direct gold mine um that you know on this on the next page over uh the proposed terms included um some some generous related party benefits at the time it was proposed at 20 million performance rights to directors as an introduction fee and a 2% net melter royalty to a company which was a related party of medals Tech chairperson at the time not sure if these actually came into fruition or or not but um just I noticed them on that page anyway fast forward a few years and the company embarked on a few lithium things but but they they dropped this scoping study on um St in November last year it Face Value the financial numbers for the project with tidy 995 million capex for $240 million npv 8 at a550 us gold price for an IR of of 116% nyear Mind life all looks good all looks good I think there's some permitting challenges and stuff like that but don't worry about that just yet um on the 20th of December last year so you know about a month month later um metaltech said that they had appointed Min Metals as a strategic advisor to help them coordinate a strategic process on the STK uh goine they they said there were eight Chinese parties and four Western parties in the da room um looking looking to do looking to do something and they said Min medals would get a success fee of of 5% on a on getting a deal done who who's are you going to go who is min Metals I don't know i' heard of them before there's not much about them online right okay here's where things get interesting in January this year medals Tech they Dro an announced M saying they had received a non-binding offer from a Canadian private Equity Group called trans metal fund LP for the for the project for you know cash up front of 36 million plus um up to another 45 million in kind of contingent payment um now that's that's a fair bit of money and it was certainly a lot more than the market cap of um metaltech at the time and metaltech they said that uh when they revealed this non-binding offer they said it was it was just the first offer to come from the process that they still open to other offers from other parties that are in the data room now what I know yeah I mean really I know like you you you and I have both worked on uh sales processes before ell in the past it is insanely unusual to make an ASX announcement about a non-binding indicative offer received from one party mid-process mid process and then say you're still open to other ones M so normally not even a binding term sheet or something exactly normally an nbio is confidential um you know but and it's just unprofessional to disclose like any any kind of offer year you received if you're running a process it's also unusual to get one offer at a different time to the other offers you usually choose a deadline for stage one bid submissions if you're running a process and in general everyone submits their bid either on that day or or the day before because there's there's informational disc them all at the same time right yeah and you're like if if you submitted a week early like you're at an informational disadvantage if if if the advis or whatever like if if something happens with that information before others submit their bit so you just you always you always submit it right at the last minute yeah that's just the way you do things y so um but the unusual elements of of this announcement they didn't stop there as Jeremy Raper tweeted at the time if you Google trans metal fund LP you don't find anything no company website no directors Etc there is also no comment or press release from anyone affiliated with trans metal fund that I can see either in um the metals Tech press or elsewhere so so with more than a few question marks floating about metaltech unfortunately found themselves in the Sin bin for a few weeks as they they appeared to be going back and forth with ASX who was pulling them up on their disclosure um and before being reinstated they uploaded an announcement that included a bit more color on the mysterious trans metal fund presumably after ASX requested it so this time they list three directors of trans metal fund and give their bios there was just Michael B James Yang and part is farangi in in may we get another process update um and and that is again unconventional to say the least this time they say they're holding site visits for parties um at STK and they State one of China's largest gold miners has recently attended a side visit as part of its due diligence process at least I didn't name the entity this time but it's still a bit unconventional uh release in relation to a strategic process you're running I've never seen that before no I don't think so we've got a party conducting DD inside at the I mean George diggers presentation probably the most similar recent example I can think of but it is quite unusual to be speaking about that so so publicly yeah yeah okay so a week later they launch an SP to to bring a bit of money into the company and I'll draw your attention to this quote in the accompanying announcement when they launched the SP says the directors and major shareholders have flag their intention to participate in the SP alongside other shareholders now this SP takes a bit of a U-turn a month later when they say they received $2.4 million of of interest um from their shareholders to participate in that SP they say they want to take all of that money without scale backs but they strangely choose to now do it via a placement instead of an SP now so they pop out a prospectus at the same time to be able to take the money as a placement instead and with a placement you've you've got you know these people they've got to reconfirm their interest um it's a new offer in some respect and so in that process it looks like they didn't get the full 2.4 they only got 1.6 million in the door leaving an $800,000 shortfall for them to place and one of the nuances of doing it as a as a placement instead of an SP is that it becomes kind of complex for directors to participate in a placement without sharehold approval get sharehold approval so so instead of oh is that is that for all placements is it yeah yeah in a placement directors need shareholder approval so remember that remember that uh initial thing I said that the shareholders intend to participate in the well well now the director now that it's a placement um it intend like it basically like as far as I can tell from the disclosures the the directors didn't stump up up didn't tip into the raise at all um and because there was there was no kind of conditional commitment or anything like that in the in the wording and surprise surprise on on Friday last week discussions with Metals Tech have been oh sorry discussions between metals Tech and the trans Metals fund have been terminated oh wow wow really yes yeah wow but it gets even jerser there's more what do you mean so watching that's only that's only last week we're up two now fuck off fuck off shout out Stella Jason who would have thought the the private Equity Group you can't find a website for uh it submitted an nbio uh yeah I just wouldn't have predicted that doesn't exist discussions would be no no it exists there details but you know who would thought it would just be flimsy in the end I never have seen that coming anyway then yesterday there's a pretty interesting development up until this point I hadn't mentioned that there were three only directors of the company okay one of those um is an executive director the other two are non-executive directors well the executive director together with another substantial shareholder in the company they agreed to sell all of their shares and all of their unvested performance rights to a third party um at a pretty hefty share price premium to Where Metal te has traded it was um you know the implied equivalent price was about 53 cents per share and and they would receive $18.5 million total for that wow now concurrent with this announcement one of the non-executive directors resigned uh presumably immediately leaving metaltech with only only two directors and and it's a requirement of ASX to have three directors so they unfortunately had to go back into the S bin as they try to find another director to to join the board so that they could actually um you know free freely trade on ASX again I've never and I've also never heard of performance rights being sold yeah might it's obviously happened but that's a that's a that's a different one it gets Stranger Than Just the performance rights in the shares being sold because if you peel through the 32-page announcement like when they there's this becoming a substantial shareholder and attaches to sort of the share sale kind of kind of deed or whatever so the buyer these are the buyer of the of their shares their shares the buyer of the shares is is this entity called manura Investment Company and uh xia Wu Lee um so they very interestingly the buyer has agreed to pay both sellers their outstanding receivables owed by metaltech as well so I assume to be kind of ACW director fees or and Consulting fees but you know for each of the kind of selling parties there's um few hundred, there um in any case like you know the the this is the interesting thing in that in that date as well the those documents they show a settlement date of the 17th of December and um so there's like three and a half months to go to see if manura stumps up the cash or or or or or you know we'll see if they turn out to be another transmetal fund but um such a rabbit hole and I didn't even mention the buyer of the shares Mana um in in that agreement they put an address and it shows this address in Kon Hong Kong Flash it up here well if you just check that in Google Maps and look at the look at the the office building it pertains to Jesus just like yeah it's kind of maybe that's a stock standard office maybe is think who knows look yeah I wouldn't yeah who knows just another day in ASX uh guys Woll coaster oh it's like a clothing District they definitely look like apartment buildings people hanging their clothes out on the um balconies yeah I don't know I don't know we might have to go to carar to visit might keep you away from there trap wow that's bloody that is that is out there I'm interested that was amazing it's a hell of a story oh jeez I don't think um just when you think it's the story is finished it takes another twist that's amazing yeah so do you want to put your hand up to be their third director so they can read no that's okay I think um oh I don't know lucky access modern technology got lots of clients I don't think Metals Tech would be one coming any anytime soon POS possibly we'll okay it's all right Axis we'll keep you humming with the rest of the world as the gurus now and where holes go who else we got in the show we had verify and DSi underground who else we got Maddie oh mate we have got plenty we got a good old bloody Silverstein with a good old CA Insurance good old greenlands equipment good old cadr and oh can't forget about Adia I'm looking forward to the maiden Adia ad R this week it's going to be bloody fruitful and uh milal mining services and don't forget to get a spark chart up you who 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 adviser and consider how appropriate the advice is to your objectives financial situation and needs