1 00:00:00,000 --> 00:00:12,960 Welcome back to The Rate of Change with York Wealth Management. 2 00:00:12,960 --> 00:00:16,880 As advisors to some of the wealthiest families in the country, The Rate of Change is a podcast 3 00:00:16,880 --> 00:00:20,680 designed to help you in the pursuit of building long-term wealth through the insights of some 4 00:00:20,680 --> 00:00:23,120 of the brightest minds in asset management. 5 00:00:23,120 --> 00:00:27,160 I'm your host Murdoch Gaddi and in today's broadcast, I'm speaking with John Forward, 6 00:00:27,160 --> 00:00:31,360 the Chief Investment Officer at Lowell Resources Management. 7 00:00:31,360 --> 00:00:36,120 Lowell manages roughly 50 million Aussie under management. 8 00:00:36,120 --> 00:00:44,600 It's a listed investment trust which invests in junior domestic and global mining companies. 9 00:00:44,600 --> 00:00:52,560 They currently allocate roughly 13% to new pre-IPO opportunities, have greater than 10% 10 00:00:52,560 --> 00:00:59,280 cash and the remaining is invested in listed mining companies across uranium, copper, natural 11 00:00:59,280 --> 00:01:04,800 gas, oil, nickel, lithium and a large percentage currently in gold. 12 00:01:04,800 --> 00:01:08,520 And they currently run a top-down bottom-up strategy. 13 00:01:08,520 --> 00:01:14,260 So that percentage allocation is constantly changing. 14 00:01:14,260 --> 00:01:23,120 As of recording, the Lowell Resources Management Fund has averaged over 10 years, 14.2%, over 15 00:01:23,120 --> 00:01:34,560 five years, 27.9% per annum, averaged over three years, 8.4% and 12 months, 14.1%. 16 00:01:34,560 --> 00:01:41,720 In relation to the S&P ASX small resources accumulation index, they've consistently outperformed 17 00:01:41,720 --> 00:01:47,880 them in that period and most interestingly in the past 12 months, while small resources 18 00:01:47,880 --> 00:01:55,640 accumulation index has been down 9.8%, they've been up 14.1%. 19 00:01:55,640 --> 00:02:03,240 So please everyone remember that this is a podcast for entertainment purposes only. 20 00:02:03,240 --> 00:02:06,280 Please listen to the disclaimer at the end of the broadcast. 21 00:02:06,280 --> 00:02:09,960 If you want to learn more about the fund, please reach out to them directly or speak 22 00:02:09,960 --> 00:02:13,480 to your advisor. 23 00:02:13,480 --> 00:02:17,400 So with that being said, I hope you enjoy this conversation as much as I did. 24 00:02:17,400 --> 00:02:30,040 So sit back, relax and enjoy it. 25 00:02:30,040 --> 00:02:34,240 John Forward, welcome to the Rate of Change with York Wealth Management. 26 00:02:34,240 --> 00:02:36,240 Murdoch, thanks. 27 00:02:36,240 --> 00:02:37,240 Great to be here. 28 00:02:37,240 --> 00:02:39,840 Thanks very much for inviting me on. 29 00:02:39,840 --> 00:02:41,880 Whereabouts in the world are you right now? 30 00:02:41,880 --> 00:02:43,720 I'm actually in North America. 31 00:02:43,720 --> 00:02:47,840 I'm sitting in a hotel room in Toronto, Canada. 32 00:02:47,840 --> 00:02:48,840 What's over there right now? 33 00:02:48,840 --> 00:02:50,840 What are you heading over there for? 34 00:02:50,840 --> 00:02:53,360 Look, I'm doing a bit of a swing through. 35 00:02:53,360 --> 00:02:59,840 I've been to Vancouver, which is the home of North American small cap miners. 36 00:02:59,840 --> 00:03:06,000 And now I'm in Toronto, which is the home of perhaps larger North American miners. 37 00:03:06,000 --> 00:03:12,600 And then I'm heading down to Miami for a mines and money conference in Florida in a couple 38 00:03:12,600 --> 00:03:14,160 of days. 39 00:03:14,160 --> 00:03:20,080 And then I'll follow that up with a brief side trip to look at a copper project in South 40 00:03:20,080 --> 00:03:21,080 America. 41 00:03:21,080 --> 00:03:24,200 So making a good trip. 42 00:03:24,200 --> 00:03:26,200 That sounds like fun. 43 00:03:26,200 --> 00:03:27,960 Hopefully you get a nice hockey game in. 44 00:03:27,960 --> 00:03:30,800 Well, look, John, I'm just interested in where you were. 45 00:03:30,800 --> 00:03:34,960 But why don't we start off by telling everyone a little bit about who is John and how you 46 00:03:34,960 --> 00:03:37,400 got into the wild world of financial markets? 47 00:03:37,400 --> 00:03:38,400 Sure. 48 00:03:38,400 --> 00:03:42,200 Look, I think I have to blame my father. 49 00:03:42,200 --> 00:03:48,720 He's a geologist and had me doing field work with and for him from a pretty young age. 50 00:03:48,720 --> 00:03:51,760 And it didn't put me off. 51 00:03:51,760 --> 00:04:03,400 So I became a geo, worked around the place, Australia, Africa, Indonesia for a few years, 52 00:04:03,400 --> 00:04:05,360 and then joined a group. 53 00:04:05,360 --> 00:04:11,280 I went to the dark side, got into the financing side of things and joined a group out of South 54 00:04:11,280 --> 00:04:16,200 Africa called RAND Merchant Bank, which was a fantastic experience. 55 00:04:16,200 --> 00:04:23,280 It was there for more than 15 years in a group called RMB Resources. 56 00:04:23,280 --> 00:04:27,420 And we did across the financing spectrum. 57 00:04:27,420 --> 00:04:33,240 So we did equity, quasi, what we call quasi equity and project financing and hedging for 58 00:04:33,240 --> 00:04:34,680 the junior resources space. 59 00:04:34,680 --> 00:04:38,320 So had some fantastic experience there. 60 00:04:38,320 --> 00:04:41,240 It was a very successful shop. 61 00:04:41,240 --> 00:04:49,880 Finished up there in 2015 and then 2016 joined Lowell Resources Fund and I've been the CIO 62 00:04:49,880 --> 00:04:53,040 there for the past eight years. 63 00:04:53,040 --> 00:04:56,480 So what exactly does Lowell Resources Fund do? 64 00:04:56,480 --> 00:04:59,840 Look, it's an unusual beast. 65 00:04:59,840 --> 00:05:07,480 There's not many institutions, if you like, that do what we do, which is really focus 66 00:05:07,480 --> 00:05:11,480 almost solely on the junior resources space. 67 00:05:11,480 --> 00:05:18,480 So we're quite broad in a very niche sector. 68 00:05:18,480 --> 00:05:24,120 We do pretty much any commodity in terms of metals and mining and oil and gas that you 69 00:05:24,120 --> 00:05:26,520 can think of. 70 00:05:26,520 --> 00:05:32,000 But we really try and focus on the junior sector where we see the biggest upside potential 71 00:05:32,000 --> 00:05:35,160 is. 72 00:05:35,160 --> 00:05:42,880 So when you say you're only focusing on the juniors, does that mean you're trying to get 73 00:05:42,880 --> 00:05:49,080 into them seed or pre-IPO or were you looking to allocate to these companies when they're 74 00:05:49,080 --> 00:05:50,080 listed? 75 00:05:50,080 --> 00:05:51,080 Yeah, both. 76 00:05:51,080 --> 00:05:54,160 And what's the percentage in the portfolio? 77 00:05:54,160 --> 00:05:59,360 Yeah, so we've got a fairly broad mandate in that sense. 78 00:05:59,360 --> 00:06:05,680 Most of our portfolio is ASX listed, but we have a number of stocks listed in the Northern 79 00:06:05,680 --> 00:06:11,760 Hemisphere on particularly the Toronto's TSX Venture Exchange. 80 00:06:11,760 --> 00:06:15,040 We've got one or two on the London Stock Exchange. 81 00:06:15,040 --> 00:06:21,960 And then we've got a number that are coming through at various stages, pre-IPO, so seed 82 00:06:21,960 --> 00:06:24,560 investments. 83 00:06:24,560 --> 00:06:32,200 We've got a reasonable exposure to seed investments, even though in general we allocate less cash 84 00:06:32,200 --> 00:06:38,720 to them because they are illiquid and much, much harder to get out ahead of a listing. 85 00:06:38,720 --> 00:06:46,040 So at the moment, we're around 13% to 14% in seed or pre-IPO investments, some of which, 86 00:06:46,040 --> 00:06:52,600 and I think we might discuss this later, relatively close to a liquidity event. 87 00:06:52,600 --> 00:06:57,080 So yeah, it's an interesting space at the moment. 88 00:06:57,080 --> 00:06:58,960 Well that is definitely going to be the fun part of the chat. 89 00:06:58,960 --> 00:07:00,340 What are your thoughts on commodities? 90 00:07:00,340 --> 00:07:01,680 What stocks are you looking at? 91 00:07:01,680 --> 00:07:05,520 Because it's been a wild world of commodities the past five years. 92 00:07:05,520 --> 00:07:11,880 But before we dig into that, let's just get through the mechanics and how the funds are 93 00:07:11,880 --> 00:07:12,880 structured. 94 00:07:12,880 --> 00:07:18,240 How is the fund structured and why did they choose to be listed compared to an unlisted 95 00:07:18,240 --> 00:07:19,240 structure? 96 00:07:19,240 --> 00:07:25,080 Yeah, look, the funds structure has evolved over time. 97 00:07:25,080 --> 00:07:28,040 It's got a long history, the Lowell Resources Fund. 98 00:07:28,040 --> 00:07:34,940 As I understand it started way back in the 1980s as an unlisted unit trust for National 99 00:07:34,940 --> 00:07:36,160 Mutual. 100 00:07:36,160 --> 00:07:45,560 And then when AXA took over the National Mutual organization, it decided this fund was basically 101 00:07:45,560 --> 00:07:46,560 moribund. 102 00:07:46,560 --> 00:07:55,560 As I understand it had exposure to the big end of town in terms of mining at that time, 103 00:07:55,560 --> 00:08:02,720 CRA, BHP, Western Mining, and likes of those companies were in the portfolio. 104 00:08:02,720 --> 00:08:08,280 From that point, the current management group bought the management company from AXA and 105 00:08:08,280 --> 00:08:16,140 really turned it around completely and started to look at the junior sector, where we see 106 00:08:16,140 --> 00:08:19,000 the upside is. 107 00:08:19,000 --> 00:08:25,960 From that point to 2003 to 2018, we ran it as an unlisted unit trust. 108 00:08:25,960 --> 00:08:28,800 In 2018, we decided to list it. 109 00:08:28,800 --> 00:08:34,200 The real driver for that was the fact that we could then have permanent capital. 110 00:08:34,200 --> 00:08:40,720 As an unlisted trust, you were subject to redemptions and subscriptions. 111 00:08:40,720 --> 00:08:43,720 In a real market downturn, that can really hurt. 112 00:08:43,720 --> 00:08:49,440 If you're getting redemptions in a falling market and you're having to sell your portfolio 113 00:08:49,440 --> 00:08:53,160 to realize cash in a falling market, that can be very tough. 114 00:08:53,160 --> 00:09:03,120 Now that we're listed, the way to trade in and out of the units is on the market. 115 00:09:03,120 --> 00:09:04,720 It's listed on the ASX. 116 00:09:04,720 --> 00:09:09,760 If you want to buy a unit, you can just do it through your broker. 117 00:09:09,760 --> 00:09:14,120 I think we're currently trading around $1.30 a unit. 118 00:09:14,120 --> 00:09:18,960 The downside of that, of course, is we're not of course, but most listed investment 119 00:09:18,960 --> 00:09:23,240 vehicles trade at a discount to their underlying NAV. 120 00:09:23,240 --> 00:09:29,080 Typically, we're trading at about a 10% discount to our underlying net asset value. 121 00:09:29,080 --> 00:09:33,560 I'm glad you covered that because I was just about to ask that. 122 00:09:33,560 --> 00:09:41,880 We've had many fund managers in liquid or unliquid assets. 123 00:09:41,880 --> 00:09:46,420 One thing which I find quite interesting about your structure is considering commodity prices 124 00:09:46,420 --> 00:09:54,320 whip around so much, it gives the ability to obviously see council speaks to your advisor, 125 00:09:54,320 --> 00:09:58,440 but it gives the ability if you have a view on the particular commodities to potentially 126 00:09:58,440 --> 00:10:04,600 come in and purchase something at a discount when people are being fearful and then take 127 00:10:04,600 --> 00:10:11,560 advantage of when people are being greedy, which is not exactly normal when looking at 128 00:10:11,560 --> 00:10:13,760 the fund managers deal in the resources space. 129 00:10:13,760 --> 00:10:20,480 The majority of them are currently unlisted and then do deal with heavy redemption cycles 130 00:10:20,480 --> 00:10:25,560 when the wind isn't necessary and the commodity cycles sail, which I definitely find quite 131 00:10:25,560 --> 00:10:26,560 interesting. 132 00:10:26,560 --> 00:10:27,560 Yeah. 133 00:10:27,560 --> 00:10:36,360 Well, we think it's a good structure for a volatile sector. 134 00:10:36,360 --> 00:10:45,520 We avoid those redemptions, particularly down points in the cycle, which can be very painful 135 00:10:45,520 --> 00:10:54,400 and not just for investors in the fund, but for the fund investments that see their share 136 00:10:54,400 --> 00:10:59,120 price crater as a result. 137 00:10:59,120 --> 00:11:05,940 The flip side of that is that if share prices are getting smashed, then if we've got cash 138 00:11:05,940 --> 00:11:12,520 up our sleeve, we have the ability to take advantage of that when the old Warren Buffett 139 00:11:12,520 --> 00:11:18,040 be greedy when everyone else is fearful adage. 140 00:11:18,040 --> 00:11:21,760 That's an opportunity that comes around every cycle. 141 00:11:21,760 --> 00:11:24,760 Yeah, I can definitely see why it's happened. 142 00:11:24,760 --> 00:11:29,320 It's an interesting structure to be able to deal with that volatility. 143 00:11:29,320 --> 00:11:31,840 With the fund, what's currently the size of the fund? 144 00:11:31,840 --> 00:11:33,680 How much money is currently in the fund? 145 00:11:33,680 --> 00:11:34,840 Yeah, look, it's a small fund. 146 00:11:34,840 --> 00:11:41,480 It's got roughly $50 million of assets under management. 147 00:11:41,480 --> 00:11:49,480 We've grown that from probably less than $20 million since I've been there. 148 00:11:49,480 --> 00:11:51,680 Net of paying out distributions. 149 00:11:51,680 --> 00:11:55,480 That's probably another aspect of the structure that I should mention. 150 00:11:55,480 --> 00:12:01,440 There are a lot of list investment, allies list investment companies out there, which 151 00:12:01,440 --> 00:12:06,440 do pay dividends, but that's discretionary, obviously, as a company. 152 00:12:06,440 --> 00:12:10,880 As a trust, we're a listed investment trust, which is a little bit more unusual. 153 00:12:10,880 --> 00:12:12,360 We don't have any discretion. 154 00:12:12,360 --> 00:12:18,520 All our taxable profits have to be paid out to our unit holders. 155 00:12:18,520 --> 00:12:23,600 We've done paid distributions over the last four years. 156 00:12:23,600 --> 00:12:31,200 The outlook for this year is we'll pay a historically relatively high distribution again in 2020 157 00:12:31,200 --> 00:12:32,200 and 2024. 158 00:12:32,200 --> 00:12:37,440 Had a couple of other questions, but let's touch on the performance and the dividends. 159 00:12:37,440 --> 00:12:41,360 What's the dividend been since you just mentioned the distribution? 160 00:12:41,360 --> 00:12:49,800 Yeah, look, this past year, we pay a distribution in July, August. 161 00:12:49,800 --> 00:12:56,340 Every year, we paid roughly a seven cent distribution. 162 00:12:56,340 --> 00:13:02,720 This coming year, it looks like it could be significantly more than that as a result of 163 00:13:02,720 --> 00:13:08,800 some significant profits that we've been able to take in this financial year. 164 00:13:08,800 --> 00:13:10,800 Yes. 165 00:13:10,800 --> 00:13:14,280 And the performance of the fund, and obviously it's volatile. 166 00:13:14,280 --> 00:13:16,520 So let me phrase it this way. 167 00:13:16,520 --> 00:13:24,200 When you have an uplift of free money being pumped in, COVID, that type of thing, how 168 00:13:24,200 --> 00:13:29,120 does that perform correlated with the markets and the resource space? 169 00:13:29,120 --> 00:13:35,000 And then when commodity cycles come off, how correlated is that? 170 00:13:35,000 --> 00:13:38,240 Just because the thing is, if we look at, say, the performance as an average over five 171 00:13:38,240 --> 00:13:40,760 years, it's very, very difficult. 172 00:13:40,760 --> 00:13:44,360 It's probably misleading as well, I'd say. 173 00:13:44,360 --> 00:13:48,200 So how would you explain the performance and how it performs with the cycles? 174 00:13:48,200 --> 00:14:00,960 Yeah, look, I think because we invest in companies with significant expiration potential and 175 00:14:00,960 --> 00:14:09,640 a real expiration success can happen at any point in the cycle. 176 00:14:09,640 --> 00:14:18,180 And we aim to, well, we hope to have exposure to that success with at least one or two companies 177 00:14:18,180 --> 00:14:19,800 per annum. 178 00:14:19,800 --> 00:14:25,840 And it means that we're actually fairly uncorrelated to the rest of the market. 179 00:14:25,840 --> 00:14:30,000 Obviously, a rising tide will lift all boats. 180 00:14:30,000 --> 00:14:44,480 But for example, last year, the small resources index fell by nearly 10% on the ASX and we 181 00:14:44,480 --> 00:14:46,400 were up 14%. 182 00:14:46,400 --> 00:14:55,560 So strongly uncorrelated to the market, which I think is a really good attribute. 183 00:14:55,560 --> 00:15:03,360 Over the last five years, we've done 28% per annum net of inclusive distributions, but 184 00:15:03,360 --> 00:15:05,320 net of fees. 185 00:15:05,320 --> 00:15:11,920 And I'd just like to, that's actually the best performance of any listed investment 186 00:15:11,920 --> 00:15:14,880 vehicle in Australia over five years. 187 00:15:14,880 --> 00:15:18,520 Sorry, this is the best of all of them across the board. 188 00:15:18,520 --> 00:15:26,280 Well, according to Bell Potter and Ordmanet universe that they cover, it's strongly outperformed 189 00:15:26,280 --> 00:15:29,760 any other listed investment vehicle in their coverage. 190 00:15:29,760 --> 00:15:32,600 Well, the only other one which I could think that would be in the echelon would probably 191 00:15:32,600 --> 00:15:36,480 be that would be, say, Hyperion Global because they've got the magnificent seven in the tech 192 00:15:36,480 --> 00:15:38,880 space and that's been Poltar. 193 00:15:38,880 --> 00:15:40,760 So that's probably up there as well. 194 00:15:40,760 --> 00:15:50,680 I've never been, but look, I just, sort of not to brag too much, but it just demonstrates 195 00:15:50,680 --> 00:15:57,960 the potential that returns that can be made in the resources space. 196 00:15:57,960 --> 00:16:03,360 In many areas, resources is very much the ugly duckling. 197 00:16:03,360 --> 00:16:04,360 It's not sexy. 198 00:16:04,360 --> 00:16:12,800 Everyone's piling into AI or whatever, but the fact that we've had such strong performance 199 00:16:12,800 --> 00:16:18,480 shows that there can be some fantastic returns to be made from this space. 200 00:16:18,480 --> 00:16:22,280 So the other thing which doesn't get talked about a lot, but I want to get into it is 201 00:16:22,280 --> 00:16:23,880 with the fund size. 202 00:16:23,880 --> 00:16:28,080 Since you're dealing with a huge amount of small caps, some of these raises, which people 203 00:16:28,080 --> 00:16:32,080 are familiar with, some of these companies might only be raising $2 million, $4 million. 204 00:16:32,080 --> 00:16:34,520 It's not like someone's going asking for $50 million. 205 00:16:34,520 --> 00:16:38,720 And then the problem is, as we've seen time and time again, from my background, being 206 00:16:38,720 --> 00:16:43,480 a broker on these transactions is whenever you get a good one, everyone wants it and 207 00:16:43,480 --> 00:16:45,080 then you get no allocation. 208 00:16:45,080 --> 00:16:51,480 And then when it's not too certain, you get way too much. 209 00:16:51,480 --> 00:16:54,920 So position sizing is always interesting on the unlisted staff. 210 00:16:54,920 --> 00:17:01,560 But the other question I had is what's the fund size's capacity or it becomes way too 211 00:17:01,560 --> 00:17:04,920 big to manage and you can't get the allocation sizes you want? 212 00:17:04,920 --> 00:17:12,280 Yeah, look, $50 million fund, the average investment size is probably somewhere between 213 00:17:12,280 --> 00:17:16,560 half a million to a million dollars. 214 00:17:16,560 --> 00:17:22,400 So we do have a reasonable portfolio and spread the risk. 215 00:17:22,400 --> 00:17:30,320 And I think that's important that the average investor in the street might hear about one 216 00:17:30,320 --> 00:17:36,840 or two interesting resources stocks, but they are extremely risky. 217 00:17:36,840 --> 00:17:45,640 So I think that's what we offer is a portfolio approach to a high risk but high return sector. 218 00:17:45,640 --> 00:17:59,080 In terms of allocations, when the market's strong, I think you need to be nimble and 219 00:17:59,080 --> 00:18:04,400 the investment process allows us to be nimble and make sure that we can react quickly to 220 00:18:04,400 --> 00:18:06,440 opportunities. 221 00:18:06,440 --> 00:18:13,720 And I think most brokers that we deal with through the cycle recognise that we are there 222 00:18:13,720 --> 00:18:14,720 through the cycle. 223 00:18:14,720 --> 00:18:18,960 We're there in the good times, but we're also there in the bad times when no one else is 224 00:18:18,960 --> 00:18:21,240 answering the phone. 225 00:18:21,240 --> 00:18:27,240 So yeah, they tend to try and give us our allocation, particularly in companies that 226 00:18:27,240 --> 00:18:30,200 we've supported over a number of years. 227 00:18:30,200 --> 00:18:33,600 And we do tend to do that. 228 00:18:33,600 --> 00:18:41,120 One of our best stocks has been a company called Predictive Discovery, which we backed 229 00:18:41,120 --> 00:18:44,160 all the way from IPO, I think in 2012. 230 00:18:44,160 --> 00:18:47,000 And it's still one of our significant holdings. 231 00:18:47,000 --> 00:18:52,560 And we participate in pretty much every placement through to its major discovery a couple of 232 00:18:52,560 --> 00:18:53,560 years ago. 233 00:18:53,560 --> 00:18:59,880 So yeah, we try and support our existing portfolio. 234 00:18:59,880 --> 00:19:04,400 So since we're discussing portfolio, I definitely want to get into how the cake is baked. 235 00:19:04,400 --> 00:19:07,640 What is the percentage weightings? 236 00:19:07,640 --> 00:19:10,040 Let's discuss the commodities first and then the companies. 237 00:19:10,040 --> 00:19:13,400 What is the percentage weightings towards specific commodities? 238 00:19:13,400 --> 00:19:20,280 And in answering that question, do you find yourself looking forward and going, you know, 239 00:19:20,280 --> 00:19:21,280 lithium's had its run. 240 00:19:21,280 --> 00:19:23,600 It might be a while before the lithium comes back. 241 00:19:23,600 --> 00:19:29,440 So you decrease the allocation in the lithium or do you just diversify and have it? 242 00:19:29,440 --> 00:19:32,000 And then essentially, one performs, one's not. 243 00:19:32,000 --> 00:19:38,600 And then it's like, how do you manage what's the percentage weightings in the portfolio? 244 00:19:38,600 --> 00:19:41,640 Yeah, look, we do. 245 00:19:41,640 --> 00:19:45,820 We have a sort of a top down and a bottom up approach. 246 00:19:45,820 --> 00:19:58,080 So we do try and manage the portfolio to increase exposure to sectors, which we strongly positive 247 00:19:58,080 --> 00:20:04,040 on and decrease exposure to sectors where we think going is going to be tough. 248 00:20:04,040 --> 00:20:11,920 So for example, we're 20% into base metals, not including nickel at the moment. 249 00:20:11,920 --> 00:20:15,340 And most of that base metal would be copper. 250 00:20:15,340 --> 00:20:18,980 And nickel is only 1% of our portfolio. 251 00:20:18,980 --> 00:20:24,600 And that's because, you know, not unlike many people, we're positive on copper. 252 00:20:24,600 --> 00:20:31,600 And we think that nickel, you know, is having, obviously is having an extremely tough time 253 00:20:31,600 --> 00:20:37,520 and probably will continue to do so for at least the next six months and possibly longer. 254 00:20:37,520 --> 00:20:40,680 But it's, you know, nickel is a very interesting space and we might be able to touch on that 255 00:20:40,680 --> 00:20:41,680 a bit further. 256 00:20:41,680 --> 00:20:50,480 So, you know, we're at 34% exposed to gold and precious metals at the moment, including 257 00:20:50,480 --> 00:20:52,480 PGMs. 258 00:20:52,480 --> 00:20:56,880 And that will, look, that will always be a substantial part of the portfolio because 259 00:20:56,880 --> 00:21:07,120 we are, you know, in junior resources and gold will always be a major feature of what 260 00:21:07,120 --> 00:21:15,440 junior companies target because it's relatively easy or not easy, but the exploration process 261 00:21:15,440 --> 00:21:18,840 is well known for gold. 262 00:21:18,840 --> 00:21:25,080 And the capital costs are not immense for gold companies. 263 00:21:25,080 --> 00:21:28,960 You know, you don't have to build a railway, you don't have to build a port, you know, 264 00:21:28,960 --> 00:21:33,700 like you might have to do for coal or iron ore or something like that. 265 00:21:33,700 --> 00:21:41,920 So yeah, it's, you know, it can be within the capacity of a junior company to develop 266 00:21:41,920 --> 00:21:47,400 a 100,000 ounce per annum gold operation from scratch. 267 00:21:47,400 --> 00:21:51,960 So yeah, so that's 34%. 268 00:21:51,960 --> 00:21:54,720 We are pretty cashed up at the moment. 269 00:21:54,720 --> 00:21:58,800 We've got about 16% in cash, which is historically high for us. 270 00:21:58,800 --> 00:22:00,760 We, you know, we're not unhappy with that. 271 00:22:00,760 --> 00:22:06,440 We see that times are tough and apart from a couple of sectors, a couple of commodities 272 00:22:06,440 --> 00:22:08,480 getting tougher at the moment. 273 00:22:08,480 --> 00:22:17,800 So we see opportunities both to support our existing portfolio companies and to add new 274 00:22:17,800 --> 00:22:23,280 positions at relatively deep, deeply discounted valuations. 275 00:22:23,280 --> 00:22:28,360 And that's part of the reason why I'm in here in North America at the moment is to follow 276 00:22:28,360 --> 00:22:32,760 up on and find some new North American opportunities. 277 00:22:32,760 --> 00:22:39,300 So yeah, and then, you know, battery, you know, we did have a very substantial exposure 278 00:22:39,300 --> 00:22:42,000 to lithium last year. 279 00:22:42,000 --> 00:22:49,960 We've sold down a lot of that position and battery, primarily lithium, but also graphite, 280 00:22:49,960 --> 00:22:52,520 you know, that's 8% of the portfolio at the moment. 281 00:22:52,520 --> 00:22:58,040 So that's been reduced substantially. 282 00:22:58,040 --> 00:23:05,000 There's another one perhaps just touch briefly on, you know, we got 4% of the funds by value 283 00:23:05,000 --> 00:23:06,840 exposed to uranium. 284 00:23:06,840 --> 00:23:11,000 We think there's a lot of upside there through some of those stocks, which we might be able 285 00:23:11,000 --> 00:23:13,320 to touch on. 286 00:23:13,320 --> 00:23:17,360 And yeah, we're looking to add to our uranium positions. 287 00:23:17,360 --> 00:23:23,600 And finally, oil and gas is something that the fund has always had an exposure to. 288 00:23:23,600 --> 00:23:29,480 We've got some exposure to both oil and gas in Australia and offshore. 289 00:23:29,480 --> 00:23:36,440 I think in a lot of times, you know, it does, we've got about 10 or 11% exposure to oil 290 00:23:36,440 --> 00:23:37,440 and gas. 291 00:23:37,440 --> 00:23:43,140 A lot of time it does provide a bit of a counter foil to the gold price. 292 00:23:43,140 --> 00:23:49,900 You can see gold and oil moving in opposite directions reasonably often. 293 00:23:49,900 --> 00:23:54,400 So yeah, we do like to keep keep exposed to oil and gas as well. 294 00:23:54,400 --> 00:23:58,720 This is the type of conversation that I can have just a couple of drinks with and be for 295 00:23:58,720 --> 00:23:59,720 the next three hours. 296 00:23:59,720 --> 00:24:03,960 It's like, it's like, where do we begin? 297 00:24:03,960 --> 00:24:08,480 I think it's closer to beer o'clock for me than it is for you. 298 00:24:08,480 --> 00:24:09,480 Nine AM in the morning. 299 00:24:09,480 --> 00:24:10,480 What's the time there? 300 00:24:10,480 --> 00:24:13,000 Are we coming up to 20 past five? 301 00:24:13,000 --> 00:24:15,000 I think that's all right then. 302 00:24:15,000 --> 00:24:16,320 Where do we begin? 303 00:24:16,320 --> 00:24:21,440 All right, well, let's let's begin with the uranium story because uranium store I found 304 00:24:21,440 --> 00:24:22,440 so fascinating. 305 00:24:22,440 --> 00:24:25,960 Like there's a particular people I followed a couple of years ago that said you need against 306 00:24:25,960 --> 00:24:30,360 uranium because these stockpiles that have been built up on the yellow commodity have 307 00:24:30,360 --> 00:24:33,160 been sitting there for you slowly depleting. 308 00:24:33,160 --> 00:24:35,920 And now they've depleted and please, I don't remember the numbers. 309 00:24:35,920 --> 00:24:36,920 I kind of know them offhand. 310 00:24:36,920 --> 00:24:40,480 But isn't there something like about 180 or 190 million tons of demand? 311 00:24:40,480 --> 00:24:43,920 There's only about 140 or 150 million worth of supply. 312 00:24:43,920 --> 00:24:48,760 So literally 40 to 50 million of the yellow commodity short. 313 00:24:48,760 --> 00:24:54,880 And over the years, you know, which and I would love actually to interchange this with 314 00:24:54,880 --> 00:25:00,040 the concert, the discussion of, you know, people just don't want to stick money into 315 00:25:00,040 --> 00:25:04,920 building mines when they don't feel like that commodity is running. 316 00:25:04,920 --> 00:25:09,000 And then everyone kind of rushes into the last moment, as we saw with lithium and then 317 00:25:09,000 --> 00:25:11,320 pushes everything up and you have an overslept power problem. 318 00:25:11,320 --> 00:25:17,440 It's just like this self-fulfilling prophecy that happens every single cycle of the commodity. 319 00:25:17,440 --> 00:25:20,960 So what's happening with uranium? 320 00:25:20,960 --> 00:25:25,520 And do you want to give an example of the couple of maybe one or two in Australia and 321 00:25:25,520 --> 00:25:28,560 then what's happening offshore and international companies? 322 00:25:28,560 --> 00:25:31,980 Yeah, look, you're right, Murdoch. 323 00:25:31,980 --> 00:25:35,640 It is a bit of a broken record, I guess. 324 00:25:35,640 --> 00:25:40,100 And you see it, it's frustrating that you see it across commodities and it's happened 325 00:25:40,100 --> 00:25:47,420 again here in uranium where, you know, you could see the situation coming from a long 326 00:25:47,420 --> 00:25:48,420 time away. 327 00:25:48,420 --> 00:25:52,240 And, you know, a lot of the uranium bulls like Johnny Bush or whatever, you know, did 328 00:25:52,240 --> 00:25:56,060 start to sound like a broken record post-Fukushima. 329 00:25:56,060 --> 00:26:03,520 You know, there's not enough new supply, there's growing demand, there's no alternative, you 330 00:26:03,520 --> 00:26:09,800 know, the alternative sources of supply like, you know, the reprocessed highly enriched 331 00:26:09,800 --> 00:26:15,720 uranium that might have come out of the former Soviet Union, you know, back in the 90s and 332 00:26:15,720 --> 00:26:19,560 2000s is not there anymore. 333 00:26:19,560 --> 00:26:30,440 But at the same time, the power utilities who have got nuclear energy reactors weren't 334 00:26:30,440 --> 00:26:35,280 supporting new supply to any great degree. 335 00:26:35,280 --> 00:26:37,720 And so the problem is just build up and build up. 336 00:26:37,720 --> 00:26:41,640 And finally, you know, we've had push came to shove last year and the uranium price jumped 337 00:26:41,640 --> 00:26:49,040 over 100%, you know, and now it's over 100 bucks, 100 bucks a pound. 338 00:26:49,040 --> 00:26:56,840 So yeah, look, you're right, there's a massive shortfall, massive supply deficit at the moment. 339 00:26:56,840 --> 00:27:02,400 And you've got the two big guys, two elephants in the room, which is Kamiko out of Canada, 340 00:27:02,400 --> 00:27:04,720 which is the second biggest producer in the world. 341 00:27:04,720 --> 00:27:10,840 And then you've got Kazatomprom out of Kazakhstan, which is the OPEC of, in fact, it's, you know, 342 00:27:10,840 --> 00:27:15,320 double OPEC, it's, or triple OPEC, it's more than 30% of world supply. 343 00:27:15,320 --> 00:27:21,040 So OPEC came out in January and earlier this month and said, look, you know, those expanded 344 00:27:21,040 --> 00:27:26,760 production targets that we talked about last year, we're not going to get there. 345 00:27:26,760 --> 00:27:33,120 They've got problems with supply of reagents. 346 00:27:33,120 --> 00:27:38,120 And I think they've got other problems in terms of well-fueled ISR performance. 347 00:27:38,120 --> 00:27:42,480 So they're going to be well short of what they said they would be able to do in terms 348 00:27:42,480 --> 00:27:45,160 of ramping up their production. 349 00:27:45,160 --> 00:27:49,680 Kamiko, you know, have actually said, look, we think we're still going to hit our targets, 350 00:27:49,680 --> 00:27:52,280 which was a surprise to everybody. 351 00:27:52,280 --> 00:27:54,320 But they're actually buying in the spot market. 352 00:27:54,320 --> 00:27:58,960 So, you know, second biggest producer in the world is actually buying uranium rather than, 353 00:27:58,960 --> 00:28:04,880 you know, selling, you know, having enough production to meet its, so, you know, all 354 00:28:04,880 --> 00:28:09,400 the uranium at the moment is, as I understand it, is spoken for. 355 00:28:09,400 --> 00:28:13,880 And new supply is not available just at the flick of a switch. 356 00:28:13,880 --> 00:28:19,840 It's a very long, very tortuous process to bring a new uranium mine online. 357 00:28:19,840 --> 00:28:28,000 So yeah, that supply deficit and, you know, we're talking about 50 new reactors in China 358 00:28:28,000 --> 00:28:34,640 over the next, I think it might be decade or so, which is a massive amount of new reactors. 359 00:28:34,640 --> 00:28:43,280 And then you're seeing, you know, pronouncements out of COP26 that countries like France and 360 00:28:43,280 --> 00:28:50,800 the US want to triple their nuclear energy production through to 2050. 361 00:28:50,800 --> 00:28:58,600 Yeah, you know, the forces there are, you know, sort of almost inexorable that the price 362 00:28:58,600 --> 00:29:00,920 is going to drive, grind higher. 363 00:29:00,920 --> 00:29:04,240 It's a relatively small market in commodity terms. 364 00:29:04,240 --> 00:29:08,400 So that leads to potential volatility. 365 00:29:08,400 --> 00:29:14,880 And we saw a significant jump from 80 bucks a pound to over 100 bucks a pound late last 366 00:29:14,880 --> 00:29:15,880 year. 367 00:29:15,880 --> 00:29:22,600 And, you know, the pundits are saying, well, we could easily see it go from 100, 120 in 368 00:29:22,600 --> 00:29:23,600 a matter of weeks. 369 00:29:23,600 --> 00:29:27,520 And, you know, then there's blue sky beyond that. 370 00:29:27,520 --> 00:29:28,520 Yeah. 371 00:29:28,520 --> 00:29:30,880 Everything you're saying is so interesting. 372 00:29:30,880 --> 00:29:31,880 Like what was that? 373 00:29:31,880 --> 00:29:36,280 13% cut to the world's largest uranium producer, which is nuts. 374 00:29:36,280 --> 00:29:41,400 And then I heard another fund manager say that when they were studying commodities, 375 00:29:41,400 --> 00:29:45,440 that what it is when they get a wind behind them have a tendency to from the absolute 376 00:29:45,440 --> 00:29:49,800 bottom to the peak top, like lithium go up 10x. 377 00:29:49,800 --> 00:29:55,600 So I'm just looking at a chart from uranium, which was peak bottom in 2016. 378 00:29:55,600 --> 00:29:58,120 I think that was about $20. 379 00:29:58,120 --> 00:30:00,920 So now it's at about $18. 380 00:30:00,920 --> 00:30:04,040 So now it's at $103. 381 00:30:04,040 --> 00:30:07,280 So a bit, you know, depending where you take that from, so the average peak bottom's been 382 00:30:07,280 --> 00:30:08,280 roughly $25. 383 00:30:08,280 --> 00:30:11,680 Now it's, you know, 4x from the bottom. 384 00:30:11,680 --> 00:30:15,520 Yeah, it's quite interesting. 385 00:30:15,520 --> 00:30:19,360 And the other thing which is quite interesting on the uranium story as well is with the war 386 00:30:19,360 --> 00:30:24,520 with Russia and Ukraine, seeing it probably one of the main reasons why lithium and car 387 00:30:24,520 --> 00:30:29,480 batteries are kicked off is the European Union and NATO are trying to wean everyone off Russian 388 00:30:29,480 --> 00:30:30,480 gas. 389 00:30:30,480 --> 00:30:36,160 And as a byproduct of that, well, you know, that's the gas side to get batteries, but 390 00:30:36,160 --> 00:30:43,520 can't just go straight to everyone's electricity by 2050, you need gas for various things. 391 00:30:43,520 --> 00:30:48,320 So the best solution is essentially nuclear plants and the technology is improved. 392 00:30:48,320 --> 00:30:53,120 So I can't remember the numbers, but how many, is it France and the UK as well that are bringing 393 00:30:53,120 --> 00:30:55,760 nuclear reactors online to kind of solve that problem? 394 00:30:55,760 --> 00:31:04,960 The UK definitely have got a new one gigawatt reactor on the drawing board. 395 00:31:04,960 --> 00:31:09,720 I'm not quite sure exactly what stage that is at. 396 00:31:09,720 --> 00:31:18,080 But yeah, look, there's many countries who are talking about adding nuclear capacity 397 00:31:18,080 --> 00:31:20,080 to their power fleets, their electricity fleets. 398 00:31:20,080 --> 00:31:23,880 How long does it take to build a reactor like say that one in the UK? 399 00:31:23,880 --> 00:31:25,800 I don't generally don't know, right? 400 00:31:25,800 --> 00:31:28,560 Because everyone goes, you hear the headlines, okay, we're building one. 401 00:31:28,560 --> 00:31:30,120 Okay, that's great that you're building one. 402 00:31:30,120 --> 00:31:31,520 But how long does that actually take? 403 00:31:31,520 --> 00:31:33,520 Oh, man, you know, it's coming along. 404 00:31:33,520 --> 00:31:40,160 The last reactor that got built in the US, it took a lot, you know, I think something 405 00:31:40,160 --> 00:31:45,840 like 10 years from permitting and there were some massive cost overruns. 406 00:31:45,840 --> 00:31:51,600 So that is the downside to this that, you know, in the Western world, permitting is 407 00:31:51,600 --> 00:31:54,120 very, very difficult. 408 00:31:54,120 --> 00:32:01,840 And, you know, with cost escalation, we've seen in projects of any sort recently, you 409 00:32:01,840 --> 00:32:04,480 know, and these are massive projects. 410 00:32:04,480 --> 00:32:10,320 So yeah, you've got to be very wary of cost overruns. 411 00:32:10,320 --> 00:32:14,040 That may or may not apply so much in China. 412 00:32:14,040 --> 00:32:20,560 And China is definitely the country which is building out its reactor fleet faster than 413 00:32:20,560 --> 00:32:21,560 anybody else. 414 00:32:21,560 --> 00:32:30,240 So I think the my expectation is that we'll see much more reactor capacity put in place 415 00:32:30,240 --> 00:32:34,280 in China than anywhere else over the next 10 years. 416 00:32:34,280 --> 00:32:35,720 So interesting. 417 00:32:35,720 --> 00:32:39,520 So if everyone wants to go, you know, clean by 2050, which I don't think is probably going 418 00:32:39,520 --> 00:32:48,000 to happen, or pipe drain, the well the gas is, as everyone says, the transition point, 419 00:32:48,000 --> 00:32:49,400 but even gas shortages, right? 420 00:32:49,400 --> 00:32:50,400 You know, what origin energy? 421 00:32:50,400 --> 00:32:55,840 You know, front sold all our Ford Ford contracts, what $9, whatever the contract was, and, you 422 00:32:55,840 --> 00:32:57,240 know, offshore. 423 00:32:57,240 --> 00:32:59,560 So we're kind of running out supply even on the East Coast. 424 00:32:59,560 --> 00:33:03,280 So you're seeing places like the Beedaloo Basin being built up, right? 425 00:33:03,280 --> 00:33:07,600 But the problem is you get greenies and everyone's saying we don't like it, you know, fracking's 426 00:33:07,600 --> 00:33:08,600 bad. 427 00:33:08,600 --> 00:33:12,240 But so I'd love to hear your thoughts of what's happening in the gas market. 428 00:33:12,240 --> 00:33:15,600 And I suppose maybe one thing also to cover as well. 429 00:33:15,600 --> 00:33:22,520 The Australian gas exploration is completely different to the Americans, say, within Masilla's 430 00:33:22,520 --> 00:33:23,520 Basin. 431 00:33:23,520 --> 00:33:24,520 But people hear, oh, it's the same. 432 00:33:24,520 --> 00:33:29,400 But people don't understand that the ownership of the land is different in America than it 433 00:33:29,400 --> 00:33:30,400 is in Australia. 434 00:33:30,400 --> 00:33:34,280 So I'd love to hear your thoughts on what's happening in that volatile space. 435 00:33:34,280 --> 00:33:37,520 And for listeners out there, the gas price has kind of gone from like $2 to $9 and then 436 00:33:37,520 --> 00:33:39,120 back down again. 437 00:33:39,120 --> 00:33:44,640 So it's another incredibly volatile commodity with a shortage. 438 00:33:44,640 --> 00:33:47,240 So I'd love to hear your thoughts. 439 00:33:47,240 --> 00:33:50,280 It's very regional, right? 440 00:33:50,280 --> 00:33:57,560 So the gas price in WA, which is a market unconnected to the East Coast, is quite different 441 00:33:57,560 --> 00:34:02,400 to the gas price and gas market on the East Coast of Australia. 442 00:34:02,400 --> 00:34:07,320 And then the gas market in the US is quite different, quite different again. 443 00:34:07,320 --> 00:34:09,360 And the drivers are quite different. 444 00:34:09,360 --> 00:34:16,560 We're seeing the US become in a pretty short space of time the largest LNG exporter in 445 00:34:16,560 --> 00:34:17,860 the world. 446 00:34:17,860 --> 00:34:25,720 And then Joe Biden has now sort of put a pause on any new permits for gas export plants in 447 00:34:25,720 --> 00:34:26,720 the US. 448 00:34:26,720 --> 00:34:32,600 In Australia, on the East Coast, definite massive squeeze. 449 00:34:32,600 --> 00:34:39,320 And one of the big drivers as that has been the Bass Strait gas production absolutely falling 450 00:34:39,320 --> 00:34:40,320 off a cliff. 451 00:34:40,320 --> 00:34:44,680 It used to be one of the mainstays of East Coast gas. 452 00:34:44,680 --> 00:34:50,040 And in the next few years, it's just depleting at an extremely rapid rate. 453 00:34:50,040 --> 00:34:58,600 So the gas price in Eastern Australia, you're hearing $12, $14, even sometimes more than 454 00:34:58,600 --> 00:35:02,440 that, a gigajoule of contracts being written recently. 455 00:35:02,440 --> 00:35:11,400 And in WA, they've got the gas reservation policy for onshore gas, which is a real hot 456 00:35:11,400 --> 00:35:12,680 political potato. 457 00:35:12,680 --> 00:35:20,800 But as you said, they've gone from two bucks to nine bucks in a relatively short space 458 00:35:20,800 --> 00:35:21,800 of time. 459 00:35:21,800 --> 00:35:27,360 They used to, Mark McGowan used to sit there like a cheesier cat and say, oh, look, our 460 00:35:27,360 --> 00:35:28,360 system's fantastic. 461 00:35:28,360 --> 00:35:31,360 And it's protected local consumers. 462 00:35:31,360 --> 00:35:39,120 And then it all came back and I bet he regrets saying that. 463 00:35:39,120 --> 00:35:47,280 So look, just on your point, the ownership of minerals in the US is quite different to 464 00:35:47,280 --> 00:35:49,680 Australia in general. 465 00:35:49,680 --> 00:35:54,000 Australian minerals are owned by the Crown in the form of the individual states. 466 00:35:54,000 --> 00:36:03,280 In the US in general, the minerals and gas is owned by individual private ownership, 467 00:36:03,280 --> 00:36:09,200 which may or may not be the same as the owner of the surface rights. 468 00:36:09,200 --> 00:36:14,120 So look, each system has its challenges. 469 00:36:14,120 --> 00:36:22,160 There's possibly greater resistance to new gas projects in parts of Australia than there 470 00:36:22,160 --> 00:36:24,800 are in parts of the US. 471 00:36:24,800 --> 00:36:31,200 But you can have very, very disparate ownership of minerals in the US and have to chase down 472 00:36:31,200 --> 00:36:39,200 dozens of people who've got small percentage ownerships in various gas fields to tie up 473 00:36:39,200 --> 00:36:40,200 the rights. 474 00:36:40,200 --> 00:36:47,320 Whereas in Australia, in general, there's only one owner and that's the state. 475 00:36:47,320 --> 00:36:52,080 And the other big difference, I think, is infrastructure. 476 00:36:52,080 --> 00:36:56,920 The US has got gas pipelines running all over the place. 477 00:36:56,920 --> 00:37:04,000 Whereas Australia, there's a number of projects which would be online already if they had 478 00:37:04,000 --> 00:37:07,120 better access to pipelines. 479 00:37:07,120 --> 00:37:12,840 So putting in new pipelines is really critical to developing new gas, particularly on the 480 00:37:12,840 --> 00:37:13,840 East Coast. 481 00:37:13,840 --> 00:37:18,720 The infrastructure spent on some of these projects is so extensive. 482 00:37:18,720 --> 00:37:23,640 I often wonder whether or not Australians building out these large gas projects would 483 00:37:23,640 --> 00:37:29,840 be better off just using bonds, like $300 and a half billion bonds and just get it done 484 00:37:29,840 --> 00:37:36,080 and continuously going back to the market and devaluing the shareholders' value with 485 00:37:36,080 --> 00:37:43,480 raise after raise coming into like F, TF raises and dilution and dilution and completely destroying 486 00:37:43,480 --> 00:37:44,840 the value of people before. 487 00:37:44,840 --> 00:37:48,840 So people with massively deep pockets out of the states just sit back and relax and 488 00:37:48,840 --> 00:37:52,480 just keep taking the stock. 489 00:37:52,480 --> 00:37:57,280 With gas, do you have much offshore in Australia? 490 00:37:57,280 --> 00:38:01,120 And are you owning producers or are you in the exploration side? 491 00:38:01,120 --> 00:38:03,920 Look, we've got to get a bit of both. 492 00:38:03,920 --> 00:38:10,480 You'll see in our portfolio recently, we've got back into, well, sorry, Karoon is a, Karoon 493 00:38:10,480 --> 00:38:14,160 Engie is an oil producer mainly. 494 00:38:14,160 --> 00:38:23,000 But we do have offshore, we've got interesting CBM play in Mongolia called TMK, which has 495 00:38:23,000 --> 00:38:29,320 got what we think are some of the best coals in the world for gas production. 496 00:38:29,320 --> 00:38:33,060 And they're on the not far from the Chinese border. 497 00:38:33,060 --> 00:38:37,880 So there is potentially a ready market for their gas. 498 00:38:37,880 --> 00:38:44,120 Here in Australia, we've got exposure to things like Comet Ridge in Queensland with the Mahalo 499 00:38:44,120 --> 00:38:48,720 Project, which is in joint venture with Santos and their Mahalo North Project, which they 500 00:38:48,720 --> 00:38:50,000 own 100%. 501 00:38:50,000 --> 00:38:59,600 So that has a relatively quick timeframe to production if they choose to take it. 502 00:38:59,600 --> 00:39:05,800 I think it's about 17K tie into the nearest pipeline. 503 00:39:05,800 --> 00:39:11,920 But for a big add development, they're going to need to put in a much larger diameter and 504 00:39:11,920 --> 00:39:19,040 longer pipeline to connect to the down south to the major East Coast network. 505 00:39:19,040 --> 00:39:20,040 What else? 506 00:39:20,040 --> 00:39:29,640 3D Energy is one that's exploring offshore Victoria in joint venture with Conoco. 507 00:39:29,640 --> 00:39:36,080 That's a pure exploration play, but yeah, some relatively high chance of success on 508 00:39:36,080 --> 00:39:42,280 some fairly substantial targets, which hopefully will be drilled in 2025. 509 00:39:42,280 --> 00:39:48,480 So yeah, look, we have a mix of exposure to oil and gas, and that's just a couple of examples 510 00:39:48,480 --> 00:39:50,140 of our investments. 511 00:39:50,140 --> 00:39:51,140 That's quite interesting. 512 00:39:51,140 --> 00:39:55,640 I noticed you didn't mention the Betelgeuse Basin, and you probably know the history of 513 00:39:55,640 --> 00:39:56,640 that a little bit more than I do. 514 00:39:56,640 --> 00:40:01,200 But to my understanding, the four largest gas deposits in the entire world are Russia, 515 00:40:01,200 --> 00:40:03,480 Saudi Arabia, and Mosella Basin. 516 00:40:03,480 --> 00:40:09,200 And I think the Texas guys came over in the 70s and identified the Betelgeuse Basin, but 517 00:40:09,200 --> 00:40:10,560 everyone was like, no, no, it's too dry. 518 00:40:10,560 --> 00:40:11,560 There's no gas there. 519 00:40:11,560 --> 00:40:14,080 But recently, it's been incredibly expensive. 520 00:40:14,080 --> 00:40:20,000 It's been a political nightmare with the greenies and all that type of business. 521 00:40:20,000 --> 00:40:23,840 So I can understand why investors have shied away from the chaos. 522 00:40:23,840 --> 00:40:26,840 But I'm just curious in your thoughts on what's happened to Betelgeuse, because it was the 523 00:40:26,840 --> 00:40:32,520 last year the government gave them one of the companies up there a $1.5 billion grant 524 00:40:32,520 --> 00:40:38,800 to essentially build out a port right next to the Japanese giant up there as well. 525 00:40:38,800 --> 00:40:40,800 Is it impacts? 526 00:40:40,800 --> 00:40:41,800 Impacts. 527 00:40:41,800 --> 00:40:42,800 Yeah. 528 00:40:42,800 --> 00:40:46,120 And then as you were discussing with the infrastructure spend, people don't understand the cost and 529 00:40:46,120 --> 00:40:51,120 the amount of money associated required to get this gas piped into the Northern Territory 530 00:40:51,120 --> 00:40:54,320 then down to Queensland. 531 00:40:54,320 --> 00:40:55,320 So I'd love to... 532 00:40:55,320 --> 00:40:56,640 So two questions there. 533 00:40:56,640 --> 00:40:58,880 I'd love to hear your thoughts on the Betelgeuse. 534 00:40:58,880 --> 00:41:03,200 And then secondly, why aren't you in the Betelgeuse or is it more of a situation how you like 535 00:41:03,200 --> 00:41:08,720 the Betelgeuse but you just don't think due to the cost of something that the timing's 536 00:41:08,720 --> 00:41:09,720 right? 537 00:41:09,720 --> 00:41:12,520 I'm very interested to hear your thoughts on the Betelgeuse basin. 538 00:41:12,520 --> 00:41:20,080 Yeah, look, Murdoch, I think perhaps the short answer is we think that the Betelgeuse is 539 00:41:20,080 --> 00:41:21,520 for the big boys. 540 00:41:21,520 --> 00:41:24,480 And we're focused on the juniors. 541 00:41:24,480 --> 00:41:31,000 And as you touched on, the reason for that are the costs are very high. 542 00:41:31,000 --> 00:41:33,240 The drilling costs are extremely high. 543 00:41:33,240 --> 00:41:36,640 And then the infrastructure costs are also extremely high. 544 00:41:36,640 --> 00:41:42,640 And generally, we want to invest in things which can be within the reach of a junior 545 00:41:42,640 --> 00:41:46,040 company that might only have a market cap of less than 200 million. 546 00:41:46,040 --> 00:41:48,200 So it's just what we do. 547 00:41:48,200 --> 00:41:54,640 Because that's what I was asking, because Tan Bourne, as an example, pre-raise had what, 548 00:41:54,640 --> 00:41:55,640 250 million market cap. 549 00:41:55,640 --> 00:41:57,600 So you're saying $200 million is the... 550 00:41:57,600 --> 00:42:00,520 Yeah, look, it's not hard and fast, obviously. 551 00:42:00,520 --> 00:42:05,560 And hopefully, all our investment companies will blast through the 200 million market 552 00:42:05,560 --> 00:42:09,640 cap valuation and go to a couple of billion. 553 00:42:09,640 --> 00:42:11,800 And we may or may not hang on to that point. 554 00:42:11,800 --> 00:42:19,880 But yeah, we're generally looking in what you might call the micro cap space. 555 00:42:19,880 --> 00:42:24,960 But the Betelgeuse, look, there's no doubt, is fantastically endowed with gas. 556 00:42:24,960 --> 00:42:31,440 It's just, as I touched on earlier, the US has got fantastic infrastructure in place. 557 00:42:31,440 --> 00:42:34,520 And the Betelgeuse is generally devoid of it. 558 00:42:34,520 --> 00:42:35,520 Yeah. 559 00:42:35,520 --> 00:42:37,920 So I hear what you're saying, as Ian, it's a great opportunity. 560 00:42:37,920 --> 00:42:39,480 It's going to take a long time. 561 00:42:39,480 --> 00:42:43,240 So the point you're making is if you go find something, then there's no infrastructure 562 00:42:43,240 --> 00:42:46,160 around, then you have to go get the money to build that and it's become such a long. 563 00:42:46,160 --> 00:42:48,120 And the question is, do you want to play that game? 564 00:42:48,120 --> 00:42:50,200 Now that makes a lot of sense. 565 00:42:50,200 --> 00:42:55,840 Okay, well, since you mentioned gas and oil, what are your thoughts on what's happening 566 00:42:55,840 --> 00:42:57,880 in the oil? 567 00:42:57,880 --> 00:43:03,560 Yeah, look, it's a pretty interesting one. 568 00:43:03,560 --> 00:43:12,680 And as I touched on, it's an interesting sort of counter foil or in some cases can be decorrelated 569 00:43:12,680 --> 00:43:15,760 to the rest of the commodities market. 570 00:43:15,760 --> 00:43:24,860 So for example, oil prices obviously has a big feed into inflation and inflationary costs. 571 00:43:24,860 --> 00:43:31,520 So if you see the oil price jumping, then you may see inflation jumping and then you 572 00:43:31,520 --> 00:43:39,680 may see or you're likely to see interest rates rising and you're likely to see in that case, 573 00:43:39,680 --> 00:43:47,920 pressure on non-yielding stocks, such as the speculative sector that we're in. 574 00:43:47,920 --> 00:43:51,160 And you're also likely to see pressure on things like the gold price. 575 00:43:51,160 --> 00:44:00,680 So that's why I like to have exposure to both gold and oil for that reason. 576 00:44:00,680 --> 00:44:10,680 So we're seeing China is now I think the biggest consumer of oil, 13, 14 million barrels a 577 00:44:10,680 --> 00:44:15,360 day out of a total of around 100. 578 00:44:15,360 --> 00:44:24,120 We're seeing US production rose or didn't, rose last year, despite the recount actually 579 00:44:24,120 --> 00:44:27,000 being flattened down. 580 00:44:27,000 --> 00:44:34,840 So there's been a lot of efficiencies extracted in the permian in the US and the US is I think 581 00:44:34,840 --> 00:44:46,240 one of the biggest producer in the world now, which almost matches the Chinese consumption 582 00:44:46,240 --> 00:44:48,680 just sort of coincidentally. 583 00:44:48,680 --> 00:44:55,760 So you've seen, I think the Chinese economy, and this is my perception based on the iron 584 00:44:55,760 --> 00:45:01,840 oil price and the record imports of iron ore, the copper TCRCs and the record imports of 585 00:45:01,840 --> 00:45:06,920 copper, the record amount of electricity consumed in China last year. 586 00:45:06,920 --> 00:45:12,040 I think the Chinese economy is actually going pretty well and added to that the record imports 587 00:45:12,040 --> 00:45:14,600 of oil. 588 00:45:14,600 --> 00:45:22,800 So I think you may see, and OPEC are actually forecasting this, that you could see growth 589 00:45:22,800 --> 00:45:25,480 in oil demand this year. 590 00:45:25,480 --> 00:45:30,560 Russia as a major producer is not forecasting it will add any production this year, may 591 00:45:30,560 --> 00:45:32,920 come off slightly. 592 00:45:32,920 --> 00:45:35,520 So you may see the oil price and we've seen it rise. 593 00:45:35,520 --> 00:45:42,000 I think it was WTI was 79 bucks on Friday or thereabouts a barrel. 594 00:45:42,000 --> 00:45:43,840 You've seen it rise. 595 00:45:43,840 --> 00:45:50,880 If OPEC continue to have production discipline, and in particular the Saudis, then you could 596 00:45:50,880 --> 00:45:55,920 see the oil price continue to strengthen. 597 00:45:55,920 --> 00:45:59,880 And yeah, obviously that would be good for oil producers. 598 00:45:59,880 --> 00:46:08,360 And just as a side comment, the oil market or the development of new oil fields and capital 599 00:46:08,360 --> 00:46:18,600 spend on the oil business has really, really been a laggard in the last decade. 600 00:46:18,600 --> 00:46:23,480 We're seeing big boys like BHP and Shell start to reinvest, but they did have a number of 601 00:46:23,480 --> 00:46:28,800 years there where they were saying, oh, we're going to spend our capex on solar farms rather 602 00:46:28,800 --> 00:46:31,640 than our own core business. 603 00:46:31,640 --> 00:46:36,560 But we've seen that start to change over the last 18 months or so. 604 00:46:36,560 --> 00:46:40,320 So yeah, but that can take a while to flow through. 605 00:46:40,320 --> 00:46:46,920 So I think as we stand today, we may see more upside than downside to the oil price. 606 00:46:46,920 --> 00:46:48,800 Yeah, that's very interesting. 607 00:46:48,800 --> 00:46:54,720 And last one I just wanted to get into is what's happening with Dr. Copper. 608 00:46:54,720 --> 00:47:01,840 And then I would love to discuss how the IPO markets kind of slowed down and when do you 609 00:47:01,840 --> 00:47:02,840 think it's going to be back again? 610 00:47:02,840 --> 00:47:05,720 But first of all, what's happening with Dr. Copper? 611 00:47:05,720 --> 00:47:10,600 Yeah, look, Dr. Copper, it's been a bit of a head scratcher. 612 00:47:10,600 --> 00:47:16,600 It's really been range bound between sort of US $3.50 and $3.80 a pound for what feels 613 00:47:16,600 --> 00:47:20,800 like quite a long time, most of 2023. 614 00:47:20,800 --> 00:47:23,840 And we're still stuck there today. 615 00:47:23,840 --> 00:47:33,200 Whereas all forecasts are saying there's a copper squeeze coming and it could come. 616 00:47:33,200 --> 00:47:40,440 A lot of forecasts have said, oh, it's going to be 2025, but it could actually be accelerated. 617 00:47:40,440 --> 00:47:42,120 We could see that this year. 618 00:47:42,120 --> 00:47:48,600 So why hasn't the price jumped out of its range bound trading? 619 00:47:48,600 --> 00:47:53,000 It's a substantial market, 25 million tonnes of copper a year. 620 00:47:53,000 --> 00:48:00,520 There must be some stockpiles that are off warehouse that we can't see that are being 621 00:48:00,520 --> 00:48:03,000 consumed. 622 00:48:03,000 --> 00:48:08,040 But warehouse stocks are generally pretty low. 623 00:48:08,040 --> 00:48:11,320 So look, the fundamentals are very, very good for copper. 624 00:48:11,320 --> 00:48:16,280 I'm not telling people anything that they don't know. 625 00:48:16,280 --> 00:48:17,280 It's really interesting. 626 00:48:17,280 --> 00:48:26,720 I saw an analysis last week of two of the largest new sources of copper production out 627 00:48:26,720 --> 00:48:31,920 of South America, Cuy of Echo and QB2. 628 00:48:31,920 --> 00:48:38,320 Both of those, if you're looking for it as an investor by the companies that have built 629 00:48:38,320 --> 00:48:46,720 them, if you're looking for say a 15% IRR return, both of those are under water. 630 00:48:46,720 --> 00:48:52,880 One needs $4.50 a pound and one needs six bucks a pound to hit that 15% IRR. 631 00:48:52,880 --> 00:49:00,640 So at current levels, the incentivisation for new copper production is really lacking. 632 00:49:00,640 --> 00:49:08,160 And I say this all the time, every project that gets delayed or deferred adds to the 633 00:49:08,160 --> 00:49:10,240 future deficit. 634 00:49:10,240 --> 00:49:18,000 So yeah, it's something that we, along with many, we like the sector. 635 00:49:18,000 --> 00:49:20,680 So that comment there is fascinating. 636 00:49:20,680 --> 00:49:28,120 Any project that gets delayed or postponed adds to the problem of supply. 637 00:49:28,120 --> 00:49:34,980 So we've seen this everywhere where pre-COVID and then run up, money was pouring in, everyone's 638 00:49:34,980 --> 00:49:39,540 finding new projects, doing raises, everyone feels rich. 639 00:49:39,540 --> 00:49:44,000 But now speaking to clients, investors, institutions, family offices, everyone's kind of feeling 640 00:49:44,000 --> 00:49:45,680 poor to an extent. 641 00:49:45,680 --> 00:49:51,600 So where that may have risked capital before, they're finding safer houses, higher property 642 00:49:51,600 --> 00:49:56,120 lending or property developments or something of the equivalent back there. 643 00:49:56,120 --> 00:49:59,960 And then the other thing which I'm finding very crazy is across the board in most asset 644 00:49:59,960 --> 00:50:03,800 classes, some of my colleagues have said that the deals they're seeing right now are the 645 00:50:03,800 --> 00:50:07,240 best that they've seen from a valuation standpoint. 646 00:50:07,240 --> 00:50:11,040 And I heard a fund manager say the other day that last year or the IPO's from last year, 647 00:50:11,040 --> 00:50:16,080 so the year before have all come off like on average, like 48% was 58%, something quite 648 00:50:16,080 --> 00:50:18,460 large. 649 00:50:18,460 --> 00:50:21,840 So valuations is very, very interesting. 650 00:50:21,840 --> 00:50:26,960 Bit of a statement there, but I suppose my question on the back of that is what is happening 651 00:50:26,960 --> 00:50:27,960 in IPO land? 652 00:50:27,960 --> 00:50:31,240 I read an article you wrote that said, what was it? 653 00:50:31,240 --> 00:50:35,480 Last year saw little to no IPO action with only three junior minor companies listing on 654 00:50:35,480 --> 00:50:37,560 the ASX in the past month or two. 655 00:50:37,560 --> 00:50:43,400 One was gold, one was rare earths and one was lithium, Kali metals. 656 00:50:43,400 --> 00:50:47,720 So my question after all that as well is what do you think is going to get the IPO market 657 00:50:47,720 --> 00:50:49,160 going again? 658 00:50:49,160 --> 00:50:53,960 Look, probably Jerome Powell. 659 00:50:53,960 --> 00:50:54,960 You reckon? 660 00:50:54,960 --> 00:51:06,640 That's a flippant comment, but interest rates are a major factor in support for speculative 661 00:51:06,640 --> 00:51:07,640 investment. 662 00:51:07,640 --> 00:51:15,760 If you can stick your money in the bank and make 5% versus, as you mentioned, IPO's which 663 00:51:15,760 --> 00:51:23,120 you're actually going to lose money on from the 2022, one of the 2022 IPO's, why wouldn't 664 00:51:23,120 --> 00:51:31,520 you put your money in the bank and earn a very safe 5% or something like that? 665 00:51:31,520 --> 00:51:39,040 If and when interest rates come down, particularly in the US, then you will see, in my view, 666 00:51:39,040 --> 00:51:44,800 you will see increasing support for the more speculative investments and in particular, 667 00:51:44,800 --> 00:51:49,440 as an example, the junior resources exploration sector. 668 00:51:49,440 --> 00:51:53,920 So yeah, look, hopefully that's right. 669 00:51:53,920 --> 00:51:58,440 That second half of 2024 is going to see moderating. 670 00:51:58,440 --> 00:52:05,360 Well, the first half of 2024 will see continued moderation in inflation and then second half 671 00:52:05,360 --> 00:52:09,600 of 2024 will see interest rates start to fall. 672 00:52:09,600 --> 00:52:16,840 And yeah, so in that case, we could see a much stronger IPO market on the ASX in H2 673 00:52:16,840 --> 00:52:17,840 2024. 674 00:52:17,840 --> 00:52:25,800 So if any IPO's are coming out with what we discussed with the commodities, I suppose 675 00:52:25,800 --> 00:52:32,240 what is your outlook on if a deal came out, what's the commodity to be in? 676 00:52:32,240 --> 00:52:36,240 Yeah, look, I think we've touched on a few of them. 677 00:52:36,240 --> 00:52:42,400 Uranium looks good, particularly on the more exploration side of things. 678 00:52:42,400 --> 00:52:49,720 I think a number of the advanced developer uranium companies perhaps ran ahead of themselves 679 00:52:49,720 --> 00:52:56,400 a bit in 2022 and 2023 was more a consolidating year. 680 00:52:56,400 --> 00:53:02,960 Copper obviously is something that everyone is interested in and we're definitely seeing 681 00:53:02,960 --> 00:53:11,880 a bit of a groundswell, both in North America and Australia, of interest in copper. 682 00:53:11,880 --> 00:53:20,000 Copper will always be there and I think that also would benefit from falling interest rates. 683 00:53:20,000 --> 00:53:27,840 Other sort of more esoteric ones, I think PGMs look pretty interesting in 2024. 684 00:53:27,840 --> 00:53:30,800 The prices have fallen a lot. 685 00:53:30,800 --> 00:53:37,840 The big producers in South Africa and Nureilsk in Russia, particularly for palladium, supply 686 00:53:37,840 --> 00:53:38,840 is falling. 687 00:53:38,840 --> 00:53:53,160 There's a deficit there and if EVs or if hybrids and plug-in hybrids are preferenced over pure 688 00:53:53,160 --> 00:54:02,480 EVs, then that needs autocatalysts and PGMs are, that's a major consumer of PGMs. 689 00:54:02,480 --> 00:54:06,200 So platinum palladium look pretty interesting. 690 00:54:06,200 --> 00:54:12,520 When we touched on Nickel earlier, I think there's probably no rush, but the major use 691 00:54:12,520 --> 00:54:16,920 of Nickel steel is not batteries, it's stainless steel. 692 00:54:16,920 --> 00:54:24,360 And Chinese production of stainless steel was a record last year and I think it's going 693 00:54:24,360 --> 00:54:29,120 to be strong again this year based on how we're seeing the iron ore price. 694 00:54:29,120 --> 00:54:36,120 So while there's still a surplus of supply coming out of Indonesia through the new technology 695 00:54:36,120 --> 00:54:42,880 and nickel laterites, I think there's a chance that in the second half of 2024, for what 696 00:54:42,880 --> 00:54:51,080 is historically the most volatile of metals, we could see nickel start to rebound. 697 00:54:51,080 --> 00:54:53,080 So that's an interesting one to watch. 698 00:54:53,080 --> 00:54:55,960 Yeah, that's very interesting. 699 00:54:55,960 --> 00:55:01,440 I suppose I was just thinking to myself then, from what you said before, all these plays 700 00:55:01,440 --> 00:55:05,400 in Australia and the resources sound fantastic, you find a side. 701 00:55:05,400 --> 00:55:11,080 But again, the problem comes down to the ability to finance them. 702 00:55:11,080 --> 00:55:15,800 So I spent a bit of time in the past couple of years speaking with German bankers regarding 703 00:55:15,800 --> 00:55:19,120 corporate bonds. 704 00:55:19,120 --> 00:55:26,160 So I'm just wondering, there's a thing happening over in Saudi and Europe where they're using 705 00:55:26,160 --> 00:55:30,640 essentially bonds where you can forecast the life of a mine 30 to 50 years and they're 706 00:55:30,640 --> 00:55:32,560 essentially reverse engineering it, right? 707 00:55:32,560 --> 00:55:36,040 So they know exactly the money required to get it out, what's essentially there, and 708 00:55:36,040 --> 00:55:43,240 then they just get the job done instead of having A, B, C, D, E, F, G on all the raises 709 00:55:43,240 --> 00:55:46,800 coming through, which anyone listening that's doing the brokering probably is going to shoot 710 00:55:46,800 --> 00:55:47,800 me for this. 711 00:55:47,800 --> 00:55:53,720 But from your position, who's been doing this for a long time and seeing it, I'm just very 712 00:55:53,720 --> 00:56:01,760 curious to hear your thoughts on the relationship of say, corporate bonds in resource companies 713 00:56:01,760 --> 00:56:05,880 because I've had conversations with people over the years in Australia, either they're 714 00:56:05,880 --> 00:56:11,120 not familiar with it or they're familiar with it and they've really seen one work in Australia. 715 00:56:11,120 --> 00:56:16,080 But I keep seeing all these large, capital intensive projects that look fantastic where 716 00:56:16,080 --> 00:56:17,960 shareholders go into it. 717 00:56:17,960 --> 00:56:21,920 It sounds exciting two, three years and then it falls over because I don't know, rivers 718 00:56:21,920 --> 00:56:23,260 run dry. 719 00:56:23,260 --> 00:56:30,480 So do you think a dead option via a bond, a corporate bond is appealing for Australian 720 00:56:30,480 --> 00:56:34,080 miners here or do you think, I don't know, what's your opinion? 721 00:56:34,080 --> 00:56:36,200 Is it balanced? 722 00:56:36,200 --> 00:56:46,880 For some, look, that's what Twiggy Forest did with FMG, access the junk bond market 723 00:56:46,880 --> 00:56:51,960 out of the US to finance Fortescue into its first production. 724 00:56:51,960 --> 00:56:58,360 And it was a nail biting thing when the iron ore price fell. 725 00:56:58,360 --> 00:57:04,280 But he has become the third force in iron ore and hats off to him. 726 00:57:04,280 --> 00:57:12,520 So for substantial projects, as you mentioned with 30, 50 year mine lives, I think it can 727 00:57:12,520 --> 00:57:14,760 work. 728 00:57:14,760 --> 00:57:16,520 You've got to get the interest rate right. 729 00:57:16,520 --> 00:57:17,520 Obviously. 730 00:57:17,520 --> 00:57:22,520 I should say as well, these bonds begin at either euro or US dollar at half a billion 731 00:57:22,520 --> 00:57:27,440 dollars because the cost of building one for 50 million US is the same as half a billion. 732 00:57:27,440 --> 00:57:29,360 So the projects aren't small. 733 00:57:29,360 --> 00:57:34,360 Well, the life cycle is not small. 734 00:57:34,360 --> 00:57:42,360 I guess that the issue is a lot of mining projects, they start out with relatively short 735 00:57:42,360 --> 00:57:50,400 lives of maybe five to 10 years, but a lot of them do keep going for decades. 736 00:57:50,400 --> 00:57:53,680 They find more and more reserves, keep on exploring. 737 00:57:53,680 --> 00:58:01,480 So that's not ideal for putting in place a long term bond, unfortunately. 738 00:58:01,480 --> 00:58:02,480 And you're right. 739 00:58:02,480 --> 00:58:06,640 Look, development capital is very, very hard to find at the moment. 740 00:58:06,640 --> 00:58:11,640 In fact, there's a number of developers that I can mention that are sitting on, they've 741 00:58:11,640 --> 00:58:14,640 got a feasibility study tied up with a bow. 742 00:58:14,640 --> 00:58:18,680 They've got their permitting all done. 743 00:58:18,680 --> 00:58:20,800 They might have a strongly positive NPV. 744 00:58:20,800 --> 00:58:32,560 They can't get the development finance because providers of that capital have seen massive 745 00:58:32,560 --> 00:58:38,680 cost overruns and scheduled blowouts in many projects over the last few years due to cost 746 00:58:38,680 --> 00:58:45,320 escalation and also due to a shortage of labour that's linked, a shortage of labour in the 747 00:58:45,320 --> 00:58:46,320 industry. 748 00:58:46,320 --> 00:58:53,320 Come back to that point before, every project that gets delayed or deferred is fading into 749 00:58:53,320 --> 00:58:54,320 the future deficits. 750 00:58:54,320 --> 00:58:58,080 And we're seeing a lot of that at the moment. 751 00:58:58,080 --> 00:59:03,560 Well you're definitely going to be seeing a lot in your trip from top to bottom with 752 00:59:03,560 --> 00:59:09,120 hopefully a stop in Miami and hopefully you're trying to find the high end cigars running 753 00:59:09,120 --> 00:59:11,320 around that beautiful city. 754 00:59:11,320 --> 00:59:13,880 Yes, I've got that on my list. 755 00:59:13,880 --> 00:59:19,760 If I've got a bit of spare time, I've got some cigars to buy from a friend of mine who's 756 00:59:19,760 --> 00:59:23,320 a cigar aficionado back in Melbourne. 757 00:59:23,320 --> 00:59:29,520 So hopefully we'll be sharing a Monte Cristo together when I get home. 758 00:59:29,520 --> 00:59:30,520 Fantastic. 759 00:59:30,520 --> 00:59:36,960 Last question I'd like to finish on is what keeps you up at night and what gets you out 760 00:59:36,960 --> 00:59:37,960 of bed in the morning? 761 00:59:37,960 --> 00:59:44,320 Look, I think the thing that keeps me up at night is the, if you like, the bets we've 762 00:59:44,320 --> 00:59:50,240 placed on what look like really good expiration prospects. 763 00:59:50,240 --> 00:59:58,040 But as a very good geologist, I know Chris Cairns like to say, mother nature's a bitch 764 00:59:58,040 --> 01:00:01,040 and she's had a lot of time to move the furniture around downstairs. 765 01:00:01,040 --> 01:00:07,680 So even the best drilling targets can come up dry. 766 01:00:07,680 --> 01:00:13,800 So that's something that keeps me awake at night. 767 01:00:13,800 --> 01:00:15,080 And what gets me up in the morning? 768 01:00:15,080 --> 01:00:20,600 I think it's probably the same thing, the excitement of the potential for one of our 769 01:00:20,600 --> 01:00:23,960 portfolio companies to make a big discovery. 770 01:00:23,960 --> 01:00:26,840 Well, the only constant in life is change. 771 01:00:26,840 --> 01:00:31,400 So with that being said, so if anyone out there wants to learn more or change up what 772 01:00:31,400 --> 01:00:37,440 they're doing, what's the best way they can reach out to you to, I don't know, broaden 773 01:00:37,440 --> 01:00:39,480 their minds or learn more. 774 01:00:39,480 --> 01:00:40,480 Sure. 775 01:00:40,480 --> 01:00:47,320 Look, if people are interested, please contact us via our website. 776 01:00:47,320 --> 01:00:54,720 Get on the mailing list for the monthly report that covers our individual portfolio, but 777 01:00:54,720 --> 01:01:02,040 also tries to address what's happening in commodities markets. 778 01:01:02,040 --> 01:01:05,200 So yeah, hopefully people have a read that. 779 01:01:05,200 --> 01:01:06,840 What's your website? 780 01:01:06,840 --> 01:01:07,840 It's lrfm.com.au. 781 01:01:07,840 --> 01:01:12,840 Lowell Resources Funds Management, LRFM. 782 01:01:12,840 --> 01:01:13,840 Fantastic. 783 01:01:13,840 --> 01:01:22,960 All right, John, well, it's a pleasure having you on and time for either a drink or to head 784 01:01:22,960 --> 01:01:24,240 to bed in your side of things. 785 01:01:24,240 --> 01:01:25,720 And my day is just getting started. 786 01:01:25,720 --> 01:01:27,720 I think the market's opening in two minutes. 787 01:01:27,720 --> 01:01:31,520 So we'll see what the ASX has in store for us today. 788 01:01:31,520 --> 01:01:32,520 All right. 789 01:01:32,520 --> 01:01:33,520 Fingers crossed. 790 01:01:33,520 --> 01:01:34,520 Thanks a lot, Murdoch. 791 01:01:34,520 --> 01:01:35,520 Good fun. 792 01:01:35,520 --> 01:01:36,520 Enjoy it. 793 01:01:36,520 --> 01:01:37,520 Cheers.