Barrick Breakup, Copper Surge and Mining M&A | Nicole Adshead-Bell

Nicole Adshead-Bell, Director of Cupel Advisory, joins Kitco Mining’s Digging Deep with Paul Harris to discuss gold M&A, Barrick Mining restructuring speculation, activist pressure at Northern Star Resources, rising copper prices, and capital deployment across the mining sector.

Adshead-Bell says potential restructuring at Barrick, Elliott Investment Management’s pressure at Northern Star, and Zijin Gold’s delayed Allied Gold acquisition point to a market demanding simpler stories, stronger execution, and better accountability. She said mining boards need the technical expertise to challenge management, while producers must rebuild trust with investors. “Do what you say you're going to do,” she said.

The discussion also covers gold producer expansion plans, the risk of cost inflation as miners deploy cash, copper M&A in Quebec and Chile, and why Adshead-Bell believes copper may need to move toward $7 to $8/lb before major new supply commitments are made. She also explains why higher metals prices are changing the true cost of streams, prepays and hedges.

Recorded June 4, 2026.

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00:30 - Barrick Africa Merger Talk
01:52 - Divesting Risky Jurisdictions
04:07 - Boardroom Accountability
05:47 - China Scrutinizes Zijin Deal
10:13 - Elliott Targets Northern Star
12:26 - Boards, ESG and Execution
17:41 - Who Buys Northern Star?
22:38 - Gold Mine Expansions Surge
25:59 - Copper M&A and Price Outlook
30:20 - Paying Off Streams and Hedges
33:22 - Mine Restarts and IPOs
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Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

Transcript

SPEAKER_00 0:00

Kitco Mining, Digging Deep with Paul Harris.

SPEAKER_01 0:04

Hello and welcome back to Kitco Mining's Digging Deep with me, Paul Harris, in which we take a closer look at some of the most interesting news items in the mining and exploration space. Today is Thursday, June the 4th, and joining me today from Quebec City in Canada is Nicole Adsid Bell of Cooper Advisory. Nicole, welcome back to Kitco.

SPEAKER_02 0:23

Thank you very much for having me back, Paul.

SPEAKER_01 0:26

We have got a very interesting suite of things to talk about this week, Nicole. So we're going to get straight into it. There's been a lot of talk about Barrack mining, IPOing its North American assets. On last week's show with Rick Rawl, I discussed whether the rest of Barrack assets will be carved up. And the answer seems to be probably yes. With news this week that Barracks African business will potentially be joining with those of Endeavour mining and a possible London listing for a combined entity that could have a $30 billion market capitalization. Nicole, discuss this. Why does this idea of putting the two African giants together, why does that make sense?

SPEAKER_02 1:07

It makes sense because I think investors, investors like things that are relatively simple. And when you're one of the largest, you were one of the largest mining companies in the world and a great degree of diversification around the world and in jurisdictions that are considered to have a lot of risk. We've had this topic before. I would argue there's also political risk in Anglophone countries, but that's not necessarily the way that the market sees it. So it means it's a cleaner, simpler business that can drive forward. And it also makes a lot of sense for Endeavour, obviously, one of the largest companies with a jurisdictional focus on Africa, presumably one would hope, and has that shown a history of being able to execute in those countries. And so, and we are in a market where there's an appetite for growth and ultimately investors want to see consolidation and sensible consolidation. So makes sense, I think, on a whole bunch of levels.

SPEAKER_01 1:56

Okay, so if Barak IPO is its North American assets, potentially does this deal with uh endeavour in Africa. Um, do we expect to see then it would divest its assets in more far-flung places such as Pakistan, Papua New Guili, Chile, Argentina, Saudi Arabia?

SPEAKER_02 2:14

Well, what generally happens when you have a replacement of an old management team with a new management team, that new management team gets to say, well, they weren't our mistakes. We didn't make those, and so can be a little bit more perhaps critical of previous strategies, etc. If they are focused on simplifying the story, which I would argue is probably a good strategic move, and being able to say that we are focused on safe jurisdictions in first world countries, it would make a huge amount of sense uh to offload assets in those far-flung jurisdictions, as you said, and and particularly Pakistan. Look, it's an amazing asset, but really fraught, not just with political risk, but with security risk. There's uh Chinese-owned companies with coal mines in the area that have had massive security incidences that are resolved in in deaths. And at the end of the day, end of the day, what is a human life worth? And and and putting your people at risk in a country like that, it doesn't really gel with trying to simplify your story and say we're we're maybe a jurisdictional go-to name. So I would expect that would absolutely occur.

SPEAKER_01 3:14

Okay, I mean, if that does occur, does Barrack mining then become effectively a holding company?

SPEAKER_02 3:20

Potentially. I mean, obviously there's there's discussions about getting together with Newmont, which makes a huge amount of sense. There's a bunch of ways that that this could go. I think the clear message to the Barrack management team and board posts the management changes is that we want to see material change, uh, that you win in this very uh arguably the opposite strategic direction that you could have that you should have gone in a rising gold price environment in the biggest bull market in gold that we've ever seen. Um, you started basically messaging that you wanted to become really, really focused on copper. And don't get me wrong, copper's an amazing commodity. I'm a massive copper bull. We've hit hit past the $6 mark, but I don't think gold companies can ever compete with the diversifieds in terms of accumulating and operating large-scale copper assets.

SPEAKER_01 4:07

Well, copper's uh blasted past $6.30 today. Um, one thing that doesn't seem to be getting a lot of press, um, you know, we we've there's been a lot of talk about you know the direction Barrack's gone over the past 10 years since the the uh it merge with Rangold. That merger was under the auspices of Chair John Thornton. He very much backed Bristow to take this much more aggressive political risk route. Um now Barrack seems to be winding that back. John Thornton's still there sitting on top. Why why is that? Why isn't Barrack look to replace John Thornton as chair?

SPEAKER_02 4:42

Uh, one of great life's great unanswerable questions. I don't know. I mean, at the end of the day, uh the chairman and the board also have to take responsibility for the direction of a company. It isn't just a CEO, and and one of the big roles of the board is to hire and fire the CEO. So if you have made a decision that maybe the market or internally you think that was the wrong decision and that former CEO is removed, I think boards have to ask themselves very, very serious and hard questions. And frankly, I'm I'm somewhat surprised that you haven't seen more movement uh uh at the board level as well, because that would be a normal course of events uh when there is a company that really underperformed its peers, it strategically put itself in the wrong direction, and yet one of the one of the people that has been a big part of the evolution of that strategic direction is still intact. And so uh I suppose the messaging is it was Mark, uh he has taken the fall, but I think larger questions need to be asked. And yes, I am surprised that there hasn't been uh more of a reshuffle, if you will. And I'm not sure that says positive things about the company because you really do have to ask yourself the hard questions.

SPEAKER_01 5:50

Okay, now the split of barrack mining, as we've been uh discussing, is driven by perhaps a more conservative view on geopolitical risk by new CEO Mark Hill. Hill is not alone uh with having different views on risk, and Chinese regulators are increasingly looking to curb foreign deals. Xi Jingold's acquisition of Allied Gold and its African asset portfolio is in the crosshairs, according to the UK Financial Times, who reported on this last week. The transaction was due to close at the end of May, but this has been pushed back to July, with regulators in China concerned about the 27% premium in that $5.5 billion Canadian transaction. Chinese regulators are concerned about other MA transactions in other sectors as well. So this is not just about Xi Jin and Allied gold. Um, Nicole, given how Chinese companies have really led the charge in buying assets in Africa over the past 10 years or so, it does seem strange for regulators to now question a transaction.

SPEAKER_02 6:50

I would agree with that. Uh the the Chinese entities, they've been focused largely on West Africa. They always have as part of the uh the Belts and Road Initiative, but they previously, before there was perhaps the antipathy towards Chinese investment in Australia and in the States and in and in Canada, they were also investing in these jurisdictions. So to some degree the agrophone world is close to the Chinese, so they are forced to focus on certain jurisdictions. In my experience, and I've had direct experience dealing with an M ⁇ A, with a with a Chinese group, when I was an investment banker back in the day, and there there is a very, very long process that has to go through once they make a uh once a deal is papered, and and often once a deal is papered, it doesn't necessarily mean that there isn't going to be some retrading of that. I would argue that the Chinese, more than any other government in the world, uh has taken what would be considered to be a very, very strong strategic hundred-year view as to how important it is to secure supply of critical minerals, of gold deposit, and it's not just the primary mining supply, but have also materially invested in that downstream processing. And the rest of the world is starting to play catch-up. So I I'm a little surprised at this because I would have thought, uh, I don't, obviously, we don't know if this is based on on facts and it could be supposition, but uh I it seems to me that that the Chinese more almost more viscerally understand than any other government how key that is, how key that is to have a security of supply of these key commodities, and and obviously the rest of the world's going, oh, we need critical minerals right now. And and I would have thought that that that commitment and that willingness and desire to be exposed to those commodities would continue. And obviously, there have been a big purchaser of gold companies, and arguably we're doing it at the right time to do it, which was when the cycle was not where it is today, where where things are a lot more expensive. Now, just stepping back, a 27% premium is absolutely within the norms. If you look at the precedent transaction premiums paid for the part in the past 30 years, it's it averages around 30%. So one could argue that they certainly didn't overpay. Maybe they're doing some more detailed due diligence, and maybe there is some potential issues. I mean, we none of us really know. And frankly speaking, uh, it doesn't matter which entity, which country, no transaction is done until it's done. And there's always material due diligence outs, etc. etc. So it will be interesting to see how that one transpires.

SPEAKER_01 9:19

Well, one of the auditors with this particular situation is that Allied has already got the approval of the Canadian and other regulators for the deal. It's the Chinese regulators that are holding this up. Regarding valuation, I agree with you that a 27% premium in a growing bull market for gold actually sounds quite reasonable. Um, G2 Mining and uh Gmining Ventures are due to conclude their transaction is a much larger premium in that. Um, for example, Xi Jin bought the Aikhem gold mine in Ghana from Unumont last year for about 1 billion US dollars, uh, which of all the assets that New Mont sold in that sort of process, that deal had the highest dollars per ounce valuation at almost $900 per ounce of reserves. So perhaps that is why the Chinese regulators are sort of putting this particular transaction under the microscope. Um of course, if it fails, maybe Allied can do a three-way deal with Barrack Mining and Endeavour for Africa. Um let's move on. Another gold company potentially on the market is Northern Star Resources, where activist investor Elliot Investment Management took a 4.6% stake of billion dollars Australian there, and then be rated the company's performance, criticizing a pattern of operational missteps, cost overruns, and inconsistent strategic direction that it says has prevented it from realizing its world-class potential. Elliot has proposed that Northern Star should appoint a new board, hire a new CEO, and possibly look for a new buyer. Um, Nicole, Northern Star's performance has not been good. Is Elliot justified in what it's saying and its proposals?

SPEAKER_02 10:56

What I think is fascinating is you have a large generalist activist investor that is starting to get activists in in the metals and mining space. And there's been a number of other ones that Elliot have been involved in that are that are public. And so to some degree it says how much more important the mining industry is becoming to the to the generalist investor. So that's perhaps the silver cloud, uh, the silver lining to the cloud here. Uh I think act I think investors, I think commonly investors are actually too reluctant to, as owners of a business, to express in in a way that will enact positive change uh and and and be public about that. There tends to be a propensity to complain and whinge and moan and then sell your position and move on. And so I don't have any issue theoretically with an activist investor coming in and really calling out uh poor performance. This is a very risky business. Uh, Northern Star has gone from being probably, I would argue, an absolute darling of the investing community and really built its profile and expanded rapidly at the time when you should do it. They are acquiring assets for incredibly cheap prices when you go back and look what they paid for their asset base. And they grew very, very rapidly. And so sometimes that entrepreneurial spirit needs to adapt and evolve as a company, but has to become a steady state producer. The biggest bugbear that any investor has in the industry is it's not rocket science people, do what you say you're going to do. It's as simple as that. And those companies that can do that trade at what I would call a trust premium because trust is the rarest commodity in our business. Now, stepping back again, it's something that I've spent a bit of time thinking about and don't have the complete stats, but just ask my good mate ChatGPT to do a quick assessment for it. And we all know that ChatGPT lies and will tell you how amazing you are and how insightful you are with coming up with a very basic question. But nonetheless, we've seen this shift over the last 30 years of moving from boards that are comprised predominantly of very, very strong mining technical backgrounds, and that includes geologists, engineers, processing people, people who viscerally understand the uh the technical complexities of our industry. And there's been a shift of focusing on corporate governance, and it's been something I've been talking about for a while and really noticing some of the biggest boards in our world might have one or two people with industry, actual mining industry experience. And interestingly enough, when you go and look at Northern Stars Board, it is majority uh there's two people, basically, that I would say have technical mining industry expertise. And as a board where your role is to obviously hire and fire the CEO, but it's also to be nose in, hands out. But you have to be able to challenge management and you have to be able to challenge the suppositions that have been put out into the public domain. And that means not only do you need to know the questions to ask, number one, you need to know what those answers actually mean. And so maybe this swing that we saw, this this this kind of corporate governance swing, we're maybe seeing some of the longer-term ramifications of that with board composition, with not having a foundation, and I would argue that's absolutely critically important, is having a foundation of technically competent directors that can that can hold management to account. Uh, and and maybe this is a warning sign or maybe uh a shot over the bow that companies should be not just focus on on sometimes maybe sometimes some corporate governance box ticking, but saying, do we actually have a fit-for-purpose board given where we are in the evolution of our company in the stage of our business?

SPEAKER_01 14:34

That's a fascinating point, Nicole. I know you and I we've spoken about this uh offline sort of quite a bit. Um, let me sort of push back on that, or rather, is the industry starting to push back on that? And I want to sort of couch that a couple of weeks ago, BHP basically said it's not going to be able to achieve its uh its CO2, its carbon emissions reductions, and to a certain extent, it's not gonna try as hard to do so, suspending, delaying projects that have done it, it's basically saying the cost is too much, um, and the messaging between the lines is there's other things we need to think about and focus on that are perhaps more important than you know bringing down our percentage of uh CO2 emissions. Do you see we're perhaps getting to that inflection point of, you know, ESG's been great, we've now got to, as you say, focus on the business, focus on stick to our knitting.

SPEAKER_02 15:21

Uh yes, you are starting to see that, and you're also seeing pushback against against BP. I think what happened was uh in some ways CEOs, a little bit like politicians, when you saw this unbelievable rapid pendulum shift on the ESG and this rush to net zero, which is actually frankly, in my opinion, completely impossible. And everybody was willing to commit to targets because they didn't have to live with those commitments, because those commitments were five, ten, fifteen years out into the future. And we've seen what's happened in England, for the ex, for example, with a decimation of, I would argue, uh the economy, the lack of security of supply around energy, the incredible escalation in prices around escal energy, and that is maybe an end member of what can happen at a country level, but you can all see that translate down to a to a um uh an individual corporate level that at the end of the day, energy is the most fundamental, paramount reason why our society and and our species, Homo and sapiens sapiens, have gotten to where we are today. So I think uh you are seeing you see it in in so many different aspects of life. A pendulum swings maybe too far one direction and and has to normalize. And maybe also part of that I think is is President Trump being elected. Um and that maybe demonstrates the hollowness of some of these ideals and the virtual signalling that we've seen a lot of people doing, which was it's okay to say something, but it's a different kettle of fish when you actually have to commit to doing that. So I uh and and also I I think technical people coming from a technical background and then transitioning into um the executive and the board roles, you've been in the entrenches and you have a visual understanding of what it takes for this business to be able to successfully execute. And it's one of the most challenging businesses in the world, and that's because you can't move your widget factory. So I think it's great that those discussions are happening and that maybe companies and governments are being a little bit more honest about to the population about what is a commitment, a commitment to these, these, these, uh, their fantastic goals, but they're completely unrealistic in the world that we live in, unless we come up with an energy source that can supply it's transportable, can supply baseload power, uh, that has minimum CO2 emissions and and can get us where we need to be from an energy perspective.

SPEAKER_01 17:44

Okay, thank you. Let's get back to sort of Northern Star. If um the company is put on sale, who would be a buyer for Northern Star, or would it more likely again be a bit of a carve-up like barrack mining is uh potentially undergoing?

SPEAKER_02 17:59

It could go either way. I think Australia is actually ripe for consolidation. I just attended the Canacord conference in in Las Vegas and sat in a number of meetings with a generalist investor. And Canacord is very heavily uh Canadian firm, but have a big presence in Australia. And so there was a lot of Australian companies there. And what really struck me about sitting through all of these back-to-back meetings was how many single asset Australian developers or companies uh that have got hub and spoke operations that are expanding an existing production facility. There must have been six or seven, seven of them. And we've seen this wave of consolidation in North America where uh single asset uh companies and developers are getting acquired. And so there is a pathway in Australia, I think, to basically create the next major, if you will, and putting a bunch of these assets together. Uh, the Australians tend to be very, very good operators. It's pretty challenging in some ways, really. On the subject of power, power is an incredibly high cost, you know, 21 to 31 cents per kilowatt hour versus seven to eight cents in Canada. So there is a really interesting opportunity here, and and you can create value by simply maybe improving uh at a at an operational level and by growing or by carving up a company. And and I think what Elliot does is Elliot likes to rubble rouse and it likes to get people thinking about it and talking about it. And just because they're saying one avenue, I'm not necessarily sure that'd be supportive of it. And the end of the day, they are they only own just above five percent. So they cannot dictate the direction of the company. It depends where there's a lot of other large institutional investors out there that that uh that are in agreement or would be supportive of that. Because I'm sorry, 5%, yes, you can call a special meeting uh and ask for a vote to change our the directors, uh, but but that's really all all you can do. And uh so you you need to bring other people on side. And then the other thing that you have in Australia is this this this captive market of institutional investors in the form of superannuation funds. So there's for a country that's got a relatively small size, there's this huge pool of circling product that needs to invest in Australian domicile product. And so I don't think Australia, the Australian people or the regulators or the investors want to see yet another company that gets acquired by an overseas or at least someone who has a presence in Australia. So it is going to be fascinating to watch what goes on. And and also it again, it's it's assigned to companies. The market is really focused on delivering, delivering into guidance, delivering into uh your capital commitments, doing things on time and on budget. And and companies need to get better at uh at having putting realistic information out there. And if you do that, I mean you can even almost completely snowball the market in some ways by giving very, very conservative estimates. But then everybody loves you when you deliver ahead of those estimates or ahead of that ahead of that schedule. And it's something that is very frustrating. And it it's it's again, as I said before, it's not rocket science. Do what you say you're gonna do.

SPEAKER_01 21:03

Okay, if Elia wants a seasoned gold CEO, could we see the return of former Barrack mining CEO Mark Bristow?

SPEAKER_02 21:11

I don't think the market would react positively to that. I I would argue I okay, another another point where I think we maybe get it slightly wrong is boards and management teams and headhunters, when when people are talking about succession planning, there's always this focus on existing CEOs. And CEOs are like a bell curve, like all of us. There's some few very, very good ones and some few very, very bad ones, and and many are on on probably the average scale. And I think that there's an incredible wealth of opportunity for people who are maybe not getting in front of CEOs, who are perfectly capable of running a large business, who know how to execute, who can communicate effectively, and let not let not let's not forget a big part of a CEO's role is is glorified investor relations. And so uh experienced CEOs. CEOs, I'm not, I would broaden the field. I think that's a very, very narrow view of the industry. And the problem that we're going to face going forward is a lot of the CEOs, and we've discussed this before, but also C-suite executives and directors on paper at least have made a lot of money given this incredible escalation that we've seen in share price performance in the gold companies. And many of those, they're not going to want to come back. And so we also need to be encouraging that next generation and building that next generation and getting them to understand what running, I suppose, a company is like and the various duties involved in that. But no, I think that would be a terrible idea.

SPEAKER_01 22:41

Okay. Well, let's move on to our next segment. Expansions are in the air. Pan American Silver is to invest about 146 million US dollars into its Timmins operation in Ontario, in Canada, in a phase development to exploit resources at the Bell Creek Mine and Satellite Deposits. This includes a shaft extension that will reduce costs and extend the mine life into the 2040s. Also in Ontario, I am Gold announced an updated resource for the Cote Gold Mine with an updated mine plan for an expansion due towards the end of the year. And also Integra Resources is looking at a My Life extension at its Florida Canyon gold mine in Nevada. Nicole, a clear theme from these three items is that perhaps the bonanza cash flows from record gold prices is enabling companies to do more work, more work more quickly, and perhaps contemplate things that would have been unthinkable a couple of years ago. Would you agree with that?

SPEAKER_02 23:38

Yeah, again, I think that in that corporate and investor behavior is very, very predictable depending on where you're on in the cycle. And once the cycle starts to mature and people get comfortable with the underlying commodity price and where you are financially, you start seeing capital deployment. That number one. And number two, investors are really focused on growth. So that conversation has changed in meetings from we want to see return of equity, we want to see uh we want to see you focus on being having couple allocation discipline to where is your next leg of growth coming from? And and the easiest leg of growth is to either acquire it or expand an existing asset. However, uh some of the dangers that come with that, and we saw this last cycle, is as you're going through those expansions, you by nature of the beast are reducing your cutoff grade. And you'll see cutoff grades getting reduced because theoretically, as a mine expands, you should be able to reduce, produce the same uh mine the same amount of material for a lower cost, but you're also using a more aggressive gold price assumption. So what that means is that you see margin compression unless you've still got the gold price continuing. And so that's perhaps a thing to watch out for. And we saw this last time, and it almost bankrupted a number of companies that made that decision at the top of the cycle. Uh, but we are seeing really material commitments with like Nico Eagle and Hope Bay. And so what that says is that boards and management teams are, and maybe this is the time when the cycle is different, is they're building so much cash on the balance sheet and so rapidly, what are they going to do with that cash? They can't just give it all back to shareholders in the form of dividends and uh and share buybacks. There all has to be investment in the business because ultimately we're a declining business. And so we're definitely at that point of the cycle where you're starting to see material capital commitments. But what comes with that, and this happened last cycle as well, is everybody start decides to start spending money at the same time. And what does that do? That results in massive competition for skilled labor. We already have a massive paucity of, I would say, project management and build and development experience. And it also comes at the expense of everybody's trying to find buying mills at the same time or buying key pieces of equipment, and obviously that results in uh in price inflation. And so they're just the things that we as an as as um members in this in the mining industry need to watch out because we tend to make decisions all at the same time and then create problems for ourselves in doing that.

SPEAKER_01 26:02

Okay, fair enough. Um, we've talked a little bit about copper in our conversation so far, and there's more copper MA on the way with Central Asia Metals to acquire Cygnus metals in a $232 million Australian stock transaction at a 60% premium to obtain the Chukamu Chugamuk Copper Gold Project in Quebec. You can laugh. Apologies to anybody in Quebec. Uh, in Chile, Titina Mines is to raise $91 million Canadian and enter a strategic partnership with the Gignac family and Sumitomo to develop the Domeko Sulphurous Copper Gold Project. Uh Nicole, the copper price um up around $6.30, as we mentioned earlier. It's been over $60 per pound for a while now, and it seems that this is now giving actors the confidence to transact and move forward on projects.

SPEAKER_02 26:55

I I don't think you're gonna see really, really big capital deployment decisions made until copper is actually well above six bucks. Uh about four or five years ago, I started saying that I thought, I mean, copper is the best trade that everybody saw coming, but nobody was acting like you're gonna see you had to see big price escalation due to the paucity of supply. Uh so and I remember saying, well, it's gonna go to six bucks, and people said you're insane, but a broken clock is right twice a day. So moving on from that. I think the real number is more likely sustainable price around seven, seven thirty to eight. So you'll see on the margin, and we're starting to see that, uh, the smart company should be acquiring assets right now because there is nothing, well, other than a material event that impacts us all in terms of a world war, but there is nothing that will derail this copper train. Where is the new supply coming from? And the the more we delay those investments into those large projects, the higher that incentive price has has to go. And so I I think we are just at the very, very beginning of a massive bull run in copper. So again, we're we'll be following the exact pathway that we've seen in gold. I would say copper is about maybe a year behind what we're seeing in gold, which you're starting to see uh companies putting money to work, you're starting to see capital allocation decisions, you're seeing investment flow into the sector, but you're not seeing commitment to the two, three, four, five, six, seven dollar builds, which frankly we need to bring on that supply of copper, which is copper is a critical commodity. And with the with the build-out in AI and the increased demand for data centers, it just there is an insatial appetite for copper, and I don't know where it's coming from. So I don't think we're there, but we're starting to see the green sheets of it.

SPEAKER_01 28:40

In uh sort of broad terms, that's just another sort of 20 to 30 percent increase in the copper price, which doesn't sound too much of a an ask at this point in time.

SPEAKER_02 28:49

No, it doesn't, but it's like people have again, it is it's it's it's how our it's how we all work is people want it when people want it. And three or four years ago, literally you could have probably acquired every single asset developer that was fatigued, they were getting no love in the market because development stories are only really rewarded in the bull market. You probably could have acquired them for a billion. And now they are all trading probably between half a billion and a billion themselves. And so the market is starting to recognize that there is a very, very strong investment thesis for the commodity, but also for the equities. And and and again, I think Partners very, very predictable. You're gonna see more money come into the space, uh, hopefully a lot more expiration, but also commitments. And we do need to see some big because some commitments from the big guys to actually deploy capital. But once again, they start building a lot of cash on their balance sheet, and then they feel uh capable of making that decision. And and this will just circle back. I mean, we have a lot of commodities that are doing well. We've got we've got cash coming into the sector. There's still some orphan juniors out there. Uh, so you're starting to see this rotation down into the explore codes. But when there's a lot of capital that comes into the sector, that's when we start seeing those real inflationary uh pressures that are just that are just due to people have more money, they want to do more things. And so it's not just oil that we need to be looking about. It's it's uh the the ability to be again back to that theme that Northern Star is suffering from is how do you manage expectations within a within a market that's going to be doing a lot of things.

SPEAKER_01 30:23

Okay, well, let's finish with some money talk, Nicole. Uh, America's gold and silver completed two transactions to strengthen its balance sheet this week by removing gold and silver delivery and purchase agreements, removing over $40 million in variable future debt obligations to royal gold and $45 million in variable future debt obligations with Sprock Mining. Similarly, Daenerys Metals announced a similar thing with their gold converts, which it said will save them about $157 million Canadian dollars in principal and interest payments over the next few years. Nicole, um, this perhaps touches on some of the things we've spoken about earlier in our conversation about the higher metals prices, the growing cash balances, giving companies more options to do more things. Um, specifically on these things, why are increasing number of companies buying out gold or so gold and silver prepay agreements and other things to strengthen their balance sheets?

SPEAKER_02 31:19

Because they're seeing the material amount of money that they would have built on the balance sheet if they didn't have those things in place. And obviously they're taking a position on the underlying commodity price because that it's gonna at least stay in these levels or or potentially increase. And on that topic, you're seeing that with the Australians. The Australians, particularly the developers, as a part of their financing, and Macquarie has made so much money from this is not funny. Uh they put hedges on. And so you are also seeing some Australian companies step up to the plate and go, we're gonna buy out those hedges. And so what is fascinating to me as you watch those that haven't built and maybe penalized in the market, the minute those hedges are gone, the incredible cash flow generation of the underlying business is amazing. It's exactly the right thing to do, and it also points to this is where streaming or putting a royalty on your primary commodity, it's in markets like this that you realize that that can be an incredibly almost an infinite cost of capital because it's a fantastic business model for the royalty and streaming companies. It's a great business model if you want to put a stream or royalty on your non-primary commodity. Uh, but the higher the underlying commodity price goes and the more that you discover, because these agreements tend to encompass not just the existing deposit today, but potential growth and area of influence, the higher cost that money becomes. And so we it will be fascinating to see what happens in the royalty and streaming space as well, because I think deals for them are going to become harder and harder and harder, unless it is as, and we have seen some very large deals this year, but it's been on the non-primary commodity. So maybe some lessons to be learnt about, and look, it's really easy to pass judgment when you're not in the hot seat and you don't have capital availability, and everybody, nobody loves you in a bear market, and the only way that you can finance your business is to put a stream or royalty on it. It's perfectly understandable, but there's a lot of risk just in terms of your ability to generate the maximum amount of cash that comes in an environment like this.

SPEAKER_01 33:14

I'm surprised that nobody's come up with the you know, Dr. Faustus royalty and streaming company. Nobody's using that as a name. It would be hilarious if they did. Yeah, anyway, um, moving on. Sunshine Silver Mining and Refining. They're going to IPO very, very soon to raise $300 million to restart operations in Idaho's Silver Valley. Also this week, Galantis Gold raised $100 million Canadian dollars to restart the Indiana and the Coyo Gold Copper projects in Chile. Um, Nicole, some very aggressive raises going out there for mine restarts. Why are we seeing these mine restarts now?

SPEAKER_02 33:52

Again, there's a huge pool of capital availability that's circling the globe. It wants to put itself to work. People are looking for those opportunities that haven't re-rated, that haven't had that massive outperformance. And we've really seen that in the producers, uh, and then obviously with the MA activity and then with the discovery cycle. And so a way to get that talky performance in perhaps a low-risk way. And I think this is why there's appetite for these restarts, it's perceived by the market to be low risk. You're not, you're not necessarily waiting on a lot of permitting, your timeline to producing metal and to free cash flow is a lot quicker. And um it's it's a function of where we are in the market. We have high prices, and you you are seeing it's those discussions of what's cheap, what hasn't moved. And some things are cheap for a reason, i.e., they they might have fundamental issues, but I think we're seeing that trade as well. And look, any company at the moment, when the ducks are cracking, you need to feed them because you don't know what's going to happen in the short and medium term. And you want to have a balance sheet that supports the volatile nature of your business. And so I think this is again very predictable that there is a lot of money available for certain stories out there.

SPEAKER_01 35:01

Excellent. Um, well, we've covered an awful lot of ground today, but uh that's it for today. Nicole adds headbelt. Thank you very much for joining me once again.

SPEAKER_02 35:11

Thank you very much for having me.

SPEAKER_01 35:13

And of course, if you like what you see, don't forget to hit that subscribe button. I'm Paul Harris, digging deep for Kitco Mining.

SPEAKER_00 35:20

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