Barrick–Newmont Nevada JV, Permitting Risk, Royalties, and Mine Financing | Analyst Joe Mazumdar

0:00You are listening to Mining Stock Education. Thank you for tuning in to Mining Stock Education. I am your host Bill Power speaking with Joe Mazimdar, the expert over at Exploration Insights. Joe has a geological background, has worked for some of the major minors. He understands the finance side of the business very well and runs his own newsletter for early stage opportunities. Joe, welcome back on to the show and let's start with your analysis of the Barric and the Newmont deal. The headline reads, Barric and Newmont reach agreement regarding Nevada Goldmines joint venture. This was a pretty big deal for the major minors. What is your analysis of what they've come up with here? Okay, so if we go back, like when I worked for Newmont, there was always this, you know, hey, does Barric and Newmont get together and there was sort of happened almost like I'm not semi-every two or three years. And then finally it happened during the time of Mark Bisto. What was weird was that Newmont ended up with a minority stake in that joint venture

1:02that they invented all their assets. And for those that don't know, Nevada, the Carlin style, the posits, they're refractory when they're sulfide and they require autoclaves or roasters. And those facilities take a long time to permit, require a lot of capital. And if you can share those facilities and not toll mill, you can make a lot of money. And so once they started joining that and it was really the infrastructure that made that all work like a turquoise ridge, I think there was a big tolling on it to get to twin creeks and taking out that toll just made that resource all the more profitable but also lower the cutoff grade. So that's the kind of impact that joint venture had. Now and then part of that joint venture happened because Newmont was trying to acquire gold corp. But Barrick was also trying to get in the mix and say this was not a good deal and trying

2:06to talk to their own shareholders and say, you know, you guys shouldn't vote for this. And to get Barrick off their back, basically they did this other joint venture. They issued a special dividend to their shareholders, pre the merger and got that deal across. Now it is Barrick that are trying to do a deal. Their deal is to spin out their North American assets from what they're calling the rest of the world, the rest of the world. Geo politically the discount is holding back what they think, the value of Nevada and Pueblo Viejo and so they want to split it. But Newmont needs to get in the mix in terms of approving it because they're part of the Nevada gold mines on the own 38.5% of it. What they're complaining about is this transformation on deposit, which is four mile, which is like 15 to 60 million ounces of 15 to 17 grams per ton, amazing deposit.

3:07I saw it at PDAQ, the core and I can get into a little bit about that. But the big deal about it was Newmont was complaining that Barrick was using the infrastructure from Nevada gold mines because gold rushes right there to explore and advance the four mile, which is at sort of like a scoping stage right now. And so they said, well, if you're going to do that, you know, if you want us to help you with the spin co and not hold it back, let's pull this in. And so if if Nevada is what's driving the value of Barrick as a whole right now, it's four mile that will drive the value of the of the post spin co Barrick. And so that project four mile scoping study level is valued anywhere between $6.6 and $10 billion by analysts.

4:09Okay. And basically the combination was, hey, I'll throw in four mile, 38.5% of four mile, you throw in fiber line and Mike fiber line and Mike have been around since I worked for Newmont back in the 2000s, not even in their resource statements, let alone the reserve statements. There's no mind plan around those right now. So basically they don't worth a lot. So most of the value of the 1.95 billion that Newmont had put in was four four mile. So that implies on a 100% basis that they that four miles worth five billion, which is a 25 to 50% discount to what the analysts say. And so everybody looked at it went, you know, Newmont got this cheap. And so Newmont stock went up Barrick stock went down. But if you look at it in terms of synergies, it makes a lot of sense because you have permanent facilities because this is a pressure oxidation circuit that would be required at for for four mile.

5:11And so we can use up some of the capacity that already exists. You don't have to permit it and also underground development wise, you wouldn't have to build a lot more underground infrastructure. You could just access it through gold rush. So if you look at the capital intensity of these projects and I just did one recently, four mile looks pretty high. It's got a high margin. It's got a high grade and a lot of high recoveries. But in terms of a capital intensity to throughput, it's high. And so anything that Barrick can do to lower that is a good thing. And one thing they could do that would be significant is put it into the joint venture. So I think that, you know, that there is a strong motivation to do it from Barrick's standpoint, not only to get the spin co-done, but also the synergies with the joint venture. So they're willing to take that discount because they know that the valuation is much higher if they could use the current infrastructure. So if you are a new month shareholder and a Barrick shareholder at the same time, would

6:11you vote on both ends for this you would? Yeah, no, it makes a lot of sense. I mean, we're only at scoping study level and that was an internal scoping study. So we don't know all the details. But in terms of just the math I did on capital intensity, it is high for that throughput. It could be a lot lower and it would come in to play a lot quicker if the facilities that they send it to are already permitted. So all they're doing is underground development. And what's interesting about this deposit is it's really fault controlled. I mean, a lot of stuff is structural controlled. But this stuff is basically a big Jurassic intrusion that goes into these Devonian sediments. And usually with carlin deposits, it's certain sediments that are good and favorable. And those are the ones you look for. Here this horn fell so into the sediments has been breached here. And so all that breached here has been annealed.

7:12So it is basically agnostic to the wall rock. And there's where you get a lot of the grade. And so in terms of a bulk mining as well, it's very good because it doesn't have the mining conditions that a lot of carlin deposit to have with dissolution breaches in that. This is a very strong geotechnical rock as well. So they could mine it probably with a higher throughput. It is not double refractory in a single refractory. So it would use an autoclave. And it would get good recoveries and use it called rush would make sense. So yeah, I think it all makes sense personally to me. The numbers are numbers because right now we don't know everything because this is scoping study level and most of it was internal. But I think there's justification to do it. When you have a producer saying to themselves, hey, we're being discounted because of some of the jurisdictions we're in. Like some people say that about B2 gold. Do you like to see that like divestiture of assets, perhaps in jurisdictions that investors

8:16aren't favoring or how does the company get re-rated? Yeah, I mean, this is a problem for a lot of projects in single asset companies, whether it's lending gold in Ecuador or in the old days, when Beesha, Neveson, and in Eritrea, they had to find an asset outside to lower their geopolitical risk. But their problem was that their asset was so good. It was they were diluting the quality of their asset by diversifying the geopolitical risk. So they could lower their discount on their asset, but they would be lowering the asset quality overall of their portfolio. So what a lot of these companies do is they issue a high proportion of their cash flow into dividends because then people would look at the dividend more than the geopolitical risk because if they say, oh, here's these dividends, I'm going to discount them much lower because these are dividends. And that's usually how they get around it.

9:16With a company like Barrick, it's where those dividends are coming from. Because besides four mile, a lot of the growth was Rikodik, which has been suspended in Blocustan, Pakistan, because of all the issues there. And then the other one was a copper project, expansion, Lumauna. And then you got Kabali, DRC, you got Mali, the problems there. So all of that suggests that people would wonder, well, how sustainable are these dividends given that your future cash flow is coming from these projects in sort of uncertain jurisdictions. So I'm going to put a bigger discount on your dividends. But then four mile gets thrown in there where four mile is a transformational multi-generational asset that should be valued higher because it's in Nevada. But it's getting discounted because your other portfolio assets are in Pakistan, in Zambia,

10:21in Mali, in the DRC. So yeah, I would think that they would get a significant boost by separating the company out. And then you would have two different suitors potentially in terms of investors, one that want that stable jurisdiction that Numaats getting, get that kind of premium. And others, maybe the Chinese, maybe the Middle Eastern investors that would focus in on that one. And that might be a good one for sale to a big Middle Eastern or a Chinese company. And then once you're out of the US, jurisdiction and that, it might be easier to sell. So I think it makes a lot of sense. So for these producers that are currently cashed up and they're returning cash to shareholders via buybacks and dividends, when do they start focusing and not continuing the dividends, but putting that back into reserves and current production, purchasing that? Okay, so I did this thing for our subscribers.

11:24I usually do one every six months on precious metal companies cash flow. So I look at about, was a 20, 30 companies and for the first half of 2026, they generated about $70 billion of revenue. And so 30% of that number was actually returned to shareholders. So that's about 20 to 21 billion dollars. 10% of that, you know, a 30 that, let's say, of the 30% was dividends, $78 billion, but more of it was shared bybacks, which was 13 to 14 billion dollars. But importantly, 70 to 80% of all those shareholder returns in terms of dollar number was by the top five companies. So the big companies, let's say the Supermajors, will continue to acquire probably production. You know, and their reserves will go up and then they'll decline. Go up and then they'll decline.

12:24But their whole thing is their new shareholders are generalists that want stable dividends and, you know, compare them to other companies as opposed to maybe an institutional equity investor that's just precious metals focused. Because now they're seeing that general investors want to diversify into gold. So they want to be what they invest in and a competitor is the ETF and not another company. So the dividends help the stable stability of your jurisdiction helps. The cash flow is more important than production. But on the intermediate side, you know, they've given less to shareholder returns. I mean, percentage base is being the same, but dollar value less. But materially, they can still grow. The problem is when you build up such a big reserve base and production base that you're producing five to six million ounces, it's hard to grow materially because these deposits

13:28like four mile or Arthur, they're hard to find. They're not easy to find. And so you consistently acquire other assets. And so the ones that you would acquire would be the intermediates and those intermediates can grow. And so I think those are the companies that will be the acquires of the developers that we invested will be more those sort of companies that that could take a three to five million ounce deposit, which would be a material impact to their bottom line. Material impact to a producer would be sea bridges KSM project. This is just a massive, massive low grade, massive gold copper project in BC. Recently, there was a First Nations group that said they weren't fully consulted for their substantially started permit, which was already issued a BC court agreed with the First Nations. So what is the implications of this both for sea bridge and for BC permitting in general? So the size matters here because we're talking about 170,000, 10 per day project.

14:35You'd like you said it's about 7.3 billion pounds of copper, 47 million ounces of gold, but it requires now far and capital of 6.4 billion dollars. So you're going to move a lot of stuff around. You require two twin tunnels that are 23 kilometers long each. You know, those are pretty long tunnels. And so they have two First Nations where they have said that that's 100% of their footprint is on these two nations. But the problem is when you have a big footprint like this, people downstream of your tailings or associated with the fringes of your footprint might feel that they're impacted because of the scale your project. But you were consulted because as the company looks at it, you're not impacted. So that's the discussion right now. And the fact is that, you know, we probably need a buffer zone where we do consult people

15:37outside of it to make sure that we don't have these sort of things happen because they're substantially started permit was about two years ago and they've already spent about a billion dollars. You know, and they're also looking for a partner. So it would be hard to find a partner right now knowing that they have this other First Nation group that's sort of holding everything back. I mean, there's a 90 day period for them to sort this out. But right now, we don't know which way that's going to go. So this is obviously a negative for sea bridge. But it's also not good for British Columbia or Canada to look at this because it sounds like the company has done a lot of their work to get it. They went through this exercise. They became substantially started to accelerate the development of the project because it's obviously big and would take a long time to build, you know, roads, bridges, you know,

16:39big camps, all that sort of stuff, the water facilities, everything. So yeah, it's like I think your question was implications for BC moving forward. They are for other companies. Yeah, their projects are going forward. But yeah, the First Nations with the with the imposition or the declaration of the United Nations Declaration of Independent of Indigenous Peoples, the Andrup, that has given First Nations a bigger say. And I'm not saying that before it was implemented that whether this group would have done this anyway, I don't know, but they have a bigger say than they did before. And what's interesting about this was I think this was the situation where another First Nation had basically lobbied on behalf of the smaller First Nation, which we've never seen before. So they're trying to make the smaller nations voice heard because it was ignored according

17:43to the court and according to some of these First Nations groups. I mean, it would be who those other First Nations that accepted the project to talk to those, the other First Nation to say, hey, we're okay with this. This is what we think is going to happen. blah, blah, blah, you know, we'll bring in, you know, let's get this going. But they sort of felt that we didn't have to talk to them. So then is it the bigger First Nations group or the BC permitting bureaucracy that goofed up if somebody's to blame? We're always looking for somebody to blame. It could be the company because in the end, they're the one that spent the $1.2 billion that investors raised on their behalf. You know, you know, I say the same thing about Mount Polly. Mount Polly was really a permitting issue because they should have allowed that water to be discharged because in bureaucracy of the BC government, it took longer to do. But in the end, the company probably should have shut the mill down and stopped putting

18:43water into the tailings facility. They're the ones that were impacted the most reputationally and from a money perspective. So in the end, it behooves the company and companies in the future to make sure that, oh, we don't have to talk to those guys. Maybe you got to talk to those guys. Failure is an orphan as they say, but success is a thousand fathers, right? Yes, right. And mothers. Where are you currently seeing the greatest value in royalty stocks, Joe? Well, I mean, so one of the best returns, and I give you the example because I think it fits into the question, is that one of the best examples returns we made was on a cash flowing royalty junior. I'll name it, who's called origin royalties. And we've held it for a long time since one of the positions was 2009. Another position was like 2012, I think. We held it because of management. They kept the share dilution to a minimum.

19:45And the whole, they went from being a prospect generaer where they would drill some of their projects and say, you know what, this is where dilution happens. And the market cyclical, so how did we keep the share structure tight? As soon as we do a project, we dress it up. We like it. We find a suitable partner and we walk. And so we have, we don't have 30%. We don't have 40%. We don't have 49%. We have nothing. We have just that 1% NSR or 2% NSR, whatever it is. And so for me, that was a good way of playing the royalty space. And what these guys did was they acquired another royalty company. They could not raise capital. So this company had a comparative advantage because they could access capital. And then their royalty on a, became producing asset, which was Urmitanio. And they had a 2% NSR on that first majestic asset, Mexico. So suddenly they're cash flowing. And because it's like between your wants and your needs, if you could keep your needs

20:49low, you know, and then your cash flow comes in, you can ride out anything. The problem is that when people make more money, they spend more money. And you want the management teams that don't, you know, subscribe to that. And so this management team wasn't one of them. And so they could make money and they never had to return to the equity markets. So while they did the M&A, which was ended up being a 1% NSR on what became a 20 million ounce oxide deposit, it wasn't a 20 million oxide deposit when we started. So the keys were that another company, a major, was growing that asset. And the royalty generator wasn't spending a penny. All their news flow from Angle Goldishanti was origins news flow. And people were reading between the lines. And so their valuation started growing even though the royalty wasn't paying. But they didn't need the royalty to pay to add value because they didn't have to go back

21:54to the markets. And so as the royalty grew, they were making money without diluting or issuing a share. And they could sell the royalty to a bigger company, a bigger royalty company, and have a liquidity event before the projects actually produced an ounce. For me, that's that's Nirvana. And we did very well on that. And we continued to hold it because we think they might have another one. So that would be the way for me, and I continue to do this, play the royalty space. And since your exploration insights, you grew that position through exploration that was funded by the owner of the project, right? Yeah, by royalty. You could see, like Angle was very, you know, it's South African company. They didn't tell people a lot of things. But since they were trying to build their reputation, let's say, as not just an African company,

22:56but more diversified and in lower risk jurisdictions in South Africa, like Nevada, now they started talking it up. So if Angle Goldishandhi never said a word about the project, you know, up to the time you know, they developed it, it wouldn't have been good for origin because there wouldn't be a lot of news. But since also Angle wanted to tell the deposit, their discovery prowess there in Nevada, this is a big thing. Blah, blah, blah, blah, blah. That fed right into origin, you know. So there was a lot of things that went right, you know, for us. The new set. 2009, you first bought the position just to re-array. Two positions, yeah, 2009, 2012. One of the positions I think was, I've got, it was like 15 beggar and the other one was 8. Wow. But, you know, this is like over a long time. And having that kind of length of tenure in an investment means a strong trust and management.

24:02And the business model, of course. Business model, right. And their ability to execute that model. So one thing is having the model and the other way is executing it. And so it's trusting the management to execute the model and then having something like that happen. Because you can have the wrong people find the right thing and still get diluted and you don't do as well. And that's why you like the prospect generator model as well. Yeah. But again, in the right hands, the model does not, let's say, underprivileged. Underpinned the investment. It's the people, whatever model it is, that are executing the model. So I have this conversation with my friends. I think that the prospect generator model allows some of the executives to live a life, live it as a lifestyle company more so and get away without being accused as running a lifestyle company versus some of the other juniors where it's a little more obvious.

25:03And that being because some of the partners are funding it. But if you look at it, like on a per share basis, some of them haven't done anything for investors in 10, 15 plus years. Yeah. There are those that have, they don't spend a lot of money, but they don't make any money and they don't do a hell of a lot, but they've got 400 million projects all over the world. And you have no idea what they're doing. That's not the model that I prescribe to. So when I'm looking at it, what is your strategy? What do you try to do? And then what's the value proposition here? And how do you execute that model? And that comes with trust. Because some of these models might take three to five years to basically bloom into something. And again, it was a combination. If they didn't have the cash flowing or a botanial royalty, they would have gone back to the markets potentially.

26:04But they wouldn't have needed much money. But then people would have been reticent in terms of buying them in the open market. Because they go, oh, this share price has gone up. They're going to come to the equity markets to raise. So I'll just wait. Did they ever have an at the market facility active? No. Never. Okay. No. No. No. No. No. They never needed money. Because one, they were making money and two, they didn't spend a lot. Because Joe, you know what the silver, how silver gets so much hype, especially from like the investors that come in, so many of them don't realize that when silver runs, all of these silver companies have ATM facilities ready to flood the market and raid cash. But I mean, that was the same thing with energy fuels when I owned it. You know, I'd look at the quarter. Then suddenly they had more money than they had before because they had a two year shelf perspective. And they were, I mean, from a company perspective, it's smart.

27:04Like you don't want people raising money at the 52 week low. You want them raising it when it tops out. So from my perspective, that's not a bad idea. But as long as that money that they're raising is going to adding value as opposed to just filling their coffers, you know, so I don't mind that. But I just want to see what that money is being used for because problematic. I do ever problem with people that consistently raise at the wrong time versus other people that know how to raise money and do it for a longer period of time. You know, as opposed to raising it for our three month program and then knowing that if you don't hit that hole, you'll be raising money again at a discount to what you raised it before. And then issuing, you know, a two year warrant, you'll be raising a five year warrant of like a 20% premium or something like that. You know, so those are the people you do not want to associate with yourself.

28:07Whatever model they're following. So then the leaders that know when to raise money, how do you decipher that as an investor? Obviously looking at their track record, but you just in talking to some guys or gals, do you just pick up on like this person understands market sentiment and knows how to maximize it for his or her existing shareholders? Yeah, the thing is you could see it by history. You could see when they raised. And when you see people consistently raising at higher prices, that's a big positive. Like great bear did a great job of that. You know, but I can see that and whenever I talk to subscribers, all of these guys are raising money. Do you have a problem with that? No, because they have to fund this, this, and this. And I also like the fact that they raised money at a whatever it is, you know, premium to what we came in, but it was also a premium tool. The last time they raised money. So consistently they're adding value between this raise and that raise such that the people

29:10that bought in here think that there's more upside from this point forward. And then I'm over here and I still think they're some side, but I didn't pay what these guys paid, but that gives me reassurance that that valuation is justified. You know, what I don't like is that if I'm here, then the next time they raise is below me, you know, and then you got and then they start issuing more. And then it's sort of like, okay, I'm out of here. Joe, the track record argument, that is the strongest argument. I had a conversation with an executive that was raising money and they were raising part flow through part hard dollars. So I said to them, I said, yeah, but look, you're raising flow through dollars with this raise. I don't know what's going to happen when those flow through dollars, non charity become free trading. And then he said this, he said, go look at my last four raises. They were all flow through and the share prices higher with each one. So I mean, that's like the strongest argument you can make to an investor is when you can say, look at my track record, look at who I bring in and what happens. Yeah.

30:10Also, who they bring in like with charity flow through, I don't mind that one. I do have a problem with flow through flow through because it's a bit agnostic, you know, because the people that are buying it are buying it for a tax incentive, not a project incentive. They don't care what your project is. They don't care about them. There's no due diligence here. At least with charity flow through you can and why wouldn't you do that? You're raising an premium with a tax loss and the charity on top of it. And then the underlying holder is buying it at the hard dollar price and he's a long-term strategic or she. So that makes perfect sense to me, you know, because then you have the strategic shareholder and it could be a company or it could be a long-term investor that people follow. You know, so that's a good thing because they understand the value of what that looks like. And especially if they're not issuing more, it's because for me it's sort of like here's,

31:11you know, you go to a restaurant and then they got mints at the end. Sort of like here's the extra incentive, you know, to go to that restaurant. Well, I don't want you issuing mints. You know, I want them to kind of restaurant for that food and not for the mints. You know, so that if they start doing that, then that's a thing because in the end, what are we doing? We're investing in a company on a per share basis, right? So we have X, which is the value of the assets and what they're taking out of it with their spending. And then we have Y, which is the number of shares outstanding. They have to add to X and by not adding too much to Y. So every time they add a lot, they're not adding a lot to the denominator. And that's where we get share price increases. We're not talking market cap here. We're talking about the share price. We don't make money off of the market cap. You know, and we don't make, we're not royalty owners, so we're not making money off of

32:12the royalty either. Or we don't have a 30% interest in the project. We are dependent on the company, dependent on the company to add value to the assets and dependent on the company to not dilute us because in the end, that value is divided by that share count. Yeah, great point. And as new investors, you have to learn that lesson that Joe just said, measure management success on a per share basis. A carney, your prime minister is pushing for investment, more investment in Canadian energy and critical metals. This probably is catalyzed a little bit with Canada's current few trade war with the US. Your thoughts on this and how it will infect mining stocks. So this is like a very ambitious $1 trillion Canadian program over five years led by this chairman of Rio Tinto and another fella. And it's working in conjunction with the major projects office. So we started talking about this last year about the major project office that basically

33:14selected 11 projects and they had a combined capital of about $65 billion. But most of it was energy like liquefied natural gas. The second largest category was mining. And so among these projects was Red Chris. Red Chris expansion from the open pit to a block cave. It's a copper gold project, Northern British Columbia, 1.8 million tons of copper, 7 million ounces of gold, a big 40,000 ton per day underground block cave, which new crest liked. That's why they bought it. Now it's a new one project. So it needs $2.6 billion to build. But here's what I don't like is that yeah, that should be we should help as a government. I know I'm not the government. Is that we should help them be able to permit get this thing going. But do we really need to lend like $500 billion to new want to do this project?

34:17No. A United States company mind you right now. Why do we need to give them money because they've got more money probably than us and they can afford this project. We just have to make it easier for them to do it. Incident of I said, but we don't have to give it $500 million. But that I didn't like that. I hope that's not what the money is doing because Canada is not the US. Canada is not Europe and we're not China. We don't have that kind of money. You know, to give $800 million to this company, $3 billion to that company or whatever, we do not have that kind of money. So this $1 trillion investment is sort of like what Peru is doing, not the same number, but they're trying to attract investment, right? So I agree with the idea of attracting it, but I don't agree with the idea of giving these people money. What I would do is use that money to build infrastructure, improve a road, do a grid, something like that. And that opens up more projects to more companies because suddenly they don't have to build it

35:19because that's what like Casino in the Yukon would love to have that Yukon BC connector, which is one of the projects that could potentially fall into this plant. If it does, that would be a good project to build because that would open up a lot of Northern BC and the Yukon. The other one that I didn't like was probably the Canada Nickel project. It's a very martial project. And I think not only should we be looking at projects that are permittable from the environmental impact, social license to operate, including First Nations, but also economic. So we should look at the economic. So if we're going to talk about this trillion dollars, is it worth to spend a couple hundred grand on an independent consultant that could take a look at that project and see if it's actually economic viable? And that the Canadian government or whichever government's helping it to advance is not going to be stuck with it in two years because it ran out of money.

36:23I mean, that's the kind of stupidity that I don't understand. Is that you're permitting the footprint. You're permitting the agreement with the First Nations, the social license to operate, all this other stuff. But does that project actually make any sense? Why don't we focus on the projects that have all that, but also are viable? Isn't it worth us to spend that extra money on an independent consultant, not trust the company's consultant? Because they're paying them. So that's the kind of filtering that we should be doing for projects. Not just saying, oh, it's in Saskatchewan. We don't have a project for Saskatchewan or it's in Quebec. We don't have a project for, it's got to be a viable project. And if it's not economically viable, we shouldn't be promoting it. Let's go south of the border, applying this same lens of should government be investing in these miners? One of your former stockpicks, Trilogy Metals, great project there in Alaska.

37:23And the US government is funding Trilogy Metals and just at a 35.6 million strategic equity financing the Department of War investing in Trilogy Metals, your thoughts? Okay, so this was actually announced back in October, 2026, right? So it took almost a year to close. And the 35 million is two investments. One directly in Trilogy and one where the Department of War is buying part of South 32 stake in Trilogy. Same terms, 217 per unit, an amazing three quarter warrant with an exercise price of a penny that is exercisable once the Amla Road is built, which is that 211 mile road. The idea is all this money, which is not a lot 35 million, if you're in the US in Alaska, that's going to be spent pretty quickly.

38:24So it's not a huge boost to actually funding the road or the project. But in terms of Trilogy, I think their share price went up 211 per cent last year. So the unit price was 217. They went up to about $6.50 on 212 million shares on October 7th. Now, when they close the deal, it's trading at about $3.27, so 50% lower. So what these sort of deals, they generate a lot of volatility in the stock. They didn't bring a lot of money in. The hope is that it will ease the permitting. But from what I understand, that 211 mile road goes through a lot of water, marshes, all this other stuff, a lot of different First Nations groups.

39:25It was permanent, but there's a lot of other First Nations that say that just like your other argument about KSM, we're not consulted. Because this is a big, long road. And that's why the permit was taken away the first place. It was given back. But I was just in Alaska and I talked to a group and they don't think that that road has high probability of happening anytime soon. So there you go. The thing is that even the federal government is not going to make pebble work. His trilogy's road, MRACS road, got to the stage of pebble. I don't know yet. Because it was permitted, but can the federal government get through a couple more First Nation groups to make sure that thing actually gets built? And it's not trilogy. It's not South 32 that are advancing that project. It's actually ADA and Alaskan development agency that's promoting that.

40:30And then who is going to, I think, I think like it's $10.3 million per mile on average to build roads in remote Alaskan. And so that could be over three and a half billion dollars just for the road. The road initial construction is about $.8 billion. Apparently that's the estimate. But who's going to give that money? That $35 million investment is, I mean, that's a small drop in the ocean of that. And the people given the money right now may not be in charge when it comes time for the road to be built, right, with how the US government switches and the people given the money is you. Well, in theory, that's how the government works, but they just print money out of thin airs, even though I pay my taxes. Oh, is that where they ended up with $40 trillion a debt? Exactly. I did exactly.

41:31Okay. Last question. CapEx, let's analyze this CapEx funding for a new mine build, the coffee project looks like it's moving forward there. Talimor mining. What do you think of this financing package? Could you break this down please? It's owned, we owned Camenac back about 10 years ago. And I was doing a little bit of a summary because at that time, Camenac, which had the coffee project, open pit, heap bleach, multi-stage crushing, PyGrade in the Eucon near Dawson, but remote. They did a feasibility study in 2016 with JDS engineering, who incidentally is the engineering company that Victoria Gold is suing because of the Eagle disaster. They did that one at $1,200 Gold, open pit, 5.71 strip ratio, a bit smaller, throughput, 18,000 tons per day. But the capital on that, interesting enough, was 250 million about that, you know, US conversion.

42:37Now, Talimor, this is a scoping study with probably more reputable consultants. Wars, WSP and SRK, $2,500 Gold price now. It's double the old Gold price. But the capital has gone up four times. So it's gone from $250 million in 10 years to a billion. That's the up from capital. And this is only scoping. And as we know that scoping study is probably the best look at a project as. And once you do real engineering, that capital number goes up. So they have raised, they were going to go for 100 million, they raised 130 million. That's a testament to the markets, the management team, the asset, injure, restriction, potentially, the UConn. They raised another $88 million of RURNs. So it's about 210. And then another $400 million. So it's about 626 10 on a seven year loan from a group that's

43:41linked to payrolls on at an 8.65% interest rate. But that's not going to fund the entire project. This is all Canadian because the project at on a PA stage is a billion. So they still need more money. And so in terms of the structure, that looks good, but it's not fully funded yet. And we don't even have a feasibility study. So the 8.65% loan is on a scoping study level project. You know, there was a feasibility study on it prior, but the consulting firm that did it is the one that's being sued by the company that had the failure of its heap leach pad, you know, also in the UConn. So do you trust those numbers? They have a better consulting group doing it now. But you know, what that number was before and what the number was is now and what it potentially will be is going to be, you know, they're probably not apples to apples.

44:44So Joe, if I could point this out with your analysis of the coffee project funding, what you said about trilogy, one of the things that you look for in your newsletter is fatal flaws because oftentimes people talk about the talking points of why this stock could go up. But on both of these last two discussions, you're talking about reasons why it might not be accurate or it might fail. So could you perhaps let's conclude with talking about that about how you look for those fatal flaws from the get go? Yeah, I mean, like I was just talking to a company and, you know, good jurisdiction base, you know, potentially a million ounces. And, and, you know, I like oxide heap leach projects, you know, I think they're good, but, you know, they have to be oxidized. So as I was talking to this company, you know, you sort of get the idea, well, how much of this is oxide and how much is it, you know, milling? And so, well, it's all oxidized, but we have to mill a portion. Okay, great.

45:45So it's half and half. It goes, yeah, but it goes as well. What cut off grade are you applying to this resource that's half and half? Oh, we're applying this one. But I mean, this is that a heap leach run of mine cut off grade? Or is it, or is it a milling cut off grade? You know, does the milling cut off portion? Is that being cut at a heap leach run of mine kind of grade? You know, so I'm trying to understand just what does this all mean? Like what are you, what are you doing here? Like how real is that one million ounces? And then, and then also like when I look at the slide, it says oxide. And it gives me the impression. And then there's a little bit about run of mine. Great. But then when I look at the recoveries, none of that is oxide run of mine. You know, so somebody else would look at oxide run of mine. And I would too. And then as the headline and then look at that recovery, I was, wow, that's a pretty good recovery for an oxide run of mine. Well, no, it's not, you know, a work in a push for the mill.

46:48I said, okay, great. But then, you know, why the oxide? Why what are you talking about here? And then how much of this is this type of deposit that could be refractory versus this other one that may not be refractory? So those are sort of the questions you want to start asking at, at an early level, so you don't get surprised later. You have a lot of high net worth subscribers for your newsletter. That's the type of due diligence then that you perform on behalf of your subscribers. That's your look like an idiot. You call like that's a whole thing about any company goes in a portfolio. The number one rule, do not embarrass me. And I have to mitigate that embarrassment by picking the right teams, you know, refining the fatal flaws, looking at jurisdictional risk. And so I have refined jurisdictions because that's often what the company can control. But I can control by not investing in those, they can go up.

47:48But I don't want to find out like one, you know, Sunday night that, you know, they had another coup or they've doubled royalties. Or something like that, you know, stable jurisdiction also means stable tax policies. You know, that people can run a 20 plus year mind in, you know, so a lot of my investments are in US, you know, Canada. I'm doing a lot more South America because now there's a lot more right of center governments working there than are pro mining. And yeah, so that's the sort of thing I'm trying to do. As well as in terms of fatal flaws. And almost always a sight tour video too, right? That's typically how you operate your business. Yeah, I mean, and it's got to be like, we're not, we don't have a big GNA. And so my only connection with the company to, you know, keep my independence is that the company covers my travel costs. But there's no obligation for me to do anything.

48:50If they don't understand that, I don't go. So I've had companies where I've gone a lot more than not. I go and I don't add it to the portfolio for whatever reason. Other times I add it because of the site visit and I'm willing to pay extra just to know, you know, because in the interim that cut stock might have gone up 50%. But I'm much more happy that that 50% premium is real. And there's more to come. Whereas if I didn't do it, then I go on the site visit, then I find out something that I didn't want to find out that can be a problem. Because when you're selling into, you know, and you got liquidity issues, that's not funny either. So the more due diligence you do, the higher probability that you will eventually be invested in a liquid stock that you can exit from. That's another good part of the issue for us as investors in equity.

49:56And for newer investors listening to us, you're all just point out, even with that level of due diligence, it doesn't always mean it works out, right? Oh, yeah. And thanks for pointing that out. I had a new subscriber who said, oh, you're doing very well. I thought I said, you know, like Rick Rool says, you know, don't, you know, don't confuse that, you know, wasn't a bull market with brains. Brains, exactly. You know, but what you're trying to do is basically try to remove as much of the chief as fast as possible. So then the next level of due diligence can be done on the ones that can make it to, if you're not comfortable with management, there's no point in reading the technical report. You know, because you'll still not be fine with management after you read that 500 page report. You know, so, and if they do something and you bought the stock because you like the asset, but didn't like management and then they do something like raise a lot of money

50:57at a significant discount issue, a lot of warrants, you knew that coming in. So that shouldn't have been a surprise to you. And then you put off a lot of your subscribers as well. And hold in to realize that. And I did a little bit more background on these guys. These guys have a history of doing this. And then I wouldn't know that coming in and I still invested in it. And so that's not a chance I want to take. So that stock might still go up, but I don't want to be associated with it. If you like what you heard, go check out exploration insights.com. As always, Joe, I appreciate you coming on the show every quarter or so. And safe travels as you get into the conference circuit and are on your way to do some slight tour visits. All right. Yeah. We'll see you at the precious mall. Something hopefully. Cheers. Thank you for listening to Mining Stock Education. Please subscribe and share this show with like-minded investors.

51:57Connect with us at MiningStockEducation.com and sign up for our email list to stay in touch. Much success to you as you learn about, invest in and profit from MiningStock's. The mining business is one that generates gigantic wealth. You know, a good drill hole that converts, might cause 50 or $100,000. And it might discover something worth a couple billion. There is no sector that I know of that has offered up as many predictable circumstances where there was the possibility, certainly not the certainty, but the possibility of 10-for-one returns as there is in small cap and micro cap MiningStock's. Concomitant with that, if you don't do the work or even if you do do the work and don't discipline yourself on the sell side, there are very few places in the world where you can lose as much money as quickly as in MiningStock's, too. I just started to study up on MiningStock's and I just became fascinated because this is such a tiny sector and it's so volatile that either you could really,

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