00:00I want to first get started with the price of gold because it's just been on a tear,
00:05although a little bit of volatility included. How far do you see this going?
00:10Yeah, morning, Sharia and Abel. Thank you, April, for hosting us. Look, I mean, gold,
00:16when you look at it, there's a structural shift. And we've talked about this previously that,
00:21you know, everything that's going on geopolitically, central banks are continuing to buy
00:25gold. You know, we've seen it around the $5,000 an ounce. There's talk that will go to
00:31$6,000 an ounce U.S. in the next few months on the back of continued buying on concerns around
00:39the U.S. economy. And so, you know, for us, we do see that there's more upward
00:45in the price than there is on the downside at the moment.
00:50Is that how, Laurie, you're going to finance some of these expansion plans that you've
00:54outlined? Walk us through them and how you're going to fund these projects?
00:59Yeah, look, I mean, for us, the balance sheet has always been set up to be able to fund all
01:04of our
01:04organic growth. And so, you know, our gearing went from 33 percent to 6 percent. We've got just under
01:10a billion dollars of cash in the bank. We made $608 million in free cash flow in the last half.
01:19And
01:19that is at a price that was about, you know, $1,400, $1,500 an ounce below spot. So, the
01:25cash flow
01:25going forward is going to be more than it was in the first half of the year. We can afford
01:31to invest
01:31in those projects. And when you think about it, the $608 million of cash that we generated in the
01:37first half was after we had invested in the business. So, we will be funding it out of our own
01:42balance sheet. It's a really strong balance sheet that we've got that can really afford to invest
01:48in these projects. And as I said on our call today, it's the right time to be investing in
01:53these projects because they're going to generate materially higher returns than what the portfolio
01:57is already delivering.
02:00On those returns, we see in the mining industry, some firms are happy with 15 to 18 percent returns.
02:07But for evolution, that seems to be a much higher projection across your expansion plans.
02:15Walk us through the thinking here. Is it more about quality than quantity for evolution?
02:20It's an excellent point there. I mean, our focus has always been on margin rather than just
02:26producing ounces. And so, our portfolio today is averaging an 18 percent return. When you look
02:33at the projects that we've got in the pipeline, they range from, you know, 23 percent right up to
02:39128 percent if you take the current price environment. So, every one of those projects that we're either
02:45executing or that we've announced today at North Parks and Ernest Henry will achieve higher than that
02:5018 percent. And therefore, for the company, that lifts the group average above that 18 percent,
02:56which is going to reward our shareholders. And that's, you know, on the back of we can invest in
03:00the business while still paying record dividends to our shareholders.
03:06On these projects, I think you have nearly all of them located in Australia, as you see on this map
03:12here,
03:13maybe one in Canada, I believe. Are you looking at other locales or jurisdictions for plans?
03:20Yes. So, we've always said we want to be in tier one jurisdictions. Our focus has been in Australia
03:26and North America. We do look at other tier one jurisdictions. We haven't found anything that's a
03:32fit for our portfolio. But when you look at what we've got in the portfolio and the projects that
03:37we've announced today, the returns we're getting, there's not a lot of pressure for us to run out
03:41and buy other projects. We did increase our footprint in Canada today, announcing two new
03:47exploration targets in British Columbia. So, we'll be drilling those in the next 12 to 15 months to try
03:52and expand our presence there in Canada. But right now, our focus will remain in those tier one
03:57jurisdictions. You also have a little bit of copper when it comes to your portfolio. Do you plan to
04:03expand your production there? How does it compare to what you have going on with gold?
04:09Yeah. So, in the first half, you know, we're around, you know, 25, 30 percent of our revenues coming
04:15from copper. The two projects that we've announced today at North Parks and Ernest Henry, they are
04:19copper gold mines. And so, we're going to be expanding production at both of those,
04:24which will then lift our copper exposure. We believe that it's good to have copper in the
04:30portfolio. We think we can have up to 40 percent of copper in our portfolio. Because when you look
04:35at the supply demand between now and 2030, the supply is not going to match demand for copper. So,
04:41that's going to be good from a copper pricing perspective. And for us, doing it in our existing
04:47operations at North Parks and Ernest Henry, we can bring that copper on in the next few years
04:52at a relatively low capital intensity and certainly a lot higher rate of return. So, we believe that
04:59the outlook for copper is good. And having copper in the portfolio is a differentiator for us.
05:07You touched on this earlier when it comes to your bread and butter gold,
05:11in the sense that we are seeing structural shifts underway in the market. With the weakness in
05:17the US dollar, is that something that you expect to continue? And how do you see that playing out
05:22in the precious metal?
05:24Yeah, I do think that when you look at what's going on in the US, you know, they're rising debt.
05:30You know,
05:31it's gone up by a couple of trillion dollars in the last six to seven months. The interest bill is
05:35rising. It's going to put pressure on the US economy. It's going to put pressure on the
05:40strength of the US dollar. Therefore, that bodes well for gold. And that's why we see that gold price
05:49has got more upside than downside. And it is linked to the economy, not just the central bank buying.
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