00:00Record final dividends. So is this the plan going forward? Keep returning money to shareholders as these prices hold and
00:07is that payout ratio something that could be tweaked down the track?
00:13Morning Paul, thank you for your time. Look I mean I think if you look at it and you were
00:18just talking about record gold prices and movements overnight, you know we had a record profit, record cash flows and
00:24moving to a net cash position during the year we knew we had to reward our shareholders.
00:29And hence we lifted our payout rate from 50% to 60%. And given the moves overnight, if gold holds
00:36at those levels over the course of the year, then the cash flow generation we're going to have in FY27
00:43will be a lot higher and we'll continue to look at how we can give some of that back to
00:46shareholders.
00:49Yeah this is a break with traditional approaches that we've seen in prior gold price rallies. I mean often companies
00:56have gone on a bit of an M&A spree.
00:58You've bought a copper project, Carnaby Resources in Queensland, and of course copper now are in hot demand with the
01:05AI build out. Do you see this growing in importance as a product for evolution?
01:12Yeah certainly. I think if you look at the fundamentals of the copper industry at the moment, there's short-term
01:19supply issues, there's increasing demand and that's what's seeing gold copper prices move up to record levels.
01:25We've got Ernest Henry and North Parks and both of them have got latent capacity in their plants, so the
01:34ability to bring on more copper production at those two assets is important to us.
01:39And the Carnaby Acquisition just up the road from Ernest Henry allows us to get an additional 10,000 tonnes
01:45of copper, which is about 15% more production for Ernest Henry relatively cheaply.
01:52Now your M&A activity this period has been a bit conservative compared to your rivals, but are you looking
01:58for more opportunities?
01:59Are there any particular regions or countries? And what sort of firepower do you have for potential acquisitions?
02:09Yeah, I mean, while we've done some smaller acquisitions in the last sort of 12 months, we've been investing more
02:16into our existing assets because of the growth opportunities we've got in the portfolio.
02:21It doesn't put pressure on us to do deals. That being said, we're always looking for opportunities and the areas,
02:27you know, we've always said tier one jurisdictions,
02:29that's in Australia, North America are our primary focus. And in those sort of deals that we've been doing recently
02:36and in the exploration space, have more been centred around North America.
02:40And I think that's what you'd see us to continue to look at.
02:45Yeah, one of your peers, of course, Northern Star, it's doing a review of its assets.
02:51Do you see any of their assets that might be appealing? Are you looking at any of their projects?
02:57I think, you know, when you look at their portfolio, unfortunately, the assets that we would really like to be
03:04involved in are probably the assets that they're not going to be looking to sell.
03:08I mean, the other ones that sort of the tail end of their asset portfolio, we'd certainly have a look,
03:13but it'd have to be something that's going to improve the quality of our portfolio and we'd have to see
03:19what that looks like.
03:20But I think, you know, as they go through their strategic review, we always have to look at what they
03:26may be considering and see if there's opportunities for us.
03:30And how about in terms of your own CapEx organic growth and expansion?
03:34Do you have any plans in that regard for the next few quarters?
03:40Yeah, so our guidance for this year, you know, sees us advancing our growth projects at North Parks, where we're
03:46developing a new underground mine.
03:49At Ernest Henry, again, developing a new underground mine.
03:53And at Cal, opening up new open pits.
03:55It's all of those, extend the mine life and grow the production rate at those three assets.
04:02So we'll advance those over the next two to three years and bring those into production, sort of FY29, FY30.
04:09And that's sort of where our primary focus is right now.
04:13And that sort of sees us spending about $1.1 to $1.15 billion on those projects, which is up
04:20a couple of hundred million dollars on what we invested last year.
04:26Now, just in terms of the macro picture, we saw a bit of U.S. Treasury intervention in the bond
04:31market today.
04:32We've got yields, though, rising, really.
04:34That's the direction of travel.
04:35Central bank buying of gold continues as well.
04:38We've got geopolitical tension.
04:39So in that environment, what's your forecast for the gold price?
04:45Yeah, what you just said there, Paul, sounds a little bit like what I presented at the Diggers and Dealers
04:50Forum a couple of weeks ago.
04:51When you look at it, central bank buying is now at its sort of highest levels for a long time.
04:58Central banks holding more in gold in reserves than they are U.S. Treasury since 1996.
05:03I think as you look at the geopolitical tensions, you look at inflation and the central banks around the world
05:10looking to hold more of gold than they are Treasuries.
05:13That gives us a good outlook in terms of what's going to happen with the gold price.
05:18And then you look at what the U.S. did last night.
05:23And, you know, they've got $8 trillion worth of debt that has to roll over in the next 12 months.
05:28And that's certainly going to put pressure on the markets there as well.
05:34Would you care to put a number on that?
05:39I'll be wrong, but, you know, I think you're going to see the short term, you know, you're going to
05:44be sub $5,000 an ounce.
05:46But in the next sort of in about 12 months time, I think you'll see us being back between five
05:51and five and a half thousand U.S. dollars an ounce,
05:54which is about $1,000 an ounce higher than where we are today.
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