This is an automatically generated transcript. Denver Gold Group cannot accept responsibility for mistakes, errors, omissions, or any action taken in reliance thereon. Use of this transcript is governed by Denver Gold Group’s Terms of Use.

Randy. How's it? Got one good to see you. Good to see you. So, next up we have Randy small boy presidency of Wheat and Precious Metals. Come join me here. Thank you. I just got to say that you are number six out of six last but not least. And you are the only thing that's keeping me from my nap. No, my snack, my snack. I feel like I'm in Whistler in January. Yeah, that's true. So let's talk about growth. Actually, let's talk about guidance first. We Imperials Metal had a very strong first half. So maybe you can talk about your fir strong first half. Well, on track to meet your 550 to 620 G Os for the year. What can we expect for the second half? Well, we've seen better grades out of Slobo than what we expected. What we're not sure about is whether that's selective mining or whether it's actually higher grades within the within the actual oil body itself. And so, so we're, you know, we're still giving guidance you know, at the end of the,, the Q two call gave guidance that we're still feel we're going to be within that, that guidance of 550 to 620. Clearly, we're targeting the top end of that. But,, you know, if,, if the grade forecasts that a lobo were correct, it means that we'll probably see a little bit less grade in the,, 3rd and 4th quarter, the latter half of the year, pull it down. We are seeing, you know, good, good growth in other areas to offset that. But but yeah, I wouldn't, you know, we're, we're not in a point of changing that guidance, but definitely with 305,000 ounces out in the first half of the year, we're in pretty good shape to at least make the guidance great. And Randy, as you know, there is an investor and analyst to going down to Sal Lobo in October, we find out the answers to some of these questions at that point in time. Well, I'll be on it. So what, what else can we see? It's a great asset. you know, you know, especially, I mean, one of the, one of the huge attractions of the streaming space, especially with our portfolio is that we're heavily heavily biased towards copper assets, big long term long life, high margin base metal assets, mainly copper assets. And so the chances of bringing an esteemed precious metal analyst to an asset like solo. It's an incredible opportunity to understand the scale of what we, what we deliver. And it's one of the huge benefits of the streaming model is that, you know, base metal assets typically have much higher capital demands and commitments in terms of getting up and running. And so, so they require a lot more investment in advance, especially with respect to reserves and resources. So you can, you know, justify that. And that's, that's where an asset like solo really shines is going in and having a look at this asset that's got such an incredible future in front of it. You know, we're in the process of of the third phase ramping up to its full capacity. We expect that by next year, Valet will, will satisfy the second completion test on that on that on that expansion, that third phase expansion. and there's ongoing studies in terms of how they can con continue to optimize it. And I think, you know, with, with some of the management changes that we've seen at Slobo, we're even more excited about what we see for what is really the flagship of the entire base metals division of Valle. This will be their flagship on a go forward basis and having that aligned interest in terms of the most important asset in our base. I do hope you'll be impressed. I think I will be I'm looking forward to the food as well. It's been the last time I went 2015. So it's been a long time. It has been a bit. Yeah, that's good. That's good. So maybe I don't think you were in the room earlier, Randy. But you know, we talked about the the intermediate streaming royalty companies and triple FL talked about big three and then Royal Gold talked about, you know, potentially not big three, big two, Frank and Nevada and, and we and precious metals and you are now the biggest in terms of market cap. So I'd be interested in, you know, your perspective in terms of risk. What do you see as potential risks that are facing the royalty and streaming business today? Well, I think, you know, I'm, I'm gonna echo first off, I think it was Bill that actually mentioned it from Royal Gold Permitting challenge is a real issue in in the mining industry as a whole. And the, and the streaming and royalty you know, as as long term investors in these assets, it comes into play at Wheaton, we put a lot of focus on trying to protect ourselves as I as I've commonly had to reinforce to potential partners, we're in the business of streaming gold, we're in the business of streaming silver, maybe a little bit of platinum, Palladium Cobalt, but we do not stream political risk. And so we, you know, at Wheaton, we really put a heavy focus on trying to protect our, our investors, our shareholders, our stakeholders from, from risks on that on that aspect. And so, but you, you, you can only go so far down that path. There's always gonna be a measure of risk of that. And so, you know, I would say that that's definitely one of the biggest challenges that the that the streaming industry has. It's one that the the, the whole industry has. When you look around the world, it's getting tougher and tougher to build mines. It's tougher and tougher. You know, it's interesting. One of the biggest changes that I think we've seen over my, this is our 20th year, we are celebrating a wheat in our 20th year of operations. But even before that, in my project evaluations before that, you know, one of the most important members of the due diligence team is the social scientist. It's the one that's in there assessing community risk and it's not so much looking at a country and saying that's a great country to invest in. You have to look at the local communities, you have to have that appreciation for how much support there is locally because a lot of times and especially with today's access to media. you, you have to have a strong, you know, a measure of confidence in terms of the support at the local level because a lot of times that's enough to stop projects going forward. And we just listened to Paul describe how, how, you know, the, the Panamanian government was in support of the new taxation agreement, but the general public wasn't, you, you can't just rely on, on government risk, it comes down to community risk. Great. And you know, as I mentioned, you are the largest royalty and streaming company today. And so, you know, turn that around. We've seen it for producers, you know, grow to a certain size, it gets to be more challenging to continue to grow their business. Are you seeing that today? You know, you've grown to a size, is it getting more challenging in terms of continuous growth? You know, I think our track record sort of speaks for itself. If you look in the last three or four years, we've been the dominant player in the Precious Metal streaming space. The number of acquisitions we've made, it's been a little bit quiet this year for us, but last year was extremely busy. We had eight transactions and completed more than 60% of the actual Precious metal streaming transactions. We are expecting to have a couple more in the house. Before the end of this year, we're very close on a couple of transactions. And so looking forward to sort of continuing to, to, to build on that. But, but, you know, it's, it's having the capacity allows us to look big and look small, look at some of the smaller assets, as I said last year with eight transactions, the average transaction size was just over $100 million per transaction. I'd much rather be in the higher end of that. I'd, I'd, you know, I'd love the billion dollar plus transactions. There's not a lot of those out there right now, but there is stuff in the 3 to $500 million range right now. And so, so, you know, we continue to focus on that, but you know, the beauty of these opportunities is they all tuck in very nicely, they add to, to the, the overall portfolio and and creates great opportunities for us to continue growing the company. Great. Any questions coming from the audience, maybe lucky he ever questions the streamers. I've had no help. Zero. You're doing a great job. Thank you, Randy. So based on our C I BC model, the most notable asset is certainly salo based on my model 32.4%. So maybe let's talk about that slightly more at this point in time. Valley reported that it has reached 90% average throughput at the lobo three starting in the first quarter. Q two was another good quarter, as you mentioned. although Q three will likely have some impact in terms of your 31 day shutdown at the processing plant. So on that, can you maybe kind of summarize again for us what we can expect for the rest of 2024 and maybe, you know, more importantly, talk about the further expansion plans, there's potential for solo four which might further increase your throughput from 30 to 100 and 20,000 tons per day. You know, I think let's step back and look at the overall asset itself as a, as a flagship asset. I don't think we could pick a better partner, a better asset, a better jurisdiction. This is the flagship as I said earlier for valet base metals. And so it's going to continually deliver and be a focus point for them and, and I'm excited about the the new management team coming in. I know Dene, I do did a great job there but Sean Usar someone I've got for a space, I've known him from way back in his Barrack days. And I think he along with Mark Kafani is gonna gonna even further develop a bit of autonomy with respect to that asset on a go forward basis. And, and that's good for us because that is their flagship. It's gonna be how they measure their own success as a stand alone entity as they, as they mature away from the valet parents. So, so, you know, the, the the, the rest of the years I mentioned earlier on, you know, we haven't seen enough detail to determine whether the higher grade that we've seen in the first half is gonna continue into the 3rd and 4th quarter.,, and or whether there was some selective mining to chase after higher grades earlier in the year and move forward., you know, who knows, there may be a bit of detail on that when we get done on site, but that's up to valet as to whether they want to share that. However, we, we know that we're confident in terms of what it's going to be able to, to deliver to us. So over the course of the year, phase three has gone very well. The challenges that solo still relate to phase one and phase two and getting them back up to a reasonable reliability, mine availability or mill availability number. And, and that really is something that's happened over the last three or four years when they had a breakdown in their preventative maintenance program. And, and you know, it will be a great case story for some mining engineering students in terms of the impact of the failure of a preventative maintenance program and how it has an impact on a processing facility. They are gradually improving. Line one and line two, the original two lines we know because for the first seven years, the 1st 67 years of that contract, that line one and line two ran at over 90% availability. So we know it's possible and it will get there eventually. They're still in the high seventies, low eighties. So they still have some space on that front to go forward. And so,, you know, I think,, I think Sean,, coming in is going to,, gonna, gonna have some, some,, some, some challenges in front of them. But I think the challenges that are already on the way to being solved and so hopefully he'll he'll check those boxes pretty quickly. Thanks Randy and I do agree in terms of looking big and small at the same time. And I do point out that you have one of the more impressive growth profiles in our universe growing 40% to 800,000 Gs by 2028. So maybe let's talk about some of that, you know, the key components of that potential growth based on my model, 5% of the NAV is Copper world or Rosemont. Copper World just received the aquifer protection permit a few weeks ago. And you know, we're estimating that it's on track to receive the air quality permit, which is the last of three key permits by end of the year. Can you tell us what role Copper world could potentially play in the company's long term growth plans? And maybe, you know, potential updates in terms of what I just talked about and how these updates potentially enhance the investment returns beyond what you have thought as an initial assessment of Rosemont way back when. Yeah, we, we signed the original Rosemont deal back in 2010. And you know, one of the key advantages of streaming transactions is that generally most of the capital, if not all of the capital, in this case, all of the capital doesn't get contributed until construction is underway and it co funds the construction as construction goes forward. So we don't, we haven't put any money into Rosemont or Copper World as it's now called. And it's interesting because I was, I led that due diligence team back in 2000. Actually, it was 2008, 2009 that we visited the site. And you know what's called Copper World now was a bunch of malachite and azurite staining on a rock bluff to the north of the pit that I thought was going to be our dessert, our gravy afterwards after we saw the benefits of the actual Rosemont ore body. And we made sure that the area of interest included that entire area to the north of the Rosemont ore body. We're going to get our dessert before we get our dinner. Yeah, the Copper World New York that that whole section has actually blossomed into a beautiful start up. Now, the one I'm not going to say it's a negative because this, these are all ounces that weren't really in the original valuation, but production levels at copper world will only be about two thirds of what they're still, they're still fine tuning that we're expecting a feasibility in the first half of next year. But,, you know, production is probably gonna be about two thirds of what we were expecting out of Rosemont. But that's not to say that Rosemont isn't going to be a part of the future. And in fact, you know, we're hopeful that, you know, sometimes I suffer from this, I believe that common sense will prevail and that they will be allowed to operate on federal lands eventually at this site. Mainly because the amount of wasted energy in terms of the inefficient builds that they're being forced to do and the amount of extra pollution, diesel consumed, extra haulage costs, you know, the net negative environmental impact from being forced down, there should finally be recognized in terms of maybe, maybe the cost of all this challenge on the federal side is too much and maybe it's time to let them run this mine as efficiently as possible and move it forward. And so our fingers crossed, you know, team is doing a great job in terms of moving this forward, as you said, getting the, getting that the aquifer permit in place, it's not an easy permit. That was the most challenging one. The air quality ones should be pretty routine in terms of moving forward, the comment period is open and and we expect to see that one coming into play in the latter half of that growth. And so it's, it's an exciting project. Great. Another key one is Plat Reef. as you know, Randy phase one concentrator is now completed construction of the second shaft about 60% complete. and a potential further expansion to increase processing capacity to 10 million ton per annum. Two parts number one, could you give us an update and how that relates to, to wheat and precious metals? Sure. I was just actually on site about three months ago now. and it's an incredible operation. I I mean, the big the big issue is I think it's gonna have it's gonna have a reset in the platinum and plati market because when it comes to the, the South African platinum plati deposits, this one is going to have a cost profile substantially below the rest of the industry down there. And I would say the rest of the industry worldwide pretty well. And so it's an interesting asset when we did the transaction. When we did the original valuation, their ultimate production target was just over 5 million tons per annum. So it's always nice to close the transaction and then within weeks, have them announce a rapid expansion up to now, the target is 10 million tons per annum. We do expect some limited production starting next year from Platt Reef. But the real production is gonna start 2029 2030. And, and again, I, I think that this is going to set a new standard in terms of cost on a pronounced basis from an operating perspective in the platinum and palladium space when it gets to that point. And so,, we're pretty excited about it. It's,, it's our first venture into Africa., we typically are pretty sensitive to political risk., it's not to say that we don't bid into riskier jurisdictions, but when we do, we price it,, to reflect the risk of those jurisdictions. And so I would say that it, it, when you look at our portfolio, it reflects the fact that our peers tend to be more aggressive when it comes to taking that political risk on., we think that this is a really good project for us to,, to do as a first venture into Africa. And so,,, looking forward to this one, I agree., and then,, maybe coming back from Africa now to Canada. Oh, sorry. We're not in Canada, North America, but Canada, this project a goose., that's a near term production asset., now they're pointing to potential production starting in Q 2, 2025 ramp up to full production in Q three. Could you maybe again, give us an update on what that means to? WM. Yeah, it's,, it's an interesting one of the, the Goose Project. Sabina. And it is Canada. So, yeah, but we're not in Canada right now. Oh, I see. We're not in Goose. You know, that's a district, that's an area that B two I think, recognized the exp expert potential. One of the things that I was impressed with in Cliven, I'll say nice things about him, even though earlier on today he wasn't saying nice things about the streaming industry., I do think apparently he doesn't like streams. You know, I will say that that that district, one of the first things that B two did was bring in the exploration drills to continue focusing. And I really do think that there's incredible potential in that whole region. And B Two's pretty well tied the whole thing up in terms of the asset base that they've acquired when taking over Sabina. So it's, it's not AAA big producer for us. I think it will produce just under 10,000 ounces a year to our credit based on current production profiles. I do think they're going to push that through expansion. There's probably a bit of exploration success that's going to be required to that. I will point out to Clive just because I did mention his comments earlier on today that when we do streams, we buy things at very close to net asset value. And you know, his objective is to try and buy companies at 0.4 times that asset value. as as a, as a company operator, you know, you can make the choice as to which avenue you want to take in terms of going forward. I think the streams are the most attractive source of capital, especially for small little single asset developers right now. So great. Maybe one last question. As we all know, wheat and precious metal started out life as silver wheaton. Could you remind us of the commodity mix today? And how do you believe that could change? Well, we are focused on precious metals and to be honest, we get a little bit of cobalt, which I always call the most precious of the base metals. However, it is a base metal but very little about 2%. We are going to see some healthy growth at Boise Bay as they shift to underground, the grades climb substantially. So we're going to see some some healthy growth out of Boise Bay, but we are focused on precious metals and we're going to stay focused that way because to be honest, that's really how we think we differentiate ourselves. I will say that the copper and the iron ore and the oil and gas that you invest to within our peers is the most expensive copper, iron ore and oil and gas that you will ever buy. There's a lot of other cheaper alternatives to get that diversity out there. And our focus is delivering solid core precious metals production to our stakeholders. So, we're, we're, we're, we're, we're staying the course. Great. Thanks Randy for a very good conversation and thanks once again for joining us. Always a pleasure council. All right, I'm done.