Our is Not to Reason Why: QAV AU #948

QAV AU 948

[00:00:00]

Tony Kynas­ton: When does day­light sav­ing kick

Cameron: Nev­er in Bris­bane. I mean, what are you ask­ing me for? Just,

Tony Kynas­ton: ask a Queens­lan­der that, should I?

Cameron: yeah, no, no idea. Wel­come to QAV Aus­tralia, Tony. QAV 948. It is the 22nd of Sep­tem­ber 2026. Um, real­ly found it hard to have, find any­thing to talk about today, Tony. I mean, the world’s going to hell in a hand­bas­ket, but we’ve talked about that every week for six months, so, uh, it’s noth­ing new real­ly

Tony Kynas­ton: Well, let me give a birth­day shout-out to one of our mem­bers, Jeff. It’s his birth­day

Cameron: It’s also Ray Har­ris’s 60th birth­day today in the Unit­ed States, my oth­er part­ner in crime. So he’s not lis­ten­ing to this, but I send him my birth­day wish­es. I have no idea, I haven’t heard from him. But, um, he’s recent­ly become an emp­ty nester. Their two daugh­ters moved out, [00:01:00] went to col­lege a cou­ple of weeks ago, so I said I hope he’s mak­ing good use of every room in the house and walk­ing around naked in a, just in a, like a kimono, naked all the time, get­ting the most out of it in his lit­tle coun­try estate in Vir­ginia

Tony Kynas­ton: that nev­er hap­pened to me when I, when we went emp­ty nest­ing. did­n’t walk around in a kimono. I

Cameron: Yeah, well, thank God for that. Yeah, yeah. You know I would. Do you wan­na see my abs?

Tony Kynas­ton: Nope.

Cameron: No, okay. I was hav­ing din­ner with, uh, our, our Sifus from Kung Fu on Sat­ur­day night and I was, he was like, “God, you’re look­ing skin­ny.” And I was like, “Yeah, my co-hosts keep beg­ging me to show me, show them my abs every week on the show.

I have to keep going, ‘What do you, no, stop it.’ ” Yeah. Um, all right, well, what I do have to talk about is, uh, I had to replace some stocks. Three stocks I’ve had to sell this week, which is high­ly unusu­al and I don’t real­ly know why. Had to replace, uh, Plen­ty Group, PLT and CCV, Cash Con­vert­ers. Is that [00:02:00] CCV, Cash Con­vert­ers?

Tony Kynas­ton: Cash Con­vert­ers

Cameron: Con­vert­ers, I always get them con­fused. And Heal­ius I had to sell today. Um, could­n’t find any good rea­son for Heal­ius in par­tic­u­lar. Um, but I para, in my n- like newslet­ter I para­phrased Alfred Lord Ten­nyson, “Ours is not to rea­son why, ours is just to sell and buy.” You like that?

Tony Kynas­ton: I do, yeah.

Cameron: That’s

Tony Kynas­ton: a league, half a league, onwards

Cameron: That’s my new QAV mot­to.

Yeah, does­n’t mat­ter. So the, some­thing’s going on. Their sh- share price col­lapsed in the last cou­ple of days, HLS. Noth­ing I can see in the news. Some­body knows some­thing or thinks they know some­thing

Tony Kynas­ton: Did­n’t go ex-div­i­dend, did

Cameron: No, no div­i­dend. Check that.

Tony Kynas­ton: Hmm.

Cameron: Noth­ing that’s report­ed in Stock Doc­tor any­way. Any­way, uh, that is lit­er­al­ly all I have to talk about.

I mean, there’s oils, the Ukraini­ans are bomb­ing Rus­si­a’s oil [00:03:00] refiner­ies, the Houthis are bomb­ing the Sau­di oil pipelines and refiner­ies, and appar­ent­ly the Amer­i­cans have got a whole bunch of war planes gath­er­ing close to the Strait of Hor­muz I saw last night. There’s some­thing big about to hap­pen there, peo­ple think.

Or Trump will taco it again, who knows? But,

Tony Kynas­ton: well we won’t, we won’t know ’cause Trump’s all the, uh, press in his office, has­n’t he?

Cameron: All the, all the main­stream media.

Tony Kynas­ton: the

Cameron: Yeah.

Tony Kynas­ton: sym­pa­thy, so there’s no cov­er­age any­more.

Cameron: Yeah, well

Tony Kynas­ton: And then I read this morn­ing he’s com­plain­ing that, uh, he does­n’t get enough pos­i­tive press cov­er­age.

Cameron: Oh, that’s why he’s ban­ning them all, yeah. I’ve got my lit­tle pack of crit­i­cal think­ing cards that I found in a box I was clean­ing out my office yes­ter­day. I can read one of those. “Your fal­la­cy is appeal to nature, mak­ing the argu­ment that because some­thing is nat­ur­al, it is there­fore valid, jus­ti­fied, inevitable, good, or ide­al.

The med­i­cine man rolled into town on his band­wag­on offer­ing var­i­ous nat­ur­al reme­dies such as very [00:04:00] spe­cial plain water. He said that it was only nat­ur­al that peo­ple should be wary of arti­fi­cial med­i­cines such as antibi­otics.” I always say that about when peo­ple say, “Well, it’s nat­ur­al,” you know? So I say, “Yeah, so are women dying in child­birth, um, babies dying in child­birth.”

That’s, uh, we don’t wan­na go back to that, do we? Maybe we do. I don’t know. I’ve been lis­ten­ing, I’ll talk about it in,

Tony Kynas­ton: when when,

Cameron: mm-

Tony Kynas­ton: say homo­sex­u­al­i­ty is unnat­ur­al. And I say, “Real­ly? Look it up. The ani­mal king­dom’s full of it.”

Cameron: I’m not sure if it’s full of it, but it, yeah, there are, are occur­rences of it, yeah. It was very nat­ur­al in, uh, ancient Greece and ancient Rome. Uh, they were all into it. I’ve been watch­ing this BBC doc­u­men­tary on, uh, Shostakovich’s Sev­enth Sym­pho­ny, the Leningrad Sym­pho­ny, which he com­posed dur­ing the Siege of Leningrad. And, uh, there’s inter­views with, uh, sur­vivors, um, of the Siege of Leningrad that went on for near­ly three years, [00:05:00] 800 days. Pop­u­la­tion of three mil­lion peo­ple, one and a half mil­lion died, most­ly of star­va­tion.

Um, absolute­ly bru­tal. But any­way, um, I was just going, “Well, that’s nat­ur­al, peo­ple just dying of star­va­tion. Yeah, not enough food to eat.” Any­way, what do you got on your list of things? Chair­man, Chair­man news

Tony Kynas­ton: Yes, Chair­man Howie. So big news over the week­end if you’re a Berk­shire watch­er that, uh, has offi­cial­ly hand­ed over the chair­man­ship to his son Howard, who’s I think sev­en­ty-two, so no spring chick­en. he’s, War­ren’s now call­ing him­self Chair­man Emer­i­tus, and so I guess that means still stays involved, and he still remains a direc­tor any­way. but Howard suc­ceeds War­ren as chair­man. a cou­ple of inter­est­ing quotes. Um, he wrote a let­ter, War­ren wrote a let­ter to share­hold­ers talk­ing about this, and he [00:06:00] said, “I care more about the future of Berk­shire Hath­away after I die than dur­ing the peri­od I’m alive.” Uh, and he went on to say, “Berk­shire was the type of suc­cess­ful com­pa­ny that takes a long time to build and could be torn apart very eas­i­ly if it fell into the hands of peo­ple who would want to break it up.” that’s always been my fear, uh, not nec­es­sar­i­ly fear, but rea­son why I don’t own the shares now is because, um, I do see Berk­shire Hath­away as a to be tak­en over and bro­ken up. It’s get­ting hard to take over now. It’s get­ting so big. But, um, I would have thought the sum of the parts were, um, prob­a­bly more than, uh, the whole, um, so you could prob­a­bly break it up. had an inter­est­ing con­ver­sa­tion with peo­ple over the week­end who thought that it was a strange suc­ces­sion to have Howard, uh, join the, join the, well, he’s been on the board for a long time. He’s been a direc­tor for thir­ty-three years, but to become chair­man. uh, [00:07:00] War­ren points out in his let­ter that Howard’s been a direc­tor for thir­ty-three years, which is longer than, he served before the, tak­ing the reins at the age of thir­ty-four. And he goes on to say Greg runs the com­pa­ny, but Howard will guard its cul­ture and val­ues, and both are worth more than any­thing on our bal­ance sheet. Um, he, I also found a 2025 arti­cle, um, where Howard Buf­fett out­lined his def­i­n­i­tion of Berk­shire’s cul­ture as, “It’s not rock­et sci­ence. The cul­ture is to keep things sim­ple, to do what you need do, but don’t do a lot of things you don’t need to do. Treat peo­ple fair­ly, respect your man­agers, respect your share­hold­ers, tell them the bad news up front, and be hon­est.” So I thought, you know, that’s a good sum­ma­ry of the Berk­shire Hath­away cul­ture and Howard gets it. And of course,

Cameron: It’s also, it’s also Trump’s mot­to. He has that, um, embla­zoned, uh, behind the desk at the White House, all of that.

Tony Kynas­ton: [00:08:00] treat peo­ple fair­ly

Cameron: Yeah, tell them the bad news up front, be hon­est. Um, do what you need to do, but don’t do a lot of things you don’t need to do. I think that, he, he lives and breathes that, you know

Tony Kynas­ton: Yeah. Uh, and, um, you know, one of the ques­tions that some­one raised with me on the week­end was, how does Howard qual­i­fy to be chair­man of a big com­pa­ny? And, I did some dig­ging, and he has been a direc­tor of numer­ous pub­lic and pri­vate com­pa­nies. I know he, he most­ly is known for being a farmer and for his char­i­ta­ble work, but he’s also been on the boards of AgroTech, Archer-Daniels-Mid­land, ConA­gra Foods, Coca-Cola, First Year Finan­cial, and Lind­say Cor­po­ra­tion, and he was the chair of the, the last one.

So he’s had a lot of expe­ri­ence on boards over the years. of course, I think his best qual­i­fi­ca­tion is he spent a long time lis­ten­ing and talk­ing with War­ren. uh, so, you know, uh, Howard’s walk­ing and talk­ing a bit like [00:09:00] War­ren, and one point he’s made at the end of the arti­cle was, um, Berk­shire Hath­away’s head­quar­ters will nev­er move from Oma­ha, Nebras­ka. um, he’s been put in place to con­tin­ue War­ren’s cul­ture in the busi­ness, I guess. He’s not gonna have a say in oper­a­tions, and prob­a­bly won’t have much of a say in invest­ments, but he’s there to keep it togeth­er and the rails in terms of cul­ture. So inter­est­ing to see how it goes. inter­est­ing, giv­en the light of the inter­view we had with the chap who’d set up a um, ETF in the States he was the,

He was point­ing out that he did­n’t want to buy Berk­shire after War­ren left. But I won­der if, Howard’s not a founder, but he’s cer­tain­ly got the same cul­ture and ethics as, as War­ren. So be inter­est­ing to see how Berk­shire goes the han­dover

Cameron: I was just look­ing up the psy­chopath epi­dem­ic, because I remem­ber we talked about Archer Daniels Mid­land in that. The lysine car­tel [00:10:00] that they were part of back in the, uh, ear­ly ’90s. Won­der if, uh, Howie was around in those days. Maybe he was brought in to clean it up.

Tony Kynas­ton: Yeah, don’t know

Cameron: Yeah, I think being a direc­tor of Berk­shire for 33 years is prob­a­bly a pret­ty good, uh, um, qual­i­fi­ca­tion for tak­ing over from his dad

Tony Kynas­ton: I agree and the, and the per­son who was ques­tion­ing it with me on the week­end was say­ing, “Well, Berk­shire’s got to cor­po­ra­tize, and now it’s got Greg Abel in there, it should have a cor­po­rate chair­man.” I’m like, “What? So they can draw mil­lions of dol­lars in salary and

Cameron: Where?

Tony Kynas­ton: ham­per the per­for­mance?

No, no, thanks. Pr-

Cameron: Well,

Tony Kynas­ton: with­in.”

Cameron: well, and, and, you know, isn’t a large part of the suc­cess, uh, of Berk­shire Hath­away the cul­ture and val­ues that War­ren and Char­lie, um, adopt­ed over the years, decades? Mm.

Tony Kynas­ton: And that whole thing of don’t, you know, do, do as much as you need to and [00:11:00] not, not much more. I mean, that’s, that’s easy to say and it sound, makes him sound lazy, but, the, I think one of the secret sauces to Berk­shire Hath­away is the fact that they bought all these com­pa­nies and large­ly left them alone for, you know, cap­i­tal allo­ca­tion.

It’s like, “No, you guys go off and run it. Keep doing what you’re doing.

Cameron: Yeah

Tony Kynas­ton: to have a strat­e­gy depart­ment to tell you what to do. Just keep doing what you’re doing.”

Cameron: And stick to their busi­ness of invest­ing in good qual­i­ty com­pa­nies and just n- not get­ting too dis­tract­ed from that.

Tony Kynas­ton: Yeah, cor­rect

Cameron: They’re, they’re not build­ing AI data cen­ters, well, at least not direct­ly

Tony Kynas­ton: Yeah, I don’t think I’ve heard Berk­shire Hath­away com­ment on AI. Must be the only com­pa­ny ev-ever that has­n’t tried to

Cameron: Well, they were asked about it in their, you know, their, their AGMs and, you know, what­ev­er. There was actu­al­ly some­thing I was gonna throw into our, uh, my notes for today. I s- mm, I for­got about it. There was, um, a, a [00:12:00] talk I saw, a video of Char­lie not long before he died. It was­n’t an AGM thing. It must have been one of the oth­er, the, like, the news­pa­per or what­ev­er that he was, um, a direc­tor of.

Uh, but him just giv­ing his bon mots of wis­dom about how to lead a good life and a suc­cess­ful life and, um, yeah. I was gonna pull a cou­ple of those points and talk about it, but I for­got. But yeah, it just, their whole

Tony Kynas­ton: were

Cameron: appro-

Tony Kynas­ton: they? points.

Cameron: Like, when I was watch­ing it, I was sit­ting on the can, Tony, and I was like, “Oh, I should add this to my notes for this week.” And then, uh, you know, one thing led to anoth­er and it did­n’t. I think I did make a note of it some­where, but not in the right place. Um, but yeah, just like, it, it, I guess the thing that, one of the things I respect so much about those two guys, apart from their, the, the invest­ing wis­dom that they adopt­ed and shared freely, was how they just ran a clean, whole­some busi­ness, [00:13:00] uh, dur­ing an era where most of Amer­i­ca was, cor­po­rate Amer­i­ca was doing any­thing but.

They just kept their nose clean and stuck to what they did and kept it sim­ple and, and, uh, yeah

Tony Kynas­ton: Yeah

But when they were engulfed in, in prob­lems, they just stepped up and said, “Well, we’re gonna fix it.” You know, cul­ture’s impor­tant. I’m think­ing of the time when there was the bond scan­dal

Cameron: Salomon Broth­ers?

Tony Kynas­ton: Broth­ers.

Cameron: Yeah

Tony Kynas­ton: stepped up, and it was because of his good char­ac­ter that the Fed dealt with them and, and helped them get out of the mess.

If it had been some­body else, I don’t think they would’ve got­ten out of the mess poten­tial­ly. Um, and War­ren’s famous line was, you know, “We’re gonna deal fair­ly, but we’re not gonna be a pat­sy.”

Cameron: Yeah

Tony Kynas­ton: which I thought was the cor­rect approach

Cameron: Yeah All righty. What else you got?

Tony Kynas­ton: No, that’s it. I’ve got a Pulled Pork on Focus Min­er­als, which I was­n’t sure if I was gonna do today. There’s a cou­ple of, um, there’s a few new things on the buy list this week, but most of

Cameron: Hmm. [00:14:00] Hmm

Tony Kynas­ton: stocks. Um, and I know in the past peo­ple have pre­ferred us to do large ADT stocks and Focus isn’t, um, um, over­ly large.

It’s about three or $400,000 trad­ed per day,

Cameron: Mm-hmm

Tony Kynas­ton: of the new things that we haven’t done Pulled Porks on before. So did pull it out and I do has­ten to add it’s a gold min­er and gold’s a, a hold, so you don’t need to race off and, um, look at this one. Just wait for the gold price to become a buy again. But it’s worth, it’s worth doing, I think, just to have the analy­sis there for peo­ple who are inter­est­ed in large stocks

Cameron: Hmm. Well, off you go then, TK

Tony Kynas­ton: All right, Focus Min­er­als. Uh, as I said, it, it’s a, it’s a one op- one area oper­a­tion and, uh, in Cool­gar­die, is not too far from Kal­go­or­lie, the big, the big gold min­ing area in WA, WA. it’s, uh, it’s new on the buy list this week. [00:15:00] ADT’s three hun­dred and nine­ty-two thou­sand dol­lars. so that’s why I’ve picked it. Um, inter­est­ing­ly enough, it’s, uh, three hun­dred and nine­ty-two thou­sand is a kind of small ADT for a, a com­pa­ny of this size. It’s about a six hun­dred mil­lion dol­lar mar­ket cap. But they do have a large own­er, which I’ll get to in a minute. So, the free float is, is less than, um, than what you’d nor­mal­ly expect to see. also, if you’re look­ing at the chart for FML, for Focus, you would have seen that it had a big growth spurt in the sec­ond half of cal­en­dar year two thou­sand and twen­ty-five, but it’s been declin­ing in twen­ty-twen­ty-six. although it has recent­ly set­tled down and become a buy again, so it’s ticked up a bit late­ly. the stock surged from thir­ty-five cents in the mid­dle of, uh, twen­ty-twen­ty-five to a high of four dol­lars in Jan­u­ary, and the price is now half that at two dol­lars and four cents, which is the price I’m using for my analy­sis. is that? [00:16:00] Well, The, the com­pa­ny oper­ates one mine in one area, the Cool­gar­die Gold Project, and, uh, cov­ers, that area cov­ers 120 square kilo­me­ters. How­ev­er, last year they oper­at­ed two mines and they had anoth­er one called the Laver­ton Gold Project, which they sold to Gen­e­sis Min­er­als for mil­lion in cash used those pro­ceeds to com­plete­ly wipe its debt, which was $175 mil­lion, its sub­stan­tial own­er, Shan­dong Gold. So in the mid­dle of last year, it became a debt-free sin­gle asset oper­a­tor. And so I just want­ed to, before I keep talk­ing about why the share price went up and then went down, uh, I should men­tion the own­er­ship struc­ture because it’s, it’s fair­ly impor­tant for this stock. So Shan­dong Gold Inter­na­tion­al Min­ing Cor­po­ra­tion holds 63.2% the com­pa­ny, the con­trol­ling stake. Gold [00:17:00] is one of the largest, uh, state-owned gold pro­duc­ers in Chi­na a big one around the world.

It’s list­ed in both Shang­hai and Hong Kong, it oper­ates in Asia, South Amer­i­ca, and Aus­tralia. their involve­ment in Focus Min­er­als goes way back for 13 or 14 years ago, they basi­cal­ly bankrolled Focus through the long explo­ration phase. So they first took con­trol of Focus in Sep­tem­ber 2012, they ini­tial­ly, uh, put in $225 odd mil­lion for a 51% stake. soon after that, the gold price crashed in, uh, July of 2013, so Focus was forced to shut down oper­a­tions in its Cool­gar­die Laver­ton areas, and they laid off hun­dreds of work­ers. Um, and then in 2021, Shan­dong tipped in an addi­tion­al $25.5 mil­lion, uh, and that was [00:18:00] because, the com­pa­ny Focus was, uh, under takeover, hos­tile takeover from a com­pa­ny called Theta Gold Mines, T‑H-E-T‑A, uh, Shan­dong fend­ed off that takeover by, um, par­tic­i­pat­ing in a rights issue and tak­ing their share­hold­ing for 63.2% where they’ve set– sat ever since and fund­ed the, um, the explo­ration and build for the, uh, two gold projects. What, what hap­pened then in the last 12 months was that after Laver­ton project, uh, pro- sor­ry, Laver­ton Gold Project was sold to Gen­e­sis Min­er­als, um, and the debt was paid down. In Octo­ber 2026, the, uh, first div­i­dend was paid by this com­pa­ny. So it was, um, cents a share, and that totaled near­ly $23 mil­lion.

Uh, so Shan­dong’s stake [00:19:00] was a $14.5 mil­lion div­i­dend, and, uh, it I guess that was the, the start of the pay­back for their invest­ment in this com­pa­ny. I mean, they got their debt paid back, and now they’re get­ting a div­i­dend as well. But it was also, the, the time when the which is called, in the Laver­ton area, called Three Mile Hill, Three Mile Hill Mine, uh, the oper­a­tion became, uh, com­mer­cial.

So it start­ed, um, oper­at­ing and pro­duc­ing sales at com­mer­cial lev­els. And investors saw in that sort of Octo­ber peri­od that the, uh, the cash was flow­ing straight through to the bot­tom line. So they got behind it, saw, uh, cash flow­ing in, saw a good mar­gin, the off, uh, sell-off of the Laver­ton, uh, oth­er mine and the pay down on debt, and the investors liked what they saw, they bid up the [00:20:00] stock price.

So then in twen­ty twen­ty-six, the, the par­ty sort of went cold because, um, of a num­ber of things. A declin­ing gold price, that also, um, depressed the share price. Uh, the, the thin ADT, so I say thin, thin com­pared to the mar­ket cap. It’s, it’s still a rea­son­able amount, but when you have a stock with, um, uh, con­strict­ed free, uh, float, it can push the share price up and down in an ampli­fied way. And so peo­ple sell­ing out, tak­ing prof­its, um, forced the, the price down. The price of gold declin­ing forced the price down. And there was also some noise in the s- in the ear­ly parts of this cal­en­dar year that, uh, there was, there was going to be a tem­po­rary halt at the Cool­gar­die mine. Um, and that’s one of the risks with this com­pa­ny now being a one-mine oper­a­tor, that if it does need to, do some main­te­nance or if there is, you know, bad weath­er or what­ev­er, that they will halt oper­a­tions, [00:21:00] um, and they’ll be with­out cash. That was all untrue, and, uh, the com­pa­ny came out and said that they were- weren’t aware of any rea­son to shut the mine, and the mine kept op-oper­at­ing, so. the dam­age was done by some, uh, peo­ple who I guess ben­e­fit­ed from the decline in the share price. so that’s why it went up and went down. Um, and that’s, uh, a bit of the his­to­ry of the stock. it’s still, um, high­ly prof­itable and still oper­at­ing the Three Mile Hill mine in the Cool­gar­die area Bit of his­to­ry on the com­pa­ny. Uh, in 1978, the, the com­pa­ny orig­i­nal­ly incor­po­rat­ed under the name Aust­minex Lim­it­ed, for its first two decades, it oper­at­ed as an explo­ration vehi­cle, pick­ing up small min­er­al pro– uh, prospects. Then in 2005, Aust­minex under­went a major cor­po­rate restruc­ture. It acquired a fifty per­cent stake in the Cool­gar­die min­ing leas­es through a JV [00:22:00] and event– and offi­cial­ly changed its name to Focus Min­er­als. then, uh, onwards into the 2000s, ag-aggres­sive­ly acquired and con­sol­i­dat­ed almost all the leas­es which were frag­ment­ed around the town of Cool­gar­die. Cool­gar­die was actu­al­ly the orig­i­nal site of the 1892 West Aus­tralian Gold Rush, which then moved on to Kal­go­or­lie. then, uh, by 2009, Focus had bought the Three Mile Hill pro­cess­ing plant back into pro­duc­tion start­ed to posi­tion itself as a mid-tier ASX gold pro­duc­er. Uh, there’s no founder here.

Um, Aust­minex was set up orig­i­nal­ly by a bunch of geol­o­gists and lawyers, as most explo­ration vehi­cles are. and as I said before, Shan­dong Gold got involved with Focus back in 2012. Um Why did they get involved? Well, appar­ent­ly dur­ing the 2010s, uh, major Chi­nese [00:23:00] state-owned enter­pris­es were under, strate­gic man­dates from Bei­jing to secure inter­na­tion­al nat­ur­al resource assets. And so they came kick­ing the tires in WA, one of the things they liked was all the ten­e­ments that, um, Focus Min­er­als held. So they made an offer, uh, for the, for the, um, uh, fifty-one per­cent stake in the com­pa­ny. And at that time, uh, Focus had some­thing like six hun­dred and fifty square kilo­me­ters across both Ki- Cool­gar­die and Laver­ton. Um, and so to a com­pa­ny l- like Shan­dong, buy­ing into Focus meant con­trol­ling a sig­nif­i­cant por­tion of the his­toric gold­fields in WA, which was appeal­ing to them. for­ward, they bought their stake. They increased it, uh, when Theta Gold’s tried to take over the com­pa­ny. yeah, and then pret­ty much fast-for­ward to today. been a cou­ple of, um, ups and downs with the Three Mile Hill mine. Um, it was shut­tered for a while [00:24:00] and then relaunched, uh, but now is oper­at­ing well. So fast-for­ward to the lat­est results, which are the– for the first half 2026. the net prof­it after tax was eighty-five point eight mil­lion dol­lars from oper­a­tions.

And I guess if you com­pare that to the first half of 2025, it’s a bit of a dif­fi­cult com­par­i­son to make. Uh, the first half of 2025, the prof­it was two hun­dred and twen­ty-one mil­lion, but that was inflat­ed by the two hun­dred and sev­en mil­lion gain from sell­ing the Laver­ton project. So you’re real­ly com­par­ing some­thing like a, a, a thir­teen mil­lion dol­lar prof­it with an eighty-five mil­lion dol­lar prof­it for under­ly­ing activ­i­ties. Rev­enue explod­ed, um, s- in 2025. For the first half, it was sev­en­ty-eight mil­lion dol­lars. this year it was two hun­dred and fifty-six mil­lion dol­lars. the same with, um, EBITDA, which went from twen­ty-one mil­lion to a hun­dred and forty-two mil­lion. that was all on the back of strong prof­it mar­gins of [00:25:00] twen­ty-nine per­cent. and like­wise, earn­ings per share went from five cents to near­ly thir­ty cents per share. So y- at its lat­est results, shows itself to be high­ly liq­uid, no debt on its bal­ance sheet, lots of cash, uh, or cash equiv­a­lents like gold bul­lion sit­ting on its bal­ance sheet. So there’s a hun­dred and twen­ty-two mil­lion dol­lars of cash or equiv­a­lents on the bal­ance sheet. They’re, sor­ry, 122 mil­lion of cash and of liq­uid cash and then a fur­ther mil­lion held in, um, term deposits and some­thing like six and a half thou­sand ounces of gold stored in the Perth Mint end of the quar­ter. So it’s, it’s cashed up. they have a declared a maid­en div­i­dend of eight cents a share, so it’s, it’s, um, start­ing to, uh, return mon­ey to share­hold­ers, which I guess is most­ly impor­tant for Shan­dong. and, uh, the record date, we, we’ve missed the record date if you’re inter­est­ed in [00:26:00] buy­ing the stock for its share, its div­i­dend, sor­ry, it was tenth of Sep­tem­ber. What else can I say about the results? The, they’re cur­rent­ly unhedged with their gold sales, so, uh, they’re cur­rent­ly pro­duc­ing a twen­ty-nine per­cent mar­gin, as I said. But, um, you would need to watch the move­ments in the gold price because, uh, any sort of mate­r­i­al upward or down­ward move­ment will change that mar­gin and cash flow for the com­pa­ny direct, uh, dra­mat­i­cal­ly. Excuse me. QAV num­bers. Price is two dol­lars and four cents today. There’s no con­sen­sus tar­get, and that’s because, um, insti­tu­tion­al investors don’t real­ly wan­na get involved with a com­pa­ny that has, uh, float, uh, but a large, uh, share­hold­er like this because, um, be dif­fi­cult to see a takeover event hap­pen­ing. Um, and they’re also going to have less influ­ence on the direc­tion of the com­pa­ny, which is large­ly being run by the, uh, [00:27:00] the and its, uh, appointees to the board. So get much cov­er­age, this stock, so no con­sen­sus tar­get. We do have an IV1, how­ev­er, of two dol­lars fif­teen, which is above the cur­rent share price of two dol­lars four, but we don’t have IV2. equi­ty per share plus thir­ty per­cent is two dol­lars and six, so we can buy it for book plus thir­ty. The yield is good at three point nine, but we don’t score it for that. We want high­er than the, um, rate, or sor­ry, the mort­gage rate. Uh, Stock Doc­tor finan­cial health is strong. The trend is steady. Stock­o­pe­dia qual­i­ty rank give it a nine­ty-six, a val­ue rank of nine­ty-two, but because of the big share price decline ear­li­er this year, momen­tum is at twen­ty-six, which low­ers the total score to eighty. uh, an F score is, uh, on Stock­o­pe­dia is, uh, nine out of nine, which is very, very good. If any­one’s inter­est­ed, return on equi­ty is thir­ty-six per­cent, which is high. I’m more inter­est­ed in is PROPCAF, which is three point eight times, [00:28:00] which is, uh, low and, and, um, and juicy. is four point one six, and that’s again a sign that the oper­at­ing cash flow is flow­ing through to earn­ings, which is good, and that’s the low­est in three years, so we score it for that. Can’t give it a score for growth.

We don’t have, um, enough cov­er­age to get a fore­cast EPS, so we can’t score it for growth over PE. Don’t have an own­er founder, so we can’t score it for that. Um, does­n’t have con­sis­tent­ly increas­ing equi­ty, so we can’t score it for that, although it was close. I think it missed out on one, half. uh, it does get a qual­i­ty score of eleven out of twelve or nine­ty-two per­cent and a QAV score of point two four, so it scores, uh, pret­ty high On our buy list, uh, but, uh, I do call out that it’s a gold min­er and gold is a hold at the moment, so don’t race out to buy this one just yet. and it does come with risks. So the biggest risk I see is that it’s a sin­gle mine oper­a­tor. I do won­der how long that will last giv­en it’s throw­ing off so much [00:29:00] cash and it has a deep pock­et­ed share­hold­er. you won­der if there are some M&A, uh, activ­i­ties in future in mind for this stock. But, um, that is also one of the oth­er risks is that if there is gonna be more acqui­si­tions, um, might be eas­i­er to do now that Laver­ton’s been sold off, but, um, they will prob­a­bly have to go through the For­eign Invest­ment Review Board giv­en the own­er­ship struc­ture. And so that may cause a, a prob­lem in terms of being able to acquire things. Uh, don’t know, but, um, it’s, it’s one more hur­dle to get over. And of course, the oth­er biggest risk is that the gold price is drop­ping. Uh, I guess they could decide to hedge their book in that case or they could take oth­er action. But, um, yeah, cer­tain­ly this is, this is a stock that’s going to, um, be very influ­enced by the, uh, the price of gold. that’s Focus Min­er­als. Uh, put that one in your back pock­et until, uh, until gold becomes a buy

Cameron: Thank you, Tony. I actu­al­ly have them in my Com­stock­’s list list­ed as nick­el and gold, [00:30:00] but, uh, you did­n’t men­tion nick­el and I was just doing some research. They sold off the Nepean group in Sep­tem­ber 2020

Tony Kynas­ton: Yeah, I did­n’t come across nick­el, sor­ry. I just saw gold

Cameron: Yeah. So I think that might be out­dat­ed.

Tony Kynas­ton: Okay

Cameron: I’m, I’m gonna remove nick­el from their, uh, com­modi­ties. Ugh Boom. Okay, that’s done. All right. We don’t own them in any­thing. I thought we would’ve, but I could­n’t find any­thing. And

Tony Kynas­ton: I think it’s the first time I’ve seen them on the buy list, and I think that’s because of the, the big change that hap­pened in the last half when they to strong oper­at­ing cash flow and pay­ment– repay­ment of debt, I

Cameron: Right. Uh, I think, I mean, I’m pulling up the, uh, the his­to­ry, buy list his­to­ry. FML, April they were there. August 2025 they were on there. Yeah. Yeah, that’s about it, I think. Uh, yeah, [00:31:00] June 2025, May 2025. They have been on and off. Uh, how do you feel about the Shan­dong thing from a QAV per­spec­tive? Do you care about that or is.

No.

Tony Kynas­ton: me at all.

Cameron: Hmm

Tony Kynas­ton: of the rea­sons why it’s on the buy list. I mean, you think about a debt-free gold min­er with a near­ly thir­ty per­cent mar­gin on the cur­rent gold price, you’d think it’d be trad­ing at a lot high­er PE than four.

Cameron: Yeah

Tony Kynas­ton: looked at sim­i­lar sort of gold stocks, they’re prob­a­bly trad­ing on ten, twelve or more.

Cameron: Right

Tony Kynas­ton: the Shan­dong side of thing is, s- I think weigh­ing on, um, uh, insti­tu­tion­al investors’ minds, but it does­n’t weigh on mine, and it allows us to buy a, uh, a cash machine at a rea­son­able price

Cameron: Hmm. And from my per­spec­tive, you know, you’ve got a com­pa­ny that owns that much of it, they’re prob­a­bly gonna be look­ing to max­i­mize their. I mean, it’s y- a founder. You, you said that you did­n’t score them for a founder or big investor, but in some ways kind of is, right? When you’ve got an- anoth­er busi­ness that [00:32:00] has a big own­er­ship stake like that

Tony Kynas­ton: True. Uh, often­times, yeah. Look, a big own­er­ship stake gives it a lot of ben­e­fits, and one of the ben­e­fits I think it gives it is, uh, which I saw in my analy­sis, was that, um, they’re able to nego­ti­ate, use the Shan­dong name to nego­ti­ate h- uh, you know, good rates on machine, um, leas­es and deals and equip­ment leas­es and deals and even, I think, in the abil­i­ty, um, to nego­ti­ate envi­ron­men­tal bonds for the gold mines.

If you’ve got Shan­dong stand­ing behind you, the gov­ern­men­t’s less like­ly to want, um, as much deposit­ed for envi­ron­men­tal cleanup, kind of thing. So there’s a big ben­e­fit for hav­ing some­one with deep pock­ets. But it’s– it lead to the own­er-founder men­tal­i­ty of, you know, watch­ing costs and set­ting cul­ture and things like that?

Don’t know.

Cameron: Right. Well, uh, that’s it for that part of the show. Quick show today, short show.

Tony Kynas­ton: Yeah

Cameron: we’ve answered all the ques­tions. No one has any ques­tions [00:33:00] any­more. It’s all run­ning like clock­work. Every­one knows what’s going on

Tony Kynas­ton: And, and also give us some feed­back on whether you wan­na hear small cap stocks, uh, as Pulled Porks too.

Cameron: Hmm.

Tony Kynas­ton: I tend to try and find a big one, but I’m hap­py to do some small ones ’cause there’s two or three on the buy list which look inter­est­ing

Cameron: Hmm. So yeah, some inter­est­ing, uh, new entrants this week. Um Who did I see that was inter­est­ing?

Tony Kynas­ton: Ad- Adrad I think is prob­a­bly the most inter­est­ing

Cameron: AdRad? Yeah, AHL, AdRad Hold­ings, but they weren’t new this week, but they’re very small Uh, well, what else you got, TK? What’s in after hours? Got any­thing good for me?

Tony Kynas­ton: Um, I don’t know if it’s good. I watched the movie called The Hard Word, which is, I think, made in about 2000. Aus­tralian crime dra­ma, uh, with Ross, uh, um, Joel Edger­ton and Guy [00:34:00] Pearce and Rachel Grif­fiths. So it fun to watch from that point of view. Um, some, some great act­ing. Guy Pearce had a pros­thet­ic nose for some rea­son, which was a bit annoy­ing watch­ing. I think he want­ed to make him­self look more like a crim­i­nal. and it’s a very flim­sy plot. It’s like a bit of a soap opera, real­ly. um, it was great to see the, all the faces from the Aus­tralian movie indus­try back in the day

Cameron: 38% on Rot­ten Toma­toes. So yeah.

Tony Kynas­ton: Like for a, for a heist movie, there was, um, very lit­tle thought giv­en into the caper.

Cameron: Right

Tony Kynas­ton: you know, “Yeah, we’re gonna knock this over. Okay, well, we’ll just turn up and we got an inside man to let us in, and just hold every­thing up and run away with the mon­ey.” It’s like there’s no, no oth­er plan­ning at all.

Cameron: Sounds easy

Tony Kynas­ton: it’s more around the per­son­al­i­ties and what they get into and, yeah,

Cameron: Right

Tony Kynas­ton: and all the rest of it

Cameron: Guy Pearce has had an inter­est­ing career. Like, [00:35:00] uh, Memen­to was great.

Tony Kynas­ton: Mm-hmm

Cameron: Prob­a­bly the only Christo­pher Nolan film I can real­ly watch. Uh, maybe cou­ple of the ear­ly Bat­mans, but, um

Tony Kynas­ton: Get­ting like Tenet? Not like Tenet

Cameron: I did­n’t watch it. I heard so many bad things about it. I,

Tony Kynas­ton: I like it.

Cameron: Real­ly? Okay. What did you like about it?

Tony Kynas­ton: Uh, well, I kind of had a, I for­get the who starred in it, but it had a Black James Bond sort of fig­ure in it, which was good. It was cool to see. but I just liked the, the whole time trav­el trope, and there’s one great scene towards the end. It’s a bat­tle scene where you have half the and equip­ment going back­wards, leav­ing the bat­tle as half the s- sol­diers and equip­ment come into the bat­tle, which is mind-bend­ing to process

Cameron: Sounds con­fus­ing Uh, what else has he done? LA Con­fi­den­tial, eh, did­n’t like that. Loved the book, did­n’t l- did­n’t love the film. Uh, The Propo­si­tion, eh, I think I like that. It’s been a while since I’ve seen it. [00:36:00] Nick Cave, uh, screen­play, right? John Hill­coat direct­ed.

Tony Kynas­ton: Mm-hmm. No, I

Cameron: Jack Irish. I nev­er saw Jack Irish.

Tony Kynas­ton: Jen­ny and

Cameron: Is it?

Tony Kynas­ton: Irish,

Cameron: Real­ly? Worth a watch? Hmm. Okay. Um, hmm

Tony Kynas­ton: it’s set in Fitzroy, so you see all the pubs and locals and things, which is real­ly good.

Cameron: Yeah, right.

Tony Kynas­ton: Mm.

Cameron: And, uh, Tod­dy Gold­smith was in it, appar­ent­ly. I’m look­ing, so there you go. You got that to look for­ward to. Found­ing mem­ber of the Chan­toosies. Was­n’t she mar­ried to, uh, what’s his face? Was she mar­ried to, uh. No, she was­n’t mar­ried to him. Don’t wor­ry about it. For­get about it. Relat­ed to Olivia New­ton-John.

Olivia New­ton-John is her aunt, was her aunt. Gosh, she’s 64 now. Wow. Uh, well, I watched, um, uh, Paris, Texas again.

Tony Kynas­ton: good

Cameron: Yeah, ’cause I’ve been try­ing to get Hunter to watch it, ’cause he liked Wim Wen­ders’ last film, [00:37:00] um, Per­fect Days, the Japan­ese one.

Tony Kynas­ton: All right. Yep

Cameron: And I was like– He’s like, “Yeah, you ever heard of this Wim Wen­ders guy?”

And I was like, “Pfft, dude, now, now you’re get­ting into real cin­e­ma, final­ly.” And, uh, rec­om­mend­ed, you know, his cat­a­log, but basi­cal­ly, you know, said Paris, Texas, Wings of Desire, Far­away, So Close, but yeah, all of those. Bue­na Vista Social Club, but, um, said start with Paris, Texas. I don’t think he’s watched it yet, but then I saw it on SBS and I was like, “Yeah, all right, I’m gonna.

I haven’t watched it in years.” Damn, holds up good. Har­ry Dean. Oh, yeah. So, so great.

Tony Kynas­ton: Yeah

Cameron: Like, once you’ve seen it, and I’ve seen it, you know, quite a few times over the years, but, um, you kind of, you, you kin­da know the char­ac­ter that Har­ry Dean is play­ing, and so you know a lit­tle bit about what’s going on. But just try­ing to remem­ber when you have– when you had­n’t seen it and you don’t know what his sto­ry is, as, as, uh, Dean [00:38:00] Stock­well does­n’t know what’s going on with him, and yeah, you’re, you’re learn­ing it in real time what his prob­lem is.

But his per­for­mance is great, and I read up on it. Har­ry Dean appar­ent­ly, um, uh. You know, he’d been around for years before that. Yeah, he– That was made in, um, let me see here. I don’t know, eight- late ’80s. And he’d been in Cool Hand Luke, Kel­ly’s Heroes, The God­fa­ther Part II, Alien, Escape from New York, Repo Man, all of those.

And, uh, ’84 Paris, Texas was. And appar­ent­ly he was drink­ing in a bar, I heard, and Sam Shep­ard was sit­ting next to him, and they were drink­ing. And Har­ry Dean was just sort of com­plain­ing about the shit­ty films that he was get­ting and how he real­ly want­ed to make some­thing that was good. And so Sam said, “Uh, I think I got some­thing.”

And, and they made that. Yeah. [00:39:00] Real­ly, real­ly good. And yeah, I told you I’ve been watch­ing this doc­u­men­tary on Shostakovich’s Sev­enth Sym­pho­ny, and it’s, uh, real­ly good. It’s a 2016 BBC doc­u­men­tary. And, uh, yeah, they’re in Rus­sia and talk­ing to sur­vivors and, um, telling the whole sto­ry of the Siege of Leningrad and, um.

Yeah, I’ve been lis­ten­ing to it. I told– Did I tell you about my thing with Tay­lor’s car last week? Just lis­ten­ing to the one CD.

Tony Kynas­ton: Nej.

Cameron: so w- I, I’ve inher­it­ed Tay­lor’s car, which was my mum’s car, which is a 2005 Toy­ota Corol­la, and it does­n’t have Blue­tooth, uh, in it, so I. It just has a CD play­er. So I went rum­mag­ing through the garage.

I thought, “We’ve got­ta have some CDs some­where.” The only CD I could find w- was a Led Zep­pelin box set that Chris­sy brought with her from Seat­tle 20 years ago.

Tony Kynas­ton: Mm-hmm

Cameron: So I stuck in Led Zep­pelin I, and I thought, “This is all I’m gonna lis­ten to in this car for the next week. Just [00:40:00] when­ev­er I’m in it, Led Zep­pelin I on repeat,” like we used to do in the old days.

Just one album, wear it out,

Tony Kynas­ton: Yep.

Cameron: and I loved it. I just, it just keeps going over and over and over and over, and I’m like, “Oh my God.” Like I’ve. It’s, I, I, I can’t remem­ber the last time I lis­tened to any album from start to fin­ish. Well, maybe, you know, when The Sto- when The Stones or some­body put out a new album, you lis­ten to it once or twice from start to fin­ish, but you don’t lis­ten to it over and over and over for a week usu­al­ly.

I’ve been lov­ing it, and talk­ing to GPT about, like, who’s play­ing the, the Ham­mond B3 in “You Shook Me,” and GPT’s like, “That’s John Paul Jones, man.” And fun­ni­ly enough, he played the s- he played the Ham­mond on a dif­fer­ent ver­sion of that track ear­li­er that year by The Jeff Beck Group, and he played it in the Zep­pelin ver­sion when they record­ed it as well.

And, um, I was like, “Who’s, who’s play­ing the har­mon­i­ca?” Yeah, well, that’s, uh, that’s, I was gonna say Roger Dal­trey. Not Roger [00:41:00] Dal­trey, the oth­er guy. Yeah.

Tony Kynas­ton: Plant, yeah.

Cameron: And Plan­t’s vocal. The whole thing is just amaz­ing. So any­way, I decid­ed while I’m wo- I can’t lis­ten to that while I’m work­ing, but I decid­ed I’m just gonna pick one album and lis­ten to it all week, and I’ve been lis­ten­ing to Shostakovich’s Sev­enth Sym­pho­ny for the last week just on repeat

Tony Kynas­ton: You, you always lis­ten to Shostakovich’s Sev­enth Sym­pho­ny.

Cameron: I lis­ten to all the Shostakovich’s, but I don’t just pick one usu­al­ly and lis­ten to it

Tony Kynas­ton: tell me about it.

Cameron: Yeah, okay, maybe I do do that a lot, but I’ve been lis­ten­ing to it on repeat, and then I found this doc­u­men­tary. Um,

Tony Kynas­ton: Ja.

Cameron: you know, I’m sure I’ve, I’ve, I’ve prob­a­bly told you this sto­ry, but when they first per­formed it in. The first per­for­mance of it in Leningrad was, I think, August 1942. Uh, the, in the mid­dle of the siege.

The siege went from 1941 to 1944. In the s- They per­formed it. Before the f- pre­mier per­for­mance of it, the Sovi­et com­man­der of Leningrad bombed the [00:42:00] Ger­man artillery posi­tions to make sure that they would be qui­et dur­ing the per­for­mance of the sym­pho­ny, and then they set up speak­ers and live broad­cast the per­for­mance to the Ger­man front lines so they could hear

Tony Kynas­ton: To turn them away.

Cameron: To

Tony Kynas­ton: a weapon. Were they

Cameron: oh.

Tony Kynas­ton: wan­na see my abs?”

Cameron: ” Do you wan­na hear more Shostakovich? ‘Cause we got more.” And they’re like, “No, stop, stop.”

Tony Kynas­ton: That’s only the first sym­pho­ny. We got sev­en more. We get–

Cameron: Oh, oh, you’re hor­ri­ble. You’re

a hor­ri­ble, hor­ri­ble man. Anec­do­tal­ly, uh, it was psy­cho­log­i­cal war­fare, but not of the kind you’re sug­gest­ing.

Anec­do­tal­ly, uh, the, uh, one of the Ger­man com­man­ders, uh, turned to his troops after the per­for­mance and said, “We’re gonna lose this war,” but not because they’re gonna keep play­ing that music to us, because it was [00:43:00] a

tremen­dous artis­tic achieve­ment and an act of defi­ance that they would com­pose and play that in the mid­dle of w- the most bru­tal siege in all of mil­i­tary his­to­ry. It is still today, you know. One and a half mil­lion peo­ple dead in three, in b- in a bit years, or rough­ly three years

Tony Kynas­ton: the peo­ple of Troy should have turned the, the horse around with speak­ers with Shostakovich play­ing Uh,

Cameron: all right

Tony Kynas­ton: that next time I’m under siege. I’ll get out Shostakovich. Good thing I did­n’t have Led Zep­pelin. Ger­mans would’ve gone, “Hey, great. Let us in. We wan­na hear more.”

Cameron: Did­n’t the FBI do that, um, in, uh, Waco or some­thing? Did­n’t they, like, set up speak­ers and play rock and [00:44:00] roll or some­thing? Yeah.

Tony Kynas­ton: Yep. I just, going back though in, in my mem­o­ry, it, it used to be great when you’d jump in your mate’s car and there’d be a new CD or cas­sette and you go, “Wow, what’s that? That’s great.” ‘Cause you just sort of like would­n’t have come across it oth­er­wise.

Cameron: Yeah

Tony Kynas­ton: Yeah. Does­n’t hap­pen now

Cameron: Shat­ner did his met­al per­for­mance yes­ter­day.

Tony Kynas­ton: Hmm

Cameron: His first met­al show on Sat­ur­day evening. Um, and there are videos of it on YouTube, which I haven’t had a chance to look at yet, but per­formed, uh, Crazy Train, Enter Sand­man. Uh, what else? Clas­sic. Ace of Spades, I think

Tony Kynas­ton: Ah, that’d be great to hear.

Cameron: Yeah. Yeah, I’m look­ing for­ward to check­ing it

Tony Kynas­ton: or was he actu­al­ly singing them?

Cameron: Well, no, I think he was doing his thing, right?

Yeah.

Tony Kynas­ton: Yeah. Speak­ing the

Cameron: Mm.

Tony Kynas­ton: of spades.

Cameron: Yeah.

Shat­ner is work­ing on [00:45:00] his debut met­al album enti­tled What the F is Heavy Met­al? for Cleopa­tra Records. It will fea­ture such guests as Queen’s Bri­an May, Judas Priest’s Rob Hal­ford, Black Sab­bath’s Tony Iom­mi, and for­mer Slay­er drum­mer Dave Lom­bar­do. So there you go. Check that out. Oh, I sure it’s a mas­ter­piece.

95 years old, on stage, doing his first heavy met­al con­cert.

You got­ta hand it to The Shat. All right. Well, that’s it. Short show this week. Um, hap­py hunt­ing, peo­ple

Tony Kynas­ton: ASX