Paul Cronin: What It Really Takes to Build a Mine

0:04Paul Cronin: Hey, good morning. Happy Friday, everybody. Welcome back to another long-form episode here on Mining Stock Daily. It's a good one. Welcoming back an old friend coming off a huge win from Adriatic Metals, that former CEO and now CIO at Admiralty Resource Fund, Mr. Paul Cronin. He is responsible for taking an overlooked historical asset in Bosnia, pushing it through exploration, development, construction, ultimately production. We talk about that path, the ebbs and flows, the challenges that came along with that story, and then the lessons he learned along the way and what other management teams in this sector now and investors can learn from his trials and tribulations.

0:54Paul Cronin: So great conversation with Paul. It's been a long time since we've had him on. Glad he could make the time. Special thank you to Integra Resources, Equinox Gold, Visa Silver, and Revival Gold for their continued support of Mining Stock Daily. Also a big thank you to Tara Hutton for showing up to Colorado the last couple weeks. Guys, I got a chance to look at some of the stuff they're working on within the Tara Hutton platform. it is so freaking cool of what they're doing and and using the video and you know the motto is making the invisible investable and they are just knocking it out of the park i'd highly recommend setting up a meeting with them and checking out how they're using uh you know digital storytelling to help mining companies it's very cool product so special thank you to tara hutton for coming out sharing some of that time with us last two weeks all right let's jump into my conversation with the one and only Paul Cronin.

1:52Paul Cronin: Have a wonderful weekend, everybody, and be well. There was a presence that was certainly missed the last couple of weeks here in Colorado. Mr. Paul Cronin, it's good to have you back on the podcast. It has been a while, but yeah, having you not at Beaver Creek, I must say, something was a little bit off last week, but it's good to have you on the podcast. Well, thanks very much for having me, Trevor. I appreciate it. Yeah, I miss Fever Creek this year. I'm sorry I did. I heard it was a very interesting event, but I had a few obligations here that I couldn't bear way for. Yeah, I completely understand.

2:32Paul Cronin: Listen, I don't think we need to do much of an introduction. In fact, I'd like to just jump right into the conversation. I do want, it's almost like a post-mortem conversation because when you were CEO of Adriatic, you and I from time to time would jump on, connect and give us those corporate updates. and Adriatic is no longer. DPM has taken over that project in Bosnia and Herzegovina. So I guess this conversation, I think if we may spend as much time as we can kind of post-mortem a little bit and also talk about what you've been up to recently with the fund. But I do want to spend a lot of time because I think it's worthwhile kind of digging down after it's been some time kind of talking about the beginnings of Adriatic all the way to that next chapter, to the final chapter you had with it.

3:28Paul Cronin: But take me back to the beginning of Adriatic. How does an Australian financer and commodity guy end up looking at an old mining district in Bosnia and Herzegovina? And what did you see at that time that most everybody else had missed? Well, I think you've got to probably go back a little bit earlier than that. You know, prior to Adriatic, I was working at R &B Resources, which is the resource fund of First Rand Bank. And we had a fairly sizable debt and equity book, primarily investing in junior mining companies. I think working in the fund and seeing a number of management teams, you would feel that enthusiasm.

4:21that management teams had about their projects and their assets and what they wanted to do. You'd also, over time, start to see the flaws in some of the way management teams were going about things. But I guess there was almost a romanticism. We're thinking, gee, I'd love to go and run a project. And when I decided to leave the bank, I went to work in corporate development for a small ASX uranium company that was developing an ISR asset in Turkey. That was always going to be an uphill battle, you know, in 2013, 14, 15, with the uranium price coming off after Fukushima. but we got that asset as advanced as I think we could with our size of balance sheet and eventually sold that into a US uranium producer.

5:23And so I hadn't really felt that I'd, you know, I'd lived that junior mining experience and I was being presented a number of companies that were looking for NEDs

5:40and was presented by a London broking firm, a company that was going to list on the aim that had assets in Montenegro and Bosnia. And the assets looked pretty interesting. They were presented as being primarily zinc and lead with a little bit of silver and gold. And we went through the process there. We got to the point of signing off the Pathfinder And I went into St. Paul's in London for a meeting to discuss the Pathfinder and sign that off and noticed that the banks had taken the Bosnian assets out of that deal. And I was surprised because I had thought they were the better assets. They were less mature.

6:28There was less data. But I felt that they were the better assets. and lo and behold, so did the market. The IPO did not proceed and the vendor of those assets then approached me through Eric DeMory and said, you know,

6:46Paul Cronin: would you be interested in buying the Bosnian assets? So we did some due diligence. I took some people over to Bosnia. We had a look. We got, I think, a pretty good understanding of where we were and what we were doing. And then we just sort of started thinking about how you might take an asset like this forward. What was interesting during the DD trip was we were actually presented with a lot more data. And when we reviewed that data, we saw that there was something there at Rapizza, but it really had had a minimal amount of work done on it. And so that was our real priority. Of course, Rapids are quite difficult to access, right on the top of a hill, middle of the Donatian Alps.

7:43and we decided we would buy the asset. We would create a British company so that we would be able to access British government support being in Bosnia, being a jurisdiction that was relatively unknown from a mining perspective. And of course, I was obviously living in the UK and we brought in a drill rig and we started drilling out the Vierbatchel Open Kit. Now, the results of that were great. You know, the first hole we put in there, which was essentially twinning old holes, but pushing deeper hit, I think from memory, it was about 80 metres at 13 % zinc equivalent. And that's a great intercept from surface because it was an old, you know, it was an old pit.

8:32And then we did another 10 or 12 holes there and all of them returned good, thick, pretty good grade mineralisation. that gave us enough to with the existing data to be able to say you know we can put a we can put a joke resource on this and that would potentially underwrite the value of an IPO if we wanted to go down that route but we still had some some money in the team we were running it very frugally I remember you know getting up at three o 'clock in the morning to drive to London Luton Airport to get on an eight euro whiz air flight to Tuzla and then a three-hour drive to Varish from there and these are the things you do when you're running a startup company, right?

9:13You do everything on the smell of an oily rag and, you know, we did that. Even our first core saw, we bought a tile cutter from a local hardware saw and we welded on some runners to make sure we didn't lose our fingers. So, you know, it was pretty crude but it was good fun. It was frontier stuff, right? But, of course, we went up to Rapizza at about, you know, probably April 2017 when the snow had started to melt. And we started putting in access tracks. You know, we went up there. There was an old tramway that the previous exploration team in the 1980s and 90s had been using. We found lunch boxes.

10:01We, you know, it was like they just left. And they did. They just left because the troubles in Bosnia had commenced and everybody just dropped down to us. So we identified all of the old collars firstly and that required a fair amount of working. And I was a lot fitter then than I am now, but I was still pretty unfit. I can tell you there were some days I thought I'm not going to make it out of here at the end of the day. But we got up there and we drilled the first hole. and the first hole was a barnstorm where it hit, I don't remember exact details, it was around 70 metres at 35 or 40 % zinc equivalent.

10:44But what was staggering was the amount of silver and gold in it. And they'd never really tested for silver and gold, only on a couple of holes and a couple of met samples. And so we're like, this is really interesting, what is this deposit? It doesn't really fit the characteristics of a VMS, It doesn't look like a CEDEX deposit. But, you know, that wasn't going to stop us. On to the next hole. And I had an exploration manager by the name of Bob Annett, who I'd worked with in Turkey. Bob and I got along really well. And I said, Bob, you know, we're going to run out of money soon. I think the next hole's got to be a real barnstormer.

11:26So let's – we looked at all the old data and said, let's step out. So I picked the location of the hole. And I flew back to the UK and we were probably about, I don't know, we hit what the interpreted target depth was going to be. There was nothing. And Bob rings me up and he said, mate, what do you want to do? And I said, Bob, just keep drilling. Just keep drilling. He's like, you know, we're running down on the wire here on cash in the company. anyway he drilled it another 50 metres rings me up and says mate we're not seeing anything there's no massive sulphides here so I wrote okay so we drilled it to about 100 metres past the intended depths and came up with a duster and at that point I thought oh god you know we are totally screwed here and I went home that night and I thought, you know what, we've gone through so much here.

12:31There is definitely something here. We're going to put a little bit more money into the company and we're going to keep drilling and we did. We drilled out another six holes and all of them hit mineralisation. We just missed, you know, the geometry of the ore bodies. We now know it in that second hole. All of them hit mineralisation. and then I started walking it around London saying to people, right, this is what we've got, blah, blah, blah. I got a couple of cheeky bids for the asset. One in particular I remember from Nick Clark, who is the chair of Central Asian Metals. Nick's a lovely guy, absolutely lovely.

13:12But he offered me$5 ,000 for it, $5 million for the project, both of them, via Vatcher and Rapetser. And I said, oh, that's not going to work, Nick. Think about what happened if you would have taken the deal. Yeah. Life would be quite different. And, you know, we then went and did a second seed round and we raised, you know, about a million pounds. So for a pre-IPO company, that was pretty good. That came out of a lot of brokers in Australia who were pretty interested in it, as well as some really good mining guys like Alberto Lavendiera from Atalea Mine. And we set about finishing that drill program, getting the company ready for IPO, doing a little bit of work so we had better facilities, a second core cutter.

14:12And then Adam Mithke at Discovery Capital, who'd come to site and done due diligence It was one of his clients who subsequently invested had said, I'd like to run your IPO for you. And so we set about doing that. And, you know, we got Canaccord involved early. We raised$10 million. We listed in, I think, on the 1st of May 2018. I'd already recommenced drilling at that point and was looking for drill hole results to be able to come out. And, you know, they came out about mid-June and they were tremendous.

14:49Paul Cronin: And there was a lot of attention coming into the company, a lot of questions from quite inquisitive analysts, particularly from Sprott, about what it was. And we still really didn't have a model, didn't have a geologic model for this. All we knew is we could just keep pushing to the northeast and we would continue to hit mineralization. And we did and we spanned it out and we spanned it out. We had a maiden resource less than a year later.

15:24You know, I got in a really sharp resource geologist who at the time worked for CSA Global, a Russian guy called Dmitry Pertel. I'd worked with Dmitry in the past. He's probably one of the best resource geos I've ever seen. And he and I worked through what this thing was. And then we were fortunate enough because we had Julian Barnes on the board. He had a relationship with Dr. Brett Davis, who's probably the world's most premier structural geologist. And he came in and did some work with us. And we started to unravel what this thing was. And we said, okay, let's just run the ruler on this and see what it looks like.

16:05you know we went from scoping study then to pfs to dfs to financing there was a lot of interest in the project um obviously in bosnia i had moved to site um uh to be able to supervise and manage all this and build those relationships with the community and government and i think we set about creating a foundation to address where we saw um potential issues of government revenues not filtering their way back to the local community because the revenues would go to the canton. There was a specific formula that allowed the municipality to get something, but we were in Bosnia and we wanted transparency over where things were going.

16:47So we set up the foundation. We defined a formula for how that would work. We appointed independent trustees who are people who are salt of the community. And we got this thing moving and we built a lot of locals support. We've had a lot of international support, both financial and NGO, as well as government. We found a lot of the groups in Bosnia were very supportive. The media was fascinated by this. It was going to be a big investment in the country. But like all of those things, out of the woodwork comes a few rotten apples. Right. You know, with the handout and, you know, I'd set up our procurement process in a very regimented way.

17:41In fact, I hired a British Army officer to run our procurement team knowing that that was the point of vulnerability. And we ran a very, very strict procurement process. but it didn't stop certain politically connected individuals from trying to find ways of, you know, forcing us to use this company or that company or whatever else. And in pushing those back, and we were very, you know, very firm in our views, we were not going to play those games. We did push them back and we made a few enemies And I think, you know, we then saw things get difficult. You know, it's hard enough trying to build a mine at a time when supply chains were breaking all over Europe because of the Ukraine conflict.

18:39We had inflation sneaking through dramatically.

18:43Paul Cronin: It was also you were also building a mine during COVID. I mean, talk about difficulties. Yeah. You know, I couldn't get the A-team that I wanted on site. I couldn't do FIFO, so I had to talk to people about moving to Bosnia and how cool it was. And you could eat these little sausages called shabapi. You know, they're like a miracle food. You're going to be able to go skiing on your weekends. In the summer, you can go to the most beautiful coastline. And we had all these videos done up of how cool it was. But it wasn't. And, you know, people came, but people left as well. You know, Bosnia is not an easy place to live.

19:26It presents a number of challenges, there's archaic laws that meant that, you know, if we hired a woman to come and work in the project, her husband couldn't join her, her children couldn't join her initially. We had to work through all of these problems. And it really shaped the type of people we could hire. And look, I'll be the first to admit, And I think this is clearly evidenced by Dundee's stewardship of the project now, because we didn't have the A-Team. But what Dundee had managed to do, despite having a bigger balance sheet and being able to develop the underground in a different way because they had more capital available than we did, is they'd been brought in really good people.

20:14They've now trained and finished the training of our local staff who are extremely competent. Um, and you know, I, I last month, uh, or sorry, in August, they announced commercial production. Um, I did notice someone commented that, you know, it's been commercial production has been announced for the third time. Um, so that was pretty funny. Um, different definition of commercial production to the guys at Money of Mine. but you can see now that that is really shaping up to be a great tier one mining asset and I don't begrudge handing it over to a group like DPM that I think there isn't an analyst in the world that doesn't agree that that is an exceptionally well-run operating team and I think the asset and the people there deserve that kind of stewardship, quite frankly.

21:18And I would retreat to what I, you know, have always done and known, which is, you know, banking and finance. But I did love the experience. I made some tremendous friends along the way. I made a few powerful enemies as well. But I think, you know, on balance, what we did was quite remarkable given all of the challenges around us, political, economic, you know, market-related. and we built a really strong group of support around the company and the asset and the industry in Bosnia. And we've now seen multiple companies in Bosnia start exploration programs and try to replicate what Adriatic did.

22:12And I think that's great. That's a really positive thing. I think it will be a very positive thing for the country.

22:20but it still has its challenges politically and legally, Bosnia. And we obviously had the constitutional court ruling which created a whole pile of legal uncertainty at the time and I don't think that legal uncertainty has ever really gone away.

22:43But, you know, you've just got to sort of work your way through this. You've got to take advice from government. You've got to take advice from lawyers and try and, you know, just keep things moving forward as best you can. And I think Dundee have done that. And, you know, my hat's off to them, to David and his team. I think they've done an exceptional job.

23:01Paul Cronin: I do think, well, I know it's in really good hands, but I do, that was a very thorough rundown. There's a couple of the items in that walkthrough here. Paul, I do want to take a little bit deeper dive, But before we get there, if I may say, and you were talking about 2018, which is about the same time I launched this channel, the same first time I did go to the Beaver Creek Precious Metals Summit. The first time I met you, and to this day, and I think about this quite often, had the biggest fuck up of an interview I've ever held in my entire life. I meet you outside on the back patio thinking I'm going to talk copper exploration of Botswana.

23:45Paul Cronin: And you literally said, shut up. This is not the story you think it is. And I had my tail between my legs. I didn't know any better, man. Like, I remember this man just like, holy cow, I felt terrible. Like, I just showed you how green I was. But for you to continue to give me opportunity. Can you remember what the name of that company was in Botswana? Because I'd love to have a look at it now. it's like the how paul cronin kept on coming back and giving me giving me some of his time is beyond me it just shows the character of you if anything no it was funny um and we've had a few funny interviews since trevor yeah that's right all right listen i think one of the more fascinating parts of the adriatic story and varash is the story of that historical information you found existing from the Yugoslav era, because that really, you had to get creative and you found this.

24:46Paul Cronin: But walk me through finding that data. At what point did you realize that that was, what was sitting in those historical records might actually represent something modern exploration could tackle? Look, the reality is the quality of the work that the Yugoslavs done was exceptional. But it was all in handwritten form. And so when I sat down with the head of the Geologic Institute in Sarajevo, which is a government body that basically stored geologic data, it didn't really do a lot because there hadn't been any exploration in the country in 30 years. But they presented me just archive boxes of information.

25:33Um, and you know, this is, this is the, one of the funny things, you know, I was expecting that we were going to have to pay a lot for this information. Um, you know, probably, you know, seven figures. Um, but the director of that institute just said to me, I'll get my, um, I'll get my staff to scan all this tomorrow and we'll send it to you. And they did. And, you know, that Christmas I had a big extended family holiday in Thailand and I sat on the beach in Thailand going through all of this data and trying to get it into SERPAC and coming up with a, you know, what does this look like? And what we found out, there was a few nuances with the data, but largely it was accurate.

26:25But what it was missing was gold and silver, the sites. and copper. So we, you know, we got that and we were stunned. But even with that data, you know, when you did a rough resource calc on that, that Rapizza gave us maybe one and a half million tonnes, maybe two if you wanted to be, you wanted to stretch the imagination a little. It had to be drilled out, but you could see that holes had ended in mineralisation The last holes drilled step outs, hit mineralization, and they didn't step out again. And there was all these dots on these maps for plant holes that we just never drilled. So what did we do?

27:09We drilled them. And I, you know, I've always maintained a relationship with the director of the Geologic Institute. He's retired now. A gentleman called Professor Hartovich, who was a very intelligent, considered, and well-tempered individual who just acted as a voice of reason to us throughout that whole experience. And he would review the data and he'd give us his thoughts and then he'd sort of go and get a little bit further information from someone who might have worked there. So he was really, really helpful. And that was the Bosnian experience. We were dealing with these amazing people.

27:53Really, really intelligent. Probably not the level of experience that you would get if you were working in Canada or Australia. That's understandable. But their willingness to work, to learn, to offer everything they had was extraordinary. And quite frankly, I just don't think we would have got there without, you know, if we were trying to do that project and replicated it to somewhere in Africa, we wouldn't get there. It was because we were in Bosnia we got it so far. And that was because of the people that were involved. So it was, you know, it was a really valuable trip to that geologic institute down by the airport.

28:42And, you know, I'm very grateful for it. But it was, you know, that was the very beginning. And then, you know, we kept finding more and more data at labs in Slovenia and in the archives in Belgrade. And it was never, we were never not putting together more data. We were always looking for more and more, but it was quite disseminated and you had to go and find it.

29:06Paul Cronin: at what point at what point in the early days at what moment did Varsh go from being you know something interesting to something where you legitimately thought oh shit we have something here it might be exceptional was it those six drill holes you went out and drilled on your last couple dimes yeah it was it was the third draw. The third one. Yeah. The second one sort of brought me back down to earth a bit. The third one, I said, right, this is real because we were there at that point on the outer edges where they drilled in the past. But it was really difficult, Trevor, to get anybody excited about it.

29:57Like, I mean, the first thing that comes to mind when you say to someone, Bosnia is, you know, Siege of Sarajevo, Sabrinica genocide. I mean, some horrific things happened there, and that's what's in the front of people's mind. It's also, if you look down the corruption index,

30:16Paul Cronin: it's right up there. I can vouch for that.

30:23But, you know, it wasn't until we brought it down to Australia, we couldn't get any interest in London, But there was a, you know, the Aussies do love a little punch, right? And there were some guys who were willing to, you know, to back us. And I think ultimately we just needed a little bit more time, a little bit more money to demonstrate what this was. We got that through our IPO raising. We burnt through that pretty quickly with multiple rigs on site and all of the staff that you needed to run multiple rigs. not just staff, I mean vehicles, we were renting four-wheel drives. We were still doing everything on Smell of Anoli Rag, but you get to the point, you know, this is getting too hard.

31:09We've got to build ourselves a proper core shed. We need to get better vehicles. We've, you know, we've got to get some food and drink up here at night so people can eat. That wasn't a cold meal because starting to get into winter again. And then we just raised more money and it just took off. I mean, it just took off. We were able to just get the work done, focus on what the pathway was to permitting because that was always going to be the big uncertainty in Europe. We identified that pathway. We worked very cooperatively with multiple levels of government to go about doing that. You know, we had a few hiccups along the way and there was lots of questions and, you know, we had a couple of groups already starting to raise that, you know, they didn't like this, they didn't like that.

32:04And that took time to sit down and go through with each of them what their concerns were. I used to have what I called my surgeries where I'd just go down and I'd sit at one of the local coffee shops in town and anyone, this is when I was going to be there, I was going to be there at 11 o 'clock on a Tuesday come and ask me whatever question you wanted you'd get an answer um and i think i personally built quite a good rapport with the people of barish and we employed a lot of their children we trained a lot of their children um we did a lot of good work in the in the town we looked at a lot of the economic and social issues that there were and tried to address those including working as a in partnership with a private hospital group to build new medical facilities in the town and, you know, lots of little things that, you know, individually probably don't look like much, but collectively they did.

33:03And, you know, it was, I think, a textbook approach to how to go about things in a European context. Yeah. But, you know, as I say now to every CEO that I talk to through the fund, you know you've got to think about these things really early on in your project and the one thing that always keeps me up at night when i look at assets and i you know i've got the same thing with a couple of companies i'm on the board of um think about water in the first the first thing you should think about when you wake up in the morning think about it again at lunchtime and think about it again before you're brushing your teeth before you go to bed because water is both your friend but it is also your enemy um and it is vital to communities um doesn't matter where you are in the world whether you're in remote wa uh or or you're trying to build a mine you know outside a small town in bosnia water is everything um uh and i think i've you know i've taken those learnings from that time at adriatic which you know i did learn a lot um and i'm now able to apply that but in a different context into into the fund management side of things um uh so when i you know when i moved back to australia last year i took a little bit of time out to think about and ponder life after i left adriatic in 2024 um came back here in in uh uh at the end of july last year and um and said right well this is what this is what i'm going to do um and some good friends of mine uh here all bankers in in asia and hong kong and singapore have set up a venture capital fund called at multi capital um and i said hey why don't you come in under our umbrella and run a resources fund and so like yeah why not um that could be fun so i seeded the fund and got a few other people to come in and and um you know it's uh it's now finished its, well, as of today, it's finished its first full year of, uh, uh, uh, of investing and it's been, you know, pretty positive.

35:16Um, uh, all in all, the last six months have been pretty brutal.

35:21Paul Cronin: Um, did the first six months make up for the last six months? Yeah. Yeah. The, uh, yeah, the first quarter, which was the September to December quarter in 2025 was a barnstormer. You know, I think we were up about 20 % for the quarter and then, you know, up another eight or nine for the second quarter and then third quarter, well, that was our first negative but only slightly and I think this quarter will probably be slightly negative as well. But the fund was based on three core thematics around monetary debasement, which I've never been a prolific gold bull, but I do now see, and I think we have seen over the course of particularly 2024 and 2025, that central banks are starting to also become concerned about inflation.

36:23I was on the front line of inflation in Europe and I could see what was going on and it was horrific. We were seeing prices go through the roof. And then obviously we're looking at the ongoing militarization around the world that is driving the need for specialty metals, rare earths, tungsten, tin, et cetera. And then obviously you've got the electrification, which is not going to slow down. I don't care what they're saying in Texas. People will have electric cars. They're just so much better. They're faster. They cost less. They cost a lot less to maintain than ICE engines. And there will be a broader adoption of those.

37:17And as we're seeing a move away out of carbon and into lower carbon technologies, nuclear, solar, wind, geothermal, hydro, et cetera, that's going to put a lot of pressure on a copper supply. You know, we all know this is coming. You know, you've got the spokesman for that, the great Robert Friedland, and he's right. He's absolutely right. There is a big, big shortage of copper coming, and it starts this year. It doubles next year, and then it doubles again. And so, you know, we will see a lot of companies hunting for copper. We are seeing that in Australia. We're seeing some consolidation of our small little copper producers into bigger producers.

38:13Glencore are now coming to the ASX, and I think that will give some focus to Australian copper production. But there is a real problem there. And so those three thematics of the fund, we've made selective investments in. Some of them are underwater at the moment. But, you know, I take comfort from the fact that, you know, Teams of intelligent people like Hancock, Prost-Sebastian have taken the same view we have. And I think ultimately over the medium and longer term, this fund will deliver outsized gains for its unit holders. But as always, you know, we are in an environment in Australia where taxes are changing and this will have an impact on equity returns, unfortunately.

39:08Paul Cronin: I do want to talk about some of the lessons you learned through your time with Adriatic and how not only how you're applying it with the fund, but really maybe some tangible takeaways, people listening, and maybe they're just investors, speculators, maybe management teams as well, listening in and wanting to learn more, you know, through what you went through. And I actually want to start with the geology a little bit because, you know, Varish was an interesting beast, right? The polymetallic, it was hard to understand at first a little bit. But now having built a complex polymetallic deposit, do you think the market systematically undervalues polymetallic projects because they're harder to understand?

40:02I think the market applies an appropriate risk premium to polymets because there are so many variables that impact recovery. For us, we had to grind to buddust to be able to get decent recoveries. We then had to continually make changes to plant design. we brought in jameson cells the last minute we had ice and mills um just to try and maximize the value and then you've got these shifting commodity prices you know you bear in mind we did our pfs when silver was 17 dollars um and zinc was 3 500. um um you know you've now got silver at 60 and zinc at 4 000 you want to get more of your silver and gold our gold was 1400 i mean you know it you've got to be able to be dynamic and and that's not easy um you've got to have really good process managers you've got to have a lot of metallurgical work varied metallurgical work that doesn't just look at one set of commodity price outcomes you've got to look at others and say well can we accommodate this in five years time or that in ten years time if these things start to change, they change really quickly, you know, in the time that we were doing or building out the Varis deposit and commissioning the Varis deposit.

41:27And, you know, it was a real challenge to make sure you can maximize that. Now, if you look at it now, although, you know, I haven't seen a huge amount of detail from Gundy on their, you know, production, it seems like they've nailed it. It does look like that to me. And I think that risk premium after a while just starts to dissipate a bit and you get paid pretty good value on those assets. But I think if you're an operating company like Dundee where you've dealt with high arsenic deposits because Schellebec was always high arsenic, they've dealt with some of the nasty deleterious elements that we also had in the various deposit.

42:13We had arsenic, we had antimony, which was going to be a penalty until it wasn't.

42:21You know, and then we're looking at, well, anyway, we've got 9 % antimony in the concentrates. I'm like, wow. Who's going to pay us for that?

42:35And, you know, so you've got to work through, you've got to work through all of those little things and yeah polymets are hard but look every deposit's got its nuances right um you know uranium deposits we've seen you know peninsula recently up in wyamie they've had gassing in their wells you know that is a that is a hydrometallurgical outcome that you've got a you know you're playing with a science a chemistry kit to try and resolve and it just takes a bit of time there's learnings that management teams have got to go through. My advice to anyone who's looking at a polymetallic, and I often talk to some of the guys in New South Wales who are looking at building polymetallics, I'm hoping to go and see one in a few weeks' time,

43:21is don't scrimp on your MET testing. Get as many samples as you can with as much variation as you can. Look at every possible outcome in terms of grind sizes, reagents, residence times, you know, just keep testing and testing and testing. You're going to have to spend, you know, a year and a half up to your pre-feasibility. You're going to be doing a year and a half of environmental baselining. That's the perfect time to go and invest the time and money into that metallurgical work so that when you do come through and you can say, for my feasibility, this is what we're going to do. But it's not an easy.

44:09Management teams, CEOs always feel under pressure from shareholders. And I think one of the things that probably differentiates since the day of multi is I've got a bit more empathy for CEOs. I've been one. You know, I understand the pressures and the challenges that they're under and how markets are impatient and pushing for outcomes all the time. You know, and there's a company we're investing in Argentina called Unico Silver, and it's a young, a very young first-time CEO, Gio, who's running it. You know, and he came out and he's going to drill this and he's going to do that and blah, blah, blah.

44:53Just take your time here, right? You haven't found everything you want to find in these deposits. You're seeing more potential for growth. I know you've given the market an idea you're going to produce a pre-feast here, but just tell them you're not. Just tell them why you're not, and they'll understand. And I think that's a company that will go from strength to strength. But I often speak to CEOs and say, just don't worry about the market. Everyone's impatient. Returns are a function of time.

45:29Paul Cronin: Do you think at the beginning of the conversation, you talked about flaws of management teams. In fact, that caught my attention. So I wrote it down and wanted to make sure I come back to you. But, you know, now that you're outside of management and investing in management teams, do you see any certain themes or flaws of management teams that continue to recur in your due diligence? now that we are in a much stronger metals market than we were when you did your technical report for Varash. What are some current flaws you're seeing repeated? Look, I think management teams are always underestimating the complexity of underground mining.

46:14They're underestimating ground conditions, water conditions that impact advance rates on underground development. I think we're seeing too many teams rush into production right now. They're quickly wanting to run the economic ruler, let's go down and we'll go and start this and then we'll keep doing exploration. There's a reason why that front end of the Lasson curve is 10 or 15 years, and because you're going to do exploration properly and then you're going to gather the data that you need to make informed decisions about what your project's going to look like and how it's going to work. you've got to spend time at that front end of the curve.

46:55It's difficult because you're competing against the capital to continue to keep things going. But if you rush it too far, you're going to have problems. And I think we've seen that with a couple of companies in Australia where they ran into a few difficulties, their share prices pulled back multiples, but now they're starting to work their way through those issues and we'll do well again. You know, Mika Metals is probably an example. Great. You've got to love the guys that run it. They are determined and they are hungry and they are going to make this work, but they've got to deal with the realities of nature and that deposit threw up a few surprises for them.

47:43But they've gone back and dusted themselves off, worked through that, and are now, I think, in pretty good shape. You know, another asset that I love is medallion metals. Now, you see, medallion is a former colleague of mine from RMB, Paul Bennett. Paul was one of the early investors in Adriatic as well. And, you know, he's put together a really good group of assets around a mill that he's bought. He's systematically de-risking the project. He's now got his permits. He's got his environmental permit. He's about to start production. And he'll see the returns for that because he's done it calmly, systematically.

48:30But there's been a few times where I've spoken to him and said, you know, just keep your chin up, mate. Don't let this stuff get you down. You're always going to have a few naysayers. There's going to be a few guys that go on Twitter and, you know, call your names. Don't worry about that. Just do what you know you've got to do. Think about the long-term value. You're not here to deliver someone a decent percentage in their quarterly report like me. I don't care. I am looking for my time frame for exiting your asset is in two years' time at this price. And as long as you get it there, I don't really care.

49:06Paul Cronin: You become a soothsayer. Well, soothsayer.

49:16Paul Cronin: Bring people off the ledge. Bring them off the ledge a little bit, Paul. You look at the development of assets and how they progress and when, when value is recognized and, and you kind of know where things are going to go. What you don't know is commodity prices, but look at gold. I mean, we are in a macroeconomic cluster of mass proportion. I haven't noticed. I haven't noticed at all. You know, you've got, you've got, A really smart Secretary of Treasury. You've got the most blustering president in the history of mankind in the White House. And you can kind of see what they're going to do about this debt problem.

50:06And we could see that through 2024. We're starting to see it now materialized through, you know, basically buybacks of long-dated bonds and reissuing of short-term bonds. I'm a great I'm a great history buff right and you know post World War II the US was in a similar situation and what did they do they had you know their debt was around 25 % T-joules and 75 % bonds they switched it and they paid off their deficit and Besson and Trump are going to do the same thing what does that mean for gold It only goes one way. And silver will follow it. I do think silver's probably still a little bit overcooked.

50:56You know, had a monumental run late last year. And I'm not surprised it's back at 60 bucks and it wouldn't surprise me if it went back to 50. But gold's not going anywhere. I can have the little banter all I want with certain personalities on social media. But my view is oil prices are coming down. Crack spreads on diesel will close, even though they're pretty ridiculous at the moment. And ultimately, you know, the Middle East will settle down. Gold will go back on its trajectory, which is, you know, I expect it will perform very well before the end of the year. I think the big challenges are still bonds and bond yields.

51:50And that's not a US challenge either. We're seeing that in Canada, Australia and elsewhere. And that is going to have an impact. Interest rates are going up. I don't think the Federal Reserve will increase again this year, but I certainly think the Australian Reserve Bank will. And things are going to get a bit painful for people. but ultimately this is a self-inflicted market by governments who just can't stop spending money they don't have and we are where we are. I think the Chinese are playing this very well. They've bought a lot of gold in their asset base. We're seeing countries all over the world reducing their exposure to US Treasuries.

52:41And even Scott Besson just yesterday was talking about lack of liquidity in the bond market. So here we go. It's all on. Yeah, yeah, yeah. I sat down with the CEO of Wheaton. It would have been maybe a year ago. And I said, what are you guys thinking? Because, you know, he's talking about that little crew of smart guys like Pierre Lassonde and others. Yeah, like, we think gold's going to go to seven. What does he say? $13 ,700. I said, that's a very precise number. Wow. I said, how did you come to that? He goes, I didn't come to a peerless on-dip. He's got a whole spreadsheet. You should see it.

53:19You know, I don't want to see it.

53:22Paul Cronin: I'm just going to sort of sit back and try and understand how he came to that conclusion. And I have. I spent a lot of time reading, a lot of time thinking about this. And look, I think gold prices have got a long way to run. Yeah, amazing. Some great macro thoughts here, Paul, and that's something you and I had never really chatted about, but it's definitely nice to hear you open up about it. I do have one kind of fun idea to kind of close our topic with or our discussion with here. And it's another kind of tangible, but also you and I can have some fun with it. But it's on the topic of building a shareholder base.

54:03Paul Cronin: And I think what you did with Adriatic was really incredible because the composition of your base was completely like diversified, I guess is the best way to put it. You had sticky institutional capital, high net worth investors, but then you also had a bunch of loud and enthusiastic retail followers, many of whom which are my dearest friends. So do the best mining companies, specifically in exploration development, do they need the retail ones, specifically the ones that are the loudest, have the biggest blowhorns? And how did that contribute to the Adriatic success? Yeah, I mean, you know, you engage with a group of retail shareholders and they're good fun.

54:54um you know i had some of them uh over to bosnia one night and um you know we had lots of uh lots of banter about various projects and whatever else but yeah your retail is kind of marginal buyer right so you need to have them um um you know the building that they all talk i mean i was aware that there was little closed chat rooms around adriatic with everybody comparing notes and, you know, living off every ah-man-ah that came out of my mouth. But you've got to have them and, you know, they are your marginal buyer. But the way we put that shareholding together initially, okay, so it was a, you know, did I ever tell you who the first shareholder was?

55:42So I lived in this little village in Gloucestershire and my local pub was a bunch of horse racing nuts, right? They all had racehorses. And we used to buy resources together and we'd send them off and they'd all lose and we'd lose money. But I went, I said to them, hey guys, I've got this, I've got this new, new thing. We're going to buy, we're going to buy a mining project in Bosnia. And they're like, oh, really? Anyway, the first round of capital, the first round of capital literally was me walking around with a bucket across the bar saying, write how much you want to put into this. Threw it in the bucket.

56:19and they all made millions.

56:24Paul Cronin: Who bought the pub? Did anybody buy the pub or maybe the owner who was able to keep it and retire or something? No, well, the pub's still there and the same crew is still there.

56:37And, you know, and they come and follow me into the next thing. I mean, the next, you know, obviously I've got True North, which is turning out to be a pretty sizable Australian copper deposit up at Mount Oxide. But Eric DeMory, who was the guy that started Adriatic with me, and I are doing a new gold project in Papua New Guinea. And it's exactly the same. Whole pile of old data, had to validate it, double checked it. We've got a drill rig arriving next Tuesday. I'll be on pad next Wednesday. Sure. And we're going to drill this thing out and see what it is. But, you know, again, it's just so.

57:14Paul Cronin: Did you take the bucket back to the pub and give your old mates the first round? Well, I think we, Eric and I are kind of funding this one on our own for now. But, yeah, I've, you know, I've made sure that my friends and family are all shareholders. And I think it'll be an interesting and fun journey for us again. um uh you know i talk to eric every day and and uh we're pretty excited for this so he's going as uh he'll end up running the company and i'll be the the grumpy old chairman behind the scenes but um uh but it is going to be fun and it's png it's such a a fun jurisdiction to work in um different challenges to bosnia but a lot of the very similar ones which is you know what i said to an exploration tank, water, water, water.

58:11Don't bugger it up because that'll turn the community against you.

58:16Paul Cronin: Well, I was going to ask you if you would do it all over again, but I think obviously we got the answer only from the chairman's speech though. Yeah. You know, I'm happy to wear the leather-soled shoes rather than the steel cap boots on this one. Yeah, absolutely. All right. It took it out of me, Trevor. It really didn't. Uh, well, I think for a lot of people, uh, who backed the project, backed the team and, uh, had great success, I think, uh, a lot of that's understood, but also a lot of people are very grateful for what you did. And that's why I'm having you. I love following up with you, man.

58:56Paul Cronin: Uh, I wish we would have done this, you know, a lot sooner, but needless to say, it's always a pleasure to have conversation with you, Paul. And, uh, hopefully we won't spend too much time until the next time we do it. Sound good? Great. Look forward to it. And thanks very much, Trevor. I really enjoy talking on this program. It's great fun. Yep. Thanks, Paul. Take care. And I promise I'll get a Botswana Copper Project for you next time.

59:25Paul Cronin: I'm going to hold you to it. All right. See you, buddy. Thanks.

59:33Paul Cronin: The information presented should not be considered investment advice. mining stock daily and its affiliates are not responsible for any loss arising from any investment decision in connection with the material presented herein please do your own research or speak with a licensed financial representative before making any investment decisions