‘Dealmaker’s Paradise’: These are the big names on the card at Diggers and Dealers
Paddy Hannan may give him a run for his money, but few Irishmen have held court in the legendary gold city of Kalgoorlie-Boulder like Ashok Parekh.
A chartered accountant who arrived in Australia several decades ago and found fortune in Kalgoorlie’s gilded streets, there are few more exciting times for the so-called King of Kalgoorlie.
Parekh owns the town’s iconic and historic Palace Hotel, which played host to US President Herbert Hoover in his younger years as a globetrotting mining engineer.
That establishment houses the town’s well-trodden watering hole the Gold Bar, while Parekh’s accountancy practice sits across the street alongside the offices to Horizon Minerals (ASX:HRZ), the ASX-listed gold explorer chaired by the local legend.
His establishment is renowned for its reputation as a dealmaking destination to gazump any West Perth board room, the Dragon’s Den of the mining world where prospectors and mining executives line the halls shaking hands on the next big discovery.
With a record 2620 investors, miners, drillers, bankers, journos, analysts and advisors poised to descend on his home from Monday for the Diggers and Dealers Mining Forum, Parekh thinks dealing will be the theme of the festivities.
“This gives a great opportunity for people to come to Kalgoorlie, mining companies to talk to other mining companies, to liaise with other mining companies, there might be JVs, there might be mergers, there might be acquisitions, there might be deals you do on the side, it’s a great environment for that sort of situation,” he said.
“I’m convinced that the dealer side where people are saying, ‘we’re a smaller company we’ve got limited resources, maybe we should hitch up with a bigger company or maybe we should merge with another company’ this sort of stuff, I think that’s more in play now than I’ve ever seen in the Goldfields.”
That delegate count is up from around 1700 only a few years ago, and is a great indication of the mood of the industry, or at least where it was before the cycle of rate rises and weakening industrial demand in China put a dampener on the mining sector.
Representing around 9% of the town’s population, Kalgoorlie is so stuffed to the gills last minute ticket holders may be doing the CEO sleepout if they want a place to stay.
Parekh, who employs 60 people at the Palace Hotel, says the mining services sector in the Goldfields is extremely busy.
“There’s a lot of contractors in town, a lot of the service industry in Kalgoorlie seems to be doing pretty well. We’re not seeing the (market) negativity there,” he said.
“The negativity that I see is out there for particularly small cap shares, which are finding it difficult to raise money in this environment, that will result eventually in, you know, how much people spend on drilling etc.
“But generally for the producers, like a Northern Star or Gold Fields or Evolution, things are as normal.”
That could open the potential for deals to acquire smaller players who are finding it tougher to get their hands on finance.
And market watchers will be coming from near and far, with this the first Diggers since 2019 to be unfettered by Covid-related travel restrictions.
“There are people who are coming to stay with us at the Palace who are flying in from New York. There’s people who are flying in from London,” Parekh said.
“There’s people flying in from Hong Kong, from Singapore, all over the world.”
Kalgoorlie and the broader Goldfields now boast economic deposits of nickel, lithium, gold, iron ore and rare earths.
But it rides or dies on the price of the yellow metal.
The commodity hit a new watermark ahead of the first post-pandemic Diggers in 2020 of U$2067/oz, but this year it has suffered from extreme volatility wrought by inflation, rate hikes and the war between Russia and Ukraine.
That has seen prices dip to ~US$1750/oz.
But Parekh, who has seen a number of gold rushes come and go firsthand in the 30-odd years Diggers has been a fixture of the mining calendar, is bullish on the commodity.
“Really in the end to me the gold price at $2500 an ounce Australian, I think is a very good gold price. If it could remain within that range between $2400-2700 Australian mining companies have to work within the margins and you should be able to make money out of that,” he said.
“At the moment it’s been a lot more expensive to get things done because you can’t get resources, staff etc. If there’s any little bit of downturn there’ll be more staff available for jobs which could be good (for the miners).”
Diggers is kind of like Woodstock for the mining investment community, repeated every year just kilometres from one of the world’s largest open cut gold mines.
Like the original Woodstock (not so much ’99) there are plenty of big name presenters, with Newcrest (ASX:NCM), Fortescue Metals Group (ASX:FMG), Pilbara Minerals (ASX:PLS), BHP (ASX:BHP), Northern Star (ASX:NST) and AngloGold Ashanti (ASX:AGG) all on the bill.
With 70 corporate presentations and a keynote speech delivered by well known Zambian economist Dambisa Moyo, this year’s is one of the biggest and busiest programmes on record.
Running from Monday to Wednesday at the Goldfields Arts Centre, it hosts what has commonly been referred to as the southern hemisphere’s largest marquee, where a gala dinner for 1300 guests will close the conference, headlined by the coveted Diggers and Dealers awards.
That will be supported by dozens of functions around town over the three nights, laying the groundwork for the industry’s next round of deals.
As for the conference itself, if you weren’t able to collect a ticket you can follow along online.
BHP’s Nickel West division is a regular presenter at Diggers, giving a rare insight into one of the giant Australian miner’s smallest but most important assets.
It is on the frontline of the world’s largest miner’s move into green energy, a major supplier of nickel for batteries made by Tesla, Toyota and soon Ford.
BHP has a habit of using Diggers for some major announcements, including the start of its pivot from stainless steel into the EV market back in 2017.
Northern Star boss Stuart Tonkin will give the lowdown on one of Australia’s three big gold miners, all of whom are presenting in Kal.
The company has plans for a potential $1.4 billion rebuild of the Super Pit’s enormous Fimiston mill, a key cog in its path to 2Moz of gold production per annum.
A junior explorer trading at 1c a little over a decade ago, $9 billion capped Northern Star has become a famous mining house in its own right in the years since.
Not only will Northern Star be presenting, but Tonkin will share a stage with former NST exec and now Bellevue Gold (ASX:BGL) CEO Darren Stralow, while former NST bosses Raleigh Finlayson and Bill Beament will take to the podium for their new companies Genesis Minerals (ASX:GMD) and Develop Global (ASX:DVP) respectively.
Former gold bull Beament famously told the Diggers crowd last year “gold is not green” as he announced his shift in direction to battery metals copper and zinc, before subsequently inking a mining services deal with Bellevue over their upcoming “green” gold mine.
A little linguistic gymnastics never hurt anyone.
Sentiment in nuclear energy has caught its second, if not third, fourth or umpteenth wind since Russia’s invasion of Ukraine.
The thesis goes that decarbonisation has to happen quicker as Western countries turn their back on Russian supplies of energy like coal and gas.
Along with renewables, restoring retired nuclear capacity could be a way forward, improving the demand case for uranium after years in the doldrums.
Russia’s substantial share of global uranium production and enrichment capacity has also set off alarm bells, with Canadian giant Cameco warning supply is too short to cover the onrush of demand.
Two miners who have pressed the buttons on restarts are due to present in Kalgoorlie, with Namibian focused Paladin leading the way on Monday morning.
By 2024 both it and South Australian mine-builder Boss Energy (ASX:BOE), which is on Wednesday’s card, should be in production.
London-listed Greatland is one of five internationally listed firms on the program alongside South Africa’s Gold Fields, Canadian gold giant Agnico Eagle, Ecuador copper play SolGold and Toronto-listed, Kambalda based Karora Resources.
It may be the most interesting of the lot, as it progresses its minority owned Havieron gold-copper project in WA’s Paterson Province.
Greatland has provided some fireworks in recent times, grinding against its JV partner and majority Havieron owner Newcrest over the valuation of the mine, for which the junior went rogue with its own resource update a few months ago.
An option for Newcrest over 5% of the mine was recently priced at US$60 million in a pre-approved process outlined in the initial JV agreement, valuing Havieron at US$1.2 billion.
Greatland is understandably happy, but thinks it should be worth more. Time will tell.
Newcrest and Antipa Minerals (ASX:AZY), which is drilling with NCM and a host of other JV partners on an extensive tenement package in and around the Paterson Province, are also on the bill.
Investors freaking love lithium, and few presos will draw more excitement from investors than new PLS boss Dale Henderson.
The company has become a beacon for lithium company shareholders thanks to its Battery Materials Exchange platform, which has caused a string of upward revisions to spodumene prices by pitting customers against each other in auctions to secure supplies of the scarce battery metal.
While goldies lead the way, the share of lithium miners on the program is growing.