2022 Full Year Results Q&A
2022 Full Year Results Q&A
Thursday, 23rd February 2023
Sakatti is also going great guns from an engineering point of view, but in an interesting world
of permitting, given where that resource is located. I spent some time in Finland a month or
so ago and people are all very much incentivised to want to try and make this happen, but
still quite a lot of work to do from an EIA perspective.
Richard Hatch (Berenberg): You have just bought 9.9% of Canada Nickel for $25 million. It
is a really interesting project and looks like it could be quite big, long life. Junior miner takes
a project forward, you then have to recapitalise it, put it right, the capex is significantly more
than what was initially envisioned. Why not buy it now? You can buy it for $150 million, in a
commodity you like, which you are underweight on based on your pie chart. Why not buy the
whole thing now and get it done?
Stephen Pearce: It is an interesting project, but at a very early stage and we are looking at
it from a technology perspective. It is quite low grade, but potentially large scale, and in very
early days in its life. We are happy to come in as a 9.9% shareholder with others and to be
part of that work programme in the next few years. But let us see how it develops.
Duncan Wanblad: In the first instance, the offtake component of that was very attractive
and important to us. And the idea that that we could deploy some of our thinking in terms of
the technologies around dry stack managements was also attractive. We have a seat at the
table there, which is very helpful for us in terms of thinking about what the options are in the
future.
Ephrem Ravi (Citigroup): Going back to Woodsmith, given the $5 billion upfront capex and
using a $50/t cost, it is hard to see how this project can generate more than single-digit
ROICS in 5-10 years down the line. How does this project stack up against all the other
options that you have, like Mogalakwena. Going back to the capital allocation framework, was
this still the best project you could do now? Or is the sunk cost fallacy holding you back - you
have already sunk 300 metres of shaft, so let us go ahead with it.
Duncan Wanblad: This project and the allocation of capital to this project is not holding up
either Mogalakwena or Collahuasi in any way, shape or form.
Stephen Pearce: We have a very strong view of the value that we think we can deliver from
this project and based on the cash flow that this project can generate for a very, very long
period of time, it is very attractive to have as part of that portfolio. Obviously, you are
missing a few bits and pieces in terms of your own simple models, and we will hopefully help
you with that over time. And you then de-risk the project as it comes through its natural
lifecycle of time and certainty, and with our view of the market, we think it will stack up quite
attractively.
Also, having a strong cash flow generating business in your home head office country is
something that we have not had before and so, to have that as part of the portfolio is also
quite an attractive thing in terms of overall economics.
Ephrem Ravi: Is it possible to get further tax benefits given lots of projects in that region
have fallen off?
Stephen Pearce: One of the things that this project does bring is very attractive growth and
activity to a region of the UK that needs it. It is one of the biggest capital projects north of
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