4th March 2026: I was asked today about my opinion on how tethered companies like SXE, GNG & LYL are to the overall commodities cycle. I thought my answer was worth sharing with the rest of the community so here it is (just my own opinions, for whatever they're worth):

SXE is not too dependent on commodity cycles as most of their revenue and earnings are derived from commercial, infrastructure etc now and only a minor percentage from miners, which is a big change from a few years ago when they were almost 100% mining services.

I reckon that's a great question to ask their CFO tomorrow. I might add something along those lines to slido in a minute. [I've done that now]

XRF and C79 are going to be fine because sample testing continues as long as production continues - i.e. grade reconcilliation testing, mine planning-related testing and deposit extension testing, etc., however those testing machine and consumables companies do get an extra tailwind from further exploration activity when the prices of the commodities they are assaying for are elevated and incentiving explorers to spend more.

Something to note is that when the gold price is high, as it is now, junior explorers are able to raise money much more easily, compared to when we are the bottom of a cycle and it gets much, much harder, so there is more cash available to spend on drilling and testing when commodity prices are high. But that's just the junior explorers.

GNG and LYL are probably 80% gold - somewhere between 70% and 80% I would say in terms of revenue and earnings contributions, however they also do copper, rare earths, lithium, and other metals. LYL has some other divisions but they are almost all commodity-(metals)-facing, other than their rail (infrastructure) servicing division which is a small part of their business. GNG have GRPS which is their energy sector services division which services oil and gas infrastructure - as in multi-year operations and maintenance contracts with large energy players for kit like drill rigs, barges, on-land oil pumping stations, etc., but again, it's a smaller part of their overall revenue mix compared to their larger EPC business which is squarely facing the mining sector.

So in that respect GNG and LYL are certainly impacted by cycles, however because their studies often take years - and they both do those studies, like Scoping (SS), Pre-Feasibility (PFS), and Definitive/Bankable FS (DFS/BFS), also sometimes just called FS - Feasibility Studies - and then the E&C contracts (EPC/EPCM/EP&PM/etc.) contracts usually also take between 1 and 2 years, sometimes longer for really big projects - NST's Hemi in the north of WA (the De Grey Mining assets that NST acquired) is going to probably take longer than 2 years to build when NST get around to that - and Barrick's massive Reko Diq in western Pakistan that LYL did the studies for and then declined to participate in the final stages of the EPCM contract tender process (so walked away from - for risk management reasons) would have taken somewhere between 3 and 5 years to build - from what I've read - the studies tend to be commissioned when sentiment around the commodity is more positive but the actual builds (the E&C) can stretch through various stages of a cycle.

There is always a risk that a company pulls the plug on a project half way through a build because one of more metal prices have tanked, if they are in a position to do so, and that actually happened two years ago (in mid-2024) to GNG with BHP's West Musgrave nickel-copper project in WA. GNG had previously (when nickel prices were higher) completed the project studies for the then-owners, OZ Minerals (were OZL) and were awarded the $312 million EPC contract (see here) in April 2023 by OZL who were then acquired by BHP the following month (in May 2023). BHP were initially happy for GNG to proceed with West Musgrave, however a year later, in July 2024, due to the nickel price having dropped so low that BHP's nickel production was no longer economic (they were losing money on nickel production), BHP decided to put all of their nickel assets on C&M, and shelve (postpone/defer) West Musgrave, so GNG were paid for what they'd done up until that point, and also paid some compensation for the inconvenience of having that project put on ice, but the project just stopped and has not proceeded since then. I expect GNG will get the call-back from BHP if nickel prices rise enough and they'd be back on the job there, but BHP can be a bit of a dinosaur with their decision making, so I wouldn't bet the farm on that happening any time soon.

So, there is certainly risk around commodity prices relating to those two (GNG & LYL) but not SXE very much, however consider this:

1. Wars don't last forever and one of the side effects of war is supply constraints as we are seeing with oil and gas not being able to be exported out of certain middle east countries right now because their ships have to pass by Iran which is blowing up any ships they see off their coast if they are able to. If this war expands, metal prices could actually get a tailwind rather than a headwind. Weaponry and ammunition takes metal to manufacture and countries like the USA are not totally self-sufficient with a significant percentage of those metals. Wars tend to increase production in some areas of the economy while inflation due to supply-side issues can stifle production in others, or make it more expensive.
2. Gold companies tend to get sold down initially along with all other liquid assets in times of panic but then the gold price rises in times of uncertainty and hightened volatility and that then drags up the prices of gold companies and also those companies that service the gold industry, as both GNG and LYL do. Overall, wars that matter to most people tend to result in a higher gold price than a lower one. Wars that don't matter to most people can have almost no effect on the gold price. This one DOES matter to most people so my expectation is that the gold price goes higher.
3. There are a number of companies, like VAU, HRZ, MM8, BTR etc. who have either now fully funded or are very close to fully funding their new gold mill builds, gold mill conversions (nickel to gold), or gold mill expansions, where GNG have done all of their studies and are going to build/convert/upgrade those mills. These companies are committed to going ahead with that expenditure over the next 6 to 18 months. Brightstar (BTR) announced today that they have just issued US$120 million worth of Bonds, which together with their recently completed placement and SPP which raised a combined A$193 means that the last piece in the funding jigsaw for their Goldfields Project (in WA) is now in place and GNG have already commenced work on that project with FEED work and orderering long-lead-time items. As part of that announcement BTR have also stated today that they have enough funding now to not only cover that new mill build but to also advance a second project, their Sandstone project (also in WA). To quote them: "The combination of the Bond issue and the previously announced A$193 million equity raising means Brightstar has secured all required funding to construct and deliver the Goldfields Project, while maintaining a substantial budget to advance the Sandstone Project through to Final Investment Decision." And that's today, in the middle of this war in the middle east. So I would suggest that this war isn't going to slow down any gold project developments, if anything it may increase the urgency for these companies to get these mills built even more quickly to take advantage of the higher gold price sooner. Many companies are just too far into the process to bail now, especially smaller companies that have limited alternative options. It's much easier for a company like BHP to shelve their nickel assets (as they did in July 2024) when they are one of the world's largest iron ore producers, and they have copper, manganese, met coal, potash uranium, zinc and silver assets all over the world (I reckon they're still the largest mining company in the world at this point in time). Much harder for companies where the mill build they're working on will be their first producing asset.
4. Where we are in the cycle - this one is a big one - have a read about what Hedley Widdup reckons about where we are right now in the commodities cycle - he is famous for his cycle clock and we're between 6 and 7 right now (cue the 6/7 hands weighing air action here that all the cool kids are apparently doing) according to Hedley, so at the start of a new mining boom - you can find that material under LSX here on SM. Below is a sample slide from his most recent LSX presentation. LSX (Lion Selection Group) is a junior-mining focused LIC that Hedley runs (and his father Robin Widdup founded) that invests only in early stage miners who have plenty of upside potential - he is mostly invested in gold companies at this point, and his portfolio and my own SPF (speccy portfolio) share a few names - like BTR, MM8, AZY & GBR - but he's not Robinson Crusoe on that mining cycle call - plenty of other analysts that I respect and follow are also calling the same thing.

He backs this up with plenty of data - have a flick through his latest presso here to see what I mean.

So I wouldn't be worried about cycles right now, I'd be thinking of where we most likely are in this cycle, plus this middle east conflict, as tailwinds rather than headwinds.

Share prices will be volatile, but I'm talking about what this means for the earnings potential of these companies rather than what might happen shorter term with their share prices. In the short term, we will likely get to buy good companies at lower prices. I don't know how low they'll go, but the lower the better if you're a buyer. And if you hold them already and have a 3 to 5 year investment time horizon or longer, then short term price volatility doesn't matter even if you already have your full allocation of a company.