Sunday 2nd November 2025:

Plenty on GG8 (Gorilla Gold Mines), their September quarter report, and on reading and interpreting diagrams and drill hole results in gold company reports, and more, here: https://strawman.com/forums/topic/12176

Onward and upward.

@bear thanks for the afternoon Wednesday update the bearish traders certainly created a sea of red.

still the tail wind for the optimists with the countries such as China buying solid assets and shoring up the sovereign risk in these uncertain global events. The price per 0z should make any goldie a winner ...Time to top up opportunistic buying today.

The bears would be saying this is the pivot of the bubble .. maybe is... see how the Au trades over the next 3 days!!

21-Oct-2025: From MarcusToday's EOD email:

The Aussie market held steady in afternoon trade. ASX closing out the day with a 0.70% gain. Another record high. Gold stocks opened strong, and stayed strong. NST was up 2.87%. One research house today said that the rise in gold is so big that physical bullion is getting close to taking second spot on the ladder of Australia’s biggest exports. Coal and LNG are trending down. Australia is the third largest gold exporter globally, behind China and Russia. The royalty cheques should help sustain our high government spending, believed to be at an elevated 28% of GDP currently.

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The gold price in A$ is now closer to $7,000/ounce than $6,000/ounce.

So how to play that - Physical gold bullion - or through a decent sized profitable gold mining company?

NST has outperformed the gold price over the past 3 years, and the gold price has thrashed the XJO and the XSO (ASX200 and the Small Ords Index respectively).

But that's a small sample size of just one company you might say. OK, let's add in my other two favourite Aussie Gold Miners, Genesis (GMD) and Ramelius (RMS), and while we're at it, let's also include Australia's second largest gold miner, Evolution Mining (EVN), who I also hold (I hold all 4).

So those three (EVN, RMS & GMD) have all provided 2 x the return that NST has, and well over 3 x the return of physical gold.

So this is what I've been saying about gold miners. They have traditionally underperformed the returns of physical gold such as bullion ETFs like GOLD, NUGG and QAU, because gold mining companies haven't always controlled their costs and spent their profits wisely; the industry has not had a good track record of excellent capital allocation in prior years, with the poster child of how to waste shareholders' money being Newcrest Mining, which, thankfully, is no more - now that the world's largest gold miner, NYSE-listed Newmont has acquired them. Newcrest bought assets like Lihir at the top of the cycle, overpaid, and then wrote the whole acquisition off over a series of financial years, while paying their executives rediculous salaries and overly generous bonuses as well.

And then along came Bill Beament at Northern Star and Jake Klein at Evolution Mining, and they showed people how to run a gold business, as a business, and to make excellent returns for their shareholders.

NST's motto or at least a common slide heading in their presentations was and remains "Business First, Miner second", which reflects the company's focus on shareholder returns, profitability, and a clear, low-risk strategy before the operational aspects of mining. This approach is consistent across various presentations over a number of years, such as the recent one for the Mining Forum Americas in September 2025, which was titled "Business First" (see here: https://www.listcorp.com/asx/nst/northern-star-resources-limited/news/investor-presentation-mining-forum-americas-3243526.html). This focus on running the miner as a business first has been carried on by their current CEO & MD Stuart Tonkin, who spent years as NST's CEO while Bill Beament was still there as NST's Executive Chairman. Bill had bought Stuey into the business - they had previously worked together at the mining services company, Barminco, where Bill had been General Manager – Operations and Stuey had been Barminco's COO (Chief Operating officer). Bill has since left NST and now heads up Develop Global (DVP) however Stuart Tonkin is still running NST (as their CEO & MD) in much the same way as he used to run it with Bill when Bill was still at NST, so that's all good.

I have written under "EVN" here about Jake Klein at EVN being outspoken about looking to buy assets from motivated sellers, and he recently said he didn't see motivated sellers around lately, they're all out eating in fancy restaurants. He adds that this is not the time to be buying assets in his view, it's the time to be printing cash and building up a huge cash buffer and returning a good portion of that cash to shareholders.

That attitude makes sense for Jake because he's always thought and worked that way, and he set up EVN by buying assets at cheap prices from motivated sellers, sometimes buying interests in succesful mines like Ernest Henry (EH) and Northparkes and then later in the case of EH buying the remainder of the mine when the other owner decided it had become a "non-core asset". Jake has bought assets from global giants like Glencore, Barrick and Newmont at various times. Barrick sold Cowal to Evolution in 2015 for ~US$550 million, Jake also acquired La Mancha Group’s Australian gold assets that same year (Frog’s Leg, White Foil and the Mungari plant, all in WA), Newmont sold its Red Lake gold complex to Evolution in 2020 for US$375 m cash + up to US$100 m contingent, Evolution acquired a 30% interest in Ernest Henry from Glencore in November 2016 and then bought the remainder of EH a couple of years later (for around $1 Bill all up), and in December 2023 Evolution completed the acquisition of an 80% interest in Northparkes from CMOC, with the other 20% ending up in the hands of Japan's Sumitomo Metal Mining/Sumitomo Corporation.

Jake even bought the Kundana gold assets from Bill Beament's NST for $400 million in 2021, which included the Millennium, Pope John, and Moonbeam underground mines, the EKJV (East Kundana Joint Venture, with TBR and RND) operations, and the Carbine Project, all located near Evolution's Mungari mine in Western Australia; most of those assets now sit under Evolution's "Mungari Operations" banner.

The biggest deal across those buys was probably the $1 billion in total (over two tranches) that EVN paid Glencore for Ernest Henry, however through that M&A process and some other smart capital allocation decisions - as well as employing very good people and running EVN very well - Jake has grown EVN into a $22.5 Billion company today (source), so that's just one example of how a gold producing company - or in EVN's case a gold and copper producer - can be run well and create value for shareholders that is well above the gains that the gold price makes over the same period.

There are different stories behind the other goldies on that chart, but each of them gets back to superior management making sensible and strategic capital allocation decisions, especially when it comes to what they buy and what they do NOT buy, when they move and how much they pay when they buy assets. And finding more gold across your own tenements helps a lot as well. And controlling your own costs and working smarter.

And now the superior-returns-pendulum has swung back from bullion to the better gold producers, and they are REALLY outperforming the gold price, which itself is REALLY outperforming the share market in general, as the graph shows.

I was walking through Martin Place last week and came across the below, which I believe are people lining up outside the gold bullion trading shop. Reminds me of 1980, except then people were selling their gold when it went on a big boom, don't know if these guys are buying or selling, but something tells me they are mainly buying. how times change Mo rules.

What to do IMO? i have held gold for a while now, and it has grown as % of total portfolio, but I'm a holder at best and more in the steady reducer camp. Maybe back towards my initial 2% weight (now at 7%!!). Momentum is the strongest force in the market; you don't know how far it will be pushed; no one does, so use it to your advantage.

a great scenario is the broad market tanks and gold holds, and i can switch into quality stocks at a great price. however, we don't always get what we want.