Thank you much for joining us. I'm Nicholas Reed from Reed Corporate, and it's my great pleasure to introduce this investor webinar for Minerals 260, ASX ticker MI6, and to welcome the company's Managing Director, Luke McFadyen. We've had a record response to this webinar and lots of questions, so we're really looking forward to getting into it. It's been a great privilege to have been involved with the MI6 story, which without doubt has been one of the great successes in the emerging to mid-tier gold space of the past 12 months. From its transformational acquisition of the Bullabulling Gold Project and AUD 220 million equity raise, to the game-changing resource upgrade just before Christmas and the recent strategic funding deal, this has been an incredibly fast-moving and compelling growth story.
From a AUD 30 million junior at the beginning of last year, MI6 is now a AUD 1.4 billion company. Luke has been presenting to institutional investors all week, but he's put some time aside for us this morning to give retail investors an update and most importantly, to tell us why MI6's growth journey is only just beginning. Luke, it's really great to see you this morning. Thanks for joining us from your office there in West Perth. Please run us through the latest.
Yeah, thanks, Nick. Thanks to Reed Corporate for setting up today. Nick and Sharon have been incredible support for us through Reed Corporate for the last 12 months, so we're certainly lucky to have them on our side. Certainly we love attending their conferences at Gather Round in Adelaide and Gold Coast later this year too. For those that haven't met me before, I am Luke McFadyen, the MD and CEO of Minerals 260. It's a pleasure to present to you today. Minerals 260 is a fairly new gold company. Like Nick said, we're sort of less than one year old since we acquired the project itself. Today I'm gonna talk to three key aspects about the company itself, our asset, our people, and then our recently announced strategic funding agreement with Franco-Nevada.
Look, one of the most pleasing outcomes of the capital raise that we did just nearly 12 months ago now, that was AUD 220 million when we were a AUD 30 million company. We set the record on the ASX. Nobody's ever raised over seven times their money before. The most pleasing thing that occurred was actually the type of investor we attracted. We absolutely continue to attract high-quality retail investors. On the institutional side, we're unique that we're essentially we've got the foundations to grow the company further with those major shareholders that you can see there listed. Franco-Nevada's the newest major shareholder with the 4.9% stake that they came in just recently. Interestingly, they obviously bought at a premium, that was a 7% premium to the time.
Like Nick said, the market cap has grown rapidly over the last 12 months, so it's been a transformational journey by any definition. Most importantly, we believe that investors, both retail and institutions, continue to be attracted to Minerals 260 because of the asset, the people, and then our strategy to get it into operations as quickly as possible. We then also have some of the best research coverage in the market across those six analysts, and I'm sure any of them would send you their research if you contacted them. Look, if we just look at the highlights, there's three really strong value propositions for investing in Minerals 260 today. That significant leverage to the Aussie dollar gold price is via the 4.5 million ounce Bullabulling Gold Project.
For those that haven't followed the journey since the acquisition, that's just nearly double what we acquired less than 12 months ago, and we're on track for our maiden ore reserve in the middle of the year. We'll then follow that up with another mineral resource update, and all of that is following about another 50,000-60,000 m of drilling, in addition to the 30,000 m of drilling that didn't get included into the resource last year. With the recent investment by Franco-Nevada, it really allows us to accelerate the development. The PFS is on track for the middle of the year. We've already commenced several DFS activities. We will commence on-site construction of the village, early site works. We will begin to procure long lead items this year, and we are still targeting production within the next three years.
Our strong corporate position is obviously enabled by that recent deal that we did. This is actually our last trading day outside of the S&P/ASX 300. By Monday, we will be included in the S&P/ASX 300, which is an incredible achievement for the employees, the company and the board to achieve that within just the last 12 months. I'll talk about our people in a moment. We do have an incredible team. This is a tier one team, and we're all aligned about getting Bullabulling into operations. Just to touch on that Franco-Nevada deal that we signed recently. The total funding package is AUD 220 million. AUD 170 million of that was for the sale of a 1.45% royalty.
They already held a 1% royalty, so this is in addition to that. There was also a AUD 50 million equity investment at a premium at the time for them to become a 4.9% shareholder, and it represents Franco-Nevada's largest ever investment in Australia. For those that aren't aware of Franco-Nevada, they are the largest royalty investor in the world. They hold hundreds of investments globally. They look at many assets for their investment. They did three full months of due diligence on Bullabulling before finalizing this agreement. It gives us an incredible amount of comfort and confidence that this is an incredible asset that is now recognized domestically and globally as one of the next biggest mines to be in operations.
With that capital, there's the list of things that we are intending to spend it on really, that I've just talked through. Like Nicholas said in his introduction, we've absolutely been on a rapid transformation, and that's obviously seen through the share price. We raised AUD 220 million just under 12 months ago now, at AUD 0.12. We delivered exploration results consistently all through last year. We updated many assumptions around the project, including the metallurgical assumptions through a lot of testing. That all culminated in the new resource publication on December 1st. That star that actually follows the MRE update, callout box there was actually the best drilling results we've had since we started drilling. That's important to note because those drilling results are not included in the current MRE.
Despite the MRE coming out in December, drilling that leads into November or October and November is not included into it 'cause you need to start working on the resource itself. We're incredibly comfortable with the resource, but we're certainly excited to see where it goes in the future, given the strong results that have followed post the resource. Then of course, more recently, we've announced that Franco-Nevada agreement, which created, you know, the rerating that we've seen in the stock price, through to obviously the validation of the project, but then also what the capital enables us to do through those activities that I've talked about. We're still only valued at about AUD 300 an ounce. That's pretty much on par with smaller but higher quality resources.
Still well and truly below the resource equivalent of producers who are trading three to five times greater than this, and that's where we wanna be in a couple of years when we are in operations. We certainly see ourselves at the beginning of our journey in terms of value in the share price, not at the end. I just thought I'd touch on some fundamentals in the market itself. I'm certainly not gonna get into price forecasting. I did that for many years before I joined Minerals 260. Certainly what we're seeing at the moment is a high level of volatility, but that's why it's always important to look back in these markets and look at where we've come from.
The recent volatility is obviously off the back of events going on in the Middle East, but the fundamentals of why gold is an attractive investment have not gone away. Whether it's a hedge against inflation, currency depreciation, or obviously what we're seeing at the moment, economic uncertainty, those haven't changed. Certainly in Australia we can't spend less than what we tax, and that's pretty common across most Western governments today. We're still seeing record gold purchases by central banks. Again, that's mostly against, a hedge against U.S. currency depreciation. We certainly see a long-term future in gold. Nobody knows where the price will go, but if you look at that long-term trend, this is a trend that started many years ago, pre-COVID, post- GFC, where we see there's a long-term future for the gold price to continue to improve.
The team itself. Look, this is a tier one team, again, by any definition. The Board of Directors led by Tim as the Chairman, and he's incredibly well known and successful in the industry. He's worked incredibly hard every day, along with Stacey, David, Emma and Adam. I'll highlight Adam. Adam recently joined us. Again, you might be familiar with him. He was the COO at Liontown for several years, taking it from a study through development and construction and then ramping up into operations. That's an incredibly unique journey to go on and obviously the one that we are attempting to do ourselves. At the executive level, we've recently added Mark Muller. Again, very well known in the market, given his 20 years at Mincor and the successful discovery of the Cassini deposit, which he won the Discovery of the Year award for.
Russell and Jack are great developers and operators. I worked with both these gentlemen at OZ Minerals and saw the incredible work they did there over many years. We've got Matthew Blake, Bruce and Jamie supporting the team as well. As we get into the resource itself, location is incredibly important. We're only a 45-minute drive from Kalgoorlie Airport, straight down the Goldfields Highway. The location west of Coolgardie is also strategically important, and this is all about tenement acquisitions. We acquired 130 sq km twelve months ago. Today, we sit on just under 600 sq km, and we've been picking up tenements around Coolgardie for three reasons.
Gold mineralization, of course, that's always the focus. More broadly, around infrastructure support and water support. That's why we've been able to grow rapidly on the tenement side, over the last 12 months. We've probably done eight to 12 acquisitions of tenements in the last 12 months to support the broadening of the tenement footprint, which is incredibly important when you're seeking to bring an asset into operation. The asset itself, look, when we first saw the data for Bullabulling through our due diligence, we were excited about the potential that we saw for it, and we've continued to learn, invest and then adopt those learnings into growing the resource.
It's one of the reasons why we were able to grow the resource from 2.3 to 4.5 in about nine months from the acquisition. The 4.5 million ounce resource is supported by three million classified indicated ounces. That's important because they're the ounces that can support a maiden ore reserve in the middle of this year. Three million indicated ounces is sort of supported by something like 12,000-12,500 drill holes, over 500,000 m of drilling. That's an incredibly well understood and supported resource, and one that we're certainly excited to keep growing. You'll see, I'll talk more about our exploration plan in a moment. Those names that you see labeled there, they come from those historically mined areas.
This is really one single large deposit and that we're continuing to grow both at depth and along strike, both north and south. To put into scale what 4.5 million ounces is, it's now the largest resource not owned by a producer. It is significant by any definition. You can add up a couple of those smaller resources and still not reach 4.5 million ounces. Like I said, we still expect this to grow in the future given the significant intercepts we've had since the resource and the drilling that we continue to undertake. Where are we drilling? Well, last year we had one of the largest drilling programs. We drilled about 120,000 m. We've announced that we're drilling about 60,000 m up until June, July this year.
We're drilling in those green areas. We see a lot of potential for growing that resource in the north and the south. We're drilling around that Gibraltar deposit, which we declared a maiden resource on in December as well. Of course, we're drilling down dip. This is a west dipping ore body, and that's where we're targeting at the moment on that western flank. Look, the results from our drilling from the beginning have been incredibly pleasing. They've exceeded our expectations in many ways, and especially some of the intercepts that we've been able to announce that have been some of the highest intercepts in the history of the project on a gram times meter perspective, which is not an easy thing to do when you've got 12,000-12,500 holes already in it before we started.
All up, like I said, last year, we added just 2.2 million ounces on top of the 2.3 from eight months from at a discovery cost of AUD 15 an ounce. We think that's an excellent return on investment and certainly benchmarks incredibly well. The project development work itself is moving full steam ahead. Like I said, the appointment of Russell and Jack are really strong signals about our intent to bring this into production. Those roles are the leadership that then we add to that team. In addition to Jack and Russell, we've got construction managers, environmental managers and everything else working needed to bring this into firstly development and then operations. Like I said, we've commenced some DFS work already, particularly on the metallurgy, on the water and on the geotech.
Our permitting timeline is able to be accelerated because we sit on a granted mining lease already. We've commenced and in many areas, completed environmental surveys. We have a native title agreement with the traditional owners, which we've already got an excellent relationship. Coming back to the location, that enables us to really move forward. The fact that Goldfields Highway from Kalgoorlie Airport comes straight to the project door is an incredible advantage for us. We don't need to build an airstrip. We're gonna use Kalgoorlie Airport. That location will continue to bring this project into operations. In summary, what's that pathway look like? Well, like I mentioned, we're on track for the PFS and a maiden ore reserve in the middle of the year. A new resource will follow soon after.
We'll spend four to six months finalizing the engineering design and the cost assumptions in the DFS. FID is targeted for later this year, early next year. While that study work is all ongoing, we will commence early works, we will commence the construction of the village, we will begin ordering long lead items, and that really accelerates or de-risks that timeline to production. That's why, whilst the last year has been incredibly busy and incredibly exciting, actually, the journey ahead is even busier and even more exciting from our perspective. Why invest in Minerals 260 today? Well, like I said, we are one of the leading gold projects in Australia by any definition, whether it's on scale, location, timing to production, but we've got all three. That clear development pathway is very well defined for us.
We're confident about that production target in the end of 2028. Some real strong key catalysts coming up very soon with the new reserve, maiden ore reserve, new resource, PFS. That Franco-Nevada funding deal that we announced only recently is an incredible validation of the project and our strategy to develop it. You've got that board and management team that I talked about that is unique in its experience of bringing assets from concepts and studies into production. That's all I've got on the slide side. Certainly happy to go to Q&A now, Nick.
Fantastic. Thanks very much, Luke. Great run through. I should have mentioned at the outset, I do know Luke has a board commitment coming up, so we've got him for about the next 20 minutes or so. We may not get through all the questions. I'll have to combine a few, but we'll do our best to cover off on most of the key topics. Luke, we'll get right into it. The first question here is from an investor who noted that the Franco-Nevada deal was obviously a big endorsement along with, you know, the support you've had from some big name institutions. Can you talk us through a bit more what that level of backing means in terms of de-risking the pathway?
Specifically, an investor just asked online whether that investment potentially allows you to, given that you're already ordering long lead items, et cetera, whether that potentially allows you to look at a quicker production startup.
Yeah, thanks Nick. Look, from the investor base that we've got, I'll talk about the institutional side. What they've all seen is an incredible opportunity, like what we've seen with many other companies through time, whether it's Northern Star, Evolution, Capricorn, Genesis, Saracen. Like, these are companies that are built on incredibly strong assets, and that's what these other institution or these institutions have seen over the last 12 months. They've been attracted to the scale, the commodity of course, the location, the near-term production target, the team. There's never really one aspect, Nick. There's always quite a few that institutions are looking for, and I think it's the same thing that retail investors should be looking for too. There's always several reasons to invest or not to invest in a company.
We certainly think that we've got those key ingredients needed to be successful going forward. What was the second part of the question? Sorry, Nick.
It was whether the-
Timelines.
Yeah, timeline. Whether you'd be able to.
Yeah, look, it's interesting. We've obviously held that target still by the end of 2028. We're certainly growing confidence that that's achievable. In terms of bringing it forward, it's based on several other things falling into place. Once you put in long lead orders, you then know the timeline. Once you put in approval documentation, you then know how long you're gonna be. We're probably still a little while away from knowing if we can bring it forward, but certainly from our perspective, we've grown a lot of confidence about our ability to deliver that end of 2028 timeline with the investment from Franco-Nevada.
Excellent. Thanks, Luke. Maybe just on that, if you can just give us another quick snapshot. There was a email question I got. If you could just walk us through specifically the development pathway from here and, you know, the key milestones in terms of PFS, DFS, first production.
Yeah. It's shown here, Nicholas, where we are, incredibly busy at the moment putting together all the components of a study itself. That PFS is the basis for approvals documentation. It's an incredibly detailed document. It covers all areas of the project itself. That PFS is then the basis of obviously a DFS and a DFS is what's known as a definitive feasibility study. It's the real key document both the board, the banks and other key investors might consider when they're funding it in the future or improving it from the board's perspective. It really tightens up the capital estimate, the timelines and the design of the project itself.
In our case, because we do have such a strong balance sheet at the moment, and because we're so confident in the viability of this asset, it's why we have commenced DFS activities already. It's why we will commence construction activities already. These are activities that typically come many months, sometimes a year after where we are at the moment. It really goes to both the validation from Franco-Nevada, but then also our confidence in the asset to deliver great returns for investors going forward.
Fantastic. Thanks, Luke. Just a question on that's come up online here. A lot of people in the industry are obviously highlighting the risks from diesel, fuel, shortages. The question is, any impacts on that side of things on MI6?
Yeah, look, we're less exposed than a site than an operator, right? We obviously don't have trucks running around a site today at the capacity that we might have in a couple of years' time. Our exposure is mostly via drill rigs. Drill rigs use diesel. We've got a large tank on site already that's full. We'll order another one to fill it up as well. We're managing the risks probably like everyone else at the moment, Nick. At this stage, no impact. I think like everyone, we're sort of watching it quite closely and ensuring we're doing what we can to manage it from our perspective. Fuel supply on site, fuel deliveries have been consistent still. Yeah, we're all watching it closely.
Yeah, I imagine being close to Kalgoorlie is a big advantage as well.
It sure is. Yeah, it absolutely is.
An investor also asked here whether you have any plans to run Bullabulling on renewables going forward, a bit like Liontown have done. Is there any consideration being given to that?
Yeah, absolutely. We've actually studied solar and wind in conjunction with diesel, gas and LNG. This is sort of classic study work at the moment where we're doing the trade-offs of what's the optimum solution for us. We're obviously targeting the lowest cost for us, given this is gonna be a long life operation. The answer to the question is absolutely yes, we've looked at it. Certainly the study will provide more detail around that.
Fantastic. Question here. Given the project's location near Kalgoorlie, how important is infrastructure and jurisdiction in supporting a new gold project of this scale?
Yeah, look, I think it's vital, Nicholas. I think, you know, in this day and age where certainly governments get nervous approving mining projects in Australia, being in WA, being in very close to Kalgoorlie, and being in a mining jurisdiction that's been mining gold for 180 years is nothing but an advantage. You know, we've got a native title agreement already with the traditional owners, which again is a really strong support from the local community that they want mining on their ground. Yeah, I think location, not just from a logistics and an investment perspective is an advantage. It's absolutely from an approvals perspective. We're not obviously near anything that's sensitive in terms of rainforest and lakes and things like that. I think from our perspective, that location on supporting our approvals is an enormous advantage over not just domestic peers, but also internationally.
Fantastic. Thanks, Luke. Speaking of approvals, an investor emailed in and asked, "What is your current estimate for when a mining proposal, i.e. an application to develop a mine, will be lodged with the Department of Energy, Mines, Industry Regulation and Safety?
Yeah, look, our approvals are actually split in two phases. The first phase is already in train. We assumed some success with Franco-Nevada. We actually started planning for construction activities in December. Those approvals documents are already in with the government for review. We're expecting a decision imminently that'll allow for the early works and the construction of the village. That's the first part of the approvals process. The second part is like the question was alluding to, around the mining side. We sit on a granted mining lease already. That's an incredible advantage in this space too. That complete PFS document will be the basis of our approval submission going forward. Once that's complete in around June, July, that then goes to the government to commence their review of how we're gonna mine this and operate this.
Again, the location becomes an incredible advantage for us here. In WA, we've got an incredibly supportive department and government that loves to see mines get developed and operate. Certainly the value of mining is really well understood in this part of the world, I would say probably better than anywhere else inside. Yes, you have to do all the right work. Yes, you have to still go through the process. At this stage, we see no key hurdles and no key risks from our perspective on the approval side.
Fantastic. Thanks, Luke. There's a couple of broader sort of questions here, and I'll just try and combine them into one. It's really a bit of a more philosophical question about your view of the growth journey for MI6. The investor here says, taking out Liontown as a case, as a great case study, it sounds like he might be a, he or she may be a Liontown shareholder as well. How do you see that growth journey evolving in terms of maximizing value? Is it just going through to production? Is it buying other assets? What's your philosophical view on how the company moves forward from here longer term?
I could be more than philosophical here, Nicholas. I think we can be practical and more direct. Look, we wanna grow this business. This is a growth company. What that means for us is all about developing Bullabulling. Developing Bullabulling is where we earn the credibility to continue to grow. If I use the example where I used to work at OZ Minerals, when I joined OZ Minerals, we had one single operation. When we sold it to BHP several years later for many times the value of what when I started, we had multiple operations and we had a global footprint. There's lots of companies that have gone on that journey. We are certainly attracted as a board to be a growth company.
Developing Bullabulling, expanding Bullabulling, looking for more ounces in the Coolgardie region. That's one of the reasons, like I said, that we've picked up ground in and around Bullabulling itself. More broadly, we wanna continue to grow. You can't lose sight of sort of the first mission is all about Bullabulling. I think if you grow too fast, you end up tripping over yourself. Yes, absolutely, Nicholas. From our perspective, we don't wanna stop just at the first phase of Bullabulling. We want to develop it. We want to expand it. We want to go outside of Bullabulling into Coolgardie, and then we want to keep moving forward. There're some incredibly successful companies still around today that are continuing to do that. I mentioned a few before.
We still see a lot of opportunity for growth in the gold space. Sometimes little volatile periods like this are a reminder of the quality of the asset that you've got, and that's what I think we've got with Bullabulling. Whilst it's short-term volatility, it doesn't distract you from the long-term trajectory of the company, which is what we think is incredibly attractive to invest in.
Absolutely. Thanks, Luke. Couple of detailed questions that have just popped up. What cut-off grade has been used for the MRE? And secondly, how well-defined is the processing route?
0.4 is the cutoff. That was in the announcement in December when we announced the resource itself. In terms of processing, we have appointed GR Engineering, one of the most well-known and credible engineering firms, particularly in the gold space and also across Australia. They've built many gold plants in Australia. We're going through the process with them at the moment about defining the processing route. For those that aren't aware, there was actually a feasibility study completed on this by a company before Zijin, who we bought it from. That's the foundations of our engineering basis, and then we haven't deviated much from that, to be honest, Nicholas. We haven't started from scratch.
We would expect this to be a very typical WA gold plant in the future, with zero to very little innovation required, given the comfort that Australia or GR Engineering Services is around designing plants within Australia.
Fantastic. Thanks, Luke. We've actually done pretty well, and I think we've powered through most of these questions. There's just another one here, which I think is not a bad one to sort of start to wrap things up. It's a great question for investors listening in. The company's had a fantastic run. The share price has had a great run. What's your view of the upside ahead? You know, why would you buy the stock today?
Yeah, look, that's a good question. I think certainly with the rise that we've had in the last 12 months, that's probably on some people's minds. Have they missed the boat? We certainly don't think so. You know, we have to remind ourselves, we've only owned this asset for 10 months. We are still very active in the drilling space, which means what we believe some growth in the resource going forward. Then we've got all the study, development, and operational operations to look forward to in less than three years. It's an incredible amount of work.
The way I think about growth in the share price going forward, Nick, we've got growth through the drill, value through the drill bit, where we're adding ounces and de-risking the resource through a maiden ore reserve, grade control drilling, and then we've got de-risking of the project via the studies and the development. If we look at all those journeys, like the companies that I've talked about in the past, they've all continued to be re-rated through time. If you look at the re-rating we had just a month ago with Franco-Nevada, it shows you how we think about driving value for the business. We believe being shareholders ourselves, and particularly Tim as the Chairman is the second largest shareholder, we do think about shareholder value in every decision we make.
We certainly aren't thinking at the moment that we stop at AUD 0.60. We certainly think there's a long way to go from here. I think if it would, if it had stopped here, we'd probably stop ourselves. No, we think there's a long way to go, Nick. Whether it's drilling or whether it's development, I think there's a lot more value in the share price to come.
Fantastic, Luke. An investor did just ask me to ask you your view on the outlook for gold.
Oh, look, we're strong. Look, I think it's a positive. I had a slide on it before. I think, there's no reason to believe that, inflation's going away, central banks gonna stop, and economic uncertainty is gonna go away. They're all the reasons why you invest in gold, and it's all the reasons why you invest in a company like Minerals 260, 'cause we've got one of the largest gold resources in Australia. So from a leverage perspective, that's how you get your exposure. Nobody knows where the gold price is gonna go tomorrow, but that's why I have a long-term chart. Over the long term, we see a strong future. Short-term volatility is always going to exist, and that's what we're seeing at the moment.
I just think, if you'd bought gold one, five, 10, or 20 years ago, you're up today. If you bought it a week ago, you might be in a bit of pain. If you look at long-term trends, it's always a supportive commodity. That's just again, based on those three fundamentals that we still think have a long way to go.
Fantastic. Great response. Thanks very much, Luke. Well, look, we might wrap it up there. I think we have dealt with most of the questions, and I know you've got a board meeting to get to. I'll just maybe leave you to give us some final words as to why we should keep MR6 firmly on our radars.
Yeah. Thanks, Nicholas. Thanks everyone for dialing in. Like I said, I can see the numbers, so incredibly grateful for the support and time that people have dialed in for today, and look forward to connecting with retail investors at Nick's conferences in April and on the Gold Coast, and then look forward to catching up with other institutions later on.
Thanks very much, Luke. Thanks to everyone who dialed in today. We really appreciate your participation and the great questions. We will release a recording of this a bit later on today on YouTube and the company socials and our socials. Catch up with Luke at our Gather Round event in Adelaide in April. Thanks very much for your participation today. Have a great day, and have a great weekend. Thank you.