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Rain on the golden parade can't dampen Diggers spirits

A shower that hit delegates working outside wasn't nearly as impactful as the carnage on the sharemarket.

Diggers & Dealers

Peter Klinger 7 Aug 2019
5 mins
Diggers & Dealers day two

It rained at Diggers & Dealers yesterday – literally as well as figuratively.

While the rain that very briefly showered delegates networking in the Goldfields Arts Centre courtyard left no lasting damage, the carnage that rained down on the share market was more impactful.

It sparked an interesting conversation inside and in front of the marquee – the conundrum of a record-breaking gold price, driven by increased global economic uncertainty.

Good for the bullion bulls but at the expense of the rest of the market.

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All of sudden anticipated presentations from the likes of Fortescue Metals Group (ASX: FMG) boss Elizabeth Gaines were overtaken by questions from media about the impact of the US-China trade wars.

The Perth Mint boss Richard Hayes may have been grinning like a Cheshire cat but spare a thought for the base metals and bulk commodity players.

Only nickel was up sharply on a bleak Monday night for London Metal Exchange stocks. Maybe the penny has dropped in investor land that nickel sulphide is an important component of the undeniable electric vehicle boom – without any visibility on where the next generation of nickel sulphide orebodies will come from.

The West Australian quoted Resolute Mining (ASX: RSG) managing director John Welborn as saying, “the terrible thing about gold mining is that events of great global instability are met with cheers and optimism because the gold price goes up, which is obviously not a positive feature”.

The instability, the one-time Wallaby said, driving the gold price higher included “geopolitical factors and Kim Jong Un dropping a bomb or the trade wars”, though he also pointed to world-wide low interest rates.

Even among the gold producers not everyone is printing money.

And conversation in the marquee reinforced again that life for juniors – the explorers and wannabe project developers – remains tough courtesy of subdued investor interest. Surely there will be a further shake-out as project-rich-but-cash-poor players seek the embrace of no-project-but-have-cash tiddlers.

Not that the overall mood lost any of the sparkle of the opening day, even if there was a plethora of weary eyes following a big Monday night of corporate entertainment across town by the likes of Hartleys, Bell Potter, Macquarie and Rothschild. There were reports of only a few minor personnel mishaps and altercations on Monday night – nothing that should trouble the LTIFR scorers or Diggers tribunal.

It will be interesting to hear Lynas Corp (ASX: LYC) CEO Amanda Lacaze’s take on the trade wars when she addresses Diggers this morning about the challenges of running one of only two ASX-listed rare earths producers. George Bauk, boss of the other rare earths producer Northern Minerals (ASX: NTU), will be watching closely.

RARE AGREEMENT

Before the companies spruiking began yesterday morning, the Gold Industry Group and Deloitte held a most entertaining breakfast function at the WA School of Mines featuring as special guest David Morrison, the former Australian Army Chief.

The retired Lieutenant General, whose last visit to Kalgoorlie-Boulder was to inform one-time Frog’s Leg underground drill and blast operator and ex-soldier Dan Keighran of his Victoria Cross award in 2012 – an award recognised at the Diggers 2013 award dinner – has become an expert in culture change and shared the following observations about the mining industry.

“It’s clear you have a very great story to tell but do you own your story or do you want someone else to?” Morrison asked a 150-strong crowd.

“Your sector has a magnificent story to tell but these stories are not resonating at the moment, so change your story.”

And Australia’s once-top soldier then added this gem: “You can’t be captive to your culture, you need to be custodians to your culture.”

It sparked an interesting discussion between a panel that included Saracen Mineral Holdings (ASX: SAR) boss Raleigh Finlayson and audience members Northern Star Resources (ASX: NST) CEO Stuart Tonkin and his Westgold Resources (ASX: WGX) counterpart Peter Cook.

“We have lost our sense of history,” Cook said.

“My view is that the industry needs to get together to promote itself for how it has built this country, this city. What our industry doesn’t do well is it doesn’t do proper input-output analysis to highlight its significance to this city, to this State and to this country.”

Powerful stuff from one of the gold sector’s veteran and most outspoken voices, and it forced this admission by Finlayson: “I never thought I’d agree with Cooky.”

Giggles aside, there is an underlying issue that will need addressing, and it has Kalgoorlie-Boulder’s future prosperity at its heart.

YOU BEWDY

Tonight marks the end of the guessing game as to who will pick up Diggers & Dealers’ coveted gongs for 2019.

Sometimes the speculation is more entertaining than the announcements, particularly given the topsy-turvy past 12 months.

Here are a few contenders:

The favourite for the Dealer of the Year will be Northern Star for its Pogo acquisition in Alaska. And, of course, the yet-to-be announced Super Pit deal …

Elsewhere in gold, Newcrest Mining (ASX: NCM) bought the Red Chris mine in Canada and St Barbara (SBM: SBM) took over Atlantic Gold. Closer to home, Silver Lake Resources (ASX: SLR) merged with Doray Minerals and has struck a deal to also take over EganStreet Resources (ASX:  EGA). Ramelius Resources (ASX: RMS) had a busy time that included acquiring Explaurum.

In copper, the headline deal was Sandfire Resources’ (ASX: SFR) agreed play for MOD Resources (ASX: MOD) though that deal is not done yet.

The sleeper would be Ausdrill’s (ASX: ASL) merger with Barminco, which has transformed Kalgoorlie’s favourite driller. And newish CEO Mark Norwell was a late inclusion as presenter in the 4.35pm slot yesterday.

The Digger of the Year is more complicated.

The wannabe hopefuls Dacian Gold (ASX: DCN) and Gascoyne Resources (in administration) have had bad years. Pilbara Minerals (ASX: PLS) is struggling with a weak lithium price.

Gold Road Resources (ASX: GOR) and Gold Fields’ Gruyere mine should be a certainty for 2020. Saracen has had a very good year as it marches towards its goal of producing 400,000oz a year and would be a worthy winner in 2019.

Maybe it’s the turn of BHP’s (ASX: BHP) Nickel West unit to take the gong for its stunning turnaround. Then again, Nickel West has also started drilling its Seahorse greenfields prospect on the Nullarbor 450km east of Kalgoorlie-Boulder – maybe a dark horse for Best Emerging Company?

The Media award (2018: The West Australian’s Stuart McKinnon) will no doubt go to someone very worthy, and the same can be said for the award highlight, the GJ Stokes Memorial Award (2018: Ron Sayers).

Let’s hope it doesn’t rain tonight as crowds begin their traditional queuing-up.

Peter Klinger is Cannings Purple’s Director of Media Strategy. He has provided strategic communications advice on more than $1 billion worth of corporate transactions over the past year. Peter is a former Business Editor of The West Australian and has also worked for The Times (London) and the Financial Review. Contact Peter

 Cannings Purple’s market-leading Investor Relations team is on the ground in Kalgoorlie-Boulder for the full three days of Diggers & Dealers.

More Cannings Purple news:

Photos thanks to Gold Industry Group and Resolute Mining.

Peter Klinger More from author

Peter Klinger is an award-winning finance journalist and editor with more than 20 years experience at papers and websites such as The Times (London), Australian Financial Review and The West Australian, most recently as its long-serving business editor.

Alongside mentoring and developing emerging journalists, Peter established a strong rapport with leaders of Australia's business community. Peter holds a BA and MBA from Curtin University, has been a guest lecturer in journalism, hosted and facilitated conferences and industry events, and has devised crisis and reputational communications strategies.

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