Beament delivers sermon on Northern Star history repeating in depleted copper sector

Watching Develop (DVP) MD Bill Beament fielding questions from the crowd gathered at the company’s booth at the Resources Rising Stars conference on the Gold Coast this week was reminiscent of the Monty Python scene in which Brian is lauded as the Messiah.

Brian eventually convinces the locals that he is not the Messiah, and Beament clearly is not either.

But Beament did arrive at the two-day conference at the RACV Royal Pines with a message for the faithful – those that have followed his value-creating career, first at the gold juggernaut Northern Star (NST), and now at his 20% owned Develop.

The message, which was contained in two slides at the end of Beament’s presentation to the RRS crowd, compared the value growth in Northern Star in the first four years after Beament joined in late 2007 and that of Develop since he made it his post-Northern Star vehicle in early 2021.

Somewhat eerily, the total shareholder return after the first four years at both was/is the same at 1100%.

A fantastic return over the first four years for both. But in the case in of Northern Star, it was just the start of a value surge under Beament to more than $15 billion before he handed over the reins to what is now the biggest homegrown gold producer.

Develop was a $50m company before Beament arrived in early 2021 and now has a market cap of $1.24 billion on the strength of its base metals exposure and its mining services business. Beament told the faithful that Develop’s rapid value growth was just the start, as was the case at Northern Star.

“So please don’t be the investor that misses that next leg up because we’re following the same track record,” Beament said.

He also highlighted that while there was stiff competition to becoming the top dog in the gold space in his years at Northern Star from the likes of Evolution snapping away at his heels, the copper and broader base metals focus of Develop was relatively competition-free on the ASX for the investor’s dollar.

“We have established a great platform to be the premier copper and base metals company on the ASX,” he said.

“And what better time to have that platform. Four of my peers are leaving the ASX or have just left (the takeovers of MAC Copper, Adriatic, Xanadu and New World Resources) - that’s $5 billion of ASX capital in the base metals space that is about to get recirculated into this industry.”

He said the big end of town has worked that out, noting that the world’s biggest resources investor Blackrock had recently emerged as a 6.4% Develop shareholder.

“Probably 40% of the sector has been taken over in three months. So if you want to play this space of copper and base metals you’ve got Sandfire at $6.5 billion. Brendan Harris and team have done a fantastic job in that business (in) Botswana and Spain, not Australia,” Beament said.

“The next company you can play in that space is Develop at a $1b. Below that there is a handful of companies that are doing great work but which are probably below the radar of institutional support, the big end of town which drives your share price.”

Develop recently pulled in $180m in equity to super charge Beament’s plans to establish a 15-year mine life for its Woodlawn copper-zinc mine in NSW, which is now being ramped up, and at the Sulphur Springs copper-zinc project in WA, which is slated for development.

The two projects are good for 50,000tpa of copper-equivalent production.

Match that production profile to 15-year mine lives from the current 10 years and 8 years respectively, and the current $1.2 billion Develop matches up to the two profiles of the two big recent takeovers - MAC for $1.6 billion and Adriatic for $1.8 billion.

And then it has its growing mining services business, which four years in is now pulling in revenue of more than $200m.

Centaurus Metals:

Roger Fitzhardinge, general manager exploration and growth for nickel stock Centaurus (CTM), opened his presentation with a good one liner.

“We are the only nickel story here today so I am pretty confident saying this is the best nickel story you are going to here at the conference,” he said.

Fitzhardinge had just arrived on stage after making his way from the Centaurus booth positioned, as he put it, in the naughty nickel corner.

Like Beament, Fitzhardinge had a message for the faithful, including those that recently kicked $23m into the company in an equity raising aimed at carrying it through to a final investment decision in the first half of next year on its Jaguar nickel sulphide project in Brazil.

Fitzhardinge said that while nickel was currently unloved, it had to be remembered that Jaguar ranks as a Tier-1 sulphide nickel project sitting in a company with a $200m market cap (35c a share).

That is a fraction of the market cap reached when nickel was running hot and Centaurus was growing the Jaguar resource after its acquisition from Brazilian heavyweight Vale in 2020.

“But this is the opportunity for those smart, contrarian , counter-cyclical investors – especially the strategic investors – to identify the best projects in the unloved space as you get them at value,” Fitzhardinge said.

A study in May this year outlined an initial 15 year open-pit mine (22,000tpa contained nickel in the first seven years) at a low all-in sustaining cost of $US4.40/lb. Today’s nickel price is around $US7/lb . “So we will have a very healthy margin, even at today’s nickel prices,” Fitzhardinge said.

“To put that in perspective, it would be a top five or six nickel sulphide producer in the world today. There is more than a $1 billion NPV and we can pay down the capital investment in less than two years.’’

Centaurus is running a strategic process to get Jaguar to the starting blocks. “We are looking at offtake partners in conjunction with our debt funding - and that’s the big piece that will really see the re-rate of this project, and this company,” he said.

Could be that Centaurus gets to skate out of the naughty nickel corner next year.

Javelin:

The gold explorers and developers were out in force at the conference. And why wouldn’t they be given the Aussie gold price is at record levels.

Big smiles all round with the 650 investors in attendance looking for the next Northern Star or Spartan, both of which were regulars at the conference back in the days when they were penny dreadfuls.

The biggest of the big smiles at the conference was that by Javelin Minerals (JAV) boss Brett Mitchell.

No wonder. There weren’t any others at the conference that could say they were going to make their market cap and more in the space of 12 months.

The $20 million company has just signed a deal with the Indian-backed mining contractor MEGA Resources under which MEGA will fund and carry out the mining of a small recoverable resource at the bottom of an old pit at Javelin’s Eureka project near Kalgoorlie in the space of 12 months.

Profits will be shared 50:50 with Javelin, which at these sort of gold prices likely looking at pulling in around $35m. So while it’s small, it stands as a nice earn in quick fashion for Javelin.

The cash inflow, starting in the June quarter next year, will give it the firepower to grow Eureka in to something bigger, as well as advance its other project near Kalgoorlie, Coogee. Ahead of the collect, Javelin has pulled in $4.5m in a placement at 2.5c a share, with MEGA putting its hand up for $1m.