From our 10% Shareholder!
The coming lithium, copper bull market will be‘frightening’
BillBeament, the man who turned Northern Star Resources from a $1 million goldminer into a $10 billion company, says he saw this week how hot lithium reallyis.
Jul 7, 2023 – 1.35pm
Lithiumcreated more millionaires in Australia than any other sector in the COVID-19and post-COVID eras and the party is only just getting started, according toone of the country’s hottest miners, Bill Beament.
Beament, 48and brimming with self belief, says the closed-door conversations happening inboardrooms involving lithium and securing supply of lithium is like nothingseen in Australia in the past 50 years.
BillBeament made his name in gold, but is getting into lithium, copper andzinc.
Chemicalscompanies, battery makers and car manufacturers are all cold-calling lithiumhopefuls and miners, trying to get their hands on supply of it and otherbattery metals and shore up their futures. He saw it first hand this week,hours after signing a deal to acquire a reasonably small lithium prospect thatis nowhere near production.
“I hadn’tseen this, or heard about this, in my time,” Beament says. “It has not happenedsince the ’60s and ’70s, when the Japanese and the Koreans needed steel fortheir industries and we opened up the Pilbara iron ore district.
“This iswhat’s happening now, and I don’t think people truly understand what’s goingon.”
Perth-basedBeament, the son of a farm machinery and parts dealer, made his name by takinggold miner Northern Star Resources from $1 million to a $10 billion blue chiplast decade. He made plenty of money for shareholders along the way, and is oneof a handful of mining executives now closely followed by Australian andoffshore institutional investors.
He’s knownfor a few things: his confidence, his ability to get the most out ofblue-collar miners, his nous for underground mining, and the art of the deal,which is a huge part of mining. He says he learnt the latter as a kid, whiletrawling auction clearance sales with his dad, who would buy second-handtractors, headers and the like from farmers in Western Australia’s wheat beltand sell them for parts.
“You learna few tricks of the trade, bidding and negotiating and spotting value and whatit means,” he says.
He says thesecret is to always put yourself in the vendor’s shoes.
“You haveto have a win-win on both sides. If you’re one of those business people thatwant to leave nothing on the table – my old man taught me this – you might getone deal away, but you never do another one.” It took more than a dozen dealsto create Northern Star.
His latestdeal is buying into lithium, at a time when it is the hottest sector inAustralia. On the ASX, all the top five stocks in the benchmark S&P/ASX200over the past three years are lithium plays: Liontown Resources, Sayona Mining,Core Lithium, Pilbara Minerals and Lake Resources. Four of those five were up20-times or more over three years.
Beament isbuying via his new company, Develop Global, a microcap where he owns a 30 percent stake. It’s part underground mining services, part asset owner, and verymuch a mini version of Chris Ellison’s Mineral Resources. It has a copper/zincproject just outside Canberra and another in the Pilbara, and its pitch isabout being a transition metals/future-facing metals-type miner and miningservices provider.
Owner andcontractor
The lithium target is Essential Metals, another microcap with a $135 million market capitalisation, which would round out the portfolio. Beament has offered Essential Metals shareholders scrip and a chance to jump aboard one of the hottest rides in Australian resources.
“We’re in a little bit of a bubble in WA, I see that,” he says. “The rest of the market is stuck in the cost-of-living recession, inflation, and so it should be.
“But whenthe world normalises, the commitments that every government has made, every bigbusiness, every car company on net zero and transmission of energy holy hell …the structural bull market coming – in copper, zinc, lithium, cobalt, nickel toa degree, rare earths – is just frightening.”
Beamentwants to own mines and be the contractor that can operate his mines, andothers. He says the cashflow from the contracting business can help get thecompany-owned projects to production. The approach mirrors his career: thefirst half was working for major mining contractor Barminco, overseeing otherpeople’s mines, before he turned to mining.
“You makeyour money out of mine ownership, let’s not kid ourselves,” he says. “Miningservices is bloody hard work.”
Fundmanagers are watching with interest. They know he doesn’t want to get too big –they have heard him talk of the soulless task of running a top-100 companywhere shareholders are often passive funds, and proxy advisers stick their noseinto company business.
“Bill hasunderpromised and overdelivered for the past 20 years,” Tribeca InvestmentPartners portfolio manager Ben Cleary says.
“He hasbeen a great CEO to back as an investor.”
Back toKalgoorlie
They likethat Beament has invested about $50 million into Develop Global, and he tellsinvestors he is in it for the long game.
EssentialMetals’ lithium asset, Pioneer Dome, would take Beament back to the Kalgoorlieregion where he spent much of his career. It’s close to a bunch of otherlithium projects – MinRes’ Mount Marion and Liontown’s Buldania – with an 11.2million-tonne mineral resource at 1.16 per cent lithium oxide grade.
That’s areasonably small project, but Beament knows it can get much bigger with furtherdrilling and investment. That’s how it works in mining, and the lithium game inparticular where resources can be firmed up pretty quickly.
“Don’tunderestimate being near a service hub like Kalgoorlie,” he says.
“You runout of nuts, bolts, gloves, glasses and all that sort of stuff. It is a reallygreat location. Flat country, there don’t seem to be permitting issues, we havea mining lease, an agreement with traditional owners, it could probably be fasttracked into production.”
Buying itwould create a smaller version of ASX-listed IGO, with MinRes-type miningcapability. MinRes, run by one of Australia’s 100 richestpeople in Chris Ellison, is Develop Global’s second-biggest shareholder.
TheEssential Metals deal was announced on Monday, and Beament says he has alreadybeen contacted about the lithium. It’s early days, but that shows how much heatis still in the sector.
As for him,how would his gold mining skills transfer to lithium?
“One of mymentors taught me a saying 25 years ago: same black hole, different address,”he says. “If I’m underground, I’m happy.
(20min delay)
