Hi Danny, my rationale (for what it's worth), I'm the biggest gold bull you'll find but I'm under no illusion that this level of margin expansion is completely unsustainable. There are projects coming online that are absolute turds yet still highly profitable. By just about every metric, gold priced in AUD is more stretched than anything I've ever seen and mean reversion in markets is a real phenomenon, ignore it at your own peril readers. I've also been investing in this space long enough to witness how quickly funding dries up when the market turns even for top quality assets. The periods from 2012-2016 and 2021-2023 were absolutely brutal. Ultimately, the tie up provides certainty through front loaded RMS cash flow in this cycle, enabling the development of low cost assets under almost any circumstances. That level of certainty is incredibly rare in gold mining.
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