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The coming lithium, copper bull market will be ‘frightening’

Bill Beament, the man who turned Northern Star Resources from a $1 million gold miner into a $10 billion company, says he saw this week how hot lithium really is.

Lithium created more millionaires in Australia than any other sector in the COVID-19 and post-COVID eras and the party is only just getting started, according to one of the country’s hottest miners, Bill Beament.

Beament, 48 and brimming with self belief, says the closed-door conversations happening in boardrooms involving lithium and securing supply of lithium is like nothing seen in Australia in the past 50 years.

Chemicals companies, battery makers and car manufacturers are all cold-calling lithium hopefuls and miners, trying to get their hands on supply of it and other battery 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 that is nowhere near production.

“I hadn’t seen this, or heard about this, in my time,” Beament says. “It has not happened since the ’60s and ’70s, when the Japanese and the Koreans needed steel for their industries and we opened up the Pilbara iron ore district.

“This is what’s happening now, and I don’t think people truly understand what’s going on.”

Perth-based Beament, the son of a farm machinery and parts dealer, made his name by taking gold miner Northern Star Resources from $1 million to a $10 billion blue chip last decade. He made plenty of money for shareholders along the way, and is one of a handful of mining executives now closely followed by Australian and offshore institutional investors.

He’s known for a few things: his confidence, his ability to get the most out of blue-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, while trawling auction clearance sales with his dad, who would buy second-hand tractors, headers and the like from farmers in Western Australia’s wheat belt and sell them for parts.

“You learn a few tricks of the trade, bidding and negotiating and spotting value and what it means,” he says.

He says the secret is to always put yourself in the vendor’s shoes.

“You have to have a win-win on both sides. If you’re one of those business people that want to leave nothing on the table – my old man taught me this – you might get one deal away, but you never do another one.” It took more than a dozen deals to create Northern Star.

His latest deal is buying into lithium, at a time when it is the hottest sector in Australia. On the ASX, all the top five stocks in the benchmark S&P/ASX200 over the past three years are lithium plays: Liontown Resources, Sayona Mining, Core Lithium, Pilbara Minerals and Lake Resources. Four of those five were up 20-times or more over three years.

Beament is buying via his new company, Develop Global, a microcap where he owns a 30 per cent stake. It’s part underground mining services, part asset owner, and very much a mini version of Chris Ellison’s Mineral Resources. It has a copper/zinc project just outside Canberra and another in the Pilbara, and its pitch is about being a transition metals/future-facing metals-type miner and mining services provider.

Owner and contractor

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 when the world normalises, the commitments that every government has made, every big business, every car company on net zero and transmission of energy holy hell … the structural bull market coming – in copper, zinc, lithium, cobalt, nickel to a degree, rare earths – is just frightening.”

Beament wants to own mines and be the contractor that can operate his mines, and others. He says the cashflow from the contracting business can help get the company-owned projects to production. The approach mirrors his career: the first half was working for major mining contractor Barminco, overseeing other people’s mines, before he turned to mining.

You make your money out of mine ownership, let’s not kid ourselves,” he says. “Mining services is bloody hard work.”

Fund managers 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 company where shareholders are often passive funds, and proxy advisers stick their nose into company business.

“Bill has underpromised and overdelivered for the past 20 years,” Tribeca Investment Partners portfolio manager Ben Cleary says.

“He has been a great CEO to back as an investor.”

Back to Kalgoorlie

They like that Beament has invested about $50 million into Develop Global, and he tells investors he is in it for the long game.

Essential Metals’ lithium asset, Pioneer Dome, would take Beament back to the Kalgoorlie region where he spent much of his career. It’s close to a bunch of other lithium projects – MinRes’ Mount Marion and Liontown’s Buldania – with an 11.2 million-tonne mineral resource at 1.16 per cent lithium oxide grade.

That’s a reasonably small project, but Beament knows it can get much bigger with further drilling and investment. That’s how it works in mining, and the lithium game in particular where resources can be firmed up pretty quickly.

“Don’t underestimate being near a service hub like Kalgoorlie,” he says.

“You run out of nuts, bolts, gloves, glasses and all that sort of stuff. It is a really great location. Flat country, there don’t seem to be permitting issues, we have a mining lease, an agreement with traditional owners, it could probably be fast tracked into production.”

Buying it would create a smaller version of ASX-listed IGO, with MinRes-type mining capability. MinRes, run by one of Australia’s 100 richest people in Chris Ellison, is Develop Global’s second-biggest shareholder.

The Essential Metals deal was announced on Monday, and Beament says he has already been contacted about the lithium. It’s early days, but that shows how much heat is still in the sector.

As for him, how would his gold mining skills transfer to lithium?

“One of my mentors taught me a saying 25 years ago: same black hole, different address,” he says. “If I’m underground, I’m happy.”