Chris Lee & Partners Ltd

Taking Stock – 12 February 2026

The fast-track panel's decision to take the full 140 working days to reach a final determination on Santana Minerals' application should be seen as a positive and necessary step rather than a delay.

By the time a decision is issued, it will be close to a full year since Santana formally entered the fast-track approval pathway, displaying that the panel is intent on running a thorough and defensible process, grounded in evidence rather than shortcuts and speed.

The purpose of the fast-track legislation was never to bypass environmental scrutiny. It was designed to bring certainty and timeliness to nationally significant projects while retaining a thorough and rigorous assessment.

Proof of this can be seen by the recent draft decision from the fast-track panel not to grant consent for a seabed mining project. While the fast-track process will produce faster outcomes, applicants still face a high level of scrutiny before being able to proceed.

In Santana's case, the panel will be larger than many other consent panels, ensuring that the decision isn't shaped by one or two individuals, but by a broad range of experts with relevant technical, environmental, economic, and regulatory experience. This materially reduces the risk of narrow or ideological decision-making and increases confidence that the final outcome, whether for or against, will be well-reasoned and robust.

Equally important will be how submissions are handled.

The panel can invite feedback from relevant parties, but relevance matters. This is not a popularity contest, nor a forum for ideological advocacy.

It would be inappropriate for shareholders to submit that the project should proceed simply because they support it. In the same way, it would be wrong for opposition groups to submit their personal views that mining shouldn't occur in their back yard. Other venues exist for the expression of such views.

Feedback must be from experts using the latest evidence, rather than based on speculation and claims about potential shortcuts in environmental management. This includes claims that there will be a tailings dam failure that have no basis in the engineering evidence actually before the panel.

New Zealand's regulatory framework is among the most rigorous in the world. Suggestions that this project will operate to substandard environmental controls ignore both our consent regime and the Santana management's demonstrated track record.

The panel's task is to assess facts, evidence, and enforceable conditions, not sentiment or fear.

Ultimately, the fast-track process for Santana is doing exactly what it was intended to do. It's testing the project against environmental impacts, economic benefits, engineering design, and risk management in a disciplined and independent way, within a defined timeframe.

A further development that reinforces the integrity of the process is Santana Minerals' recently executed land access agreement with Central Otago District Council.

Following extensive negotiations, the council has approved access arrangements over council-owned roads required for the project. This agreement relates solely to land access and constitutes neither approval for mining activity, nor disapproval.

The agreement provides clarity and certainty around access while explicitly preserving the independence of the consenting process. The council has been clear that it hasn't taken a position for or against the mine, and that the ultimate decision rests with the relevant regulatory and fast-track panels.

From a community perspective, the agreement establishes a transparent financial framework. Santana has committed to a CPI-indexed annual payment of $1.25 million to the council, equivalent to roughly $100,000 per month, every month, for the life of the mine (once commencing commercial production). These funds will be directed toward infrastructure, environmental initiatives, and broader economic development across the region.

This arrangement shows how local government can engage pragmatically with major projects without compromising neutrality. The agreement will deliver tangible, long-term community benefit which is a significant win for the Otago district.

Separately, there's been some noise recently about the project economics being misrepresented. However rather than being misrepresented, it is likely being understated by the constraints demanded by ASX listing rules.

When Santana published its feasibility study in July 2025, corporate tax payable to the New Zealand Government over the life of mine was estimated at $983 million. At the current gold price, that figure is now $1.7 billion. Estimated Crown royalties have also increased from $410 million to $703 million.

That's $2.403 billion in taxes and royalties alone. And that's before you add PAYE tax from the hundreds of employees who'll be working on site throughout the mine life.

These are material contributions to the New Zealand economy, and suggesting that the economics don't stack up or have been inflated ignores the reality of updated modelling and the very real increase in gold prices since the feasibility study was completed.

It would also be ridiculous for an opponent to claim to know more about the modelling than highly experienced, and accountable, experts.

Concerns about taxpayers being left to cover environmental cleanup costs don't reflect how modern mining regulation works. Western Australia's Mining Rehabilitation Fund, for example, provide an example of how some jurisdictions managed these costs.

The fund covers nearly 1,000 active mine sites. Since 2013, mining operators have contributed A$374 million to the fund through annual levies, yet actual expenditure on failed mine rehabilitation has been minimal.

The system ensures that when mining companies fail to meet their rehabilitation obligations, the fund covers the costs rather than taxpayers. 

New Zealand operates similar requirements, where companies must provide financial assurance covering full rehabilitation costs, protecting taxpayers from being left with cleanup bills. 

A rigorous process is ultimately in Santana's best interest. A consent that's been properly tested is far less vulnerable to challenge down the track.

A consent granted following a robust fast-track process is more likely to endure changes in political climate, judicial review risk, and public pressure. In that sense, the additional time being taken by the panel should be viewed as an investment in durability. It increases confidence that whatever the outcome, the decision will be grounded in fact, legally defensible, and able to withstand scrutiny.

It's also realistic to expect continued share price volatility through this final phase of the regulatory process.

As the fast-track panel undertakes its work, commentary and speculation will inevitably increase, generating noise that may have little to do with the project's actual merits. That volatility is a feature of all such projects at this stage, not a signal about the quality or integrity of the process underway.

At the same time, broader market conditions remain supportive.

Public support continues to build, with more than 22,000 New Zealand based shareholders now invested in the project, representing the majority of all Santana shareholders. The gold price has risen approximately 8% over the past month alone, materially increasing the economic benefit to the country. And recent drilling indicates significantly more gold than what is currently reflected in Santana's modelling.

The direction of travel is positive and has encouraging implications for long-term project value.

For shareholders, this final phase requires a clear-eyed understanding of risk and volatility. Each investor must consider their own risk tolerance and time horizon as the consent process runs its course.

The fast-track panel's role isn't to manage share price movements, but to reach a decision based on evidence from experts, not pressure from advocacy groups on either side.

If the project is ultimately consented, the value created for New Zealand, for shareholders, and through government royalties and tax revenue would be substantial.

That outcome, however, must be earned through process, not assumed.

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Travel

18 February – Christchurch – Johnny Lee

2 March – Christchurch – Chris Lee

3 March (am) – Christchurch – Chris Lee

3 March (pm) – Ashburton – Chris Lee

4 March – Timaru – Chris Lee

6 March – Wanaka – Chris Lee

Edward Lee 

Chris Lee & Partners Limited

Taking Stock 5 February 2026

IN ALL the intrigue and the publishing of interesting anecdotes, one question about gold continues to remain unanswered.

Who owns it?

When gold soared during January to briefly approach US $5,500 an ounce for about half a blink, the equivalent of NZ $9,100, a few blinks later it had returned to around NZ $7,800, a fall of around 14%. (At the time of writing it was an astonishing NZ $8,200.)

The price still seemed robust after that January 30 fall, having begun the year at around NZ $7,300.

The world looked to explain this by referring to geopolitical events, apparently pricing gold each day on the speed of Trump's flipping and flopping.

Clearly the fall was generated by "paper" gold in the derivative markets.

Physical gold has been in such a shortage that supply had almost vanished.

The price had hit such a trajectory that JP Morgan Chase was forecasting the gold price would hit US $6,000 an ounce before 2027, that is a figure of around NZ $10,000.

Elderly women in China were taking jewellery to a public gold-melting machine enabling them to sell their trinkets for hundreds, sometimes thousands of dollars.

All the while governments of the world were switching some of their reserves to gold, thus increasing demand.

Or were they?

In the last four centuries something like 250,000 tonnes of gold have been extracted from rock, or panned from creeks.

Every year somewhere between 2,000 and maybe 2,750 tonnes are produced.

We know jewellery consumes some of this; modern appliances consume a little.

Who owns the rest of the 250,000 tonnes?

It is certainly not New Zealand. We sell our produced gold within days of extraction, largely to the Perth Mint in Australia.

The best figures I can uncover shows that the USA is the largest holder of gold, with close to 9,000 tonnes. Germany, France, Italy, Switzerland, India, China, Japan and Russia own between 1,000 tonnes and 5,000 tonnes.

Call that 35,000 tonnes between the nine largest hoarders of the metal.

Who owns the rest? I have no idea. There is no public data to reveal this. Jewellery is not the missing link, though it would be a large part of it.

It is a fair guess that China owns much more than official figures show.

The Russians claim they are skilled at trading gold, though Putin, like Trump and Idi Amin, is not necessarily accurate at calling the cards in his hand. (Trump and Amin cannot read).

Where is it?

The US government's 9,000 tonnes has a market value of over US $1 trillion dollars though for some reasons the USA values gold at an historical cost, not at market.

The total of 250,000 tonnes at today's price would have a value of over US $27 trillion.

Who owns this?

The market believes China, Russia and others want to create a global currency based on gold, oil and other commodities, to break away from the US dollar, which is devalued by the printing machine (deficits, Quantitative Easing etc), at the whim of the USA. A global currency should not be priced by the whim of one country.

We will learn more of this some time.

Maybe we will then learn who owns the 250,000 tonnes.

Footnote: Santana, if consented, would aim to produce around 3 to 4 tonnes a year for 14 years, or more if gold exploration continues successfully. The mines at Waihi and Macraes produce a similar amount.

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ANY New Zealand investor who monitors the constant announcements of receiverships and liquidations must have noticed that in every case one particular creditor is always identified as a victim.

Of course that is the Inland Revenue Department, which inevitably has not been paid outstanding GST, PAYE, or more rarely, corporate tax. (Companies that collapse rarely owe tax. Corporate tax is a liability only when the company is profitable).

Taking Stock readers may recall that this newsletter has often railed against the inherent dishonesty of collecting money owed to the IRD (GST and PAYE) or others, and then spending it (to survive) rather than paying it to its rightful owner.

The Taking Stock campaign goes back nearly 40 years when several sharebroking firms in Wellington and Auckland collected money from the sale of clients’ shares, intermingled the money with company money, often used the money to pay for shares bought by different clients, and then, through breathtaking incompetence and/or dishonesty, went broke.

After the collapse, the poor client would find the broker had sold shares as instructed, but the client had never been paid, and had become an unsecured creditor with a real problem — dealing with a receiver/liquidator who has to first address secured creditors like the bank or IRD.

The same sort of cheating occurred in law firms and accounting firms. Sometimes there were fidelity funds, provided by all in the sectors to compensate. Fidelity funds exist today only in the memory of old fogeys, a status that may include me.

Brokers, lawyers and accountants rightly went to jail, or at very least went to Coventry, for their cheating.

So what the heck is happening with company owners and managers who steal GST and PAYE tax from the nation’s tax collector, the IRD, now disclosed almost every day? Do they go to jail for larceny?

Today brokers, accountants and lawyers, even real estate agents, are in for a "helping of porridge" if they do not isolate money received on behalf of the IRD, and pass them on at the appointed day.

How come failed building companies, restaurants, bars, cafes etc are gathering up months or even years of IRD money, and not passing the money to its owner?

Of course the first stanza of the explanation is that these companies, by definition insolvent (unable to pay their bills), are intermingling the money with their company revenues and very likely oiling the squeakiest wheel, when they pay any debts, each month.

A key supplier (say wine at a restaurant) will stop supplying if not paid. The IRD it seems will be tolerant. So the wine supplier gets paid by money belonging to the IRD.

The IRD wheel clearly is not squeaking loudly enough. 

Yet the IRD has the biggest bazooka. 

Why is the bazooka’s trigger not working?

Throughout my career, credit control has remained a function of critical importance in virtually every small business, and usually in every big business.

As a 15-year-old working in the holidays for my father’s business, I would make phone calls on the 21st of the month, politely asking if our invoice/statement had been received. That was 60 years ago. Bad debts were almost non-existent.

The IRD must now, as a priority, update its technology so that contact is made with any debtor whose due payment becomes two days overdue.

Early intervention is the equivalent of a very squeaky wheel. 

Penalty interest should begin. The IRD needs the power to put errant companies on weekly payment cycles.

A new commitment to repay the dues must be accompanied by the certainty that the bazooka is loaded, and will be used; Binary; pay or come to court; Not your money! Theft.

GST and PAYE is always money that belongs only to the IRD, as is the case with KiwiSaver deductions from the payslip.

The month or two granted to most companies to minimise administrative burdens by paying this two-monthly was never an invitation to use IRD money as company cash flow. The IRD is not a bank. It is acting for every New Zealander.

The IRD is fortunate that it does not "go broke" when its debtors fail to pay. The burden simply falls on taxpayers.

We are long overdue to stop this.

Talk to your local MP. This does matter. NZ’s available money for social services is insufficient, without allowing inept or dishonest companies to spend what is not their money.

One wonders how many hundreds of millions (at least) are unrecoverable (on behalf of taxpayers) and have to be replaced by higher burdens on those who do not commit fraud, and pay their bills.

Restaurants and bars seem to be prime offenders.

Message to the IRD : go after these cheats before the amount builds up.

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THE former wholesale-only fund manager from Rangiora, Bernie Whimp, did NZ investors a great favour when he caused the Financial Markets Authority to face questions about how they define a "fit and proper" person. The question needed raising.

Whimp, in my view just a public nuisance, has had his empire closed down by the FMA. He has responded by seeking to fight the FMA, claiming their use of a liquidator will mean that of the $50 million he had raised, investors might lose around $20m, because of enforced sell downs of his plans and investments.

He now is extremely chatty on a forum, right down to his low opinion of some of his former staff. He says he employed 44 people, a few of whom were duds.

My comment on this is that if he was carving off an (excessive) 3% fee for managing $50 million, his income would have been $1.5m. 

Forty-four staff each being paid $35,000 a year would cost $1.540m. A salary of $35,000 sounds credible, given the outcome, but income of $1.5m would not be enough to cover the lease cost of a range of staff vehicles, let alone anything for him.

For comparative purposes, successful managers of other people's money usually manage "billions" and usually charge far less than 3%. They attract useful staff by paying a tad more than what his arithmetic looks like (but may be misunderstood by me).

Whatever, the fit and proper person issue raised is important. Thanks to Whimp for being the catalyst for a deep discussion.

Now we have a second issue stemming from Whimp. Again, I thank him.

The Commerce Minister, Scott Simpson, is publicly discussing the need to protect investors with new clarity about the definition of a wholesale investor.

Whimp says the majority of his few hundred investors were "wholesale". I take that to mean they were experienced and knowledgeable, that they conducted sensible due diligence and they were skilled in weighing risks and return.

By definition they must have selected Whimp as their fund manager after, at very least, a Google search.

My view is that Simpson is exactly right to revisit the optimal means of allowing wholesale investors to be accurately defined and certificated, then differentiated from retail investors who need protection.

What wholesale investors will not be are people with some money from one-off events, like selling a house or a business, unless they display a history of making unlisted investments based on intelligent due diligence and risk/return analysis.

They will not be people who happen to be in a well-paid occupation, but have no relevant investment knowledge.

They will not be people who do not have access to skilled advisors.

They will not be people who become excited by newspaper advertising and are influenced by offers of high returns.

Commerce Minister Scott Simpson is well aware that at least 30 lawyers and accountants have been identified for endorsing wholesale investor status, without any real assessment of their skills, or their ability to withstand capital losses. Presumably, they will be dealt with, shortly.

Those lawyers and accountants who sign such certificates for $105 plus GST may be, should be, charged with fraud, for false certification.

There are not many reasons that I can imagine for thanking Whimp’s presence in financial markets, but I sincerely would thank him if the regulators soon, very soon, were to call me in to discuss what I have learned about wholesale certification, and the qualities of fit and proper financial market people.

Asked to demonstrate “experience” one investor wrote that he had a KiwiSaver account, ergo, a wholesale investor.

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While Simpson is thinking of investor protection, he needs to focus his mind on the responsibility of those newspapers who advertise offers that are either illegal or clearly absurd.

Newspapers in the South Island have often accepted the money, published absurd offers, and claimed no responsibility when investors were subsequently ripped off.

One of the country’s finest legal minds sees this subject as in need of resolution.

Of course the media needs advertising revenue. Where is its accountability for recklessly promoting illegal or improbable advertisements?

How come a newspaper could run an article about the fraud in, say, Bridgecorp, and two pages later run a half page advertisement for unsecured notes investments ………... in Bridgecorp?

Check out the Christchurch Star, a giveaway paper, and some of its advertising in recent years.

Is it time to test liability in a formal setting?

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Travel

12 February – Lower Hutt – David Colman

18 February – Christchurch – Johnny Lee

2 March – Christchurch – Chris Lee

3 March(am) – Christchurch – Chris Lee

3 March(pm) – Ashburton – Chris Lee

4 March – Timaru – Chris Lee

6 March – Wanaka – Chris Lee

Chris LeeChris Lee & Partners Limited