Chris Lee & Partners Ltd

Taking Stock - 11 June 2026

Edward Lee writes:

CRITICAL minerals and strategic resources are fast becoming one of New Zealand’s biggest opportunities.

New Zealand has spent many years talking about productivity, exports, regional development and building a stronger economy. Governments, business leaders and economists return to these themes often, but far less attention is given to the practical question of where future growth will actually come from.

For a country of five million people, economic growth is ultimately built on producing goods and services that the rest of the world is willing to pay for.

Historically, New Zealand has achieved this through agriculture, tourism, retail, forestry, technology and services, and now, another sector is attracting renewed global attention - mining and strategic resources.

Around 70% of New Zealand's economy is made up of service industries. Productive sectors such as agriculture, forestry, fishing, manufacturing and resource extraction account for a much smaller share of GDP, despite generating a significant proportion of the country's export earnings.

Recently, I spent time with management from both Tāiko Critical Minerals and Rua Gold. I have also continued to follow developments at Santana Minerals, which many of our clients have invested alongside us over recent years.

These companies all operate in different commodity markets and have different development pathways, but together they highlight something increasingly clear in that the world is changing rapidly, and secure access to raw materials is becoming strategically important again.

For decades, globalisation encouraged countries to rely on international supply chains, with an assumption that raw materials, components and finished products would always be available when needed.

That assumption is now being challenged by trade tensions, war, export controls, energy security concerns and deteriorating relationships between major powers. The result is that minerals, mining and resource security have returned to the centre of economic discussions.

Critical minerals feed modern economies through energy systems, electronics, industrial manufacturing, infrastructure, telecommunications, transport networks and defence capability. Everything from electric vehicles and batteries through to smartphones, semiconductors, solar panels, data centres and military equipment require materials that must come from somewhere.

Remember, everything around us has either been mined or grown, making resource extraction one of the most essential parts of every modern economy. Whether it is timber, coal, iron ore, gold or rare earth minerals, modern societies depend on raw materials.

New Zealand cannot afford to be left behind. If critical minerals become harder to source while demand continues to rise, basic economics suggests prices will increase and countries with secure supply will be in a stronger position.

The idea that New Zealand should avoid developing its own resources, rely on other countries to do the mining, pay whatever prices global markets demand, and forgo the jobs, taxes and royalties that responsible mining can create, simply leaves the country further behind.

China recognised the strategic importance of critical minerals earlier than most countries. Over many years it built influence across mining, refining, financing and processing, with processing and separation capacity often becoming the more important part of the supply chain.

In several commodity markets, Chinese producers have also been prepared to increase supply aggressively when competing projects outside China were attempting to establish themselves. This placed pressure on prices, made financing more difficult and reinforced China’s dominance across many mineral supply chains.

Investors who have followed lithium, rare earths, antimony or other specialty mineral markets will recognise this pattern.

Projects outside China can spend years drilling, consenting, modelling economics and raising capital, only to face sharp price falls just as they approach development.

Governments increasingly describe critical minerals as strategically important, but projects do not get built from supportive speeches. If governments genuinely want diversified supply chains, there is a reasonable argument that strategically important projects may require greater government support.

That may mean subsidies or direct ownership, or it may involve debt facilities, purchasing commitments, faster consenting, strategic investment, offtake agreements or mechanisms that reduce exposure to market distortions.

The New Zealand government attempted to modernise our outdated consenting system by introducing legislation to help speed up the process, however the Fast-Track process may need to be renamed, as it certainly isn’t fast.

There has been some discussion that “consented projects which go through this new legislation will get reversed”. However, in practice, this would be highly unlikely.

Labour, National, ACT and New Zealand First, representing the overwhelming majority of Parliament, have all indicated that companies already within the Fast-Track process, provided applications have been lodged before the election, would continue progressing through that process.

This has created a rush by companies to get applications lodged before the election.

If an election resulted in a change of government, new applications would likely be halted while any incoming government negotiated potential changes to Fast-Track legislation but companies already within the process are likely to be in a materially stronger position than those still preparing applications.

This broader backdrop helps explain why companies such as Tāiko Critical Minerals are beginning to attract attention.

Tāiko’s Barrytown project sits on the West Coast and focuses on mineral sands containing products including ilmenite, garnet, zircon and rare earth-bearing minerals.

Tāiko has now lodged its substantive Fast-Track application, representing another step forward in the project's development pathway.

While regulatory approvals are never guaranteed, the project is continuing to progress through the various stages required before development decisions can ultimately be made.

Although mining often creates images of deep underground operations or massive open pits, this project is materially different. It is a relatively shallow mineral sands operation, on farm land, with average mining depths around six metres and maximum depths of approximately nine metres.

Lower mining depths reduce extraction complexity, simplify rehabilitation planning and lower operational risk compared with many traditional mining developments.

The company has indicated that the disturbed mining footprint at any one time would only be approximately four hectares, with rehabilitation occurring progressively as mining advances.

The shallow nature of the deposit also allows the resource to be drilled and understood in far greater detail than many deeper mining projects. Over 270 drill holes have been completed, with drilling on 100 metre lines at 30 metre hole spacing, and samples collected at one metre intervals.

This provides a level of resource definition that is unusual for many early-stage mining projects and provides investors with greater confidence that the company is working with a well-tested and well-understood resource.

The company already holds resource consent for the initial mining area and has consent for a mineral separation plant near Rapahoe.

It is also worth noting that the initial mining area and mineral separation plant were consented through the traditional Resource Management Act process, including public submissions, hearings and Environment Court proceedings.

The Fast-track application relates primarily to extending the resource area and mine life rather than creating an entirely new project from the beginning.

The project's most distinctive feature is its grade. Barrytown contains one of the highest global in-situ valuable heavy mineral grades, reportedly almost five times higher than many comparable mineral sands projects internationally.

Many mining projects are promoted on size. However, in practice, it is often grade that determines whether a project becomes commercially attractive. Higher grades mean less material must be mined, transported and processed to achieve the same production outcome. The result is lower capital requirements, lower operating costs, a smaller disturbed footprint and faster progressive rehabilitation.

Combined with shallow mining depths, extensive drilling and an already well-advanced consenting pathway, it is not difficult to see why the project has attracted international attention.

Another interesting part of Tāiko’s approach is its focus on processing.

Historically, many mineral sands projects export mixed concentrate offshore. Once exported, overseas processors separate the minerals, refine them and capture much of the economic value.

Rather than shipping this mixed concentrate offshore, Tāiko intends to separate the individual minerals here in New Zealand before sale. This should improve pricing outcomes, reduce dependence on overseas processors and allow more of the economic value to be retained locally.

If New Zealand is going to develop natural resources, thinking carefully about where value is created is important.

Another example of how quickly this environment is changing is Santana Minerals.

Mining projects do not succeed on geology alone. As projects start to mature, financing, permitting, technical studies, environmental management, engineering design and political certainty become increasingly important.

Santana’s Bendigo-Ophir project has now moved materially further through the Fast-track process than many investors may realise. The statutory decision date remains 29 October 2026, with a draft decision expected at least six weeks beforehand.

Public Fast-track documents now include more than 30 Expert Panel minutes, multiple technical conferences, site visits, specialist evidence, legal submissions and concurrent hearings across disciplines including groundwater, planning, ecology, economics, transport, landscape, geotechnical engineering and environmental management.

The scale of this process highlights how much the conversation has shifted. The focus increasingly appears to be on management plans, consent conditions, groundwater work and technical refinements rather than whether there is a project at all.

Santana has recently been asked to provide updated management plans and proposed consent conditions by 22 June.

None of this suggests approval is guaranteed, but we remain hopeful. If this application were declined, it would raise broader questions about New Zealand’s ability to attract capital into large-scale resource developments.

Environmental opposition will always exist, with debate around water, landscape effects, ecology and broader environmental considerations.

Santana is aware of these concerns and will address legitimate issues carefully through the consenting process, while also responding to claims which are inaccurate or not supported by the evidence.

Further south, Rua Gold represents a different type of resource opportunity, with most investors still viewing the company primarily through the lens of gold, even though that description increasingly understates what management appears to be building.

The more interesting part of the Rua story may be antimony, a metal that receives far less attention than gold, copper or lithium because most people have never heard of it. Antimony is becoming increasingly important across batteries, semiconductors, flame retardants, industrial manufacturing, photovoltaic equipment and defence applications.

Products ranging from ammunition to night vision equipment rely on antimony in various forms, while China’s dominance of global supply chains has reminded investors and governments how vulnerable supply chains can become when production and processing are concentrated in a small number of jurisdictions.

Rua’s Auld Creek project combines gold with antimony, and management has increasingly positioned the project around this critical minerals opportunity rather than gold production.

However, antimony is interesting because demand is increasingly influenced by defence procurement, supply chain resilience, export restrictions and national security concerns, alongside traditional industrial demand.

As geopolitical competition increases, antimony has moved from being viewed simply as an industrial metal to being recognised as a resource with strategic importance.

Tāiko and Rua are not identical projects. One is focused on mineral sands and value-added separation. The other combines gold with strategic antimony exposure in the Reefton Goldfield.

The common thread is that both projects sit within a changing global environment where supply security, processing capability and resource independence are becoming more valuable.

Over recent decades, New Zealand has become more hesitant about resource development while continuing to discuss the need for higher productivity, stronger exports and greater economic resilience. Those goals need to be reconciled with the reality that modern economies depend on minerals.

Renewable energy systems, advanced manufacturing, defence capability, artificial intelligence infrastructure, data centres, telecommunications networks and batteries all require raw materials.

The real question for New Zealand is not whether resource extraction occurs, but where it occurs, under what standards, and who benefits from it.

Mining should be scrutinised carefully, with high expectations around environmental management, community engagement and rehabilitation.

However, rejecting credible projects simply because they involve mining becomes harder to justify when New Zealand is also seeking higher productivity, stronger exports, regional investment and more resilient supply chains.

It is also becoming increasingly difficult to say no to mining given the benefits it can bring to local communities through jobs, taxes and royalties. Mining has, and will continue to, transform local communities.

The West Coast provides an interesting example. It already has infrastructure, communities with mining experience, established transport networks and a long history of resource development. Projects developed in regions that understand mining often face different challenges from projects attempting to establish entirely new industries.

What stands out is that these projects are no longer concepts on a map.

Santana is progressing through the Fast-Track process. Rua is advancing what may become one of the most strategically important antimony projects in the country. Tāiko has assembled a combination of high grades, shallow mining depths, extensive drilling, existing resource consents and value-added processing that is uncommon within the resource sector.

We continue to believe New Zealand possesses far more strategic value than it often gives itself credit for. Strategic resources, regional capability, existing infrastructure and growing global demand create opportunities that are likely to become increasingly important over the next decade.

Clients interested in learning more about Santana Minerals, Tāiko Critical Minerals or Rua Gold, particularly those comfortable with higher-risk and more speculative investments, are welcome to contact our office.

We would be happy to discuss these companies in greater detail and whether they may be appropriate within the context of your overall portfolio.

Infratil Bond Issue

Infratil has announced a subordinated capital bond issue. The offer is for a 31-year bond, first redeemable after six years. Like similar capital bonds on our exchange (such as CEN090), the bond is priced assuming it will mature after six years on the initial optional redemption date.

The bonds, paying 5.50%, will also be listed on the NZX, allowing investors to exit the investment whenever they would like.

Infratil is to raise $150 million, with the option to accept unlimited oversubscriptions. The bond will carry an investment grade credit rating of BBB-, two notches below Infratil’s own rating (BBB+). This discrepancy is to account for the subordinated nature of the capital bond.

Investors wishing for a FIRM allocation should contact us as soon as possible with their CSN and amount they wish to invest.

Paraparaumu Seminar

The first of our seminars this year will be held at Southwards, Paraparaumu at 10.30am on July 7. Please contact us via email if you would like to attend.

New Financial Advisor Position

We are currently looking to add an experienced Financial Adviser to the Chris Lee & Partners team.

This is a long-term role based in Paraparaumu, working closely with our long-standing clients throughout New Zealand.

If you are interested in learning more, please contact us confidentially at office@chrislee.co.nz

Travel

24 June – Lower Hutt – David Colman

26 June – Napier – Edward Lee

30 June – Christchurch – Chris Lee (FULL)

1 July – Christchurch – Chris Lee (FULL)

Chris Lee & Partners Limited

Taking Stock 4 June 2026

Chris Lee writes:

Heartland Bank Merger

THE recent news that Heartland Bank is to merge with TSB Bank will inject confidence into financial markets.

It will surprise no serious financial market participant, having been mooted for at least a decade, often discussed in Taking Stock.

People like the late Lloyd Morrison, his brother Rob Morrison (former Kiwibank Chairman), and Bill English have all discussed the need for bank consolidations. Given Infratil founder, the much admired Lloyd Morrison, died 14 years ago, this first step towards NZ banking consolidation is hardly a surprise.

What may be a surprise is the timing, the merger coming at a time when NZ business confidence is low, and prospects look bleak, with no obvious plan to reduce national debt, and much childish talk in the media against projects that can quickly increase tax revenues, productivity and average wages.

The transaction values TSB at $620 million, which is 76% of its book value, implying book value is bolstered by intangibles.

It values Heartland's shares at $1.25, a price immediately achieved on the share market upon announcement of the news this week.

Heartland's nett cost, payable in cash, seems to be low tens of millions given the structure of the deal, with TSB effectively funding most of the cost.

TSB is owned by TOI, a community trust tasked with supporting groups in Taranaki.

As the sole shareholder, TOI would never be my idea of an ideal overseer of a bank, though it no doubt has some nice people on its community-elected board, as well as some caring people focussed on their charitable grants.

The new bank will be chaired by one of New Zealand's most successful and admirable business leaders, Greg Tomlinson, himself a foundation shareholder and board member of Heartland Bank, and now a 7% shareholder of the proposed bigger organisation.

Building a stronger governance and executive team will be a major task for Tomlinson.

The TSB began life in the 1980s when there were many regional savings banks, including the Auckland Savings Bank, the Wellington Savings Bank, Canterbury Savings Bank and several others.

Many of these merged to create Trustbank, which Westpac acquired under that brand name when it was building its NZ scale.

The Auckland Savings Bank and the Taranaki Savings Bank had declined to be part of Trustbank, the Auckland bank eventually selling to the Commonwealth Bank of Australia (as ASB Bank).

Taranaki held out and has operated as a mildly profitable, folksy provincial bank owned by the Taranaki Community Trust, which has a community-elected "foundation" board that elects the directors to govern the bank.

For 21 years TSB was managed in a kind, cautious manner by Kevin Rimmington, then successfully by Kevin Murphy till 2018.

Since then TSB has had two female CEOs, Donna Cooper and the current CEO, Kerry Boielle, who may take up a management role in the new bank.

All the way through these 38 years the bank has had a board that was a mix of community people. 

The directors appointed by the community foundation are a bunch of people with varying backgrounds, none of whom would fit my description of a natural director of a bank.

My definition is irrelevant.

TSB bank was a community bank and offered simple products with a low level of complexity, low margins, low risk, an emphasis on social matters, and no obvious ability to compete with Australian banks.

It certainly has not failed to connect with Iwi, both the foundation and the bank having directors with strong Treaty commitments.

While TSB has been operating as designed, New Zealand has been debating how a New Zealand-owned bank could compete effectively with the admirable Australian banks.

Scale – size – matters.

In the late 1990s the government had missed a chance to buy the National Bank of New Zealand from Lloyds Bank, which was keen to sell. ANZ bought it. Hmm.

So Kiwibank was formed, as a welfare bank, its promoter being the late Jim Anderton, a socialist with precious little connection with commerce.

After a tough few years, Kiwibank morphed under excellent management, though starved of capital and never free from the constraints of a bumbling Crown ownership structure.

By 2010, when Heartland was formed, TSB was making modest profits. The PSIS (now the Co-operative Bank) was fumbling but surviving, and the Southland Building Society (SBS Bank) was eking out a role in the South Island. Kiwibank was becoming a small but serious bank.

It was fairly obvious to me, and many others, that a grand merger of Kiwibank, Heartland, TSB, SBS and the PSIS bank would collectively provide NZ with a genuine home-grown banking option. Today, the ideal merger would be based on Kiwibank.

The topic was regularly discussed, and has continued to be discussed for 15 years, sometimes raucously, in Taking Stock.

Heartland has now succeeded with what may be the first step towards a New Zealand bank with a wider range of services and with scale.

The Heartland NZX listing, with access to capital and to capital market disciplines, will open new doors for the TSB.

Wellington mumbles about Kiwibank's muddling Crown constraints.

Opportunistic Kiwisaver salesmen salivate at the thought of getting privileged discounted access to a Kiwibank sharemarket listing. Ignore them.

Might Heartland's first step with TSB be given two or three years to merge effectively, demonstrate the benefits of scale, and then be the vehicle to re-ignite an adult discussion about a truly sizeable NZ bank, such as we have not had since the destruction and subsequent forced sale of BNZ?

Remember BNZ's collapse was principally caused by dreadful government inattention to mundane issues like banking supervision and capital controls.

Such goofiness is unlikely to recur, meaning a scaled new bank, listed and with access to capital, would not be likely to follow the BNZ's crazy fast route to hell.

Under the new name of TSB Heartland, the current merged banks might increase earnings per share, and build a more diverse, resilient organisation. There would then be hope that one day, NZ will own a competitive sizeable bank.

The next steps will be to allow Tomlinson the chance to build a board and an executive management that achieve those goals.

How he would love to have the now departed National Bank of New Zealand's outstanding banker, Sir John Anderson, helping him to achieve his vision!

Wellington Property Market

THE Wellington commercial property market tells the story of a capital city crippled by previously dreadful leadership and by fear of the future.

Commercial property sales are almost nil as, under pressure, vendors fear a vicious round of formal devaluations if sales focus at current offered prices.

Newly developed residential property, townhouses etc are recording almost no sales, as developers fight to hold out their lenders, in hope of recovering at least their cost prices.

Buyers, of which there are potentially many, are also holding out, expecting even greater discounts in a market that would be even further depressed were lending rates to increase, as forecast.

In a city dominated by left-wing politics, obvious solutions are ignored. For example, neither the council nor Kainga Ora have been buying the hundreds of townhouses now selling at or below cost, despite the pressure on government and local government to provide ever-larger numbers with shelter.

Wellington could not avoid the damage done by the Christchurch, Kaikoura and Seddon earthquakes.

Ancient water and sewerage pipes do not function better after being heavily shaken.

Wellington could have found better solutions had it not employed a council chief executive who was inept and detached from her “board of directors”.

More so, it needed a wise, experienced, commercial mayor, such as it now has, thankfully.

Instead it appointed a dysfunctional young woman with no meaningful commercial training, inadequate social skills, and no leadership qualities.

A functional council led by a competent mayor would have advanced the most obvious first step.

Inner-city living was that first step.

Many old buildings, once occupied by small business, had demonstrated good “bones” by surviving the big earthquakes.

Developers bought buildings, refurbished them with apartments, and looked to university students and others to buy market rents.

Student numbers fell, not surprisingly given the gap between university ideology and job market requirements, the concept created by Ardern’s government unsurprisingly failing.

Her government preached university education should be the goal for all. The job market begged to differ. I hate to label Victoria University as a hotbed of irrelevant socialists but that is how it presents itself, through the media.

Shorn of overseas and domestic renters, the inner-city rentals were in need of council and government support.

The simple answer was a council or government rental guarantee, leading to lower rentals (less risk for the developer) and a rise in inner-city numbers.

All over the western world there is evidence that bigger numbers in inner-city living refreshes economies, leads to a small security risk (and thus cost) and a more united city.

Councils which provide a rental guarantee lead to an increase in developments, lower rentals and, most importantly, do not involve the sort of public debt required to build.

Wellington, a city built around central government and thus public servants, elected a mayor with neither experience, knowledge, nor wisdom.

Sadly, some false statistics told a misleading story. These falsely based statistics told Wellington and New Zealand that Wellington was the most productive per-head city in New Zealand, its citizens having an exceptionally high average salary.

Here is the explanation.

Gross Domestic Product (GDP) divided by income-earners provides a figure of individual productivity. Wellington’s figure is high.

GDP is calculated by adding up all the sales and value created - in New Zealand’s case perhaps close to $300 billion. To that figure is added the cost of the public sector; not the value or sales of the public sector; the cost.

So if Wellington has more public servants and pays them higher salaries, GDP goes up! If the cost is $150 billion GDP rises to $450 billion.

The public sector is on average paid more than the private sector.

The false calculation method “proves” that Wellington is more “productive” than the Waikato, or Taranaki, or Canterbury, or Southland; or anywhere.

This methodology does not reflect “productivity” or “value” in any definition I understand.

I see cost, with virtually no value, in many government entities. (Thankfully, ACT looks on from the same angle).

Wellington now has a genuine leader, the former leader of the Labour Party, Andrew Little.

It needs right now to restore the inner city, attracting new residents by encouraging developers, and by enabling sales to recommence.

Infratil Bond Issue

Infratil has announced a subordinated capital bond issue. The offer is for a 31-year bond, first redeemable after six years. Like the other similar capital bonds on our exchange (such as CEN090), the bond will be priced assuming it will mature after six years on the initial optional redemption date.

The bonds will also be listed on the NZX, allowing investors to exit the investment whenever they would like.

Infratil is to raise $150 million, with the option to accept unlimited oversubscriptions. The bond will carry an investment grade credit rating of BBB-, two notches below Infratil’s own rating (BBB+). This discrepancy is to account for the subordinated nature of the capital bond.

The offer opened Tuesday (2 June), with FIRM offers closing at 10am this Friday, 5 June. 

These bonds will carry a minimum interest rate of 5.50%.

Investors wishing for a FIRM allocation should contact us as soon as possible with their CSN and amount they wish to invest.

Ryman Bond Offer

Ryman Healthcare is considering an offer of 6-year fixed-rate, senior, secured bonds.

The interest rate has not yet been set, although given current market conditions, we expect the rate to be around 5.70% per annum, fixed for the full 6-year term.

Ryman is also likely to pay the transaction costs, meaning clients are unlikely to pay brokerage. This will be confirmed when the full offer documents are released.

Ryman is New Zealand’s largest retirement living and aged care provider, with 47 retirement villages across New Zealand and Australia. It provides homes to more than 15,500 residents and employs around 7,800 staff.

Ryman has been through a major business reset over the past two years. Its latest result showed a meaningful improvement, including its first positive free cash flow result in more than a decade, with revenue increasing to $849 million.

The company has also reduced its debt level to 27.8% (which is the lowest in the sector), has no bank debt maturing until FY31, and is continuing to release cash from asset and land sales. Ryman has indicated that its focus is now on improving aged care earnings, reducing vacant stock, lowering capital expenditure, and strengthening cash flow from its existing villages.

In our view, Ryman is now in a much better position than it was two years ago. The company has moved away from its previous high-growth development model and is now focused on cash flow, debt reduction, and disciplined capital management.

Full details of the offer are expected next week.

If you would like to register your interest, pending further information, please contact us promptly with the amount you may wish to invest and the CSN you intend to use.

Please note that an indication of interest does not create any obligation or commitment to invest.

Paraparaumu Seminar

The first of our seminars this year will be held at Southwards, Paraparaumu on July 7. Please contact us via email if you would like to attend.

New Financial Advisor Position

We are currently looking to add an experienced Financial Adviser to the Chris Lee & Partners team.

This is a long-term role based in Paraparaumu, working closely with our long-standing clients throughout New Zealand.

If you are interested in learning more, please contact us confidentially at office@chrislee.co.nz

Travel

8 June – Nelson – Chris Lee (FULL)

9 June – Blenheim – Chris Lee (FULL)

30 June – Christchurch – Chris Lee (FULL)

1 July – Christchurch – Chris Lee (FULL)

Chris Lee & Partners Limited