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+30% would do fine.
I can't wait for you to elaborate on the maths behind the below calc. of yours Fosters
Seems that copper needs to move 150% from todays price?
Too much emphasis is being placed on profitability of the project, there is a big difference in drilling and proving up a resource to take it toward mining it themselves, to selling it on.
They are just outlining a project that will show good enough economics along with geological justification for an acquirer to see that there is a business case to take it further.
It is still conceptual and will not be robust economics anyway.
Andrew. Agree up to a point other than to say imo a poc of 10k would not make Bush VERY profitable but more like MARGINALLY profitable.
Exactly what I've been saying Andrew, CB is making decisions basd on his personal life, age and ambitions not on the best route for the company.
I hardly post here much now as there is not a lot to say. This is bottom draw now - unless CB actually surprises everyone with a successful copper exploration play this year. All his previous exploration punts have failed but maybe he thinks he must get lucky soon :) Unless he gets lucky with exploration, I cant see the sp doing much now until POC hits $10K when bushranger value moves from being worthless to potentially profitable.
I think some are overthinking the manica sale rationale. The manica sale imho supports my previous view that CB knows time is running out for him (81 this year) . He has now accumulated a lot of cash quicker than he would have done under the original deal and he can now gamble it all over next 2 years on 9 Red and 15 Black on the roulette wheel, and hope he finally can make a name for himself and get the kudos from his peers.
Its not about the money for CB - its about the acclaim of finding a discovery before he leaves the stage. He wants to leave a legacy and his current legacy is not one that he wants !
It's a bit like someone selling all their assets and gambling it to see if they can be a millionaire. Madness to do that if we did it, but as CB is gambling with our money then very sensible approach from CB's perspective !
If he was in his 50s and had more time I think he would have kept manica and developed it long term and we would have seen 2p after official profit was announced in the final years accounts.
I will leave on some positive news. I haven't sold any as I think POC will ensure Bushranger will be very profitable and will, eventually, be sold but not for anywhere as much as CB implied and in much much longer time scales. 4 to 6p is my thinking but that may take another 2 years.
I'll see you again in 2 years or when POC hits $10K !
An excellent summary and analysis. One flaw - the chances of a Dividend are the same as me being given an astronaut opportunity - and I am 78 !!
In answer to Prickly (part 1):
I've had to think this through quite a lot. My thinking is that the deal for 23% of profit after opex (not 23% of income as has been incorrectly stated here many times) is not a great one for XTR mainly because it is opaque and debatable and for example what is capex and what is opex. It could be a non stop wrangle for the next few years.
A deal like Empress with a % off the top would be much preferable and surely the way to go on any future deal (or half off the top, half off the bottom!) - but we don't have that. But worth remembering that MMP not xtr built the mine for $10-$20m hence their keeping the lions share.
We are dealing with MMP a local co in Mozambique with probably little visibility on day to day ops. Grades are uneven and my understanding is that the "easy bit" of the mine has a couple of years left max. It was never going to be straight line $4-5m profit per annum for 7 years.
Manica would then need significant capex to address different ore types and areas, lets say another $10m for argument sake. MMP are not just going to pay for that and roll forward the 23% deal. XTR would have to stump up a proportion - I'm guessing the time for making a decision on that is close hence a deal discussion.
$16m equates to 3 to 4 good years net profit for XTR nailed down and no requirement to find significant capital for phase 2. If they don't pay on schedule we get the license back if I understand.
Its not an amazing deal but I think its OK if we put the money to good use - ok there's a question mark there!
1. personally I don't want anything more spent on drilling bushranger until copper goes past $10k + and I think most of us agree on that. Colin has confirmed no more drilling.
2. He does have very good connections in Zambia and a couple of well placed licenses in the NW which is the copper future I believe, I would like to see him add in that area with some of these funds and explore the ones we already have.
3. I would like a distribution of a part of the $16m ( say $4million) as some form of dividend so some cash is returned to shareholders. I am not sure currently how this can be achieved.
On balance I would rather have the cash figures confirmed now and drawn down regularly to target some good prospects in zambia, particularly the NW. IF the time ever came to do something with Bushranger we have cash.
if the deal gets rejected we sit with an unknowable $ profit share and a need to raise a chunk of cash to carry on to phase 2 probably quite soon. If we don't want to or can't raise it I'm not sure what happens. Wish it was $20m or 25 of course but as it stands we could be well placed to focus more profitably elsewhere.
Not an easy call but we are getting $16m pretty much guaranteed without having built a plant and the timing could be very good for investment elsewhere.
You can vote on line too, certainly via HL, and would imagine other brokers allow the same.
For 2 pence worth AA are still the frame. CB just playing it long and under radar.
Monica proves it , hence why he wasn’t shouting from the roof tops about it. He had already done a deal for RON and that’s ’later Ron’
His got the money so AA will not think his desperate to sell or do a fire sale of a deal.
The only good thing about XTR (and this includes all CB companies) was that it actually produced an income and hence not liable to regular dilutions that afflict the rest of his companies. I cannot see where the value in selling off for $15 m .
Brilliant deal for buyer MMP who have a delayed purchase arrangement so they can pay us out of cash flow . Largely using our 23% share of income. I was expecting $5m from income PA not from a flogging off a key asset for a song. I shall attend the GM and vote against. Unless anybody here can give me a good reason why not...
That's a very good question Billy, I've never thought of that. Other companies stop product when the viablity has gone, recently we've had Landrover stop production due to over production for instance so I suppose it's a thing.
I should imagine a copper producer wouldn't stop mining, just stop selling the copper and stock pile the pay until the price makes it viable again (hopefully) purely to keep the continuity for the workers etc.
Unlike Range Rovers the copper isn't going to suffer left in a field for a couple of years.
Plus the fact we won't be doing the mining so we don't have to worry about such things .
Jez my post from last night missed a few lines off as I was on a ferry in the Irish Sea.
Tonnage is important with break even point and equilibrium where X meets Y multiples by price.
You as CB says need copper at £xxx per ton to make it viable. What happens when copper price falls do we stop mining?
I'll pass on that one Cruella... and instead have fun responding to Jezzoo's "off to the races Zak"..
CB will be going off the the races in 24 whatever Jezzoo:
Meydan(Dubai)
Ascot
Epsom
Goodwood
and being a loyal Yorkshireman, a few visits 'up north' in 24 no doubt.. tough decisions to pick say just the three from:
Beverley
Catterick
Doncaster
Pontefract
Redcar
Ripon
Thirsk
Wetherby
York
Perhaps a new Program Manager on board xtr.l to help get it right on which race meeting when?
Hi NTM
Trying to get my head around selling Manica
few questions I think you can answer
If XTR kept 23% and not invested in the expansion
Would gold production /revenue be impacted by drilling program?
Would XTR still have got 23% of expanded mine when complete
Listened to podcast 3 times now and understand costs are not fixed in stone from outset plus XTR have no say in running project. So there is a risk costs could have increased which with higher interest rates could be disastrous.
Re Kukaya near term cashflow? Wasn't that supposed to happen by end 23❓
Thanks for your time
We will have a long wait bit that's the figure CB said would work.
And you can have all the tonnage in the world but if the copper in it is worth less than the cost of extraction it will never be viable. If he could prove up another .7mt to get us to 2mt and up the grade with a few lucky holes we'd be "off to the races Zak"
Jez £11k p/t
We have a long wait then. We keep hearing when copper price hits £??? Then it’s a economically viable. It’s economically viable when we hit our economics of scale. So it shouldn’t matter about a future higher price. We have to be producing lower than the spot price in the 1st instance. Capex can’t be set off future ifs and buts.
Get the tonnage right you will make profit regardless of spot price.
Waiting for future spot to go up is just investor relations smoke and mirrors. Then all of a suddenly a company works out guess it s
I'm generalising and taking all that into consideration as I can't be bothered to repeat it, it doesn't change the fact that ATM it's uneconomic and more drilling of the same grade won't help.
I'm praying for US$11k a tonne !
Hi Jez It’s not that grades are uneconomic. That is such too vague a statement. US$10,000 was a targeted price for copper to see the resource of this nature to be economic from as far back as the ‘21 conceptual study, and is evident that has not changed.
The economic limits of the deposit were initially calculated as part of a pit optimisation assessment using Deswik's pseudoflow module.
Using Deswik’s pseudoflow instead of the usual Whittling open pit optimisation software, with Deswik’s they have to calculate the revenues and costs for each block in the block model themselves, so have more input control. Potentially they could have been too cautious in overestimating those CapEx and OpEx costs, hence now why these are seeing some further optimisation as they fine tune the model as well as extra metallurgy to increase recovery rate.
I agree with everything you say NicetoMichu, especially the Bird will do what he likes bit.
Nothing I say on this BB will make the slightest of difference but it makes me feel better to vent knowing the old git reads it to judge how easy he's getting away with it.
I got it, hence the reply !
Irony doesn't seem to work here.
PS: A more general point I feel I should make here:
While I'm not overly enthused by this strategy of selling out on Manica to focus on Copper Exploration only, I'll counter that by saying that I don't think the skills of Mr Bird and his team 'mates' were suited to involvement in an ongoing African Gold production company situation. His and his 'mates' skills lie far more in the Exploration Space, and especially Copper Exploration ; so I'll just accept the latest strategy and park any thoughts I had on 'Not Nice to Michu' Mr Bird off the back of his non marketing of Manica.
I still have plenty of concerns here, but understand that Mr Bird has done what he likes as a rule previously here and I expect will readily find a way of doing what he likes going forward here too.. and outsiders to the Bird gang such as Ben 'Owell, myself and plenty of others posting here wouldn't be able to knock this Bird/his mates off perch, even if we tried 'ard.
If they don't find anything with a better grade all they will be doing is demonstrating more uneconomical resource.
Risky.