The only thing I know is that this will be moving a lot higher over the coming weeks.
wassapper - 21 May 2015 - 14:48 - 3293 of 3293 - 3
@ Cash - I have dug up my posts 847 and 942 on this. See below. A very important point is that Jan said yesterday that the current resource estimates were based upon what Jan said was 0.15% (??) Cu in the tailings. On the company website it varies a little higher (0.23%). However, yesterday he said that in the past there was talk of something like 0.5% Cu - that is a major upgrade if true of in excess of 100%. Was the $400m based upon 0.15%? If so it could be 3 times that. At least 2 times 0.23%. And they are looking for other projects.
I've been in this game too long to get carried away, but my view (as I replied to you below) is that Chepika will be the cash cow to fund the main event which is South Africa and copper. Colin Bird describes himself as a copper bull.
These guys will not be content until they have created at least a £100m company. See my comments below re CAML and its value (which is now higher).
Post 847 ....
I did a bit more of a dig into this last night, comparing XTR with my favourite copper stock, CAML.
Both are looking at tailings recovery. In the O'Kiep Project XTR has about 10% of the contained copper of CAML, but XTR has much better grades. The market cap of CAML is well below what it should be but is about £140m at the moment. XTR has a long way to go to get projects with the same amount of contained copper as CAML at Kounrad but given the stated targets that assets have to meet profit criteria of between $10-$30m pa, and that CAML’s 2014 Operating Profit was $38m we can hope that XTR should achieve a value at least 5 x current. This does not include anything for Chepica or other projects that may come to the table.
CAML have proved that a low cost tailings operation is the way to go; they even pay a 7% divi. They do more value add than XTR plan with their SX-EW plant (XTR plan a 25% concentrate) but what is to say that XTR won’t try to replicate this model if they can get a larger tailings resource?
Post 942 ...
Cash - a fair point but the growth will come from tailings. I see Chepica as a cash cow. If it is more then that is fine. To get an idea of the potential in tailings have a glance at the latest CAML presentation. Bear in mind they go through the full value chain with SX-EW production, but they probably pay a project discount due to location. Chepica mining will always bring its own problems. Mining is notorious for this and although they have added extra capacity and duplicated processes, there are still many single points of failure which can hold things back. Jan knows better than most how to minimise this risk so I am confident, but one to bear in mind once the dumpers have gone.
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