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I think it is very positive. The bottom line is, can we profitably mine gold? This JORC report says, very likely we can.
It is not a question of what AB wants to say, the JORC limits the envelope of what can be said. The next phase of drilling is not to improve the Resource per se but to improve the viability of the intended mine. This drilling will inform the mine design and lead to the Mining License application. I would expect an application in maybe Q3 21. I have no idea how long it would take to get issued.
Further drilling is not likely to lead to a further reduction since CSA are recommending at least some of it because they there are areas of higher grade that are untouched.
DYOR
Cheer helpful.
So my take , as that it represent good forward step to having slightly more focused higher grade , albeit lower totals. Are you also thinking that this was positive news, pitched poorly?
because AB wasn’t really focusing on the concentration of AU but made his headline the drop of some 600koz . Which was always going to be the case. I would consider a further reduction and concentration further good news and more likely attract the right level of operator to take this forward , or even tempt AB into seeing this project on further than, trading it off for poor royalties.
No one reads anything.
The previous JORC read 1.2mil ounces at a lower average grade. The JORC 2012 looks at what can be economically recovered on reasonable estimates. There may be more gold but is it sufficiently concentrated in one place to give you a mine? In this case, the JORC is stating that there is at least one potential mine on the leases for about 700k ounces: with the possibility of further drilling increasing the resource and the grade. Separately, RRR had submitted a mining application back in 2011 for the tailings and was in the process of submitting one for Nyanza in 2014 when they stopped work because of the legal dispute.
Both the tailings and Nyanza are still there. If you go back and read the stuff that was being published at the time, RRR regarded themselves as being at a very early stage in the exploration on Migori: that remains the same. Some of the potential targets have not had any exploration done on them.
But the headline take is JORC was 1.2mil ounces and it is now 700k ounces. I expect that we will be starting drilling in the next two/three weeks at Migori.
https://www.investegate.co.uk/red-rock-resources/rns/drilling-update---nyanza-prospect/201204261634031781C/
https://www.investegate.co.uk/red-rock-resources/rns/positive-update-from-migori-project--kenya/201405291153403530I/
In taking things forward RRR has to prioritise. Which is better to take forward the 700k oz asset or the 200k oz asset?
Note on Nyanza the plan was to produce 80k out from the 200k oz without leaching and stockpile the tailings for later treatment. You would get a read across from the Nyanza to Mikei.
To get the other assets on Migori into a JORC 2012 report RRR will need to do further work on them.
Which is better focus on getting a mine into near term production or just keep on expanding the resource?
https://www.proactiveinvestors.com.au/companies/news/39223/red-rock-resources-submits-mining-application-for-macalder-gold-tailings-project-46843.html
DYOR
Kenya project , I’m a little confused by how Luke warm the AB interview was about the updated 2012 JORC in Kenya. “We have a mine” now I’m not a geologist , but 1.5g/T is considered very viable, great money is being generated at lesser grades in in Egypt, is there something I’m missing on this project that explains why the market is so down on this ?
NB copper at $9,000 a tonne. Makes a difference to the DRC licenses. There is even a little bit of copper in the Macalder tailings.
RRR is a junior explorer. The model with all of them, is to scratch around in the dirt, find something, take it to the next valuation inflection point and then move it up the value chain to someone else with a lower cost of capital. No matter what the asset is, it is worth more to someone with a lower cost of capital.
That model worked quite well up to about 2016 and then transactions pretty much stopped. In 2019 that market started to come back and stopped again in 2020 due to COVID. It has restarted and will now accelerate because the industry thinks we are in a commodities super cycle.
AB pretty much said the same thing in an interview about three weeks ago.
In looking to maximise value, RRR has to take each project as far as it can using it resources before the cost of capital outweighs taking it any further. Anyone looking at RRR's assets will be trying to work out if RRR has the capital and determination to take it to the next value inflection point or not. If not, then just wait because RRR will be a weak seller. If yes, then they need to move sooner because they don't want to pay the price demanded after the next value inflection point has been reached.
The best way to get value out of Migori and Musonoi to make it look like RRR will get to the next value inflection point and relatively quickly.
Separately, AB has said that RRR's strategic advantage is to get involved in messy situations and sort them out. Adidi Kanga being the most apposite example.
Another advantage would be if RRR is seen as a good partner because it is good at the above. In DRC RRR is seen as a good partner, mainly because of AB.
Lots happening in the next few weeks. Juno matters to RRR and that will list on 11/03.
We should hear more on the RRAL situation and its licenses imminently.
DYOR
CPFC- I used to agree with you until I recently realised RRR is just a supermarket!
Non of the projects will be brought into operation by RRR - they are there merely to be sold with hopefully a % retained interest. This is why we see the endless RNSs about revisiting databanks, field logging and surveys - all trying to increase the marketable value of the asset above the price RRR acquired it for.... ........ Not the SP
Yesterday - What should have been a fantastic, long awaited Resource RNS on Migori (following all of the above activities) was obviously not seen as fantastic as the SP went down (I was hoping to closed around 1.6p) and I now wonder if besides an actual sale/farm in transaction there is anything that will spike the SP?.
Yesterday’s RNS seemed to confirm - If the gold price is $1800per Troy ounce once processed, then consequently (as I’m told) the value in the ground is taken as $32 - so yesterday’s RNS confirmed the inground value of our “ do nothing it’s already there gold” to be £ 23 million on a Company that has 4 other assets and still has a minimal market cap of £10 million
How can that be right ?
And furthermore, if anyone had confidence they would be buying up shares extensively sub 1p, but no one trusts a word bell says. I would consider selling here despite thinking the price could rise just out of principle because of his complete lack of conviction over 12 years
Exactly - it’s an embarrassment. Im long here but don’t know how long before people realise it doesn’t matter how many royalties of capital comes in. He’ll take fluff and has delivered on exactly none. Projects are sceptical. He needs to go. Immediately. Yesterday’s price action summarised it perfectly. When the guy opens his mouth the share sells off. Interview after interview does nothing because he has no credibility left in the city. Any other share, yesterday would have led to +20% but no one has confidence he can use capital well.
What he should do is outline the capital expenditure costs, discounted cash flow, etc. Then investors can see if the project has enough promise to buy RRR shares.
If you want to get some idea of what Bell is all about and how he operates you'd do well to read this.
https://stockhead.com.au/resources/is-nearology-a-load-of-rubbish-recent-history-says-yes/
The Sirius Resources discovery at Nova in the Fraser Range drew them in like moths to a flame. Guess who was one of those moths?
https://www.dropbox.com/s/nkv8ctz4u7i5thu/fraser%20range%20-%20regency.pdf?dl=0
And guess what it turned up for Regency's investors! The middle of a polo mint (again).
At least it kept Bell in the life style to which he is clearly very much accustomed.
TDT
Personally, I think it is because he is not used to addressing the market with info so often. Never seen him so active.
And for once, he is at least attempting to stop the share price free falling by complimenting the News with details investors may not of understood or missed from the RNS.
Plus i assume he wants out at some point so he will need to drag this above 2p.
I