The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Agree Gixxer - I was referring to the mechanics of the deal, not the deal itself. The fact that they withheld the projected AISC from shareholders until after the buyout was outrageous. I fared broadly the same as you by the sounds of things
1+1 - 'That worked out quite well for shareholders as the deal was part cash part Sandstorm stock' - I was heavily invested in Mariana when they got bought out. I did very well out of the sale (6 fig profit) but it was no where near what it should have been (As I recall some drill results were showing some gold intercepts over 110g/t). I voted against the buy-out but the vote was, overwhelmingly, in favour.
In that scenario Mariana didn't even complete drilling before the buy-out once the II's had taken notice and started to move in, I do expect the same thing to happen here should assays yield decent %'s.
Benhowell
>>>>>I wonder if Colin would like to do some basic surveying of the other licences to have something post buy back? Part of me thinks he'll try and sell the whole company rather than start again with IP surveys, stage 1 drilling over again, etc..
The was a sum of $460k in the ‘proposed’ year 1 exploration program budget, earmarked for regional exploration of adjoining EL’s.
Nothing to suggest this will not be started while Racecourse is ongoing.
'But I am, of course, only talking of Xtract’s Racecourse prospect, which is side-lining its others. These include its adjacent Bushranger licences (which are not part of the AA buy-back agreement) and its Africa projects which are on the verge of generating cash (though small beer compared with Racecourse’s potential)'
This is a from John Cornford article in Masterinvestor.
25th Jan 2021.
Hello CaveatEmptor re. Your post @9.09
Interesting scenario. Noted.
Would be good to know with any certainty what the BOD’s intentions are.
A further 3-5 holes I would guess should establish the overall size of racecourse ‘deposit’. That may well be enough alone to hit target.
Decisions will be made after more is known about this system I would think.
Ben - agreed about selling the whole company. Definitely think this will be the most tax efficient approach for shareholders if the resource turns out to be as good as I hope it is.
If they wanted to, AA could then spin out the Africa assets into a newco. Sandstorm Gold did something similar with Mariana Resources - Sandstorm acquired the whole of AIM listed Mariana for the Turkey Hod Madden resource then spun out non-core African assets into a new TSX vehicle called Awale Resources. That worked out quite well for shareholders as the deal was part cash part Sandstorm stock, and the stock element did not attract a capital gains tax charge at the time of acquisition, so it allowed the gain to be spread over several years which was handy for tax planning.
.... very good point Littlewing and something I have thought.
Just because AA have an option doesn’t mean they will want to exercise
The higher the option price the less likely it gets activated. If it was at £4 some people’s excitement would be ridiculously high ... but not a chance of being taken up.
It’ll still be worth a lot more than 6.2 when the traders have left for pastures new. Just hold and wait here. (Yorkshireman like CBwhen theyveloaded up justover 1.00 with three slugs don’t o and commit 60k of their hard earned either when it’s five fold what they got in before at)
Yep there still seems to be some confusion over this.
The April 2020 presentation states the AA buy back option is for EL5574, which Footrot, southern intrusions AND Racecourse all lie within. If we trigger the 2MT, then AA get all of that.
The other licences, whilst potentially having the same geology, have been completely unexplored.
I wonder if Colin would like to do some basic surveying of the other licences to have something post buy back? Part of me thinks he'll try and sell the whole company rather than start again with IP surveys, stage 1 drilling over again, etc..
Andrew... my thoughts are that it could well be all of bushranger which is why we are spending money now on the extensive IP and Phase 2. It wouldn't make sense to spend out now on something that doesn't have to be proved up so early if its only the racecourse bit that will be sold separately and first ? or it could be that Colin is playing our options as its not certain that AA will be interested regardless if their option is racecourse or all of bushranger. So colin may well be thinking somebody else may be interested in the whole lot ?
This has been discussed before. Some have said it’s unequivocal that the buy-back agreement refers to all of Bushranger, not just Racecourse.
I’m not so sure.
The start of the agreement is below. If it was for all of the licence area then why have the word RACECOURSE in the opening title? Why not just state the licence number and not specifically refer to Racecourse?
I think it can be read two ways so I don’t know if the agreement is racecourse only or all of the licence.
If the agreement refers to all of the licence then once we hit 2mt at racecourse how are the other assets valued? Are they assumed to have no value (as no drilling done) so AA get them for free?
;Anglo Buy-Back Option To Monetise Project Value Racecourse Deposit - EL 5574 '
CE... Is not the AA buy back option for all of Bushranger though ? The scenario that we could benefit from say Footrot after Racecourse is offloaded would be ideal but I just cant find anything to confirm that its just the Racecourse area that Phase 1 was completed on that will be up for sale ? I'm sure Colin would try to negotiate something for the future though even if it is all of Bushranger that is to be lumped together ?
Hello Howezap,
Agreed it would take a couple of years or so get any additional porphyries at Bushranger proved up to a saleable/mineable level, but only a matter of months (maybe up to a year from when we started drilling) to get Racecourse to the point where the AA buyback clause is triggered.
I would not be surprised, if we do find Footrot is as big as Racecourse, to see that we use some of the profits from the sale of Racecourse to retain a significant working interest in the production from Footrot, turning us into a mid cap mining company in very short order...
<<
All part of the master plan...
What will it possibly be in 18months to 2 years. My estimation of buy-back deal being done. (Hopefully)
John Cornford, master investor, stated within 2-3 years in his mining journal around January time
Question is, how long will it likely take from when the buyer shows their intent once JORC issued. To deal being done?
Early days I know, but with the price of copper continuing to rise and the target getting bigger. Is all in our favour for sure
Cu $9397mt. A decent rise today and could reach $10000 by year end if not sooner.