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To be clear, my view is that on the basis the project is able to be economic (admittedly based on the discussed assumptions) including Capex based off the previous JORC (i.e. prior to all of our exploration / addition of a huge amount of potential ore). When you further improve efficiencies / add significant mine life which can effectively be seen as ‘the Capex is now paid off and we know that this throws off a decent cash margin when only opex is considered’ then I’m assuming this project will be more, not less viable.
An open question to the bb: if the Capex can be paid off using the original open pit model referenced above, and we know the project is viable/throws off good cash when only considering the Opex, what do you think happens when several years life of mine is added to that original model (i.e. after Capex is paid off) AND on top of that the operating margin can be increased significantly through pre-concentration?
Answers on a postcard please.
Now lets look at some of the new information we have from the latest open pit mining study RNS / Updated mineral resource RNS’s:
“Following the completion of a substantial drilling programme by Xtract, independent consultants, Measured Group, updated the historic Inferred Mineral Resource Estimate for the Racecourse Prospect, which is now reported as 512Mt @ 0.22% CuEq*, at a cut-off of 0.1% CuEq, containing 1.1Mt of copper equivalent metal and classified as Indicated and Inferred in accordance with JORC (2012)”
Ref: https://www.lse.co.uk/rns/XTR/racecourse-prospect-updated-mineral-resource-k5dfrxajgs0ls13.html
“A maiden Inferred Mineral Resource Estimate for the Ascot Prospect at the Bushranger Project is reported by independent consultants Measured Group Pty Limited ("Measured Group") as 87Mt @ 0.22% CuEq*, at a cut-off of 0.1% CuEq, containing 0.19Mt of copper equivalent metal and classified as Inferred in accordance with JORC (2012)”
Ref: https://www.lse.co.uk/rns/XTR/ascot-prospect-maiden-mineral-resource-x1tplqdy6mkrsi1.html
“Optimal Mining has identified a copper project with similar grades to Bushranger where pre-concentration reduced the amount of material to be concentrated up to approximately 50%, significantly reducing pre-production capital and operating costs.”
Now lets use our brains a bit… what do you, the reader, without being fed the information by an anonymous poster or being told that this will/won’t work by any of the posters here, think the outcome of an updated open pit conceptual study will be where we assume the following:
Considerably more Ore
Longer Mine life
Considerably lower Opex due to pre concentration
Significantly lower Capex
As detailed in the most recent RNS.
Ref: https://www.lse.co.uk/rns/XTR/update-on-open-pit-mining-study-for-bushranger-kk3razabvvakq58.html
Let's begin this discussion with the statement: 'NPV of the project is going to be hugely affected by Life of mine (LoM)', considering we're discussing porphyry mining I feel this is often overlooked in bb discussions.
Here are some of the figures/a little info from the original (pre drill campaign) conceptual open pit study:
“Open pit modelling was carried out using the currently defined JORC (2012) compliant Inferred Resource of 71Mt @ 0.44% Cu and 0.064 g/t Au at a cut-off of 0.3% Cu, as well as additional unclassified resources at the Racecourse prospect”
Now I’m sure some of you will remember that a positive NPV (including Capex) was established (Scenario 10) - please see reference for further details.
Some of the key metrics:
Assumes 20mtpa
Assumes $5 / lb
Capex AUD$1,454m (circa $965m)
Opex AUD$4,152m (circa $2,756m)
Mine life 9 years based on total ore assumption of 162mt
8% discount rate NPV AUD$267,768m (circa $177,901m)
10% discount rate NPV AUD$134,943m (circa $89,649m)
Ref: https://www.lse.co.uk/rns/XTR/bushranger-conceptual-open-pit-mining-study-c05hq78ws9qagfq.html
It is uncertain if it will deliver any pay packet down the line. That is the concern. Colin implied it was nailed on to deliver. It has now joined one of many projects worldwide that in all probability may not see a return for shareholders as is the case for the vast majority of exploration projects. we know AIM exploration is risky. Colin should not have time and time again implied BR was different.
"but the grades were sending a signal that this was not one of the top porphyries in the world"
Yes, but CB said a number of times that "I'm not worried about the grades" " We know we have the grades"
I can't help wondering where the SP would be now if CB had talked about getting greater than 1mt cu and been more circumspect on many other timescales and outputs.
We may not have hit 8p, but we probably would be above 4p now.
Andrew
If this was an explorer that was living on dilution in the hope of selling an asset that they were hoping was in the ground then I'd be gone from here. But, they have gold income from Africa just as the gold price looks to be appreciating. That allows XTR to take thier time even if it does wind up shareholders. Yes, CB said he would tie a bow and we'd be gone but the grades were sending a signal that this was not one of the top porphyries in the world. It needs a bit more coaxing to come to fruition. That doesn't mean it wont be worthwhile. Hence the concentrator and more drilling. If that means a bigger pay packet down the line then I'll wait.
Cygnus
I'm of the same view.
Bottom line imho is that 1.3mt CuEq at a higher POC will be wanted by majors but we don't know how long the wait is for POC to get to the level it needs to... but I'm sure it will eventually get there (within 2 years probably)
More drilling may well take place but the FB money should ensure we dont need to raise assuming CB goes at a steady pace.
Problem is that's not what CB implied or even said. Nothing like. The AGM in 3 months should be, ur, interesting ! His creditability is shot to pieces and no one will believe anything he says in an interview unless its RNS'd.
(Well when I say no one, there may be one person who still believes him.. waves at Dani :) )
I do have faith that this will eventually be financially worthwhile to us shareholders but also feel CB may be playing for time as all punndits suggest that the Cu price may be rather soft for a year or two before the world's electrification causes price to appreciate. The wait doesn't bother me. If waiting a couple of years means I can continue to build my holding while further drilling expands the resource then the current wait will be worthwhile. As long as there's a pay day at the end!
Having said that I find it difficult to image that the existing resource, plus more at Ascot and potentially an additional porphyry in the IP anomalie west of Ascot, and a higher Cu price will not make BR a real money spinner - eventually.
$8000 - $11000 was used. The shells had the "potential" to be cash flow positive depending on rate, cutoff and copper price. Since it was stated that the result depends on copper price, I deduce that at least the lower value of copper price (8000) was not one of the potential cash flow positive shells. This is without CAPEX being considered. So what value of copper price can we deduce is needed ? Maybe the next value of 9000 is good (withoutCAPEX) ? Is it reasonable that 10,000 may just be viable ?
Colin stressing how the copper shortage is key to his thinking (and how that will drive up price) makes me think we are going to be needing copper price at around 10,000 for the project to be worthwhile to someone. I dont think Colin will be tying on the bow anytime soon.
I’d be pretty amazed if any of the pit shells weren’t economic excluding Capex, if you look at the conceptual study from July 2021 and focus on the worst NPV which is 20mtpa, $3/lb and a cut of grade of 0.25% you can see that the NPV8 is -1.3bn AUD we know from the same study that the Capex is 1.4bn Aud so the worst case of the previous study would be positive cash flow without capex (obviously this is a silly metric, I guess done as part of a screening process). I see no reason why this would have drastically changed.
Having said that I also find it odd that they didn’t publish the interim report showing NPVs as I’m sure they have a good idea if the capex for the conceptual development, so I’d be inclined to think that they are broadly inline with the previous conceptual study eg needs a high copper price to work when loaded with capex.
'even not including lol'
EXCULDING would have been better.
They used 16 scenarios of which ALL! where cash positive.
In ground values @
8k 10.4B
9k 11.7B
10k 13B
11k 14.3B
Some will be @.15 cut off and .1!
The old capex was 1 Billion and they will reduce that with the new concentrator study.
I think it is significant that all where positive even not including the Billion cappex.
You may be right Jezzoo but do remember that the capex wil change depending on whether a 'concentrator' is employed, or not.
LittleWing is correct, the glaring omission of CAPEX and NPV begs the question that they know it's not viable in it's present format.
If it was CB would be shouting it from the rooftops, he's as transparent as a very transparent thing indeed.
Add in the 3 month to 6 month stretch in results and the rat starts to get rather pungent.
What it says in the highlights of the interim RNS -
- 16 economic pit shells were modelled in the Interim Report from an operating cost perspective only with capital cost requirements excluded and to be finalised on completion of the Study. The 20Mtpa and 25Mtpa open pit options potentially generate significant operating cash margins dependent upon mining rate, copper price and cut-off grade.
‘Potentially’ implies that once the cap costs are included. As further down it then states -
-A total of 16 scenarios were run for open pit mining of the Racecourse and Ascot Mineral Resources, with economic pit shells being generated for all of these scenarios.
Is still a waiting game but to bear in mind there is still a further optimisation phase of drilling that will improve economics even further, from direction that the updated mining study will point.
MaBaker... "Recent podcast from Colin ststes current model by Optimum already producing cash."
Before the CAPEX costs are included. And of the 16 pit shells studied not all were cash flow positive even then depending on copper price. Some shells had the potential to be cash flow positive.
The expected original report was supposed to be an economic pit study (hopefully showing a good positive NPV). Why do you think the goal posts were moved so that it became an interim report excluding CAPEX and not showing NPV ?
You do know that "cash flow positive" is NOT the same as profitable and viable right ?
I'm just amazed you still believe what CB says in interviews, when he says it in an RNS I'll take more notice and so will the SP.
MaBaker, you've picked a right loser here.
Stick with it, and you'll be truly impoverished.
Just saying...
MaBaker, not trying to rile you up at all. Until we know if BR is viable we cannot say that BR has delivered anything. We don't know if BR is viable once CAPEX is included. We hope it will be, but we just don't know. We also don't know what copper price is needed to make it viable.
So I just dont understand what BR has delivered for shareholders despite your claim that it has delivered 1.3mT and an open pit to recover that resource over 9 years at a depth of 250m. For shareholder value to be realised, something more than just hope has to be attainable.
https://oilprice.com/Metals/Commodities/Copper-Prices-Face-Bearish-Headwinds.html
The first typo was better . Must be to invest on AIM !.
Jolly amusing typo !!
*most here are already invested, not bonkers!!!
"The company has delivered on performance whilst the shareprice has gone down... ultimate value investors dream."
Stark raving bonkers. Most here are ALREADY bonkers. I'm balls deep, like many here, having believed Colin's spiel about tier 1 and "this is massive Zac!" This is not a dream for most here, seeing share price increase being completely and utterly inversely proportional to company progress. This is the exact opposite of a dream to me and many others. Colin HAS to deliver and fast. Telling AA to shove a 10p offer seems very far off right now, and your delusion and lack of realism is not helpful!
MaBaker... How has BR delivered ? Also define what you see as Manica having delivered so far ? (not what you hope will happen).