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It is partly about risk appetite - maybe this the wrong way to look at it, but I see sticking with Manica could only ever get us back up to 2 or 2.5p eventually imo. It won't ever get us to 5 or 6p plus which I want to see a proper profit from holding xtr stock for so long.
In reality we have yet to see anything like an annualised profit of even $4m let alone $5 or $6m and perhaps there is a big argument going on as to how thee opex is arrived at. The current deal is opaque and open to interpretation imo and therefore open to plenty of risk also.
if we had been shown as of todays date that we are actually banking $4-$5m NET profit from our 23% at Manica then it would be a different matter and the staged $16m wouldn't look appealing.
Good post from JDAU's and I that we need more detail on the potential of any future investments outside Manica, where and how much - a 2 or 3 year plan effectively - to make a properly informed decision.
Completely agree
"...would you rather spend the money on our existing site that we know has potential or go rainbow chasing with the money and have no money and no asset in 2027 "
Most SH, I believe, will go for first option. Play the long game.
But by 2027 CB will be circa 84. I doubt CB will be around in a professionally capacity by then and there is every chance he will have "shuffled off this mortal coil" by then
Why should CB care about what's best for long term planning. It is irrelevant to him now !
And he knows it.
SH best interests and CB best interests are now not aligned.
The choice is simple, have $15m over three years and be out.
or
carry on taking the 23% and put that into our share of development of an underground mine.
For those saying it would be dilution look at it this way, would you rather spend the money on our existing site that we know has potential or go rainbow chasing with the money and have no money and no asset in 2027 ?
I think we need more for the asset and payment over a shorter period, if they can't afford to pay us more let them go looking for the cash from a JV.
Why should we get less than it's worth if they can't afford it, I bet they are laughing at CB, We took all the risk in the first instance and when we proved the asset we had to JV to get the gold out of the aluvials. Why shouldn't they give some away to a JV partner , they will have 23% of the asset to give them.
Thnk about it, CB is trying to roll this turd of a deal in glitter.
Based on the following statement from the podcast (referenced) I’m very much expecting some further information/news on pipeline assets before I can be expected to vote on the matter at hand.
“… and I think over the next few weeks, we will make sure that the significance is well understood and taken on board on the importance of that NW Zambian couple of positions we’ve got…”
Ref approx 12:19-12:31: https://m.youtube.com/watch?v=DhOSp4gVb_0
Over to you Colin, you have until 10am on the 9th of Feb to convince us that selling the asset some of us have invested our hard earned and waited years to get into production just as it gets off the ground and efficiencies start being made for a sum of money in staged payments arguably similar to what we expected as a net profit share over the same time period is the right move.
I appreciate the want for control over an asset rather than being the silent partner, but I’d rather be a silent partner in an asset we can be relatively confident on making a good return on for the next several years than selling up to have majority control over an attempted discovery when most of our attempts so far have lead to our hard earned put into an asset we either write off or put on the back burner.
If it was $15m up front (tbh even at that price it seems like a steal considering the current production trend on site) that would sweeten the deal but staged payments?!
With how little i feel I currently know about the boards plan for the way forward I’d rather own the asset I know about and take staged payments from the current profit share agreement with the blue sky potential coming from further discovery in the licence as we put money earned back into the development of our existing, producing gold mine.
BR can stay on the back burner until it’s the right time to sell/further develop and our Zambian assets should be able to be developed from cash flow from an improving situation at Manica: better head grade/improved cost efficiencies/plant up to expected tonnage.
I don’t think I’m alone in my thoughts and at the moment, I wouldn’t say I’m convinced.
Your move CB.
Cardo
It will give CB a good retirement fund for 3 years. Even if he puts new CEO in he will still have a roll as a book end for the next 3 years drawing his spoils.
I have voted against, will my paltry holding make any difference, almost certainly not.
My view is that the money received, over a period of time, will not benefit shareholders and will simply be used for another fishing trip for CB. His personal aims are not alied to those of shareholders, and that may apply across all his many companies and projects.
Me too. Another CB rip-off. 3.2M Votes against.
Thanks for these contributions.
Cyberiachus says 1. Profit of 4-5m not a straight line guarantee 2. we might soon have to stump up 23% share of $10m capex. 3 . $15m equates to 3 or 4 years and can be better used elsewhere.
Andrew thinks a younger man would probably hang on but CB wants a chance at one last blast on the world copper roulette table but both he and Jezoo think this is CB's benefit not for we shareholders. On balance I have not changed my opinion . $15m in the hand right now may just be persuasive but this sale is scheduled to take a few years when we could have been drawing our profit share so it does not make sense to me. The partner seems to have delivered so far and unless they are holding a gun to our head and threatening to stop paying why sell out ? i am voting against. The prospect has done zero for the SP as it happens. So nobody else seems to value it or they doubt if the proceeds when they arrive will be spent wisely.
+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