Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
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....." I would be most unhappy if XTR changed strategy at this late stage in the game and started down a very long path in search of more jam tomorrow. "
I agree with this statement 100%. My concern is that we may never actually be in the loop if things get spun out here. We have been told that Colin would work towards shareholders' interests here but we won't know for sure that is the agenda here until we see evidence of that. Will the revenue from FB provide a much needed lift in the SP or will the market conclude that the cash will not be spent to the benefit of shareholders ? We just dont know. FWIW I am not one of the "SP doesn't matter" brigade.... Unless a special dividend style payment is made to shareholders the SP is all that matters.
A fair few PIs put their money here for the promised Bushranger strategy as advertised extensively by Colin. He knows that. He also knows that if things haven't gone to plan then the market will not look kindly on that. So I have no doubt we will be kept in the dark if that is unfolding. I choose to keep invested here as even if a fraction of the early assumed reward comes our way it is worth it IMHO. If Colin announced he was taking XTR into the jam sandwich business, and that lifted the SP to somewhere between 10p and 20p, I would be happy. How the SP gets its lift is irrelevant to me, but what is relevant is the belief that Colin will act in the interests of shareholders and not some fancy deal that excites the non shareholders or mining technos. Hopefully we will start to see the wood soon enough.
Captain
No one was summarising that by keeping the 20% raises will be required, unless I have missed a post.
Clearly if/when EL 5574 is sold, then a material amount of that cash will be distributed back to shareholders. Stevemocal was suggesting that because AA would want 100% of the asset they will pay a premium for the 20% not in the buy back and other licenses (which makes sense to a degree). However my point was that as the buy has a clause that if XTR can’t fund there share of development costs there working interest in the asset is diluted and they end up with a 0.75% NSR, hence they are not going to overpay for this as they will know XTR won’t want to keep the 20% nor could they pay (as the cash would have been distributed to shareholders) so would likely end up with the 100% of El 5574 regardless. Obviously this is just speculation on my part but that’s what we are all doing anyways while we wait for actual news.
Cheers
James
It’s not that bad an idea lucky, think about it. Br sells now and the bloodsucking wife will only want to redecorate the whole bleeding house, again, and guarantee make you feel guilty for treating yourself to that Harley you always promised yourself. Besides, the brats will get it all in the end, so I say have the last laugh and make ‘them’ see what it feels like to have the suffering of actually having to wait for something.
Where’s all the money? It will be paid out imminently!
But I really do want a Harley
Yes, great idea, let's use the few hundred million to pay for our share of the capex and opex and wait 12 years for the mine to be built and then wait a couple of years for full production and another 5 years for xtract to start paying a dividend and then over the course of ten years we might get our investment rewarded.
I would be delighted if RC + Ascot MRE reached 2mt. I hope Steve' s right but I would be very surprised if it was more than 1.7Mt combined (imho).
I hope i'm proved wrong but I doubt it.
The later holes were also testing the outer limits of the Racecourse porphyry and the grades are obviously going to reduce... it is the same for any porphyry anywhere in the world!
There may also be some doubt as to whether Racecourse can make the magic 2mt of contain Cu Eq by itself, but XTR have said they are also going to also provide a resource estimate for Ascot and this should ease concerns. Despite the limited drilling at Ascot - which is open in all directions - it is likely that when its' resource estimate is combined with Racecourse, it will total round the 2mt mark - the 2mt does not have to come from Racecourse but from targets within the EL7754 licence.
I would add that anyone who has been following the exploration of the EL7754 licence closely will know this multi porphyry system is likely to ultimately contain many times more than the target 2mt of contained Cu Eq... and make no mistake, AA and other majors will have been paying close attention.
I am invested in xtract and Atlantic lithium which he also mentions in this article and it is riddled with factual inaccuracies as far as Atlantic goes so can only think he doesn't look into these companies thoroughly.
I suggest that very -very- few understand anything - /much - about porphyry's Andew .. which is a big problem in itself... witness the current xtr.l s/p for e.g
Generally, this guy is no mug in the space.. and if he doesn't understand much about porph.....etc...
And the main ill-informed comment by JC (imho) re Racecourse grades
"... the rather low grades disclosed by later drilling......"
The grades are standard porphyry grades. Not low.
Makes me wonder if JC actually understands anything about porphyry's ??
Or, worse, does he even know that Bushranger is a porphyry deposit because, as far as I can tell, that word was not mentioned in his article.
Can’t believe John Cornford wrote that piece that Andrew shared. Made he sound rather ill informed.
In his capacity, I would think he would have a better grasp of the buy back agreement. Placing emphasis on the 2mt with no consideration there is actually another option that xtract are now pursuing! He was tempted to sell but didn’t, because it’s difficult to understand what other investors will do???? Appears to be putting the drift back down into the 3’s due to the drilling results and Colin not helping with fewer excited blogs!! What about Covid, war, global economic instability. Are they not contributing factors?
Assuming investors are thinking that in their own right it will still be worthwhile even though they are assuming 2mt won’t be met, as there is still unexplored ascot and footrot! He obviously doesn’t listen to the ‘excited blogs’ anyway!
And 400mt of contained copper!
Come on!
In his position he should just stick to journalism and not commenting on his own investments.
Australia certainly seems to be one of THE BEST places on earth in which to hunt critical minerals! More great news from the Australian government: https://www.pm.gov.au/media/support-critical-minerals-breakthroughs
Captainbob - That would be a significant change in strategy.
I bought in here because the strategy (re Bushranger) was to prove it up and sell it on. With the world so unpredictable at the moment, it is a strategy I think XTR needs to stick to. I would be most unhappy if XTR changed strategy at this late stage in the game and started down a very long path in search of more jam tomorrow.
Nothing much as far as I can see Captain. The ship is still on course and no sign of any icebergs of a significant size.
I'll just go and get my lifejacket, turning a bit chilly this evening.
How anyone can summise, that by keeping the 20%, raises will be required, when 80% will have been sold, the expenditure required, maybe 1bn, 20% of which would fall to XTR, who could then reinvest, the funds raised, at what would be sp of multiples from here, over a few years, with evential returns in the several billuons over time. All the while seeing income from Africa, what am I missing here?
johnswan1 - From the RNS dated 12th August 2021...
"The Company was pleased to be informed by the New South Wales licensing authority that it is proposed to renew the exploration licence covering the Racecourse deposit and adjoining prospects for a further three years until June 2024"
The focus at the time was naturally on the 'Racecourse' licence (EL7754) but they renewed them all at the same time.
Thanks Steve, do we know that they have renewed the other licenses? The presentation shows they were up for renewal in June and Sep of this year.
Cornford article
"I haven’t mentioned Xtract Resources for a few months – after the last time saying that, following the initial excitement on the long intervals of copper shown by the initial drilling of Racecourse, the rather low grades disclosed by later drilling meant that initial expectations of a 2 million tonne copper resource that would attract Anglo American might be misplaced. I didn’t suggest selling (as I was tempted to do for my holding) because, as always in these situations, it is difficult to know what other investors will do when the resource still looks more valuable than the then share price.
As it is, the shares have drifted back to the low 3’s (and a low £30m market cap) reached when early holders had cashed their profits from the initial spurt from the 1’s to the 7p’s. The latest drift hasn’t been helped either by fewer excited blogs from CEO Colin Bird. But with all drilling results now in, and a new, apparently separate, resource discovered less than a mile away and named Ascot, news is due soon on an up to date economic model. This will be for a larger open pit than was assumed for the earlier estimate of 400m tonnes contained copper at Racecourse, and might also add a preliminary estimate for Ascot.
So, while investors are assuming Racecourse won’t meet the 2m tonnes copper target, what may still be worthwhile in their own right are the still unexplored Ascot and Footrot prospects, which might revive interest. That is especially so because a recent Queensland deal established a US$170m price for a smaller deposit (670,00 tonnes) than Bushranger. It is, however, more developed, with a Preliminary Economic Analysis under its belt and possibly better economics. So it’s all eyes on Xtract’s own forthcoming reports."
At the bottom of the article John Cornford gives an update on his current veiw of extract.
Just waiting like the rest of us.
https://masterinvestor.co.uk/commodities/does-lithium-offer-hope-in-a-tough-mining-climate/
What's to stop XTR from using the payment from the sale of the 80% to fund their 20%, it'll be built over a number years so the full amount wouldn't be payable on day one.
Don't know if it would be a good idea, but at the very least it gives them time to find a buyer for the 20%.
...... was it Aristotle that also said.... the sum of the hole(s) gets bigger the closer you get to 2MT?
Jamsie - XTR could use all sorts of delaying tactics to avoid dilution through cash calls whilst looking to offload their 20% stake... they'd have to endure junior partner pace for at least a while. Anyway, I don't see AA trying to play hardball, especially if they want the other licences. Either way, we seem to be splitting hairs as we are pretty much in agreement.
It is weird but the board always seems to circle back to discussing the buy-back clause whenever there is a lull in news! And I always seem to get sucked in!?! Can't be doing it again... wake me up when the next RNS lands! ;)
Wasn’t disputing that, more your comment that they would have to go at the pace of the junior.
I fully agree they are likely to want 100%, but obviously they have the ability to buy 80% at fair value and then dilute XTR down with cash calls etc which could be there preferred route if XTR try to push them to much on the 20% they don’t have the option on.
johnswan1 - It can be confusing getting to grips with what the buy-back clause relates to because the terms 'Bushranger' and Racecourse' are used interchangeably and neither provide an accurate description of an actual asset.
'Bushranger' is simple the name of the XTR exploration project located in the Lachlan Fold Belt. It consists of four exploratory licences, which includes EL7754 where the anomalies known as Raccourse, Ascot and Footrot are located (as you correctly say). The buy-back clause only applies to licence EL7754 and not the remaining three neighbouring licences. People can see the location of each licence of the four licences in the following presentation from the XTR website...
https://xtractresources.com/wp-content/uploads/Bushranger-Summary-Presentation_April-2020.pdf
Jamesiecakes - You may be right but it is difficult to say because none of us have seen the actual buy-back clause and are relying on published snippets that are paraphrased. Either way, that is nothing to indicate that XTR would be prohibited from selling on their 20%, which could see AA forced into bed with a rival. I personally don't think they'd want that and would therefore pay a fair price to acquire the lot. Time will tell.
Steve
I don’t think that’s quite right, assuming AA only brought 80% then the partners are required to pro rata the funding, if XTR can’t do this there WI is diluted down and they will ultimately end up with a 0.75% NSR (the power point doesn’t make it exactly clear how this works).
John
The buyback is clearly for 80% of EL 5575, CB just aspires to sell 100% of it and the other licenses.
Cheers
James
CB has already clarified that the buyback relates to everything at Bushranger, i.e. Racecourse, Ascot and Footrot.