George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
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James, don't forget capex and opex also increase.
Part of the reason gold and copper is up, is because the cost of mining goes up with everything else at the moment....... but I agree, I would like the calculations done again.
I assume it wouldn't be too hard to update? Just changing figures in the special software model.
Also to take into consideration along with increase in copper price is ‘resulting’ impact on increase in free cash flow after the optimisation of operating costs, metallurgical recovery rates, plant capacity and capital costs that are still ongoing. They included an illustrative 17th scenario based on reduction in processing cost and compared with same mining parameters for it produced an extra US$425m free cash flow on top from that reduction in processing costs.
This optimisation all in, is expected to have a positive effect on the economic performance when done, metallurgy recovery rates will improve from re sampling. The first sighter round only had 3 samples taken from RC, the other from the 4 total was from Ascot. The 3 from RC included a low reading of 78% from one in the NW that brings the average down to 88% used in all scenarios, so warranted more work. Other 2 had recovery rates of 89-90%.
Along with what you have illustrated james, it’s not difficult to see how BR free cash flow can swing positively to give a ‘lower’ break even and hopefully produce a good enough cash margin once CapEx is included.
if you look at option 3 from the br conceptual study you can see it has an npv10 of circa -100m aud at usd9k copper, usd 1,900 gold and usd 22 silver.
if you update those numbers to todays spot prices on a *** packet you get approximately aud 250m additional revenue (this was done quick and dirty so i could have made an error).the mine life is approx 7 years so around aud 35m additional income per year which i’d guess (not calculating it as i don’t know how long the mine takes to construct) would offset the negative npv. point i’m trying to make is that according to my very rough *** packet and using todays spot prices (which i’m not suggesting a buyer would do) i reckon br is a circa break even project.
We can argue ad nauseam, we can analyse and split hairs about xtr but it's obvious that xtr will only improve it's price and marketability only when CB retires, if ever!
BAM may indeed easily go BAM, Mr Zap
Think BAM may go same way as Pebble NtM
Both in highly environmentally sensitive regions which maybe why there is difficulties in selling.
Permitting will rely heavily on ESG due to its location nearby to lakes and watercourses.
Bushranger however……
Over at Landore Resources, Old Bill H - he wasn't old when he started on that 'exploration programme', but he's older than Mr CB now .. - has spent v approx. USD70m over 15 to 20 years proving up well what is long ago already showing as a good gold resource and may still turn out to be an amazing gold resource.. he's been trying to sell up for a half decent price for a few years now..no joy...and the company is all but gone under, Bill all but dead.. and the medium - longtermers long ago sunk - shareholders -eg me, even including a small amount of good range trading - all but wiped out...
Finding the Ascot crown has no relevance whatsoever to what they ‘need’ to show to justify drilling to find it.
BR is far more valuable with a financially viable mining concept than just the amount of contained copper eq. Nobody is likely to buy it without one!
Due to the very nature of porphyry huge bulk tonnages and total necessity to have on site processing leading to huge capital outlay. ( imagine the cost to haul 10m tonnes of ore PA off site! ) A viability of concept along with all the data surrounding the resource model is crucial to give an acquirer the financial and geological justification and confidence to take the project further.
The project value will be derived from an NPV model first and foremost, they will ‘then’ pay for what is in the JORC only, which will see discounted to reflect being only inferred.
Xtr just need to produce numbers that work to do this and sell, an acquirer might throw many more millions at BR and show that there is an alternative concept leading to feasibility that involves Ascot in that payback phase.
Xtr have really still only scratched the surface of what is in Bushranger.
You don't even know if they've found the Crown at Racecourse yet/already, not to mind starting another campaign on Ascot, Cygnus.. and we've already done a $10m + drilling journey.. plus a chunk more money on qualified third party models/reports etc..
Generally, Bushranger type exploration has shown itself to be too big a thing for a company the size of Xtr.l .. It needs to be parked until it - hopefully -can be sold, as currently is, to a bigger player imho
CB has already he's thinking is along my above lines.. so it's an academic debate anyway imho
I'm with you Cygnus7, although I tend to think they didn't hold out much hope to find the Ascot crown in the budget they had left, or it's so deep it's not practical to mine at the expected grades.
Howezap, if the resources had been spent looking for the crown of Ascot....doen't that mean that we would have two high grade parcels - admittedly a few km away from each other? Yes, people keep telling me that I'm missing the point but I'd rather have those two 'crowns' than a failed bridge.
You miss the point Cygnus 1.5-1.6 mt is no good if it cannot be all used in a viable mining concept, it was far more important to utilise as much of the lower grade bulk tonnages as budget would allow. We already have the RC high grade parcel that will kick start the projects early payback phase.
Howezap: yes, i understand they wanted to join them up but it seemed to me that that pipedream quickly faded. Two close by porphyries seemed like a good consolation. If the extra time and resources had been invested in finding the crown of Ascot we may well be talking about BR having 1.5 or 1.6 MT of inferred copper. Still, water under the bridge.
“never did understand that ploy....”
Before Ascot was identified as a seperate porphyry the vision/dream was that the potential size or amount of the racecourse open pittable material would extend all the way through to, and to include the southern anomoly (Ascot). With the disappointment that the grades between southern RC and Ascot were too low to see them join up RC and Ascot as a 3km long single mining concept. If so the economics would have been far stronger toward the overall financial performance of the model due to economy of scale, that has been recently released.
So was very important indeed.
Xtr now need to get the best economic performance out of the financial model from the material just from RC which is why Ascot material has not been included at this time in a mining concept due to it being isolated.
Far more drilling to Ascot and RC may change the dynamics but won’t be for xtr to do.
The volume traded here remains utterly, totally and completely appalling -we're still talking, on average ish, 10k gbp ish a day - resulting in this stock moving up or down 5 or 10 per cent on a few grand more buys than sells or sells than buys ..
If even 50k gbp worth of buying here for a day or three my guess is this could spike 50 % + in short order..
.. and such a day or three will come along sooner or later, I'd expect.. RNS driven probably.. but POC - and POG to an extent too - keeping rallying alone might find some few with decently deep pockets willing to buy in decent size here.. and volume begets more volume...etc.. and the AIM market generally is less dead in April than it was thru winter imho..
Further drilling in BR in 2024 at least should absolutely not happen imho ..
Jezzoo, assuming we are in a good financial place, I would not mind some drilling to firm up Ascot which was pretty well ignored in the report that put the dampers on BR. We never did find the sweet spot of Ascot as all of the drilling went to finding the bridge between Racecourse and Ascot - never did understand that ploy....
Cygnus7:
I think it's zero ATM, once we get to $11k it will atart to be of interest but then so will many other "marginal" value potential mines. I still think we eventually sell for multiples of the current Mcap.
When that will happen is at the mercy of POC, Colin Bird and the world economy.
Unless we make a fortune in Zambia I don't think we will spend any money on drilling at BR.
On the point of the price of copper per ton, does anybody know if the mining industy uses:
US ton = 2000 lbs
Long ton (British) = 2240 lbs
Metric ton = 2204 lbs
I image it's the uS ton but would like confirmation - thanks.
Yes Jezzoo, BR may soon be back on the agenda. What would that be worth I wonder and should the coampany spend any more cash on it?
Hopefully Colin will update the market shortly on Zambia drilling schedules and any BR news now he has resumed RNSing.
The option to go UG was a backstop option if the company could not identify better value creating opportunities elsewhere.
Hopefully the markets will evaluate the new opportunities to reflect better in the SP what has been achieved.
In better news, copper really is on a run, $9540 and rising fast.
Bush Ranger is getting close to viability ?
Maybe why he doesn’t want to go there again.
Even as far back as when Auroch minerals produced the feasibility study for fairbride, xtr put it under review. This was primarily toward the initial mining phase but the same risks will always be there.
Mining consultant Daan van Heerden of Minxcon had said: "The Manica study has produced a robust project targeted toward simplicity and predictability. We concur with managements approach to the concession and agree that the previously announced hybrid approach might have led to enhanced capital and operating risk."
Hybrid approach was surface then going straight into underground mining.
Point being risks are real and is not smoke to justify selling up just to go chasing rainbows. Could argue management were reluctant to go UG from day 1
Like Chepica you mean ?
And yet he still did it.