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Sorry.... answered my own question..... search bar top right.... xtract
Gordie.... how do you use that map? To drill down to just our interests?
If Bushranger gets sold for $500m that's 42p a share.
Even if its sold for half that, we still get 21p a share.
I think bushranger has to worth at least $250m?
Cut off value s a changing variable that is influenced by prices and mining processing costs that will be different for each block of ore that makes up the resource. Obviously going by an overall average.
The conceptual pit study (71mt) concluded that the Racecourse deposit contains significant low-grade tonnes of copper and gold which can be economically recovered at a copper sales price above US$4 per lb and
can deliver a positive NPV return at a 0.15% Cu cut-off with a production rate of 20Mt per annum at a copper price of US$5 per lb
Just need the extra ore from all drilling to get the LOM up to around the 20 year+ mark and either a long range forecast in copper price when it’s ready to go on the market or, we have to wait until copper recovers to do the rest. The latter is a question we can hope to understand soon.
and just to add ( sorry ) the cadastre picture also gives a good impression on the amount of exploration space available for further drilling . i,m expecting us to still be there in ten+ years .
whilst i,m here ant you might also try the mozambique mining cadastre ( next door ) remembering to search with xplorator limitada , then clear the other licences and turn on satelite , this will give a more upto date picture of our excavations than google and zoom .https://portals.landfolio.com/mozambique/en/ cheers.
ant, i am assuming that it is us , unless i,m making a mistake . i have also noticed that the eureka tenement is licensed to falcon minerals and took me a while to find the mine itself , but have been unable to find more info. it also seems kpz were kicked off kalenga and according to local media kpz are suing the mining minister accusing him of corruption .
the zambian mining cadastre is showing four new small scale exploration licences and one large scale exploration licence for xtract mines and minerals resources limited, these are over and above eureka, kalengwa and chongwe , so i imagine there will be plenty to look at should BR be sold . https://portals.landfolio.com/zambia/
Doesn't the 0.15% cut-off only become viable when cu is over $10k? - I seem to recall hearing/reading that somewhere....
Thanks for the response Ben, and what you say makes sense.
The 0.15%, do you remember where this came from? Was it a CB interview or a study from the old owner (I’m forgetting the name)?
As well as CB comment in the last RNS my reason for thinking cut off will be more inline with 0.2%-0.25% is that this range seems to fit well with the lower end of the assays received to date, but fully except this isn’t conclusive and I could easily be misinterpreting the information!
James, I remember reading the RNS and seeing I differently.
It has 152m @0.14% Cu. There are intersections above that although Colin's conclusion that 'there is a long interval below viable grade' still fits with our 0.15% cut off due to this intersection. We can nitpick about Copper Equivalent but adding gold to the mix complicates matters, both in terms of value and processing.
I'm not entirely sure we can conclude our viable grade has gone up to 0.2% as a result of this hole and his subsequent comment but it may well have done.
Could be a complete rookie error on my part….. but if I look at the latest RNS it basically says for hole 42 that average grade is below the viable mining grade. Grade is generally above 0.15% so me this means the cut off XTR will use will be above 0.15% and maybe more in the 0.2%-0.25% range.
Understand that this viable cut off might be different in different parts of the deposit due to depth etc but would be interested to know others thoughts/what rookie error I’m making.
Cheers
James
Just a point of clarification. The increased price of copper has allowed the minable ore grade to drop to 0.15% which increases the minable copper content of RC. What it does not do is also decrease the 2MT point of interest to AA. If it did you would have a double edged sword working for you which is not logical.
If on the other hand your grade limit was maintained (say 0.3% for instance) then the increased price of copper would allow the size of the ore deposit to fall while maintaining the same profitability for AA.
Just musing.
AA would have have based the 2mt against the price of Copper/Gold at the time, so probably not much different from the prices at the moment.
https://www.kitco.com/news/2022-07-07/Gold-price-could-see-2000-flashback-as-most-commodities-reverse-in-second-half-of-2022-Bloomberg-Intelligence.html
At least gold still seems a good bet and should keep the lights on.
AA would have crunched the numbers when they put the 2m figure in the buyback clause. When Colin says they have exceeded their "original" expectations, we know that, but does a mid size deposit hold significant value in the current market and does it stand up to his later exuberance in his podcasts. A good result at Ascot would be nice at the moment.
Footrot has already been drilled Joeman and they were onto the ‘last’ hole into Ascot to investigate gold at depth. It may be the ‘extra’ infill to increase the high grade crown will not be required from financial evaluation. Likely they will not decide that until the models are updated I would have now thought.
Whilst trying to turn a new leaf and consider a worst case I have been trying to understand the reasoning behind such a scenario. There just isn’t enough information released to make a call either way tbf.
I keep going back to this statement in the RNS for the annual report. From Colins comments,
>> In general, our exploration activities in Australia have been extremely encouraging and without a doubt we have discovered a major system, well beyond our original expectations.
That’s not a comment that suggests underachieving in their mission. Viability, particularly financial, on the other hand, is a different thing but worth remembering the original starting model from the 71mt JORC resource, from memory, showed a scenario that had a positive cash flow at 0.15 cut off. All of the typical porphyry ore grade rock that has been added since to the resource model including infill work through phase 2 to bolster the high grade crown will only increase and improve that viability.
Eastern,
CB latest comment in the RNS was that having received the last couple of holes from Racecourse and closed off the open pit in that direction, they can now progress the final Racecourse model. So all systems go on that front I hope.
Maybe the team can schedule in another technical presentation showing this final model soon. The Footrot and Ascot additional drills and the shallower drills can all follow afterwards imo ....before they issue the decision to mine... unless of course the model already shows the 2mt copper. If thats the case it will move even faster.
I'm not worried about that scenario as if BR and Ascot were not viable, they would be putting more than a couple of holes into footrot.
Well I did not think we would see the SP this low, ever. I appreciate all the positive evaluations and predictions by seasoned LTHs. My fear and perhaps this is borne out by the wider market is that CB's comments can also be interpreted along the lines of, we do not have 2mt of feasible copper at BR and Ascot is not proving to be low on copper, only off-set by a small amount of gold. I would hate for attention and hope to now switch to Footrot without BR and Ascot being clarified. I am pleased we are nearing full scale production at Manica and look forward to Eureka in Q3, albeit this is once again a CB time scale.
Prickly, I think you'll find the cost of production will be a lot less than $5000 per tonne. Suggesting that any company associated with copper is getting a pounding - usually beyond what the economics would suggest.
Now I'm off to watch the Grand Prix.
If i may oversimplify things…assuming cost of production at $5000 usd per tonne then a reduction in selling price of copper from $10000 to 7500 would halve our profit and I would expect the SP to reflect this. Which it has.
Will add to my opinion on valuing, that economics are ‘far’ from being my most informed topic, and is based purely on my interp overall.
I fully understand and agree with Andrews ‘realistic estimate’ i believe his conservative methods of valuing are correct, I think we are just divided in the size of the resource!
So apologies to all the pre BR investors I no doubt pi55ed off with my unjust comments, I was trying to hit home with a hard point through frustration, that back fired on me by alienating some no doubt well informed investors. That wasn’t my intent, just passionate, and wholeheartedly support some contention between some of the big hitters to give good healthy discussion. Sometimes there is a distinct lack of that as many don’t like to appear confrontational if their own opinions differ. Nothing wrong with that either.
I think there has been some good come from Andrew and myself’s spat last week , it has cleared the air of much negativity born from frustration/ anger etc. Time for a bit of harmony as we near knowing where the project finally sits on the world stage, but not too much harmony though, it won’t be much of a discussion board if we all just go around patting each other on the back!
Steve, I think the main thing that needs to be addressed first is to inform the market what they actually have, keeping cards close to their chest cannot go on for any longer than necessary. It will destroy any remaining confidence the market has in the company, let alone its very own shareholders. I don’t know how the market will react to the meaningfull income, if that income is seemingly all being thrown into exploration that has no directive anymore.
At present, the changing geology, particularly at Ascot has seen further exploratory work needed that could not be ignored. Causing the delays we are into now, otherwise, the plan has not shown any deviation from what we have been told, that the project is in a final definition phase. So until we have a viable asset that is ready for the market, I cannot see the plan changing, that will firstly see either of the options. triggered, to eliminate the binding agreement one way or another. After that, it may change of course, but until then I see it being business as usual.
Where the valuation is concerned, yes it may have been better to have taken advantage of surging prices, but it was only through 21 that saw the big gains, on early discussions there was a clear path to valuation that a third party consulting firm would likely take. Value would be determined using three projected copper forecasts, a low, medium and a high forecast that anticipate these sort of fluctuations. Then there is the Valmin code that looks at previous acquisitions etc.
So a scenario that would see a valuation and agreed sale price at the heady copper prices we have recently seen, may have actually been a lot lower than many anticipated leaving some actually disappointed! The same thing could still apply to your suggestion to a degree that “no major is suddenly going to be generous enough to a small-cap miner to accept an NPV based on significantly higher copper prices (than now)” prices that had surged over just four consecutive quarters.
The biggest factor will be the willingness to buy, not necessarily our willingness to sell.
I keep seeing this comment about current prices not affecting the BR sale because copper will be higher in the future. I don't know where people get that idea. Unfortunately, price now definitely does affect future prices and no major is suddenly going to be generous enough to a small-cap miner to accept an NPV based on significantly higher copper prices than now. However, happy to be corrected if you highlight any sales where the assumed copper price was much higher than at the time of sale.
Here are the current official copper futures prices on the London Metal Exchange. Copper now is 7790. Copper for December 2025 delivery is 7865, or about 1% more. When the copper price falls, the copper futures also fall.
https://www.lme.com/Metals/Non-ferrous/LME-Copper#Trading+day+summary
I agree that copper prices are very likely to go up. However, the reality of making deals means we need to wait for that to happen to get the best value. In the meantime, lets do some drilling.
I certainly think it’s arguable either way steve as you suggest. I personally don’t see a downturn in the economies of major nations now, would affect a sale of an asset based on long term projected copper/gold values though.
The statement regarding no further raise in the next twelve months along with, previous comments that would see revenues from African mines and small JV’s that would pay for exploration, on only one occasion was it said that the JV’s would pay toward the drilling efforts in oz, that was during the last AGM I believe.
Of course there are two ways of looking at that, but I see it as the opportunity once BR is wrapped up the sooner the better, that then the exploration in Zambia can get going.