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My understanding is that XTR need to produce a definitive feasibility study confirming the viability of a mine and then they can trigger the buyback clause... regardless of what the JORC resource estimate is.
I guess the question then is how many more steps/phases are there before XTR get to the definitive feasibility study stage? If the study being produced reaches the level of a pre-feasibility study, then perhaps just one more drilling phase will get the data need to get this over the line? If more than one drilling phase is required , then I think we are looking at another 12 months of work. As always... ready to listen and learn from those more experienced that can perhaps answer the question better?
Littlewing, you mention "supporting studies will have to be accepted by AA."
CB has mentioned and several have confirmed that in Oz, the "Decision to mine" is an official term with quite specific parameters. I would also like to think the contract which Xtract took on when acquiring BR was watertight with whatever needed to be done to trigger this clause. Presumably Colin knows exactly what he needs to do to go down this path (and we are currently on it). AA won't be able to sit there for years if we are able to implement the decision to mine clause. CB at the AGM last year gave me (and others) the impression that he would like AA out the way to sell to a wider market. I would like to think a) Colin and AA have a reasonable relationship that they won't screw us around and b) Colin wouldn't have taken this project on if it wasn't going to be feasible making money out of it. Time will tell though.
On a slightly different note, let's compare to the situation that developed with Kiwara and First Quantum. 5/10/2009, CB announced they were getting Snowden to conduct a PFS, which was expected to be released Q12010. (This gives us an idea of how long a wait to expect)
23/11/2009 - CB announces they have agreed to sell to FQ.
A PFS was therefore not necessary to sell. Obviously, AA may operate differently and we are tied to the contract. But the situation implies we may already have the data to ignite interest from AA and others.
Let's remember we are also in a vastly different situation to 2009. Copper price higher and supply issues in the pipeline.
Many moons and interviews ago CB was asked whether we needed a PFS/DFS and he said that you don't need such things to sell a project in a situation sucj as this one,although it is preferable.
He did gloss over the DtM requirements though and that has proven to be the stumbling block now, it transpires it not just a case of saying " Hey we're going to build a mine, do you want to buy it now ?"
Radio silence since CB's last buy is required as a closed period, not sure when that is lifted but I have a feeling we will have some news very soon after that that will help the SP to improve.
Having fallen short of the 2m tons trigger, AA basically hold all the cards now. Supporting studies to make any DtM valid will have to be accepted by AA. Its going to cost a lot of cash for no increase in resource size. AA will be happy to sit there for years as they know thay will be able to pick the project up at any time they want at the price they dictate. It matters not that "somebody else" may well want it. Phase 1 and 2 has come up short of what we were hoping for and that has given us a big problem.
Well if there is no more drilling then we only have a decision to mine. Will this just be a, we are going to mine or would a full viability study be required.
https://aheadoftheherd.com/copper-mines-becoming-more-capital-intensive-and-costly-to-run/
Read this over the weekend. An article from last year but did give some good numbers going forward. In a down market and many still warning of a global recession next year it is easy to understand/be frustrated by the current low shareprices. Long term plenty of reasons to hope for a rebound across the copper space.
Death by a thousand interviews.
They can't realistically sell it until after the AA buyback has been triggered by a 2mt JORC or a decision to mine because the clause would pass on to a new owner. So they'll keep working on it until they are in a position to trigger the buyback clause.
So whats going to happen now. No more drilling, targets missed. This needs offloading now, can we assume this is happening behind the scenes. We've not got the promised 2 million so can sell to anyone now?
Estimated to be an early mining phase of high grades at both RC and Ascot of about 9 years after checking
Outdated is all you can really say about that one from ‘21 that shows rough valuation calcs based on a 2mt resource at RC ‘alone’.
From ‘21 article
>>>At today’s $8,000/tonne copper price, and valued at 3% which is probably a conservative margin to pay for what will be a cheap-to-mine resource, that would be worth $384m – or 40p per Xtract shares now in issue after the £5m raise.
RC looking to be in region of 1.3mtCuEq after this next drill phase with hopefully the updated model showing either Ascot potential to join up with RC or even partially to be in ‘addition’ to RC tonnage, that at least the high grade at Ascot can be mined initially too in a second starter pit in the next mining phase, once RC high grade has been mined for first 8+/- yrs paying back CapEx after first 4+\- years of those.
The 3% in ground value is certainly debatable but never the less there is good potential to show from the awaiting mining study and to where a valuation is looking, from how Ascot can or will contribute toward NPV after further targeted drilling there too.
More chance of making money investing in a coffee shop on mars than a Colin Bird company .
https://masterinvestor.co.uk/equities/johns-mining-journal-where-next-for-xtract-resources/
What is everyone's opinion on this article from January 2021?
susceptible= scepticism
I think the "sack of salt" susceptible is only required when CB said something very positive or optimistic. I dont think saying more drilling will be required falls into that rampish category so I believe him when he said that in pod cast.
The RNS statement also seems to supports that view.
We will be doing more infill drilling but may need to wait for the report - or income from FB before commencing this. My end of the year buy out is looking very very optimistic and I suspect the sp fall over the last few months is because many many have decided to sell as this is too long to wait.
They will know doubt be back as things progress and get nearer to conclusion
The updated mining study will determine potential profitability and where to target best, the next drilling to maximise further potential.
They are either waiting for the mining study to be returned or it is in hand and are holding off until funds are in place from revenues to cover the contractual obligations of the next drill phase and other technical work as was the case for phase 2.
CB explains what the mining consultants Optimal are working toward and does mention they are waiting for them. As per RNS thanks to gixxer
https://audioboom.com/posts/8217460-midweek-takeaway-with-colin-bird-executive-chairman-of-xtract-resources-aim-xtr
19th Dec 2022
Further Plans
Now that the maiden Ascot Prospect Mineral Resource has been estimated and the Racecourse Prospect Mineral Resource updated with all the Phase 2 drilling data, Xtract has again contracted independent consultants Optimal Mining Solutions (Pty) Ltd to update the Bushranger Project open pit mining study. The update to the open pit mining study will examine the economics of a 25Mtpa open pit mining operation extracting both the Ascot and Racecourse Mineral Resources. Xtract estimates that the update to the open pit mining study will be completed early in 2023. Following the updating of the open pit mining study, Xtract will determine the optimum way to further advance the Bushranger Project and advise shareholders and the market early in 2023 of the Company's plans for the Project.
>> Xtract will determine the optimum way to further advance the Bushranger Project and advise shareholders and the market early in 2023 of the Company's plans for the Project. - Bird stated, verbally so sack of salt required, there would be more drilling based off the results/guidance of the open pit mining study.....
"What would prevent getting on with the drilling immediately? Cash flow? Availability of rig? Lack of motivation? Weather?"
Maybe awaiting the ES report to know what "gaps" need to be filled and where best to do the infill drilling? Of course lack of funding and waiting for FB to keep ramping up could also be a reason ?
If further drilling was to be embarked upon, which is seen as a possibility since being floated getting on for 2 months ago, would drilling not have begun already? And if drilling had commenced would we have been told it was underway?
Any views on historical precedent from prev drilling campaigns?
What would prevent getting on with the drilling immediately? Cash flow? Availability of rig? Lack of motivation? Weather?
What can be expected in terms of cost and time to complete the next drill campaign?
From ascot MRE podcast, CB quoted that drilling will be targeted toward adding to the resource, targeted toward adding value, …..‘or’….,targeting to parts of the resource that need further infill.
Say an 8k metre campaign, 10-20 holes dependant on depth at cost of $250 per metre drilling and a realistic drill target of 2,000m per month that would cost about $500,000 per month for 4 months then another 2-3 months assays and modelling. so about $2m plus other costs associated for a further drilling phase taking approx 6+ months.
We can assume assay labs will be quieter relating to the market values of companies in the mining sector being down affecting that ability to generate funding to progress projects. There will be a slow ramp up in activity in ‘23, I would guess.
The …or… comment is the interesting one. I expect infilling to the higher grade 0.33%Cu parcel for early CapEx pay back that will be subject of a PFS so is potentially required to be converted to indicated on top of the 50mt current indicated resource that is only at 0.25%Cu
Initial mining phase for CapEx payback stated as about 4yrs so 20mtpa x 4yrs = 80mt indicated resource is the minimum that needs to be converted to a probable ore reserve from the high grade crown that a PFS can be based to satisfy AAL we have the ability to head toward funding.
As for cost of a PFS, a simple search would imply anything from 0.5% up to 2.5% of overall project value and can take a further 3-5 months to complete.
Is only my opinion of course based on what is already known so far.
Any thoughts?
Hi Eastern, I do think the main arguable point being is that CB has done a ‘necessary’ job in keeping shareholders interested with heightened expectations to get the market cap as high as possible to minimise share dilution from the fund raises that were had in ‘21 and any subsequent needed to follow on with a third phase. Potentially why he continued to suggest that the 2mt was achievable well into Q3 ‘22 as there were no guarantees up to a certain point that Fairbride was going to go into production.
There is no doubt the global economic downturn has been the single most contributing factor to the share price drop through ‘22 and in part, toward the market reaction when resource statements were released, along with the resulting disappointment from CB’s previous rhetoric of not seeing the 2mt.
With more income now from Africa, we do seem to already be seeing, and hope to continually see, a more pragmatic approach with reporting from CB as there should not be any further need to exaggerate optimism, particularly ‘If,’ the treasury can support the next drilling and other technical work required to get to the next decision point.
Howezap, how does that saying go ? 'In vino veritas.' You are correct, we waste time listening to CB's comments on Roast or another media platform. He has no credibility, his wishful thinking and optimistic statements simply do not bear out. All we can trust are the numbers in the RNS and even then, that is a qualified comment as they can be vague and conflicting, especially when you look at the quarterly mining updates.
I remain invested in various of Colin's companies but admit l don't have a clue which projects will provide the best investment and which will fail. These days l just remind myself they are all just holes in the ground. But hopefully one will be the 10 bagger .......
>>>Either way seems they are only interested in rampy comments
Exactly, I really don’t see the benefit, which is why I have never bothered. I understand it is actually a good platform as you can post pictures and charts etc to share research. But without, I would guess any challenging opposing views that create healthy debate which is normal on a public forum. It is not for me.
Much prefer the amateurish forum fodder we get here from rinsing as much as possible out of another of CB’s puzzling comments from the latest paid for promotional podcast.
In jest of course, p issed again
After listening to so many of the roast "interviews" on many of CBs companies, its clear to me that the roast boys are nothing more than CBs "head of public relations". Couldn't agree more A4444.
I was recently been removed from the Roasts Telegram forum for responding to a question 'Would you invest in another CB company' - I, surprise surprise, responded no and gave reasons based on my experience here which were around Bird's failure to meet deadlines and over exuberance (misunderstandings) RE:2MT in the bag.
I asked them why on the GLR forum and they claimed ignorance....Perhaps it was Bird himself! Either way seems they are only interested in rampy comments there which I guess is fair enough considering they are probably pulling in $$ from CB (us)...