The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
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I think it is fair to say a re-rate is ongoing, the cheap stock is being eaten away, anything below 2p is a gift.
It is also getting harder to buy in any real size which is always a good sign.
>>Can buy now. 1.85p - Same
Can buy now. 1.85p
Sells dont seem to holding this back.....atm anyway :)
I am impressed with the analysis on this board. The deal we have at Manica which allows proportionately more income as the POG increases is looking very promising so I have bought more today . Am still showing a 20% loss but this is the best performing CB share at the moment. Shame CB has lost all credibility and his companies are being massively discounted but the hard facts of gold production mean we do not need to rely on the chairman's forecast any more.
The two big sells today didnt seem to stop the MMs increasing the Ask.
Now n/t to buy like yesterday.
Another tick-up coming????
Fine recent posting on Manica future Gold revenue forecasts Andrew and JamesieCakes... very much appreciated.
Indeed, as much as I was - will again no doubt be - extremely thankful for the quality of Iceberg's input on the Geology/ General exploration journey of Bushranger knowledge is as much as I'm extremely thankful for the quality of your collective African Gold revenue forecasting analysis.
Generally, I hope the many who are 'here for Bushranger' quickly grow to appreciate your - established over many years here - quality in Africa gold revenunes analysis. The relative lack of ticks against your recent posts tells me that many of those Bushrangerers have not yet, alas.. but I'm hopeful that due respect will more and more be paid to Xtr's African Gold Assets, and by extension, and your related high quality revenue forecasting - and indeed more general -analysis, by the 'here for Bushranger' gang as we go forward from here.
Nice to have iceberg and hawaiifiveo back on board. I do see this as a recovery stock from here, but was not happy at all with the drop in share price and market cap, which I attribute largely to Colin Birds over-promising and under-delivering (again).
Luckily, there is some copper and gold in them there hills, so am hanging in there. Take care all and enjoy your pan-galactic gargle blasters this weekend.
Will be near 3p pretty sharpish if Gold continues this strength. Cash generating and only increasing.
Hi Andrew
End of the day if either of us are right, XTR appears under valued!
If we assumed that the plant can process 42ktpm, let’s assume downtime of 10% (I don’t recall seeing anything on downtime in any deck) meaning approximately 450ktpa is processed. At the stated average grade 2.62/gt this equates to 1.19m grams or approx 37k oz pa. Assuming a recovery factor of 95% (what I’ve seen for the oxide material) would mean 35k Oz pa for the first few years, using a average 78% recovery for the transition/sulphide material and this drops to 29k Oz pa for the next 5 years or a total of 215 oz over the 7 years so pretty much inline with the dfs production (hopefully my calc is reasonable and this isn’t a coincidence), Slide 9 of the below shows the metal recovery ive used.
https://xtractresources.com/wp-content/uploads/Manica-presentation-12March-2017.pdf
I’m likely going wrong by using an average grade, but don’t believe I’ve seen anything on grade by material type etc, despite this and my knowledge that CB believes a glass with a drop of water in it is in fact half full I’m still reasonably comfortable to expect between 2.5k - 3k Oz per month especially in the first few years of the project.
We are certainly aligned on the rest of the calc, I also think we will have some relief on the corp tax as well but don’t have the information to base an assumption. I tried to ask this question at the AGM but didn’t get a clear answer from Joel (could have been an unclear question in fairness to him).
Cheers
James
I hope you're right James, but I would be surprised if at full capacity FB production was more than 2500 oz a month for EVERY month . DFS said 31k a year = circa 2500 a month.
I think 75kg a month (circa 2500 oz) is max it will be. I know CB said 80kg to 100kg a month but we all know he exaggerates.
At $2000 POG less 700 cost = 1300 oz net profit x 2500 = $3.25M a month. 23% = $747K / £600K pre tax profit a month to xtract.
I think in reality the average production a month over a 12 month period may be more like 2200 due to some production disruption with rainy season in Dec / Jan / Feb, so that may mean pre tax profit is more like £500K to £550K a month.
However, we also need to deduct 32% corporation tax and 6% mining tax. So £350K a month FCF is probably more likely.
Two other factors to consider are taxable profits offset by previous years losses. I'm no expert on this but we have made a loss in previous tax years so we MAY be able to offset some of this against Corp Tax liability so may not pay as much tax?? Second factor is GF and BE contribution. Looking at previous results I make that circa £40K to £50K FCF (After costs and tax).
So my best estimate is a MINIMUM of circa £400k FCF a month by end Q3 latest. If production is at the previously claimed 2500 oz a month and if we can off set some Corp tax against previously losses, it may be as high as £600K by end Q3 - but that is with a lot going in our favour IMHO.
Bottom line, even with a very conservative £400K FCF a month that will be transformational for a company with such a small MC. SP of 2.5p to 3p by end of the year latest (with just manica income alone) looks very reasonable and likely imho.
Obviously POG could well be higher by then and production could be nearer the 2500 oz a month and more than my conservative figures. If so mid 3p's would not be out the question.
of course AIMHO
I don’t think we will get to steady state production of 2500-3000 oz per month for a little while yet, we ended Q1 2023 at around half of this production level. My hope/expectation is that by H2 we are running at 500k per month profit all in (at current prices). Based on my understanding of the satellite deposits I think XTR net 13% of revenue in GF and then less in Boa (funny calc depending on the depth mined) and production isn’t going to be material in comparison to FB (based on a quick glance at the q4 production update these will add about 250oz per month combined of which we can assume say 10%-13% net to XTR)
For what it is worth I have bought back in !
Thank you. I’ve not re looked at these contracts for ages.
So at 1700 we have have 1000 profit
At 2000 it’s 1300 profit.
So the 15% increase in pog that we’ve had - gives us a 30% increase in profit. (Obviously very raw and simple)
With gold at say 2100 then that’s around £6m a year?
Then with hard rock (now that alluvials have finished at say 750k a quarter 3m a year.
Would I be right in finally expecting £8m - 9m this year?
Re BR-Ascot. My assumption is that they are still trying to find the best npv figure and solution. No point scaring the market until you know what the options are. Tbh, I’ve given up believing what Colin says.
Under the terms of the Collaboration Agreement, MMP will receive 77% of all the operating profit produced from the permitted area through the performance of the contract by MMP when the prevailing price of gold is greater than US$1,250 per ounce. MMP's entitlement increases to 78.5% at a prevailing gold price between US$1,175 and US$1,249 per ounce, and to 80% when the prevailing gold price is less than US$1,100 per ounce. For the purposes of the Collaboration Agreement, "profit" is calculated as: Revenue on Sale less deductible costs (excluding non-cash items) and corporation tax. Any royalty payments due to any third parties (such as royalty and streaming payments) are for the account of MMP and will be settled from its entitlement under the Collaboration Agreement.
From July 21 RNS
For the MMP contract don’t we get x above the price of 1550. (From memory). Basically the contract is along the lines of guaranteed profit for empress. Guaranteed for mmp then we get get the risk portion essentially if the price is above xxxx?
I could easily be getting confused though.
James
I agree with your calcs. The DFS said 31K a year = 2580 oz a month. If correct thats about 75kg a month so I think CB is being overly optimistic when he said 80kg to 100kg. (Not like him eh? )
I'm expecting 2200 to 2400 a month when at full capacity.
As for % mark-up. I agree with you
POG 2000 700 costs = 1300 profit
20% increase in POG
POG 2400 700 cost = 1700 profit
So 20% increase in POG = 30% increase in profit
Iceberg
When you get a moment, what are your thoughts on Xtract not releasing any NPV r capex in the Open Pit Mining Interim Report?
Was that a Red flag in your opinion of it not being economic?
Is a pre concentration approach standard in these assessments and not a "last attempt" to make things work?
Hi Theiceberg
Obviously any forecast is all about the assumptions, but assuming 3000oz per month, 6% production tax, direct cash cost of 700/oz, 32% CIT and an ex rate of 1.25.
At 1700 I’m getting around £4m pa while at 2000 this is around £5.3m pa so clearly their is a nice bonus at higher prices but nothing like 200-300% upside from 1700, plus cash flow is still material at 1700.
Let’s see how the numbers look when we start getting to steady state production
Cheers
James
Update, can now buy 20 quids worth.....
Still the same for me A4444 - Can't even buy £200
I have been re-investing some funds in here. (finished today).
I still think Colin is a liability, but the price of Gold and the ending of alluvials(which cost almost as much as they made) are both important triggers.
The MMP contract massively rewards us for the Gold Price. (at 1700 we get not a great amount, at 2000 or 2100 we get much much more 200-300% more).
Anyway I won't be posting much, but thought i would say when I brought a few back.
I wish !
Move up to 10p and out
N/t to buy atm
For any amount.
Move up due???
13.33% WS why?