The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
i do remember quite a few years ago these rising 175% one day ,can't remember what for.
Mattyashy - not sure if this helps. It's from the acquisition documentation.
"Globally, porphyry-related copper-gold deposits commonly occur in clusters. The Bushranger licence package remains under-explored, with several further adjacent porphyry targets, most of which have not yet been drill tested. Geophysical surveying, which originally identified the Racecourse deposit, has highlighted another target southeast of Racecourse, as well as the nearby Footrot and White Springs prospects.
The western portions of the Bushranger Project, on Exploration Licences EL's 8305 and 8585, are prospective for structurally controlled high-grade gold mineralisation".
I took note of CB mentioning not showing your poker hand too soon. That to me is he is already/about to negotiate a sale. Patience will be very well rewarded here at multiples this price.
As of 31st may RNS
To date, 8,526m of diamond drilling has been completed at the Ascot prospect, with assays still awaited for drill holes BRDD-22-040, BRDD-22-045, BRDD-22-046, BRDD-22-049, BRDD-22-050, BRDD-22-051 and BRDD-22-052.
By time this was released, the last, hole 52 had already been logged and sent for analysis, so by the time the RNS was complied potentially up to a further two more could have been drilled, certainly one as I would guess at a week for analysis and logging?? Plus a further hole since so maybe 3 more in total. Potentially ‘more’ if longer to get sent and then there is when it was sent prior to RNS
No indications as yet to where hole 52 is located as is omitted from the accompanying drill location plan.
Not a bad head start to get the remaining ‘additional’ holes drilled. Maybe Colin’s couple of months likely 3, doesn’t look too overly optimistic after all.
Could be the case Joeman.
One assay result I'm waiting on for Racecourse is hole 36. Sounded positive on the geo observations back in Dec. It would also add quite a bit to RC in the South.
If it was poor I think it would have been released with the rag tag waifs and strays assays RNS we had recently.
****Colin if you're reading this can you ask Quinton to see if it's dropped down the back of his desk***,*
"Drill hole BRDD-21-036 tested the southern end of the Racecourse Inferred Mineral Resource, intersecting zones of alteration and variable strength visible copper mineralisation from 11m depth to end of hole at 618m, with stronger mineralisation from 11m-216m depth"
"Drill hole BRDD-21-036 confirmed the southern continuity of the Racecourse mineralisation, again with a significant interval of stronger mineralisation, which supports our prognosis that the southern extension progresses well beyond the southern end of the conceptual open pit."
My opinion is (and a lot is speculation) that the 2 extra Racecourse holes aren't 100% required. They will add definition im sure but I think the underlying usefulness of them is to give us a reason to delay the decision to mine by a few months. That allows us time to probe the rest of the area as well as improve understanding of Ascot. Remember as soon as that buyback is triggered, the clock is ticking so they want the story straight before negotiations start.
On the shallow drilling to pinpoint the higher grades near surface, that is to better define the CAPEX payback period, shorten it as much as possible (reducing risk) making the project as attractive as possible. It will be easier to sell a project with a lower cutoff if the buyer is sure they can payoff the the CAPEX early while PoC is high....
Just a thought.
The selling going on-
Do wonder how many investors actually go the extra mile beyond the obvious website and presentations for research and news releases. Not everyone I guess reads public forums, and subsequently gets to hear the podcasts that can be helpful. (Most of the time)
Xtract would have been of the many AIM stocks that was being pumped, occasionally sitting at the top of the risers leaderboard, I’m sure many of the new influx of so called lockdown traders at that time were drawn in. For all the right reasons, but seeing this not making them the quick buck, there’s one probability.
Many investors just simply can’t be bothered and don’t take research seriously it’s madness.
Many other reasons on any given day of course.
I think that’s realistic Andrew, you just cannot see it being a couple of months, with drilling required. Also I’m not certain what he means.
In Zak’s podcast he seemed clearer that the high grade component will have an infill programme to increase the higher recoveries to 5,6 or 7years done before the resource model is finished.
With kev and Phil he mentions the high grade component at 4-6 years recovery, but then I get an impression that it will be extended further to 8 years ‘after’ the model has been done, saying that might send us into an infill programme that will extend recoveries from 4-6years to 8 years.
It may have been due to editing, not sure. What do others make of the comments?
High grade component with Zak @3min40
https://podcasts.google.com?feed=aHR0cHM6Ly9hdWRpb2Jvb20uY29tL2NoYW5uZWxzLzUwNTExMzMucnNz&episode=dGFnOmF1ZGlvYm9vbS5jb20sMjAyMi0wNS0zMTovcG9zdHMvODA5MjcxNg%3D%3D
High grade component with kev and Phil @1min40
https://podcasts.google.com?feed=aHR0cHM6Ly9hdWRpb2Jvb20uY29tL2NoYW5uZWxzLzUwNjQ0MzcucnNz&episode=dGFnOmF1ZGlvYm9vbS5jb20sMjAyMi0wNi0wNzovcG9zdHMvODA5Njk4NA%3D%3D
Colin was clear about a couple of holes being needed to fill in a hole in the model that will be drilled before the conceptual pit will be finished, which is not to be confused with the high grade drilling.
At Ascot he mentions finding out what’s below the gold and also what’s above it so no doubts a very minimum of two holes there, which I think he suggested. Then of course, not forgetting Footrot
I'm also happy for CB to explore other anomalies . But as CB says, its a big system so I'm also not too sure how we will be doing a lot more drilling + assay at the other anomalies in just an extra 2 months?
Ben's comment about "year" is probably more accurate . Be it early next year or 12 months from now.
Maybe CB is so sure FB income will be available by July, or Aug latest, that he wants to make good use of it? I would be amazed if we get a buy out this year now. Q1 earliest now IMHO.
On a separate but related matter. I just dont understand why some are selling, just before FB will go into production. RNS could land tomorrow or end of month (latest?). SP will surely be up to 6p minimum, on that news?? Possible over 7p?? circa 10p on first income confirmed?
I guess we'll know soon - very soon probably.
As you say very much guesswork with timelines. We've been saying for 2 years on here about the potential of footrot though and I'm very excited to see what it has. Is it more like Racecourse or more like Ascot. Very intriguing. There's lots to come of the next year or so in Oz, Zambia and Mozambique.
CB said we were not 'late' but there may be a delay of a couple of months. Not sure I understand the logic: being late with a good reason is still late. That said I was trying to work out whether 2 months would be long enough for what needs to be done. I suggest some timescales for certain tasks below. This is real finger in the air stuff with the intention of getting people with more knowledge to comment and give us a better timeline.
So I think we should estimate 8 weeks after drilling is completed to get the last assay results.
The approvals for the drill locations might be handled concurrently but may take still take 8 weeks say minus 3 weeks because they have probably put the requests in a few weeks ago. (I wonder whether this is actually true for Footrot.)
I assume we only have two drilling rigs and we can only do half of the ascot frilling and probably none of the Footrot drilling before getting the new approvals, so as a guess we might need say four weeks of drilling at Ascot after approvals, then four weeks more at Footrot. (I suspect two holes in Footrot will not be enough because they may well miss at mineralisation on the first go.)
So that suggests to me a probable earliest timescale we could complete the planned tasks is:
Approvals of new drilling sites at Ascot and Footrot: 5 weeks
Drilling Ascot say 4 weeks drilling after approvals.
Drilling footrot 4 weeks more (need the drills)
Complete assay results 8 weeks after the last Footrot drilling.
So in total 5+4+4+8 weeks = (approx) 5 months.
Any improvements on this or better way of calculating the probable timescale? Thanks!
Lucky and James
You both obviously have a better accountant than me:)
More than happy if we do get a brucie bonus tax reduction!
I'm expecting an RNS today or tomorrow to confirm that our money printing machine has been switched on. Any conflicting expectations?
Best,
Mr T
Depends on how far back they can go. When was manica acquired and how much losses have we made since then. Uk I thinks 7 years.
Hi Andrew
Fully agree on including tax in the calculation, i am calculating taxes the same way as you to be conservative and for simplicity.
However in reality I would imagine that they would be amortising the value of the manica license as they produce (I think they paid circa $10m from memory) which should give a nice bit of relief against CIT.
Cheers
James
Steve
Understood.
I didnt think you were but didnt want anyone to be disappointed if they thought it likely Q1 figures would continue the upwards trend and be better.
Of course, I could be wrong and they may be better :)
Lucky
You say lots of losses, and I know CB has mentioned this, but I dont think these loses will significantly affect profit. May be a bit more profit.
Last recorded losses were 90K a year. I would think the monthly profit may increase a by £10K a month, at the most.
@Andrew4444
Yes, agree on Q1 being lower for alluvials due to the rainy season and also the likely CB update strategy. I wasn't trying to create a false impression - just showing that income is growing over time rather than steady.
Andrew, don't forget we have lots of losses over the years to offset some tax.
Steve
I agree that we are ramping up small HR production, and GF and BE figures may be better than Q4s, but Q1 for alluvial production, is always the lowest of the 4 quarters (rains), so I would be amazed if we still see the steady increase in income next release that we have seen all of the last 12 months.
I would think Q1would be less than $1m?? The very lengthy release in figures may also imply a reduction or poor quarter?
Q2 could well be the best ever or very near Q4s figures
I would not be surprised if CB did we he did before and released two quarters very close to each other. Average / poor Q1 followed by very good Q2s. That 3 months gap of news release made into 2 weeks :)
You also need to take off 32% corporation tax (thats the rate in Moz)
So, for alluvials + small HR, thats $1.32M a year = $110K a month = £88K free cash flow a month.
CB said FB will be making same profit in a month as alluvials make in a quarter. That looks a little low to me and by my calcs we will be getting £350K a month from FB FCF. So £400K to £450K a month FCF from all of manica.
Yesterday, CB said we will be getting $600K to $900K a month after expenses and that was from all of manica.
Taking the mid point as $750K a month = £600K a month = £408K a month FCF after expenses AND corporation tax so in the £400K to £450K range.
When CB quotes these figures he understandably is not taking off corp tax which is 32% in Moz, so the headline figures seem better (then what FCF will be).
£450K FCF a month (£400k Min £500K Max) will be transformational. Even if the market doesn't realise it :)
The below is for 12 months but the production is gradually ramping up.
Q1: $144k
Q2: $218k
Q3: $785k
Q4: $1.38m
Also the hard rock only started in Q3 (from the smaller mines, not Fairbride) with 170oz in Q3 and 505oz in Q4. The rest is alluvials. Fairbride will be much larger than the smaller operations such as Guy Fawkes and Boa Esperanza.
All of the above are different parts of the overall Manica operations.
I too get confused!
For me, 1) is being delayed a bit while Ascot (?) is scrutinised further, though there might already be things happening behind the scenes?
2) Waiting for the cash register to start rolling, which will help 1) as you say. Manica does not get much air time, but I get the feeling from here, this is imminent? Just how imminent I do not know, but it will be nice when one starts creating an income.
3 & 4...pass!
We seem to have plenty in the pipeline, once one starts, it might be like a snowball?
Can I just get my 5k a month straight transfer?
We are in the money.
At the weekend I booked a holiday for next year. I pushed the boat out and went for a balcony. I should of made it a suite.
Best,
Mr T