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A repost by iWantThatOne from 26 Nov 2022 09:13 who btw is, in my opinion one of the stand out contributors for his knowledge and quality of posting on this board.
>>>We know from earlier modelling that RC pays back the initial capex and produces >$200m NPV at $5/lb. That was based on the original JORC’d resource. We now know that the high grade crown contains more copper-equivalent material than that, at least another 0.1Mt worth >$1bn revenue - again at $5/lb. That’s before you consider the remaining low grade 0.5Mt that would be mined from year 11 onwards. So, very clearly, BR will produce a positive NPV at $5/lb - possibly a very attractive one. The question is then, what about at lower prices? And will the economics be sufficient to attract a buyer? <<<
Since then, the Ascot shallow high grade of 34mt @.33%CuEq can be added to immediately increase NPV by a further $1B which is another 0.1Mt net roughly after recoveries. It has been confirmed that then further drilling will be directed from the updated conceptual study due, to further improve those economics and to add more value as the company take the project toward an eventual PFS to take the project to market. So for now, it does seem clear that this due study is just a snap shot of its current economic state and the targeted drilling will no doubt further improve NPV and with the potential to be economical at a lower copper sale price. CB does appear positive to be able to include the early high grade from Ascot to the model.
Any other factors to consider?
The extra $1B revenue from ascot once discounted will give an NPV…… ;-)(
Is Ma or if you dare say Da. Could be Little red riding hood next. Didn’t she grow up in the woods too?
IWTO was one of the closest in the guesstimates of RC resource, good math with a grasp of what drives resource economics and was vociferous in defending RC resource against steve4077 claims with sound reasoning imo.
iWantThatOne post RE: Blocked on Telegram
28 Nov 2022 18:50
If you missed it
Hey Shirley, you are barking up the wrong tree in the woods I’m afraid where this GUY is concerned.
Was referring to post before that one @18.50 although both are relevant
For in ground value yes, but it’s not revenue, its about right as a rough guide, it does just takes into account the approx 10% loss of concentrate from processing.
Example-0.1MtCuEq = 100kt x $10k copper price =$1.B
It is reasonable to assume a very positive NPV will come from copper at $10k per US short ton ($5/lb)
Copper spot price somewhere between $8k -$9k is a more realistic target price though we can hope ‘eventual’ economic modelling can show a desirable NPV on a discounted cash flow basis.
What can we expect to see or hope to see, from the updated conceptual mining study?
So at minimum I expect a positive NPV at a lower copper price than $5/lb from it would justify continuing the next phase of the project. Higher the better of course.
Expect to see Ascot potential to contribute to an initial, high grade mining phase from open pit
Expect to see pit optimised to 25mtpa throughput
Hope to see an IRR figure but suspect may not until project gets up to PFS
Hope is to show there is at least some potential that Ascot pit can be joined up with RC pit into one large pit 3k long.
Hope to see some direction toward exploiting the deeper porphyry and gold system below RC and Ascot
What can be included?
Hello ma what are you not sure of? It’s still early days yet as this updated study due is still conceptual, so there will be a lot of scope and directed toward improving anyway.
In layman's terms he is saying if we throw a shed load of copper piping in the machine it will look like we have found more copper.
Market doesn't seem to have taken too well to Colin polishing the turd
I think we all knew that the grades were towards the bottom of the global range. However, in recent decades the way to solve this problem is to use a concentrator. Why it took around 3 months for the modellers to reach this conclusion is beyond me, just hope they're not changing top dollar for this stuff. Anyway, the concentrator is the obvious way to go.
Those who think this is an admission that the prospect is non viable then you need to ask why continue with the f****? That doesn't make sense to me. The modellers have to find the most economic way forward and the concentrator is that solution. In the mean time more drilling will take place. Sounds good to me. Nobody is going to leave 1.3M+ T of copper in the ground in a convenient location in Auss. It's just going to take longer than we planned. The question for me is whether the cost of the drilling will come from dilution or be financed from Africa? See attached link on concentrators.
https://www.mogroup.com/insights/blog/mining-and-metals/the-environmental-and-economic-benefits-of-pre-concentration/
f*** should read f****.
Don't know where that came from...
MaBaker... we have to acknowledge what the market thinks... unless you think Optimum will be buying Bushranger !
LSE clearly doesn't like the word f a r s e .
The reason the price is falling is due to the increased delay that this development introduces.
However, for LTH that want to build a position, this is good news. The RNS suggests that this is economically viable but you'll have to wait for your money.
>> Those who think this is an admission that the prospect is non viable then you need to ask why continue with the f****?
Do you seriously think that if the model came back as non-viable, XTR would just release a clear RNS to that effect? Instead, they would prevaricate and obfuscate, like they and many other AIM companies do all the time. Eventually the project will just quietly disappear like Kalengwa, Eureka, etc.. Why do you think there is a new distraction in Zambia?
At some point, you have to take off the rose-coloured classes and realise what is actually being said in the RNS.
Or alternatively, consider that if you were not currently invested in XTR, is this where you would invest right now? When I asked myself that question last year, I sold and put the money elsewhere. Still very much weighted to copper BTW - I believe that part.
Pre concetration scoping seems fair and reasonable path to now take to me.
Generally, I rate Africa Gold at minimum 2p and maximum 5p per share value.. so for this to be 1.65 p as I type is an extremely squared harsh overall company valuation here imho
eg The market is saying that a bunch more money is going to be spent on Bushranger and in the end Bushranger wil be worth zero.. I do not buy that .. and , again, offer a very bad sell on value for bushranger is £10 to £15 m gbp range in my mind.. eg approx 1 p to 1.5 p per share value range .. and with Africa Gold at 2p minimum .. that makes the current share price FAR too low now in my mind.. so I'm happy to just stay patient here.. and/ or top up if this goes under 1.5p..
Thanks 3Card.
Dyslexia rules KO...
Question is, why did LSE pick up on my spelling mistake. Normally it just uses the writers error... unless it thought I was being rude!
"Do you seriously think that if the model came back as non-viable, XTR would just release a clear RNS to that effect? Instead, they would prevaricate and obfuscate, like they and many other AIM companies do all the time. Eventually the project will just quietly disappear like Kalengwa, Eureka, etc.. Why do you think there is a new distraction in Zambia?"
Steve: That conclusion does net explain why there's a plan to continue with the modelling and to return to drilling.
I repeat, there is no way they are agoing to leave 1.3MT+ of copper in the ground in a convenient location in Auss.
Any educated guesses on Africa's production income at the moment? I know it is hard with all the crumbs of info we've been fed with but still... Thanks
>> I repeat, there is no way they are agoing to leave 1.3MT+ of copper in the ground in a convenient location in Auss.
Yes, I used to believe that too. However, I eventually came to three conclusions:
1) Unless the copper price is high enough, it isn't economic due to the grades and (as the RNS admits) inferred isn't good enough to effectively plan a mine so more in-fill drilling is needed to raise that to a reserve (exactly what other companies are doing). That needs money from somewhere.
2) Even if the money is available from FB and the drilling is done to raise the JORC status and the copper price hits $5. the majors will still need to be confident that higher price is the 'new normal'. Otherwise, potential price volatility is too much risk for a large investment that requires a high copper price
3) Even if the copper price goes to $5 or $6 (which I think it will ) and looks like staying there (which I also think is true), the majors still have to choose where to invest and XTR is going to be further down the list than potential mines that break even at lower prices.
I decided to invest in options that are potentially higher on that list and also in more general copper stocks.
Steve, I don't want to get into a '*** for tat' arguement so this will be my last message on the matter.
It seems that the first two points you make are solved by your own arguement that copper prices are on their way up (if one assumes that the big miners believe likewise). With the way the world is changing it's difficult to imagine that the big miners are not of the same opinion.
On your third point, yes, there are better grades/prospects around the world. No body is argueing that BR is a world beater. But it's already (and will grow) a reasonable amount of Cu without the hassle experienced in other parts of the world. Would seem strange if it get left alone because ... well, can't think of a reason to finish the sentence.
In reality, it looks bad to many because it did not live entirely up to the hype. But that does not mean it's not valuable.
Ultimately we all vote with our wallets.
I hope your strategy works for you.
Thanks Cygnus7 - we are probably not that far apart in our views, but are just placing different emphasis on point 3.
Good luck with your investments too!
Having listened to the latest audioboom, I found it impossible to avoid comparing Birdie's cautious demeanour today with his previous constant hype about fantastic grades, 2MT in the bag, done deal with AA etc.
When did he bang on about pre-concentration during the drilling campaign? Let's face it, he's only talking about it now because, having miserably failed to hit 2MT and do a deal with AA, he needs to find some way to package BR up as an attractive proposition.
He keeps banging on about cash flow but when asked about viability he's vague and defensive.
He also mentioned that global mining grades are now much lower at an average 0.6% , but we are stuck at around 0.3% and even with pre-concentration, he struggles to convince that we would get much more than 0.45%.
Not a troll. Just someone who is angry with himself for getting sucked in by Birdie's over-optimistic hype.
Fully get where your coming from 3cardbrag got sucked in myself but my own research has led me now to believe that it is quite normal timescales we are experiencing to prove up to a saleable state a large scale porphyry project. Worth pointing out though that 0.6%Cu is an average across all mineralisation types of deposits. The average for porphyries is stated as being 0.44%Cu in the ‘21 presentation. Being economically mined down to grades as low as 0.15%Cu. Blah blah yeah I know ;-)
One last point regarding pre-concentrate ore sorting if is of any consolation. After just some minimal research it is apparent that this technology has been used in many large, low grade mines of which has ‘made’ many projects economically viable and not just enhanced those that were already viable.
Hi ma no it does not increase the JORC as the tech only increases the efficiency of the processing phase of that same material. It is used to drive down energy consumption per tonne of concentrate produced and reduce water and reagent consumption.
It is a reason why you often see higher head grades quoted well over the mineral resource av grade on current producing mines.
There are many different methods of ore sorting that are suitable for different ore type. That I do know.
Lastly that is rather subjective to answer, but, to illustrate the point that major mining companies ‘will’ be adopting these technologies. AA themselves are leading the way.
https://www.angloamerican.com/futuresmart/stories/our-industry/mining-explained/bulk-ore-sorting-and-co****-particle-recovery-leading-the-way-in-mineral-processing-innovation
A projects low carbon footprint which includes, from using renewable energy will trump projects for majors, that just have higher grades and are off the grid!