Roundtable Discussion; The Future of Mineral Sands. Watch the video 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.
LW
Possibly, but even if all the FB income was "wasted" then the Manica valuation (and MC) should be still at the agreed sale price of $17.5M - which is more than current MC
I'm not sure that a lot would think its 100% certain that any FB money would definitely be wasted on Bushranger. I would be surprised if CB did that knowing he was throwing money away just to pretend all is well. He would know the true situation so may well choose to spend FB income on Bushranger.
I think often in AIM the MC become detached from reality and the fundamentals (too high or too low) and this is probably whats happening here.
There is also now the requirement from most SH (I think) that they will now want to see the results and not believe anything CB says now. So maybe when FB income is declared IN AN RNS sp will respond.
CBs "interviews" are now just noise to most shareholders and that PR trick has been played out by CB and found out by SH's.
A4444... the anomaly could be due to the sentiment that the Manica revenue could be poured into something that ultimately still would not deliver for shareholders. The SP could possibly even be higher if BR was put in the same drawer as Kalengwa and Eureka. The feeling is that BR will be a drain on funds not returning anything ?
Ma, the podcast does not mention any cash raise. It does mention further drilling which I always thought was a good idea as I didn't want to pass on undiscovered resources to a third party - even if those resources are only known to a low level of confidence. So, the drilling needs to be paid for. My hope is that African gold will cover it but my next best option is a loan financed by the African income and then lastly dilution via a raise. At these sp prices it could be a substantial number of shares to enter the market. Hopefully we can avoid that.
Your positivity is (on occasion) to be admired, despite it being founded on naivety and crackpot ideas.
Tell me this: What does CB have to do to provide some sort of shareholder value?
What news does he need to release to increase the market cap here?
Is he underperforming currently in terms of his PR of this company?
It seems, the chirpier you are about this being a dead-cert winner, the more the sp falls. You note that it's OK if it falls to 1p so you can buy more. BUT that means the market trusts Colin EVEN less to deliver. Therefore I refer you to my questions above. He HAS to deliver something to turn this around. Currently there is NO evidence he is able to and there is NO plan that he has published that suggests a turnaround in fortunes and therefore an increase in sp.
CB, if you are reading this, something needs to change. The sp is declining. The market doesn't believe we will progress here. Can you outsource Comms? Can you do another webinar? Can you provide a clear plan of action with associated timelines?
Re discussion concerning current very low MC, we paid $12.5m for manica and had offer of $17.5m a year later.
That offer is now less than the current MC ! And thats with zero value for Bushranger and not giving additional value for FB mine completion and in production ! And ignoring the small hard rock income
So even if Bushranger is written off, the current valuation is an anomaly imho.
https://www.lse.co.uk/rns/XTR/disposal-of-manica-gold-project-for-us175m-e2l0lbeow2nube4.html
It makes sense to me to do at least one stage further 'complete' the process on Bushranger definition Maddogpete.. but perhaps only to the extent of max 2m gbp more spend on it.. but, as you say, the extent of any bull commodities market to come and/or the results of this next phase drilling will further clarify thinking on next actions re bushranger, later in 2023 or in 2024.
PS: The extent of grow out of revenue from fairbride 'ard - nett to xtract - in the coming months is a s/p key driver now imho... CB should be giving colour on that in April .. he may not of course .. because he does what he feels like whenever .. which generally plays out to be, at best, bang average information flow managment on his part, alas..
NtM. It makes sense to complete the process to get AA out of the way. But does that mean shareholders will attach any value to BR at the end of that process. And should they ?. As CEO of JLP, Colin took the Tjate platinum project to jorc. 60 million ounces of platinum waiting to be mined. The project remains on the books years later but currently offers shareholders no value. Both projects require a bull market in commodities which we currently aren't seeing. Just my thoughts and would like to be wrong.
Hi LittleWing
if you focus on the conceptual mining study from 2021, what we know is that case 10 generated the following (all in AUD);
Revenue: 6,627
Capex: 1,454
Opex: 4,152
BTCF: 1,021
If we then apply some super simple assumptions to this, these are finger in the air to give an indication of impact
Revenue: Assume 90% (We lose some of the metals due to concentrator but gain a little in the recovery process which is my understanding of how this works)
Capex: Assume 85% (I am making this up, assuming everything is smaller but offset by cost of concentrator)
Opex: Assume 75% (I am assuming 50% of the opex relates to processing and this cost is cut in half)
This generates the following
Rev: 5,964
Capex: 1,236
Opex: 3,114
BTCF: 1,614
These numbers and assumptions will obviously be drastically wrong and don't consider any of the new material from drilling campaign but give an indication about the potential upside from this pre-concentrator. *** packet calcualtion on this increased BTCF would be that it adds 400-500m AUD to the NPV8.
I am a bit more optimistic about BR than I was last week and looking forward to the conceptual economics being released baking in the pre-concentrator and hoping for a breakeven price sub $4/lb
Cheers
James
The least I value Africa Gold assets at is 15 to 20 m gbp.
(While Fairbride Gold output grow out has likely seen a slow start, there remains a good chance that we'll get to 250k gbp + revenue nett to xtr a month from Mozambique Gold at or before mid this year.... and similar for at least 5 years to come thereafter..hence my 15 - 20m gbp valuation)
So, with market cap of xtr currently at 13m gbp ish, I see the market currently valuing Bushranger at approx minus 5m ish gbp ie that much more will be spent on it and it will be worth zero after that.
Further so, including say, all in, 8m ish gbp ? spent already on Bushranger, making 13m ish gbp spend in total, for zero sell on value .
Generally, it remains very hard for me to see this as fair or reasonable. But the market share price is the benchmark we all play the game against, and it is what it is.,whenever
(Again, I'm confident the least the sell on value for Bushranger will be is 10 to 15m gbp - the most I see its sell on value, in due course, would be 100m gbp btw - so I do not think that under 2.5p is a fair or reasonable share price here)
My suspicions are not just due to his BR guidance over the 2/3 years but also the other instances which have been well discussed on here.
steve... yes I used the wrong term. I agree it doesn't confirm anything but just increases my suspicions that he is intentionally misguiding.
"His inability to give meaningful guidance confirms my conclusion that his guidance is intentionally vague so he doesn't have to be seen as having failed his shareholders."
LittleWing - It does not 'confirm' you conclusion at at all. His inability to give meaningful guidance could be deliberate (as you suspect) or it could just be what was stated in the RNS i.e. they haven't finished the modelling due to the decision to test whether a cheaper processing technique would work.
"It has to be viewed as part of an NPV calculation to be any use to us"
I was just trying to get a feel for if we actually have anything that will deliver something for shareholders at BR. I was hoping that the promised study on what we have so far would be showing that the project is a viable sell on. Colin has avoided giving us that confidence. OK I get that we cant know the exact costs unless all the pieces are in place but no project ever has that. Is it viable to sell on or not and what sort of return are we looking at ? Colin avoiding giving anything helpful to shareholders over what he knows is important to us is poor. His inability to give meaningful guidance confirms my conclusion that his guidance is intentionally vague so he doesn't have to be seen as having failed his shareholders.
Unless he can show that BR is still a viable sell on that will benefit shareholders with ALL costs considered, then it looks like it is not. Why would he avoid giving good news ? My head probably knows even though my heart still looks for ways of explaining his misguidance.
Also I would argue, copper prices in 20 years could be 15/20 dollars a LB.
Hi LW..... can work it out easily on the basis of say an 8% rate.... but the answer isnt going to tell us anything. Particularly as the plan would be to process the higher grade ore in the early years to pay down the original investment.... so cashflow and revenue against OPEX will vary wildly over those 25 years....
It has to be viewed as part of an NPV calculation to be any use to us.
But fun fact Cost of 1billion .... not paid back at all over 25 years at an 8% rate is 6.8billion...... ouch
Well according to some "expert's" we could see a deflation period! So.....I'll leave that question to the expert's little wing.
What would be the cost of that initial $1Billion over the 25 years ? Any money people know ?
Glad you are seeing the positive side of the bigger picture lucky.
Definitely at the business end now with the optimisation of what what has been circled by phase 2. With a PFS in sight the main focus now is concentrating solely on the ‘initial’ mining phase that will support the DtM with a positive economic evaluation. Hence why the talk now is centred around an 11-14 year ‘initial’ production run.
Even taking into account recovery losses from the ore sorting and production process there is a decent margin still.
Xtract only have to show there is reasonable justification starting with economic viability for a buyer to take the project on toward the next stages.
There are many hurdles ahead for the acquirer and this study and the next are just hurdles this company has to get over.
Not to mention, this is a district play. Possibly another cadia. Good luck all.
The old opex was approximately US $300m P/A
If they can reduce it to say US $200m P/A
That's US $5 Billion over 25 years.
Add in the capex at say US $750M or even the original US $1 Billion.
Even at the Conservative 8k per tonne, over $4.4 Billion left! That's US $175 million P/A revenue.
So basically, you can't get a pre feasibility on an inferred resource. This is why we have some indicated and will drill more to change the high grade top, into indicated. Why? Because you can't say to AA your building a mine, without a pre feasibility study. We need a sufficient pre feasibility study to declare decision to mine and break away from AA or they take it.
Regarding there not being Capex added to the economics so far, this is irrelevant as they do not know what the new Capex is, so why tell us now and then change it. I know Steve is saying this is terrible and they are doing it because otherwise it is not economical.....blah blah. That's a load of rubbish as the original capex was only $1 Billion us dollars. With a reduction of capex from the concentration being added, it may drop to $750M.
The opex may reduce by 65% with the concentration process.
The current 1.3 MT is worth $10.4 Billion at a very Conservative $8k per tonne.
$13 Billion at $10k
Indicated Mineral Resource
An Indicated Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality,
densities, shape and physical characteristics are estimated with sufficient confidence to allow the
application of Modifying Factors in sufficient detail to support mine planning and evaluation of the
economic viability of the deposit.
Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing
and is sufficient to assume geological and grade or quality continuity between points of observation.
An Indicated Mineral Resource has a lower level of confidence than that applying to a Measured
Mineral Resource and may only be converted to a Probable Mineral Reserve.
Mineralization may be classified as an Indicated Mineral Resource by the Qualified Person when the nature,
quality, quantity and distribution of data are such as to allow confident interpretation of the geological
framework and to reasonably assume the continuity of mineralization. The Qualified Person must recognize
the importance of the Indicated Mineral Resource category to the advancement of the feasibility of the project.
An Indicated Mineral Resource estimate is of sufficient quality to support a Pre-Feasibility Study which can
serve as the basis for major development decisions.
developed mines. Inferred Mineral Resources can only be used in economic studies as provided under NI 43-
101.
There may be circumstances, where appropriate sampling, testing, and other measurements are sufficient to
demonstrate data integrity, geological and grade/quality continuity of a measured or Indicated Mineral
Resource, however, quality assurance and quality control, or other information may not meet all industry
norms for the disclosure of an indicated or Measured Mineral Resource. Under these circumstances, it may be
reasonable for the Qualified Person to report an Inferred Mineral Resource if the Qualified Person has taken
steps to verify the information meets the requirements of an Inferred Mineral Resource
Inferred Mineral Resource
An Inferred Mineral Resource is that part of a Mineral Resource for which quantity and grade or
quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is
sufficient to imply but not verify geological and grade or quality continuity.
An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated
Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the
majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with
continued exploration.
An Inferred Mineral Resource is based on limited information and sampling gathered through appropriate
sampling techniques from locations such as outcrops, trenches, pits, workings and drill holes. Inferred Mineral
Resources must not be included in the economic analysis, production schedules, or estimated mine life in
publicly disclosed pre- feasibility or feasibility studies, or in the life of mine plans and cash flow models of
e-Feasibility Study (Preliminary Feasibility Study)
The CIM Definition Standards requires the completion of a Pre-Feasibility Study as the minimum prerequisite
for the conversion of Mineral Resources to Mineral Reserves.
A Pre-Feasibility Study is a comprehensive study of a range of options for the technical and economic
viability of a mineral project that has advanced to a stage where a preferred mining method, in the case
of underground mining, or the pit configuration, in the case of an open pit, is established and an
effective method of mineral processing is determined. It includes a financial analysis based on
reasonable assumptions on the Modifying Factors and the evaluation of any other relevant factors which
are sufficient for a Qualified Person, acting reasonably, to determine if all or part of the Mineral
Resource may be converted to a Mineral Reserve at the time of reporting. A Pre-Feasibility Study is at a
lower confidence level than a Feasibility Study