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Steve - Whether it is new or old rock is something of a moot point. What matters is whether it is economical to dig up. To that end, we need to first understand the value of the Cu Eq that can be extracted, and I would agree that you've been able to make a reasonable estimate of this using data reported by XTR. However, we then need to know the capex and the opex and this is where you calculations have to rely on on some rather unsophisticated assumptions.
My main issue is with your opex estimate. You assume there is a correlation between opex and the amount of ore i.e. a pro-rata doubling of opex due to there being twice as much ore. Why? Firstly, as you point out, nearly all the new ore is 'the same rock', which means it was waste rock that had to come out of the pit anyway and the cost of getting it out is therefore already accounted for. Secondly, the cost of processing ore (as opposed to dumping waste) is only a small part of the total opex - see link below to a presentation I found that gives some insight into opex costs. Personally, I think you have significantly overstated the opex and I don't see how you could have any statistical confidence in the numbers you have used and therefore the conclusion you have reached.
https://dxi97tvbmhbca.cloudfront.net/upload/user/image/GPoxleitner_OperatingCostEstimationForMiners_201620191128185443446.pdf
I would also question your interpretation of any hidden message in CB's song selection!
A very plausible sounding synopsis joeman which have noted so thank you
Howezap... I believe 8% might be the figure you can reverse calculate once the economics have been bottomed out, when you have a project with amazing economics and low CAPEX and risk and therefore an NPV calculated compared to the resource in ground is extremely attractive.... and the low risk means that the purchaser will pay a high % of NPV to secure the project.
When using in-ground resource value as the basis for estimating a sale price then it seems foolhardy to use a % that would be attributed to only the best opportunities that anyone is liable to find.
In particular for Bushranger our positives are jurisdiction, access to utilities and distance from large population centres.... but we know at the least that the high CAPEX represents a risk and any sensible investor will recognise the risk associated with being likely tied to a relatively high (although widely predicted) copper price.
I dont think 8% should even be mentioned at this stage .... im pointing out its overly rampy.
>>It is important to recognize that the cutoff grade is not simply calculated to a definitive answer. It is in fact a strategic variable that has major implications on mine design. The cutoff grade is adapted as the economic environment changes with regard to metal prices and mining costs, and is therefore constantly changing.
Hi Steve hope you are good mate, I doubt you are deliberately misinterpreting icebergs analysis. So are you just trying too hard now and your judgement is being clouded by your desire to be proved right.
The 71mt JORC has a 0.3 cut off simply because the average grade is a lot higher due it being the central higher grade part of the overall resource. It is a a lot easier and cheaper to process the higher grade at a higher economic cut off. As more of the lower grades are now included in the updated JORC, the economic cut off will come down.
?Iceberg >>Just to make it completely clear the unclassified resource is the resource model which was of insufficient information to be included in the JORC.
We are back to swings and roundabouts again I think until the economic model is out.
>> Digest the lyrics in their entirety
"Son, I've made a life by reading people's face and knowing what their cards were, by the way they held their eyes, so if you don't mind me saying, I can see you're out of aces. For a taste of your whisky, I'll give you some advice"
Guess what that advice might be.
Steve4077, I beg to differ re your observation on your karaoke song. Digest the lyrics in their entirety, then fully consider the context in which this particular song has made an appearance. The choice of The Gambler is a perfect riposte, and most certainly is not a call for shareholders to leave the table!
>> The ore that is not included in the JORC resource , that makes up the resource model is ‘not’ just the low grade below the cut off grade
Yes, that was the expected response :)
If that was actually true, the new JORC would not have had to drop the cut-off from 0.3% to 0.1% to incorporate the old resource model. It was self-evidently much lower grade ore that was added to the JORC, not new ore at similar grades.
Steve>> What XTR have done is take the ore that was not good enough to get into the old JORC with a 0.3% cut-off, but apparently is good enough to get into the new one with a 0.1% cut-off.<<
The ore that is not included in the JORC resource , that makes up the resource model is ‘not’ just the low grade below the cut off grade. It is the resource that has not been drilled sufficiently enough to have the necessary degree of confidence, and is made up of a whole range of grades.
?
I haven't been posting, but as I had a mention on the Sunday Roast, I'll respond. Many people have commented on theiceberg's blog. Read it again, carefully, and consider the following:
Firstly, he states that "ALL research is good and valuable" and "By and large, I don’t have too many issues with the figures and maths"
The main point he makes is the difference between resource model and JORC. In effect, as I stated in my doc and theiceberg restated in his blog, the new JORC is comprised mainly of the old resource model. I called it a 0.15% cut-off version of the old JORC and the theiceberg calls it the old resource model, but we are talking about the same rock. What XTR have done is take the ore that was not good enough to get into the old JORC with a 0.3% cut-off, but apparently is good enough to get into the new one with a 0.1% cut-off.
Bear in mind that means that Anglo were aware of the ore that is in the new JORC when they sold - they just weren't prepared to do the drilling to move into their JORC. So if they didn't think it was economic in a resource model, why would it be economic in a JORC?
However, the iceberg makes the valid point that the same might be true now. There could be new ore that the drilling found that wasn't good enough to make it into the new JORC, but could be included in an updated resource model. There are two major considerations here:
1) The way that the old resource model became the new JORC was by lowering the cut-off, not by finding significant new ore. However, the new cut-off is 0.1%. Not much you can add by lowering the cut-off again, although there could be low grade ore away from the original JORC/Resource model perhaps. And there is maybe potential at Ascot.
2) Even though theiceberg has been selling lately, he is still invested, or was when he blogged.
One final thought. The Gambler is one of my karaoke songs, which is not surprising given my past career. Not sure the ideal response to my doc is to post a song with the lyrics: "Know when to walk away, know when to run.".
The 8% I believe was just a figure they could aim for as an opening gambit.
Dani,
We are going to have to drop the notion of 8% of value in ground....before there has been any economic assessment. .... particularly as it stems from an off the cuff comment made by Colin.
Seems more of a consensus to use something lower than 3% unless the NPV assessment comes back with fireworks attached.
Suggesting 8% at this stage just makes you sound overly rampy.
Dani... was the ha ha LW aimed at me ?
Could up to 50p be a realistic target value per share return for BR?
Certainly will depend on a positive NPV and at a reasonable copper price.
There is the viability to include Ascot in the model and how that could affect the financial evaluation. The percentage of in ground value an acquirer will be asked to pay could be much higher than the minimum values of around 1.5% much touted here. All the contributing factors will likely be at the top of their ranges. Jurisdiction, geographical and possibly ecological landscape, type of mining operation and the ease that it can be dug out the ground, determined in part from the strip ratio.
Then there is being in a stronger position to negotiate on open market outside the terms of the agreement if AA do pass up their option.
If we are all still here, then together we must still have confidence so can we at least, show some positivity leading into the final furlong?
Because colin sent some guy a link to a song.
Let's all rest our hopes on the song lyrics!
ZeroMatrix
Posted in: XTR
Posts: 111
Price: 3.35
No Opinion
RE: Next News...16 Nov 2022 10:44
And for that reason I wouldn't want to be out of this over the weekend ...!
There, said it!
_______________________________________
ZERO, I wish I was out of this a few weekends ago lol
At least I'm in profit ;)
Yes zero, I'm a moron just like you. We all got bent over, but dani still think 50p is achievable hahaha
yet you are here
Dani hasn't got a clue about what she's talking about.... then again, I wouldn't trust a word anyone else says on here either.
Hi Dani I know you have been fairly critical of iceberg previously, particularly surrounding the valmin code value range, saying this on 7th sept,
>> You are an insider to the acquirer or trying to get people to sell out of extract way before it's reached. It's maximum value.
?with a later post on the 9th stating,
>> I give credit where credit is due. Iceberg's input and knowledge in geology and his interpretation of the RNS is second to none. He put XTR on the investor map and gave LTHolder's, myself included, renewed hope in XTR and that Bushranger would create massive value for us shareholders.
Can you elaborate further on your angle from todays post please? Am interested what you have to say being an AGM attendee.
Dare I start to dream that sentiment is turning on XTR? Would be great to see a small SP rise even before Ascot MRE and FB income RNSs.
Butler: "I like your thinking Andrew. And with FB revenue coming in now, there would have been the money to fund a ph3 drill programme. So the fact they aren’t doing it says loads."
Yep. To be fair it wasnt just me who came to that conclusion. Another posted said the same on 16 October:
"Its hard to find a scenario where CB is highlighting the release of MREs, creation of models and a decision to mine (while also holding off on more drilling) if the 'mine' wasn't economic - especially as there is income available to do drilling where necessary"
Any guesses who said that :)
Posted on Telegram: https://www.youtube.com/watch?v=EGI0dN012Qk&ab_channel=BolidenAB
This video is 12 years old and looks like they were already well into production. Just shows how efficient a mine can be, they were making big $$ back when the cu price was much lower.
'Musings'
Well, what a nightmare the last week was, 'luckily' I had little or no net for 4 days so missed most of it!
I have to say, like most of us I was initially shocked that the JORC had come out so low - I had RC at about 1.35e6t, as did a few others. I should also say, and I should have really known this, that I initially had no idea all of the data would not be in the JORC, bad research on my part. Saying that, it would have been good if the company also released a short .ppt highlighting that to us mining noobs; I feel that would have caused less panic.
I should say IMO, If CB had tempered expectations early on the SP would probably increased off the RC JORC. I really hope he learns from that, although I doubt it.
Anyway, Let's hope they do some sort of presentation for Ascot. Treat us like idiots and lay it out on a plate in simple terms please!
So what could we have: @RC? 1.1MT (in the bag)+ .03Mt=~1.3/1.4Mt
@AC? 0.3
So we could be looking at ~1.6MT all in? I think the market would be extremely happy with that at this stage. Based on that it would seem, as CB stated, he could get us to 2MT with more drilling.
Problem is SP is fecked so where does the $ come from for a bit more drilling without a long wait for Manica $ to build up? - Could we get a small, 5m, loan off the back of the results and projected Manica Income? - Maybe Boliden would jump into bed with us? They seem best placed to be the eventual buyers of this project.
A point shared Steve and Andrew, I have always kept single minded in the confidence in my own research to be optimistic on overall, a successful outcome. That still hasn’t changed or wavered.
Was certainly dumfounded, not only at first when the suggested comparisons in the old and new JORC were bought up. But also the evaluation could be, so fatally flawed.
Thanks to iceberg for his blog update to set things a lot clearer on why that evaluation was wrong and the suggestion that a significant increase that the ore that wasn’t drilled enough to be included in the updated JORC, will add to the resource model.
One question, can any assumptions be made from this extra ore that is not in the updated JORC to be included in the new financial evaluation along side the updated JORC this time, as the company needs to take it toward a PFS?
Or do they simply not need to?