The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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Why not LW? For the suggestion of both resources to be utilised in the mining study twice in the RNS would certainly imply a positive outlook for either the 1.5km bit between rc and ascot to be of economic grade or that ascot could be mined simultaneously to share processing capability.
Got the impression Colin was itching to confirm something but opted for a bit of obvious reverse psychology in saying “I’m going to be negative in saying…….” With CB it’s sometimes not what he actually says but why he says it.
Quite. Colin said he hopes Ascot joins up. The study can't possibly be for extracting both Racecourse and Ascot from the revised open pit study if he doesn't know if Racecourse and Ascot join ? Those two interviews give me the impression they describe wishlists rather than something based on factual evidence. When pushed on an answer Colin has started this "cant possibly negotiate in an interview" but then says he hasnt even spoken to AA. We dont want negotiation detail Colin, but some honesty so we can evaluate our investment.
From Updated JORC RNS
>>Once, the maiden Mineral Resource has been defined for Ascot, we will update the open pit mining study, which will detail the economics of a 25Mtpa mining operation, based upon extracting both the Racecourse and Ascot Mineral Resources. We expect that the open pit mining study will be completed early in 2023."<<
Just to make things even more confusing LW
I have to ask if we are deliberately being blinded by purposely confusing figures in these interviews. The same happened with the early alluvial projections. We need to be given facts as shareholders or how else can we do the research to evaluate our investment. I get why it may suit Colin that we are given confusing figures but enough is enough. The interview hosts should keep the questions direct and give Colin an opportunity to give direct answers rather than chip in with their own opinions regarding figures mid interview which Colin doesn't then actually correct.
I thought Kevin made it more confusing ‘again’ the gist was payback after about 4 years with the remaining 3-4 years of the high grade giving high return of profit, then the next 16 years @$200m per annum based on $10,000 per ton
Please correct if that’s wrong
"Colin quoted the open pit will deliver 200m (presumably $) per annum revenue. How can he quote that revenue figure without already knowing whats in the study ? "
CB said that in an interview. Best to take it with a pinch of salt or best just ignore it.
Its probably what he thinks could happen or wants to happen, rather than any empirical evidence supporting that figure.
The updated mining study for the open pit is due early 2023. Colin quoted the open pit will deliver 200m (presumably $) per annum revenue. How can he quote that revenue figure without already knowing whats in the study ? That revenue is after 4billion has been deducted from the $8 billion in ground Cu value. Does this mean by quoting 200m/annum that it is now profitable as he has the study figures already ?
From July 2021 study >>>Shareholders should note that the Conceptual Study is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorised as mineral reserves. The Conceptual Study is based on low-level technical and economic assessments and is insufficient to support estimation of Ore Reserves or to provide assurance of an economic development case at this stage, or to provide certainty that the conclusions of the Conceptual Study will be realised.
From updated JORC
>>> The Racecourse Mineral Resource contains 50Mt @ 0.25% CuEq which has been classified as Indicated in accordance with JORC (2012)
The question is, will 50mt indicated be sufficient to provide that economic assurance to a partner to come onboard of our 20% interest toward a 200-$250m investment toward capital outlay in a resource that can only be converted to a ‘probable’ ore reserve?
With eyes wide open, I think not!
Hence design and base the dtm on a much smaller starter pit and mining operation of 10,20,50ktpa to run ore offsite for sale or processing nearby with far less to finance and satisfy a partner.
The hurdle is to trigger the buy back above all else that is the most important thing.
" I'm still considering 20p as easily within reach"
Possibly, but I think the main driver in determining any buy-out price will now be POC.
We now have a good idea of Mt, even though it my increase a bit, so the biggest variable will be POC IMHO. CB said they will play around with different copper prices and see what figures they get (after model done). I bet they will show a massive difference in economics depending on POC used.
As we all know, the relationship of POC to profit is not a linear progression, but a geometric curve progression.
Whatever level POC needs to be to ensure a sale or to ensure best buy price, I'm sure it will get there before end of next year at the very latest.
We could possibly benefit from a FB style deal. Taking a cut of the 200million/annum revenue for no outlay.
Yes... but then need to find 20% of the start up costs... 20% of 1billion.
If we were in an 80:20 JV,(which I don't think we will be), we would have the 200million from the sale of the 80%.... no worries.....
hTTps://www.mining.com/worlds-biggest-copper-mine-moves-closer-to-strike/
Agree. What a stat to quote. Especially in Aus near infrastructure. And open pittabke.
"Andrew - you should volunteer to take on the PR for XTR!"
Thanks but Andy Mills has got that covered :)
If I worked with CB, I suspect we would have some "professional disagreements" on the best way to promote the company and what should and shouldnt be said in interviews:)
Andrew’s research earlier today revealed that Bushranger at 1.1MT is the 9th largest copper discovery in the last 10 years - in the world! What a missed opportunity from a PR viewpoint! If this had been front and centre in the RNS and Colin’s podcast, then the SP may not have sunk so low - even with the disappointment of not making 2MT. Andrew - you should volunteer to take on the PR for XTR!
Still think its premature to discuss a sale. Don’t think they have ruled out further drilling yet.
CB is cunning, he has only said they are not going to spend more money on trying to get to 2mt, and the DtM is the best option to spend shareholders money.
But, bear in mind the DtM only has to ‘potentially’ be based on a very small mining operation on a small portion of the overall resource at RC as the agreement is not specific in throughput to satisfy the agreement to engage AA’s response. It also doesn’t need infrastructure or processing capabilities so there is no huge capital outlay to fund. Plans could be for a small starter pit mine that will haul the ore off site to sell to a nearby plant.
So worst case some more definition drilling relative to the DtM. He also commented that “the 1.1 would maybe grow to 1.3mt when we make the circle a bit bigger with the opportunities that are there.” Indicating further drilling.
So if this is the way then that 3rd phase to test further the other highlighted areas could be on.
A JORC is normally updated at certain points to understand what to do next and what programs of work are required to reach the next key decision point. It wouldn’t just be a case of sticking a few more holes in, it doesn’t work like that wether you are resource building to sell on or a company is building the resource toward the actual mining and extraction process. There are contractual obligations to consider with drillers and supporting staff.
With the broader scope now that a 3rd drilling phase could reveal, and at $250 per metre drilling costs and a maximum realistic drill of 2,000m per month that would require about $500,000 per month for, say 4 months minimum then another 3-4 months assays and modelling. so about $2m plus other costs associated for a further drilling phase and another 9 or so months . It potentially won’t be that bad and will add value throughout a period where nothing is likely to happen anyway as we wait for copper to climb.
I'd assume taxes are pretty low. No doubt they will have top accounts 'manipulating' the books to keep them minimal...
So, prospects still very good but we may have to wait another year.....lyrics are spookily accurate for Xtract SH's :)
https://www.youtube.com/watch?v=-b3XTj5G_SA
What do we know ? We have 500Mt rock giving 1.1mT Cu Eq giving an in ground value of around $8billion (using $7300/ton).
That gives a mine life of 20 years at 25mT/year throughput. Colin says that will give 200million/year revenue (assume $).
So the 8 billion in ground gives 20 years x 200m = 4 billion revenue over the 20 years. Apart from taxes, what else is to come off that 4billion revenue ? I assume the 4billion already taken off is the capital cost of setting up the mine plus the fixed annual operating costs. Colin says the higher grade cap could be mined first and that would payoff the initial mine build after a few years. Obviously we dont have the ability to build a mine and the AA 80:20 would mean we would have to fund 20% of the mine build which assuming 1 billion would be approx 200million. So that is a no go (FB was a good deal as we got a 80:20 arrangement without having to put up 20% of the build costs). Without the AA 80:20 we could accept a 0.75% royalty I believe instead. Is that 0.75% of the 200million per annum revenue ? If so that would be approx 1.5million/year (way less than the FB deal should be giving us).
Which takes us back to the outright sale. Basically we would be selling on a 200million annual revenue (assume $). What would that be worth... any guesses ?
Thanks Andrew that report puts things into perspective
Butlerman, you took the words right out of my mouth! Make no mistake, even at 1.1m this is a big copper discovery on the global stage (thanks for the stats, Andrew) but, the thing is, it’s only going to get bigger. Big Mining is already well aware of the developing Bushranger story, and will be following it closely. I suspect strongly that Colin will have no shortage of suitors beating a path to his door, with their chequebook wide open. There’s an oft-used phrase which is quite apt here: “he who hesitates is lost”. Big Mining simply cannot afford to run the risk of dithering, or trying to get Bushranger on the cheap…..thus missing out on (potentially) the opportunity of a lifetime.
Now that I’ve had time to reflect on this week’s events, I really don’t feel too distraught. I was clearly very disappointed that we didn’t get closer to Colin’s oft touted 2Mt, but we have 1.1Mt, accessible by open pit, in a very friendly mining country, close to power and infrastructure. With higher grade near the surface. I know the economics can’t be fully determined until the open pit model is released, but with the information we have, and even before Ascot, this share has been considerably de-risked, in my opinion. Sentiment may remain low, for some time, keeping the share price low, as result of the expectation disappointment, but the SP will surely recover over time, as the pit model is released and a buyer is found. So, now this is a medium to long term hold, for me ( 3 - 9 months). I won’t be buying more, as I’m quite heavily invested, but I won’t be selling either.
The last few days have caused most of us to age considerably more than a few months!