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Why do you say that Lucky ?
The drop I mean.
Going to be a big drop in the ftse 100 Monday morning I think. Funny the time difference between the us market and uk market coincide with a 2% drop after the London market closed.
I certainly wouldn’t disagree there flipper at this stage, it would be a little premature until we know what is actually on the table, both in terms of what else is required to make BR saleable and what, where and at what cost these further projects are looking to be.
My reasoning is more toward the overall business model and part of that is a budget ceiling for BR. From the acquisition of the license, there has always been a clear objective to prove up the 2mtCuEq and / or decision to mine to see if AA want to buy it back.
I think also, referring to Bens recollection of the 20-30p comment by CB, it is also an indication that, even back then, they obviously had a certain expectation as to where the resource would sit with a budget needed to achieve that goal with a realistic sale price in mind. Even a timeframe of a sale by end of ‘22 was quoted by CB back then, all shows that there is a clear enough, maybe even a definitive plan, within that overall strategy to grow the company.
To all
It’s remit for growth is to look for assets that meet a certain criteria and that criteria does not involve risky, expensive exploration programmes in unsafe jurisdictions. It’s all in the recent audited report.
It’s where their expertise lies and focus is now.
I’m sure the Colin Bird stable of companies are adequately structured to enable new projects to be taken on along side the existing, without the burden being solely placed on Colin’s shoulders ;-) There is also regional/national/continental risk diversification of assets to consider in the longer term when considering new projects I would think.
Joe
If we did a deal with MMP we could pay half the costs of plant mod and have a higher % of gold share. I'm sure both sides could do the number crunching to work out what the new % could be? I agree its a slightly more complex arrangement but could be done if both parties agreed.
Whatever the new arrangement re cost v profit at mania, I hope we focus on what we know works, in an area we understand and with another company we have been working with.
I kinda agree Andrew, but we won't be spending money on the plant as it doesn't belong to us.
More likely we will put the effort into drilling and understanding that license.....
...... or provide funding to MMP for their plant expansion in return for a Royalty agreement ...... now that would be a confusing quarterly results spreadsheet....
50p over and out !
CB has said many times "If you're looking for Elephants then go and look were Elephants have been found before"
A sensible approach mho.
So why does he need to explore other areas when right under his nose is manica. We know there is a resource there. Only 10% of the licence has been drilled and according to Ed Slowey, CB's Geo, "There is Gold everywhere at manica"
The problem is that it covers all sorts of different mineralisation, Oxide, transition and sulphide. The current plant can only process oxides so why not spend the money on modifying this plant and exploring the other 90% of the licence. CB has said we have the option of 50/50 partnership with MMP with costs split same as profit share ie 50/50.
That seems a much less risk then CB going for another treasure hunt in some other unknown area . Manica would offer very good risk to reward for shareholders.
I suspect CB wont be doing that as that is not sexy enough for him and he really wants the Kudos of another great discovery like Kiwara. He seems happy to take the greater risk for the greater reward esp as time is running out for him.
Lets hope his ego can be satisfied with a big sale of bushranger and the acclaim that that would bring?
And then we can be boring and just develop manica. Or other parts of Bushranger if not all of it sold?
But please no more high risk treasure hunts. Kalengwa is a right off and Eureka has not delivered anything after years of promises.
Howezap "I did read a comment that we should concentrate on what we have and not take on any more. I say, there should always be a business plan.
What do others reckon?"
Normally what you are saying is totally obvious. Of course an exploration company should be taking on new projects. The problem here is that Colin has multiple companies with a vast number of projects and is no longer as young as he would wish. I have shares in other CB companies as others have. Why do I want more of the same ?. Plus investing in a safe country like Oz is completely different to say Zimbabwe which I personally dismiss from past personal experience. I am sure many on here wouldn't want to see money made from a BR sale reinvested in such locations no matter how great the geology.
Yes, it's my fault for believing the only source of our information!! Lol
And it was 20/25/30p why would you skip from 25p to 40p?
Why would I be having a laugh with that comment, it would have been pretty weird for CB not to factor in further license potential when coming up with a forecast valuation would it not?
You say you are no longer naive and maybe I’m wrong to say this but I don’t believe you were at the event where this comment was made so you are believing people on a BB (not saying the people who attended this event aren’t trustworthy) Additionally for someone who isn’t naive and has been invested with CB for some time you prob should have learnt the guy is an optimist
All the best
James
Yes James, I was extremely nieve when I bought xtract share some years ago. I am no longer nieve.
And to say that Colin thought it was for the whole license before another porphyry was discovered??? Have a laugh.
The eternaly optimistic shareholders group I am no longer part of. Thanks Lucky
Hi Cygnus yes I see where you are coming from now, I guess the comment CB had made about sequentially drilling in a phase 3 programme rather than all at once, is indicative of that comment about, ‘sitting on hands’. Particularly of course if AA pass, on their options to buy back in then Xtracts optionality opens up further once again, with cash reserves in bank to get the project potentially over the line and the ability to self fund any further exploration beyond that to build on the resource.
I do believe though, that there will be an overall budget cap for Bushranger, they are not just going to keep spending because they can, not sure to what amount, but I think it will likely be sold before a full phase 3 is completed.
The further small, minimal capital cost, near production ready, safe jurisdiction etc joint ventures they are hopefully going to be reporting on soon that are planned for strategic growth. Will be important toward the long term outlook of Xtract and sound like they could well have the majority of income set aside for them. Although are potentially minimal capital outlay, they still don’t sound cheap. The company are in a stronger position now to be getting on board some of these projects as many more will be finding it increasingly difficult to get the funding without giving to much away in dilution in getting these projects finally to production.
I did read a comment that we should concentrate on what we have and not take on any more. I say, there should always be a business plan.
What do others reckon?
It is worth noting that Australia is a net exporter of energy (coal and gas) and coal remains a significant source of power generation. https://www.energy.gov.au/data/energy-trade.
This helps the Government contain electricity price increases better than European governments.
Australia is also highly invested in switching significantly to renewables and increasing the footprint of the National Grid. This will be highly resource intensive for copper.
Ups and downs!
One other point, with the lower price of Cu and the high price of energy (required to mine the Cu), at this time the resource model will in all likelihood need to use a higher cut-off grade figure than 0.15% leading to a smaller resource. But that will depend on the economic situation at the time the model is signed off.
Sorry to be negative but need to be honest about these things.
howezap,
My comment on 'sitting on hands' was meant to imply that as we are currently self financing we cannot be held to ransom with a low ball offer i.e if we don't take the offer we will suffer dilution etc. Instead, we can threaten to 'sit on our hands' until the right offer come along.
howezap,
My comment on 'sitting on hands' was meant to imply that as we are currently self financing we cannot be held to ransom with a low ball offer i.e if we don't take the offer we will suffer dilution etc. Instead, we can threaten to 'sit on our hands' until the right offer come along.
Lucky
I was at the investor night where CB made the statement, from memory it was along the lines 20,25 or 40 pence after a few whiskeys. My take on this at the time was it was based on what he thought the asset would ultimately be worth not just on the information he had at that time so don’t think it’s fair to say the asset was worth 20/25 now we have found ascot and other targets it should be 20/25 + ascot.
No doubt the USD strength has helped with any dollar conversions, but to just focus on that is naive (in my view) when there have also been numerous headwinds since the investor night e.g. fears of recession, rising interest rates, copper price drop off, wars, huge spike in energy costs, inflation etc etc which none of particularly helps M&A.
End of the day what I’m trying to say is if CB “only” sells all the old prospector assets for 20p id happily buy him a drink despite the fact there has been some frustration on my part along this journey.
Cheers
James
Dollar to pound could go to 1.05 which is 32% extra. 26.4/33/39.6p plus ascot,foot rot and other anomalies. Plus the additional revenue from manica.
Showing everyone this so that when it comes time to sell bushranger, you can look back and see if Colin was telling the truth about 20/25/30p.
I don't want all the additional waiting and drilling for Colin to just get 20p and then say 'I told you so'
Back when Colin said we will sell it for 20/25/30p the pound to dollar Was about 1.38. Its now 1.16.
That 20% more for us.
So it's now 24/30/36p
that's before the ascot discovery and extra drilling and more anomalies to check.
Looking forward to my 50p a share Colin, happy to take 20p now though. Need to pay the energy bill.
Thanks. Interesting observations. Shows how quickly it can happen. The grades are impressive but as you say, Oz is a safer location and current grades are generally lower. If AA aren't interested I am sure the Chinese will snap it up.
I am happy to just sit back and wait it out. Still hope for that big payout, preferably gold but cash would be acceptable !.
With the recent slide in the pound compared to the dollar, I had a little think about how this might impact us and a potential buyout. First, we are making more from Manica due to a more favourable exchange.
Second, I had a quick look at Kiwara's news releases way back in 2009 to see a) the exact exchange rate at the time of the buy out by First Quantum, b) how quickly significant news led to official confirmation of buyout and c) the size of the actual resource
In turn:
a) Unsurprisingly, the situation has changed significantly and in our favour.
The magic figure of $260m back then was worth 157.6m GBP. Now that 260m US is worth 225.75 GBP, a 43% markup on the exchange 13 years ago. We are not only getting more from our gold production, but should an international buy out take place, we may benefit from the weaker pound. (I don't see the pound getting any stronger in the near future, but there are many better placed to give their opinion on this).
b) Re timings and speed of sale. On 5 October 2009, Kiwara hired consultants to conduct a pre-feasibility study based on an inferred resource of 340million tonnes @ 0.78 (using a 0.55% cut off!). On 21 October 2009, Kiwara then announced the results of an infill programme (where have we heard this before!) with some pretty impressive shallow mineralisation (including 20.4m grading 0.94% Cu from 12.8m (!) and 45.6m also grading 0.94% Cu from 167.6m. This was one of 4 drills hitting impressive copper.
One month and two days later, the company was sold. The pre-feasibility study hadn’t been finished or published. From news of the buyout on 23 November 2009, it took around two months for Kiwara to cease trading on 28 January, the following year.
c) In terms of the resource, the Resource Estimation Report was published two months prior to a sale (https://investegate.co.uk/kiwara-plc--kiw-/rns/kalumbila-resource-update/200909020800013638Y/ )
In short, it was a big one. We now know it’s one of the world’s biggest mines but the indications were there in 2009. 1.45bn tonnes @ 0.76%. 3.76bn tonnes @ 0.37%.
Some musings: The stories are similar. Resource estimate published in September. Infill drilling programme. Kalumbila was evidently much bigger but copper price was (as far as I can see) just under 7k /tonne on the day the sale was announced (it had more than doubled from lows during the financial crisis – I remember Colin saying at the AGM that he sold at the right time!) We are, however, in a much better jurisdiction. As Colin said, things move quickly. I believe him when he says that AA might not want BR and there may well be other customers waiting in the wings. What will be interesting is something else he alluded to: the idea of being a 200m company. Does he want to sell off BR for a dividend and keep Xtract going or sell the whole of Xtract?
For info, I have used the link below which details all of Kiwara’s old RNSs. https://investegate.co.uk/Index.aspx?searchtype=3&wo
Good stuff Cygnus the only thing I would tend do disagree on is sitting on hands tho.
Being in recessionary times, does not mean that M&A’s will not happen, where one, or any of the majors are concerned it will be an ideal time to jump, wether it be AA, or other once we get the agreement out the way.
Businesses are, or should be, examining their existing lists of potential acquisition targets and should be prepared to act, as deal premiums maybe likely to come down and assets that companies had been reluctant to sell in the past may become available. As in xtract’s case with its primary asset being under the confines of the buy back agreement.
>>Evidence from the global financial crisis from late 2007 through early 2009 shows that companies that made significant acquisitions during an economic downturn outperform those that did not.
There are some caveats: The GFC was, as its name indicates, a financial crisis, and was somewhat limited to the financial services and real estate sectors. << But it is the nearest example there is.
I believe Xtract will have a fairly decisive plan what to do with Bushranger and if that is to actively market it once the models are released (as per paragraph in annual report RNS) then that along with Colin’s “being happy with an $8000 copper price” will not see a shortage of willing buyers.
Steve4077’s post notes from the AGM (24 Aug 2022 09:56) do suggest they will be actively marketing too, as soon as the modelling is announced, then after speaking to AA it seems, entering into more drilling, at first to improve the IRR with higher grade at RC then other targeted areas sequentially. With a further comment from Steves notes on Colin
>> Again reading between the lines, it sounds like informal contacts may have already happened. Colin made it clear that when a deal happens, it can happen quickly.
If there is a fair value to be had it will be got. The actual sale process going foreword I don’t believe has been affected so far beyond the 2-4 month delay in RC modelling by any of the external factors……..yet!
Howezap & Zaph,
This is currently something of a 'wilderness time' where we simply need to wait until the model(s) and results are ready and the market turns. To think that all can create a perfect storm and arrive at the same time is a tad fanciful but CB, with African income is in a position to say that by looking forward both the price of Cu and the market will be far more attractive to XTR and hence we can, if necessary sit on our hands. I know that's not what many (most) want but it may well pressure AA, or another, to increase their bid for our assets when the market sentiment does not reflect such an offer. Also, during this time if XTR initiates phase 3 then the resource and the price will only increase leading to more pressure for a prospective new owner to make an offer. So, having been used to watching XTR like a hawk I will have to get used to things moving a little slower but there is the prospect of picking up more shares as the sp will drift during this time. It is AIM after all.
Good post at 20:54 last night howezap. I normally try not to post in the absence of news but it is easy to see that in the current negative economic and geopolitical conditions that sentiment is in the doldrums and hence so is the sp. However, I have plans to sell exactly zero shares, and I am pretty excited about news over the next few months. Usually when I have been impatient I have lost out on big gains so I am trying to develop more Zen-like qualities during this market turmoil.
GLA all and have a good day fellow Xtractors.
Hi Ben
Of them last lot of holes in phase 2, Holes 47 through to 52 tested the ground between Ascot and Racecourse, the southern extents of Ascot (52), and further defined the structure and extent of mineralisation in the central mineralised zone surrounding hole 35. >>They all intersected extensive zones of altered volcanics with trace, to locally weak to strong porphyry-related mineralisation throughout. << Then we had the couple of extra infill drills into RC that assays were turned around quick for, followed up by the very last hole into Ascot that was to test for the extension of mineralisation beneath hole 35 at depth, which subject to assays could add 100m of mineralisation with higher copper and gold tenor to the current known depth.
Going by the core analysis that was given, they don’t appear to be disappointing or not great. I also believe it would have been thought that maybe the very last hole in the programme was going to be the one down the throat, but they appear not to have done that exactly, maybe concentrating more on the structure of the main body with the gold shoots found in hole 39 maybe suspected to extend at depth below, and what has been tagged with hole 55?
We do know that a follow up phase however, will target the higher grade gold intersections, which would include the deep system (39) the outlying anomaly that assayed 2m @ 15.5g/t Au (33) along with the gold at shallower depths at both RC and Ascot.