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The world is headed for a severe shortage of copper crucial to the green-energy transition as new mines become increasingly difficult to build, according to the new head of Anglo American Plc.
“I genuinely don’t see where all of this copper is going to come from at this point in time,” Anglo Chief Executive Officer Duncan Wanblad said in an interview in London on Thursday.
That drill campaign of circa 12,000 mtrs would cost about £1.8M using £150 a mtr cost (CB mentioned a year ago)
£1.8M over 4 months = £450K a month.
That does seems affordable when FB income starts to come in, in earnest, next month.
Just a guess and my opinion.
But for phase 3 i would like to see
6x500m at footrot.
9x 300m at the shallow gold in hole 37 (of whatever it was). Neither Ascot or RC.
8x800m at ascot (although this is unknown as we haven't had the deeper results back.)
Given 2 rigs it's probably 3-4 months of drilling then a 2 month lag for assays, so a delay of six months.
All paid for from good revenue.
Tb h the SP would be higher with the jorc for RC under the belt as well as the economics of a simple open pit. We will also have evidence of the gold income streams (sp 6-8p) everyone happy!
Nice short sweet and contained.
I'm fine with detention instead LittleWing :-)
On reflection, best leave a reasonable amount to the imagination, I mostly accept..... so scratch my thong/miro thought.. BUT... I'll still go with lite mini skirt and sexy panties required in this market..
Point is, it may now be a fair bit than some would like to think is required... eg my bet is a lot more than 10 to 15 holes in Phase 3 ..
I'm sure I'm not alone when I say I hope Colin will be more wheeler dealer to maximise a return for shareholders sooner than later, rather than geologist who would drill forever if someone else pays. I understand the temptation to spend the FB cash but as someone said earlier, in this uncertain world a bird in the hand is worth two in the bush... NicetoMichu quiet at the back :-)
That’s the point of the next phase isn’t it, to prove that the system is mineralised, so we don’t give away a Cadia. Not to prove up mineralisation. That’s the big difference that xtract have in that, even though they have needed to consider and model with a view to the potential and the eventual extraction for Racecourse, I m sure phase 3 will be more focussed on maximising resource potential from a marketing perspective than they would be toward the actual extraction and selling process.
I would say the next phase is not going to be anywhere as extensive as phase 2. Maybe a wild guess of 10-15 holes notwithstanding the shallow surface programmes for RC and Ascot
In this market Steve, we may have to go as far as a thong in a see thru micro skirt, to maximize the value of the Bush............ Ranger
Good post Steve and I agree with your thinking. We can't keep wondering whats over there.. and there ... and then there.
That approach of "showing a bit of thigh (Racecourse)" and with "a bit a glimpse of lacy knicker (Ascot and Footrot)" was exactly what CB said his original intention was - but not with such imagery :)
So the question is, why change the approach? Yes I know CB says its so we dont give a cadia away - but maybe the bit of thigh that we showed the majors was that of a middle aged woman and not as appealing as we thought it would be :)
Maybe we are seeing if ascot is more sexy and can entice them?
If Ascot is more sexy you can under stand why we would want to keep drilling Ascot :)
(I've missed my vocation - I should have been a script writer for the "carry on films" :)
The thing with adding exploration phases is that they can go on and on and ain't quick or cheap!
I recently watched a presentation by Dan Wood, who is the geologist that led the discovery team at Cadia for Newcrest (link below for anyone interested). It was very informative and what really hits home is just how long discoveries take and how expensive it is... he estimated that they spent A$900m on exploration whilst he was with Newcrest and, 30 years on, they are still exploring and, he believes, there are still major deposits to be found.
So, if Bushranger is potentially a Cadiaesque like system, the question is when will enough be enough?
I'd personally like us to stick to the plan of proving the Racecourse deposit can be economically extracted (covering a shamelessly large finders fee for Extract, the initial capex, future exploration costs and still returning a nice profit to boot) and do just enough to show Bushranger is very likely a multi (mineralised) porphyry system that the new owner can happily spend the next 30-50 years adding more and more to the resource reserve, and all from the comfort of the safest jurisdiction in the world.
We just need to show a lovely bit of thigh (Racecourse) and a glimpse of lacy knicker (Ascot and Footrot) to get potential punters salivating and reaching for their wallets. So come on CB, we know you've got the goods... flash some flesh and get Bushranger sold!
https://www.youtube.com/watch?v=A4LD9VaFIA4
The detail of the agreement is probably a good question for the AGM.
I think over the 18+ months it’s apparent that nobody has a full grasp of the agreement.
There was always a suggestion AA could step in early with an offer ‘before’ 2mt was declared that maybe would not reflect full project potential as further exploration would stop, for what we would have up to that point would still have received a fair value it, but we would miss out on the bonanza as any offer would have to be taken seriously and prob go to shareholder vote. It does form one part of the overall buy back agreement.
Now wether or not that was even a thing.. who knows?
Any major will want it de-risking first, they buy success. It will not be until xtract are ready to sell to AA that the buy back mechanism will trigger.
That’s my best shot at it,
>>The “Buy Back” option held by Anglo represents an excellent mechanism for capturing value upon ‘exploration success’ and returning that value to shareholders
Pretty pathetic tbh. I decided to try and buy some this morning and I was only able to get 2 smallish buys. 2700 and 3400 before they said no and raised the ask.
Realistically you can only buy if somebody sells a chunk first.
The AA buyback clause relates to the EL5574 licence and the Racecourse, Ascot and Footrot deposits are all within it. Source...
https://xtractresources.com/wp-content/uploads/Bushranger-Summary-Presentation_April-2020.pdf
I agree with howezap that even if Xtract release a JORC estimate for RC of 2mt of contained Cu Eq, it would not automatically trigger the buyback clause. Xtract can keep sizing up the other deposits within the licence (and also hold onto the other neighbouring licences) until they are ready to declare what they have 'ultimately' discovered. Personally, I think there is too much risk in the world at the moment and I'd prefer Xtract to bank the Bushranger asset sooner rather than later.
Grateful for clarity from someone with better knowledge of the contract. If the Racecourse model declares 2Mt+, does this, or does this not, trigger the invitation for AA to buy back, and start the clock ticking on the time AA have to come in with an offer? I always thought this was the case, and hence why 2Mt wouldn’t be declared until Ascot and Footrot inferred resource could also be included. So that a total resource JORC could be declared, and the whole lot offered in a single parcel. But Howezap’s comment has me thinking again.
The Rc pit model will be released with tonnages when it’s done. There is an argument to say wether they will wait until market picks up but I don’t see that as the case. It will not affect the ongoing drill programme planning for Ascot either way.
Is likely will just see the new conceptual pit with the financial evaluation, it will not trigger an automatic buy back wether 2mt or not, so they do not need to wait for all exploration to be finalised to release it.
I understand it to be that all the licence is included in a sale too joeman
(Also confirmed by CB in another interview)
Joeman, I would agree that it would seem logical to sell Racecourse and continue exploring Ascot and Footrot. However, I do believe the buy back option is for the whole of the licence which includes the above. Hence the danger of selling us short and missing a potential cadia etc.
I believe ascot and foot rot do fall under buyback as under the same license. Happy to be corrected if I am wrong. I would be happy with a phase 3 drill programme though and park RC at whatever resource
Great reminder.... I think this was a great little interview and I was surprised there was little market response at the time.
But I disagree with your comment about Racecourse waiting for a phase 3 or a phase 4 drilling campaign before a sale. Notwithstanding that the final sale might easily take us well into next year to finally have ink on paper, I would be unhappy if Racecourse wasn't fully declared in the next couple of months.
As Ascot and Footrot (and any other anomalies along the way) don't fall under the buyback I think continuing drilling on them would be a great move.... there could even be a forward sale agreement defined on future value, much the same way that the buyback on Racecourse works....
But to take another 6 months to declare Racecourse after all the communications we have had to the contrary wouldn't be acceptable in my opinion.
Steve, the enormity now and financial implications of the project has clearly increased since the new round of geophys and subsequent gold intercepts. I don’t think it is any doubt it would have gone into next year anyway.
Is looking very much like Ascot and other anomalous targets will be the crux of a phase 3 when operations continue, after the break to evaluate the data from Ascot and to plan the new drill programme whilst working toward completing all the modelling for RC.
CB did say, “We’ll be ‘ending up’ with a near surface programme for both Rc and Ascot.” This may imply that these drills to bolster the higher grade early recoveries may even be in a final 4th phase!
It’s worth looking forward with an open mind and forgetting about any sale on the horizon for now. CB was clearly evasive when pressed by kev Hornsby on talking to AA at end of last midweek takeaway.
https://podcasts.google.com?feed=aHR0cHM6Ly9hdWRpb2Jvb20uY29tL2NoYW5uZWxzLzUwNjQ0MzcucnNz&episode=dGFnOmF1ZGlvYm9vbS5jb20sMjAyMi0wNi0wNzovcG9zdHMvODA5Njk4NA%3D%3D
If the 2mtCuEq does show to come from RC model alone, the overall resource estimate could well be on the way up to a billion tonnes of ore after a 3rd phase. Even better, if both the gold systems can be modelled with decent strike and mass, we could potentially have a billion dollar asset.
If this gets through, this will really kick copper off as well:
https://www.euronews.com/green/2022/07/29/surprise-climate-deal-could-be-the-most-significant-in-us-history-says-joe-biden
Copper prices are expected to rebound further in the coming months after heavy losses, a Reuters poll showed, as China unleashes more infrastructure spending and other stimulus for the economy.
News of more infrastructure projects and support for China’s property market boosted copper prices this week.
>> There is without a doubt huge value to be added from Ascot and would be absolutely irresponsible, even negligent of the BOD not to proceed with further exploratory work if it can take the project continually further up the value curve, particularly with the implications the gold will have on the financial model. Especially now with meaningful income to fully fund any necessary work.
Yes, agree with this conclusion. Also we probably need to wait for the market to improve, or at least the mining sector, before beginning the sales process, so we might as well drill rather than sit on our hands. The income means we can progress a lot further than other similar cap exploration companies, who will be reluctant to raise in the current market.
Been trying to pick up any clues from previous podcast comments and in RNS that would give further indication at what level of further exploration we could potentially expect from a third phase of drilling to follow on at Ascot.
It has been pointed out that all results are in for RC and so the model can be finished. My interp is the financial model will ascertain wether the high grade parcel will be extended up to 8+ years with a follow on, shallow drilling programme. This will be targeted to the north west of RC above the deep intercepts of holes 18 and 20.
From 10 feb RNS
>>> Follow-up drilling in this area will focus on the interpreted shallower and higher-grade 'crown' to the mineralisation<<<
Other clues I can find are, one is a comment made while discussing the gold system at Ascot in that they want to find out what’s above and below it. We know they did a deep drill to test below for the last hole in the programme. As for above it.
Also from 31st may RNS to support that
>>> Our assessment of the drilling results from Ascot is ongoing and we will focus on the potential to extend the gold intersections to shallower depths."<<<
( This is not the high grade crown they will also be looking for, but will add toward the early recoverable high grade ore that could be derived partly from this shallow gold )
from 26thJan RNS
>>> Mineral textures observed within the Ascot drill core could indicate that Ascot sits closer to a feeder zone for the system and the company intends to model and test this theory with further test work and drilling.
(This may have been tested, there are some unidentified holes not yet reported )
From 10th may RNS
>>> Drill Hole BRDD-21-033 targeted an outlying geophysical anomaly to the east and intersected a high-grade gold interval of 15.5 g/t Au which warrants follow-up drilling to test for along-strike and down-dip extension
From 31st may RNS
>>> Geological data suggests that an equivalent to the best mineralised "crown" position above the porphyry at the Racecourse prospect, has not yet been intersected at Ascot.<<
( This will maybe need some initial exploratory boreholes to find it first )
The big question, if criteria are met to trigger the buy back, will AA be approached once the models for Racecourse are complete to persue a sale? Or will Xtract continue to use the safety net of having the binding agreement in place as a deterrent to fend of any corporate manoeuvrings while more asset value is added with each drill?
One thing is more clear to me now, my outlook has changed. There is without a doubt huge value to be added from Ascot and would be absolutely irresponsible, even negligent of the BOD not to proceed with further exploratory work if it can take the project continually further up the value curve, particularly with the implications the gold will have on the financial model. Especially now with meaningful income to fully fund any necessary work.
I’m sure you are probably right Butlerman I’m open minded, it again shows how wildly CB’s comments can be interpreted.
Howezap, I read it as the ‘decision ‘ being whether or not AA buy it. And if they buy it, AA develop it. If they don’t buy it, another big miner will, and they, themselves, will develop it. In this context, the ‘when’ refers to the timescale to sell it - very quickly if AA take it, after being given first refusal, or longer if they don’t take it, and it goes for sale on the open market. I don’t doubt that AA have the money, resources and capability to develop it themselves, if they take it.
That’s my interpretation of the statement anyway. Not saying you are incorrect - it’s just a different meaning from the words that I took.