Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
if there is a "Paul" in the group who sat in the front row and asked quite a lot of questions would you mind making yourself known ? I can also be contacted on twitter https://twitter.com/andmillsy if preferable
9. Need to improve comms and investor info eg Kalengwa still on website etc....
Agreed and will post recent pictures and videos from Manica. Colin gave a quick tour of the FB operation including gold pour to one or two of us after the meeting broke up from videos on his phone. Joel committed that once commercial production is reached this will be publicised to ensure greater awareness of what they have achieved in being a funded explorer.
10. Focus on what they already have and not go after new projects
This was definitely not a commitment they would make but they are aware of capacity within Xtract and they would appear to prefer a smaller production operation but no specifics were shared – watch this space.
5. If we declare 2MT then what happens ? Try and assess confidence about achieving 2MT and from just RC. What if we are at 1.9MT ? What are the steps and timelines to trigger decision to mine, how would funding issue be addressed?
Largely covered in (1). Decision to mine is alternative trigger and they are progressing this. Note decision to mine is a defined term in Australian mining. It means that there is an economic resource which could be mined doesn’t mean all funding etc. are in place. It is clear that to develop a mine of this scale would require a major.
6. XTR has several exploration options - what is priority ? Either Manica, Eureka, EL5574 or other Oz licences? How would income from Manica be allocated to exploration ?
7. Timescale and potential for revenue at Eureka ?
This was the least clear part of the meeting for me. As stated in the chairman stated the company is funded for next 12 months this was reinforced but it is reliant on income from Fairbride. It wasn’t at all clear though how funds will be allocated to the different targets. The Eureka discussion wasn’t clear and initially focussed on operations and not exploration but any plans for further drilling on the exploration side weren’t clearly explained. Anyone else at the meeting who can add to this.
8. Quarterly gold reports not fit for purpose and don't reconcile for last 2 years to annual reports. Need segregation of different hard rock agreements, closing gold stock and transparency on how operating costs at Fairbride are determined and reported.
Joel appeared receptive to segmentation of results to give better visibility of alluvials v hard rock v Fairbride. James and I offered to provide investor input to the proforma report. We won’t get closing stock oz as it is deemed a control risk to publish that data.
Fairbride is progressing well and income should be received in Nov / Dec with commercial production. Gold pouring needs further focus. Equipment is working well. Life is 3 years based on oxides but transition zone and sulphides, with enhancement to plant, can prolong this. There are many yet to be explored deposits and Colin mentioned specifically more potential at Dots Luck.
Likely net operating cash flow c$1000 / oz.
I was reassured by the controls they have in place to ensure the right outcome for Xtract e.g. physical presence in the gold room, appearing on top of definition of operating costs.
1. Bushranger what is timescale for RC model and Ascot if separate timeline. What happened to last timetable!
Bushranger was discussed at length for maybe an hour of the 1h45 q&a.
Colin admitted previous timescale not hit but stated they will have only missed it by a couple of months as aim to have an updated model for RC in the next couple of months and this is both the resource model and financial model to support any decision to mine. He appears to want to limit any immediate further drilling to the objective of proving up what they already have at Racecourse and focus on early high grade for mining and helping the financial case. This would be the priority, in my understanding, ahead of Ascot and drilling in new areas defined by the geophysics for example NW of Ascot was an area of interest.
A mine at RC will be in the order of 25 years at 20mt subject to above financial modelling with a likely cut off at 0.15, there is 2mt (on the entire licence)”
2. Does he still stand by comments that "it's not a 10p porphyry" eg £100million. How would he compare it to other recent sales eg Josemaria $485m
Not explicitly asked but from the discussion referenced above he definitely stands by that and he specifically mentioned sale of Kiwara at US$260m agreed when copper price was c$5500/tonne. Josemaria mentioned so I suspect he was reading the bulletin board.
3. What are next steps and timeline for Ascot - is comparison with Cadia potential valid e.g statements made on 39 assays on 27 May "similar characteristics to the discovery of the deeper, gold-rich Ridgeway deposit, which is a part of the Cadia-Ridgeway group of porphyry deposit"
Immediate priority for any further drilling is on Racecourse again Colin talks about the nature of the gold found on drilling and belief this is above the main porphyry. The geophysicists would appear to want to do more here right now but main focus is to complete RC model.
4. Details of buyback agreement eg whole of 5574 or RC only. If whole of licence then how will value be attributed to Ascot and Footrot.
Whole of EL5574. Clear that having a wider audience of potential buyers for BR will yield a better outcome than just a single buyer. Unclear if BR will be in target jurisdiction for AA but world is changing geopolitically and that may change perception. 80% sale and 20% retention is a useful bargaining tool if AA were the ultimate buyer but clear a global audience would give a better outcome.
5. If we declare 2MT then what happens ? Try and assess confidence about achieving 2MT and from just RC. What if we are at 1.9MT ? What are the steps and timelines to trigger decision to mine, how would funding issue be addressed?
Largely covered in (1). Decision to mine is alternative trigger and they are progressing this . Note decision to mine is a defined term in Australian mining. It means that there is an economic resource which could be mined doesn’t mean all funding place. Clear major needed to devel
I went out with a few friends after the meeting last night and so only just getting to sharing the update now. Was there anything new and earth shattering - "no". Have I bought or sold any share today - "no". But it was good to go and the sentiment from the board including Kjeld was very assured and positive and I do feel they have a strategy they are following around BR but we aren't privvy to the whole strategy. Hopefully my notes, being posted shortly, will give a bit of insight but it really isn't anything which isn't already in the public domain.
Here you go Joeman - I have the pleasure of being shackled to my laptop so easy to cut and paste.
Hope to see a few you tomorrow.
A list for AGM I compiled a while ago. I don't imagine I'll have to ask all of them...
Thoughts on questions for AGM
1. Bushranger what is timescale for RC model and Ascot if separate timeline. What happened to last timetable!
2. Does he still stand by comments that "it's not a 10p porphyry" eg £100million. How would he compare it to other recent sales eg Josemaria $485m
3. What are next steps and timeline for Ascot - is comparison with Cadia potential valid e.g statements made on 39 assays on 27 May "similar characteristics to the discovery of the deeper, gold-rich Ridgeway deposit, which is a part of the Cadia-Ridgeway group of porphyry deposit"
4. Details of buyback agreement eg whole of 5574 or RC only. If whole of licence then how will value be attributed to Ascot and Footrot.
5. If we declare 2MT then what happens ? Try and assess confidence about achieving 2MT and from just RC. What if we are at 1.9MT ? What are the steps and timelines to trigger decision to mine, how would funding issue be addressed?
6. XTR has several exploration options - what is priority ? Either Manica, Eureka, EL5574 or other Oz licences? How would income from Manica be allocated to exploration ?
7. Timescale and potential for revenue at Eureka ?
8. Quarterly gold reports not fit for purpose and don't reconcile for last 2 years to annual reports. Need segregation of different hard rock agreements, closing gold stock and transparency on how operating costs at Fairbride are determined and reported.
9. Need to improve comms and investor info eg Kalengwa still on website etc....
10. Focus on what they already have and not go after new projects
The policy of providing a NED with a bonus who is the chair of the remuneration committee is a bit of a red flag for me in addition to the comms.
According to BDO only 2% of AIM NEDs received a bonus
I'm very much a novice on this technique and may have even mis-spelt kriging!
This link is one I harvested from GGP which gives some insight.
I hope your background in ballistics proves helpful when the share price here explodes :)
https://drive.google.com/file/d/1wlFXrqKsQz5BZAd7Qqu1g17cP7JM0ndb/view?usp=sharing
Hi Cygnus
Do you know by any chance if your Porphyry PHD colleague has attempted to run a technique called kringing on any of the available assays and hole data ?
I feel they have chosen a career / academic path which will be in great future demand !
JS I'll attend. Was away with work for last AGM but I attended the investor conference shortly before the AGM and the chance to talk directly with Colin in a smaller group was very valuable.
I'm glad we have the final slot of the day
TDoubleU
I think its the resolution from last AGM you are referring to:
"Transaction Incentive Awards: These will be awarded to Eligible Participants and the Award Triggers will
be based on the Company completing a successful acquisition or disposal transaction (the “Transaction”)
based on criteria determined by the remuneration committee. The maximum award payable in relation to
a transaction will be in the range 1% to 2% of the Transaction value and be allocated amongst the Eligible
Participants by the remuneration committee. Awards may be paid in cash and/or Company shares and if in
Company shares based on the 30-day VWAP following the date the Company announces the Transaction.
Corporate Event: In the event of a takeover or merger, general offer being made to shareholders, scheme
of arrangement, member’s voluntary winding up, change of control or other similar corporate event (a
“Corporate Event”), the Eligible Participant will be deemed to have met their Annual Incentive Award
and/or Award Trigger unless determined otherwise by the Remuneration committee taking into account the
Eligible Participants Annual Trigger and/or Award Trigger"
It is at end of this doc
https://xtractresources.com/wp-content/uploads/Xtract-AGM-Circular-CL_final.pdf
You may wish to look at post from Jamesiecakes on 24 June.
This is perhaps a conservative view based on my analysis of Fairbride a few days ago
Can't give direct link to his post but scroll through his history from the link below.
PS hope that's okay JC
https://www.lse.co.uk/profiles/jamesiecakes/
Joeman
I think its this one from Dec 21 you are referencing
https://www.youtube.com/watch?v=QJ8b--rhvRI
Always worth another watch !
A list for AGM I compiled a while ago. I don't imagine I'll have to ask all of them...
Thoughts on questions for AGM
1. Bushranger what is timescale for RC model and Ascot if separate timeline. What happened to last timetable!
2. Does he still stand by comments that "it's not a 10p porphyry" eg £100million. How would he compare it to other recent sales eg Josemaria $485m
3. What are next steps and timeline for Ascot - is comparison with Cadia potential valid e.g statements made on 39 assays on 27 May "similar characteristics to the discovery of the deeper, gold-rich Ridgeway deposit, which is a part of the Cadia-Ridgeway group of porphyry deposit"
4. Details of buyback agreement eg whole of 5574 or RC only. If whole of licence then how will value be attributed to Ascot and Footrot.
5. If we declare 2MT then what happens ? Try and assess confidence about achieving 2MT and from just RC. What if we are at 1.9MT ? What are the steps and timelines to trigger decision to mine, how would funding issue be addressed?
6. XTR has several exploration options - what is priority ? Either Manica, Eureka, EL5574 or other Oz licences? How would income from Manica be allocated to exploration ?
7. Timescale and potential for revenue at Eureka ?
8. Quarterly gold reports not fit for purpose and don't reconcile for last 2 years to annual reports. Need segregation of different hard rock agreements, closing gold stock and transparency on how operating costs at Fairbride are determined and reported.
9. Need to improve comms and investor info eg Kalengwa still on website etc....
10. Focus on what they already have and not go after new projects
Thanks iceberg and XTRe are so well positioned with Manica to benefit if gold strengthens
Empress have updated their monthly report and stated Manica expected commercial production in Q4 2022.
https://empressroyalty.com/investors/presentation/
They are also showing revenue from Manica as $2M in 2023.
Short headline is Ithis equates to Xtract EBITDA of US$10.5m p.a. at gold price of $1817 per oz.
A $55 movement in gold price moves Xtract EBITDA by $500k p.a. (up or down).
Full rationale:
Empress $2M p.a. is at 3.375% royalty rate and $1750 their assumed gold price per oz means they are forecasting about 34,000 oz of gold to be produced.
I think they are being conservative in this assumption as it could be as much as 42,000 tonnes per month processed with a yield of 2.62g/t (from XTR website) so producing 1300kg of gold per year which is about 45,000 oz per year. I recall Colin stating 100kg per month (yes it was in an interview)
Jamiescakes gave an estimated operating cost of $667 per oz and this seems realistic, maybe even high, based on AISC for Aussie gold producers
https://drive.google.com/file/d/1KHqF-ARKmgn1MluerdxnxfYR6TH4DPsT/view?usp=drivesdk
So at today's spot price $1817 operating profit of $1150 per oz assuming $667 operating cost, on a middle ground volume of 40,000 oz p.a. @23% share = US$10.5m p.a. EBITDA.
Rockley, as most are probably aware, is close to EL5574.
Legacy have in earlier corporate presentations referenced Bushranger.
Interesting to see that we are now being referenced in their recent ASX announcement .
https://wcsecure.weblink.com.au/pdf/LGM/02545817.pdf
Few extracts:
1. Other significant explorers and miners in the Rockley-Gulgong belt include Newmont (NYSE: NEM), Alkane Resources, (ASX: ALK) and Xtract Resources Plc (AIM: XTR).
2. The tenement is located less than 15km from the emerging Bushranger Cu-Au porphyry held by Xtract Resources (AIM: XTR). The Rockley Project is also considered prospective for shear zone hosted gold and copper.
3. Remanent magnetism may also exhibit a negative response as seen at the Bushranger Prospect
Great to see we're being mentioned in the same sentence as the big boys and the fact that the approach at Bushranger is deemed as successful and being referenced and used by other explorers.
The whole report has a lot of information which others may get value or insights from.
I just did a quick check on NSW TMS for any new applications for EL5574. I can't see any new open applications for drilling. I am slightly concerned that my access may have changed however as some older applications are no longer visible.
I'll keep checking occasionally.
Typically new applications appear to take 6 - 10 weeks for approval longer lead time for exempted area approvals.
https://audioboom.com/posts/8135633-midweek-takeaway-with-colin-bird-executive-chairman-of-bezant-resources-aim-bzt
Not listened yet as traveling today