RE: Lots of jolly good news to come!24 Aug 2022 09:51
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.
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