Member Info for Andrew4444

Lucky

That is a possibility. I just think if that was the next RNS that substantial news may be a bit leaky and I would expect a massive rise a day or so before. That's what usually happens in aim with transformational news.

I do expect that RNS to happen at some point, be it today or in a years time.

Lucky

Yep. The rise may be due to many thinking like you, news this week re plant build, hence the buys. If they are right this will rerate.

If not then I think we will probably be back to near or at todays start. I would be surprised if it went lower than todays opening price even with poor alluvial results - I think they are now priced in tbh.

We'll see.

As welcome as the rise is, I'd be happier if it was against an RNS. We've seen spikes and falls many times here, based on hope. We may know why there was an sp rise with next RNS ???

RE Discussion / opinion on future POG

Start from 12m 15 sec in.

Last 1 mins is very interesting

https://www.youtube.com/watch?v=B7-eNIIJa_0&feature=push-fr&attr_tag=8L-fgDlRV2jWc6Ss%3A6

dought = doubt :)

Hi James

Agreed.

It's difficult to see a realistic and logical reason why this won't multi -bag from these levels over the next 6 to 18 months. There can be debate on either a 4,6,8 or 10 bag (maybe more if you believe some calculations :)) but I think all or nearly all see a big upside from this level.

The risk and possible downside? I can only think that it takes a lot longer then anticipated to get HR up and running and we need another raise to cover G and A, so more dilution?? That is a worse case scenario (i think) and the, say, 10% or 20% dilution will be well covered by the rerate, later on. POG crashing is another but that seems highly unlikely.

As MMP will be taking the lions share of FB profits, I'm sure they wont walk away and are very keen to get the profits asap. I am sceptical about the 8 month construction lead times stated by CB as most mines take 18 months to build. I know some of the mine has already been built by Omnia, but 8 months does seem very optimistic lead times. Hence I think first pour Q1 2021. I suspect that's down to CB being CB again and looking at the best possible case - ie a stretch target and moreover aspiration rather than realistic time scales.

That said, we should get there in the end - no dought with a few more bumps in the road ahead. Hopefully not starting with Q4 alluvial results next week :)

I've set-up an excel spreadsheet which calculates profit against different POG, and as you say, a higher POG makes a substantial difference in the profit. Fixed and variable cost etc. I think we are in a Gold bull run and will see POG $2000 oz within 2 years.

I also wouldnt dismiss any other higher buy-out calculations but I havn't seen any other robust calcs (as detailed as yours) to support a higher buy-out price so until I do I'll stick with my maths and methodology to determine the buy-out price, which is not that far off yours.

A few points:

1. I was the person who stated FB is circa a quarter of known reserves. Obviously we can't just x FB profit by 4 but there should be a lot more available later on (whenever that is!).

2. CB is well known for his inaccurate forward guidance wrt timescales and figures, so don't expect HR in production this year, despite his timescales. First pour Q1 2021 (IMHO)

Thanks for your thoughts and workings.

Hello Dave

Thanks for all your work doing the calcs.

If I've understood you correctly you seem to be coming to the conclusion that $33.8M would be the buy-out figure. Obviously, at todays date and against certain assumptions.

If so, that's in the same area I calculated yesterday as I said circa $30M to $35M . If I understand you correctly, then you appear to agree, roughly, with my figures.

However, IF the buy-out price is circa $34M then that's circa £26M which is circa 5.7p a share. Again not a million miles form my 5 to 5.5p SP but if that's correct, are you dismissing the other buy-out valuations that were much higher?

I want the higher valuations to be realistic but can't see it, and it appears your calcs support my view. Correct??

Hi James

I think your point that MMP would not want to pay more than xtract's cumulative profit (23% over 7 years) is a very astute one and it does bring into question the accuracy of calcs / assumptions that have a higher figure than xtracts total LOM profit.

Some time ago, CB mentioned FB profit of circa $4M a year but at just 20% share and lower POG. So may be $5M a year now? This figure is reasonably consistent with mine and your assumptions. So circa $30M to $35M of profit seems reasonable over LOM for xtract.

Although I agree that some valuations are far too high, I think yours are on the low side. As the $20M reserve price was against a lower POG I feel this should be at least 25% higher so probably circa $25 to $30M (FB alone). This is still less than Xtract LOM profit so MMP would still benefit from this buy-out.

If we included all of manica then I think it's worth a lot more than $5M extra. FB is a quarter of all 1.4M ounces reserves.

Although I think you are slightly on the low side, your more realistic valuation is welcome. As you rightly said, why would MMP pay more than Xtract's total LOM profits for Xtracts share.

We may know more soon!? Thanks for your views.

That's why I asked about the calc for NPV.

It could be that the assumptions that are being made are wrong and that the offer should not be 13p against current NPV. That said, I think the offer, if it were made today, would be significantly higher than reserve figure offer of $20M. I would be very surprised if the offer, even against a lower price assumption and more costs, was not circa $30M as a minimum. That would see an SP of 5.5p.

Until we know how the calc is done we are just guessing but it does seem reasonable to assume we should get a min 5p offer for FB alone.

I have a feeling CB may be willing to include all of manica in a buy-out, for the reasons I've already stated.

Hi James

Thanks for that. I have also tried to work-out the FB profit to Xtract and came-up with £3M to £4m profit a year - so very similar to your figures.

I completely understand your rationale in saying that MMP wont pay the calculated amount as it's too much but in the agreement of 29 May it said 'equal to the greater of'. Will they have a choice of price if they want the buy-out???.. Legally binding??

Option to purchase the concession

The Company has granted MMP an option to purchase the Fairbride concession, subject to all parties receiving necessary regulatory approvals including, but not limited to, the Company obtaining shareholder approval, for an amount EQUAL TO THE GREATER OF:

· An amount equal to 80% of the net present value using a discount rate of 15%; or

· US$20 million

Daz

No problem.

I only asked as I was interested in understanding how the increasing POG effected the NPV. The percentage POG increase against AISC may have been used or the net profit.

Ie Net profit on original DFS is $400 an ounce ($1263 POG less AISC $863)

Against current POG of $1575 profit has increased to $712 ($1575 less $863) so 78% increase

However, the POG percentage increase is 25% ($1263 to $1575)

Original NPV of $42M now becomes $52.5 using one method (+25%) and $75M (+78%) using another.
Current currency conversion rate is 0.77 (USD to GBP) so one method gives us a MC of £40M and another of £58M. I assume CE used the % profit increase as this figure is nearer his new MC.

tbh I’m not sure which method is more accurate and realistic. I know which one i'd like to use :)

Thanks

Daz

Could you show me how you worked that out. I'm not too sure how to work out NPV and how POG effects it.

Ta

Very good Gwyn ! :)

Hello CE

I’ve always thought it likely CB would go down the buy-out option sooner rather than later, for three reasons:

1. Why have the indicative calcs for buy-out price against NPV if this was not a consideration in the future.
2. Time is against CB (77 this year) and he may not have the energy to see manica into full potential.
3. CB’s first love is copper, not Gold. He may well want one last dance with his first love and focus on Zambia

He may be open to a buy-out for ALL of manica and not just FB. And with current POG and the likelihood of it going higher, possibly much higher, MMP may well be more than happy to make the bid.

I’d take 13p for ALL of manica now tbh, not just FB.

We’ll see what actually does happen soon enough.

8 v 1 - Buys v Sells and yet sp down 3%

Typical Aim !

Lucky

Results taking longer than usual due to the amount of alluvial gold produced last quarter. They're still counting it :)

That'll be it ....

lptuf93

You're going to look very silly today when we get an RNS confirming the highest alluvial production ever, largest ever profit, confirmation of start of construction of Hard Rock plant and massive copper reserves in Zampia.

You need to have more faith in CB.

When has he ever let us down before.........

I wonder if CB has a cunning plan here.

Keep delaying Q4 results, bring forward Q1 results and combine the two - and hope no one notices!

If you didnt laugh here, you'd cry!

Hello CE

At this moment in time, I think this is more appropriate for CB :)

https://www.youtube.com/watch?v=qqG4A4sciQA