Member Info for Andrew4444

porvenireal

I agree with you, its good that some are doing a bit more comparisons.

But I also think its good if some do a bit more research. Things have got a lot bigger !! And the economics will have got a lot better :)

26 July RNS

“Open pit modelling was carried out using the currently defined JORC (2012) compliant Inferred Resource of 71Mt @ 0.44% Cu and 0.064 g/t Au at a cut-off of 0.3% Cu, as well as additional unclassified resources at the Racecourse prospect”

(So study was done before p1 and p2 results incorporated. Its massively increased since then)

“The Conceptual Study concluded that the Racecourse deposit contains significant low-grade tonnes of copper and gold which may be economically recovered at a copper sales price above US$4 per lb”

(Again, that was also before p1 and p2 results incorporated)

“I am further encouraged by the fact that the modelling key assumptions were based on the Cadia Hill Copper-Gold Mine located some 75km northwest. We confidently expect to be able to significantly increase the current Racecourse Mineral Resource, following the results of the Phase One drilling as well as the Phase Two drilling programme which has recently commenced, and any increases to the Mineral Resource will enhance the economics of a mining operation at Racecourse.”

“When the results of the Phase One and Phase Two drilling programmes are incorporated into the Racecourse mineralisation model, Xtract expects that the Inferred Resource will increase significantly in size, which will have a strongly positive effect on the overall economics of a mining operation at Racecourse.”

Nice to see it doing very well today and getting close to $10k on LME

Will it break it today??

Hopefully!

Gixxer

He certainly does have a history of misleading statements. I've referenced them many times before. But those misleading statements have been of less significance. Annoying yes, but not against substantial issues.

If assay results are bad, I can't see the market just thinking "oh well, Its just CB being CB - whats he like eh?"

I would think this would be a significant order of magnitude compared to his other forward guidance errors. I used the word "idiot" because he would be an idiot to do something that trashes his reputation - and probably the SP!

If the reason is option 2 then I think his credibility will be shot.

Only a week ago he did an up beat interview (below) with no hint of bad news coming. I've been sceptical and critical of CB on some issues in the past, but he would have to be an idiot on a suicide mission if he knew assay results were bad and gave a positive interview.

I don't believe he's an idiot :)

https://audioboom.com/posts/8006238-the-sunday-roast-presents-12-stocks-for-the-12-days-of-christmas-episode-10-xtract-resources

IMO the delays in assay results can only be down to 1 of 3 reasons. I can’t think of any other reasons than:

1. Assay results have not been done. Due to back-log? Covid? Resource issue? Or something else.

2. They have been done but are not very good so are being held back and will be released later when there is some other good news?

3. They have been done and are decent (or better than that) but CB is collating the results to batch-up and are being used to compile open pit model. Big bang realise of all info?

I believe the most likely reason is reason 3. CB has done a recent interview and was upbeat - so I would be very surprised if the reason was 1 or 2. I don't think he'd have been so bullish if that was the case!

Of course I could be wrong.

Hello CE

You may well be right. That's why I prefixed my comment with .."Assuming CBs comments are correct"

That said, we got Q3 income just 2 weeks after the period ended, if that happens again then we should get Q4s by Friday.

I suspect the driver for the release will be how good the results are. If they are as good as last quarters then I remain hopefully that, for once, CBs time scales will be correct :)

Assuming CBs comments re alluvial income (to be announced in early Jan) are correct, we should be getting an RNS this week

If its anything like the last quarter it should be a meaningful amount of income. Q4 usually is a decent quarter (Q1 poor due to rains) so I am hoping for good news next week??

“It’s simply a win win situation to be in Andrew, however the resource is packaged it comes down to the strong probability that it ‘will’ be sold”

Yes agreed. Either Plan A or Plan B should lead to a sale and see the sp substantially rerate. But i’m not sure we know which plan will play out yet (long or short) , despite CBs apparent clear indication of intent.

I believe that is were we may have different views. I agree with 99% of you other views !

Whether CB is talking about timescales, project directives or future plans, my main point was that we can’t always believe everything he says. For whatever reason, things don’t always happen as he has implied they would..

It will be interesting to see what has actually happened by Q3 and compare that to what CB has said would be the plan and his forward guidance..

“On this occasion, and for the first real time he has given a clear indication of intent, and yet we still second guess him. It wouldn’t be just an over optimistic statement to give a June latest projection. It would be a lie, as it would no doubt be followed by a fund raise ….,”

In that case CB must have lied any times :)

Over the 7+ years I’ve been invested here CB give his given a clear indication of intent and timelines many times. Most, if not all, did not happen as he had stated. He could, and often did explain away the delay by saying events and circumstances were outside his control - that was the reason for the delay. .

One recent example (of many) was the predicted flow of assay results. That has not happened as he indicated.

For many possible reasons, the June timescale may not be met. That said, if we continue past June I still dont think there will be a fund raise due to African income.

I agree with you IWTO. I would be happy to wait another year and even have more dilution to gain greater value from footrot and Ascot. I’m sure the added value will be greater than the loss due to dilution. Its not as if these other two areas are punts or shots in the dark.

Further, I’m not sure we would need to raise after March / April as we should be getting good income from the African projects by then?

The cynic in me says that CB’s “by June latest” time scale may be, hmm “deliberately optimistic” as he may know this could take longer as we may be doing more drilling (for good reason). He may want to give the impression that we are “nearly there” as he is knows many Aim investors have a short term time horizon so doesn’t want to say it will be a year or so before we sell?

I hope that cynical view is correct (it may not be) as I think more time and more drilling (and yes more expenditure) will be handsomely rewarded here.

As sceptical as I’ve been with CBs timelines and forward guidance, I would be amazed if we didn’t get to (or have now) at least 2mt. It would be game over for CB’s credibility if we didn’t reach that threshold - not after all that he has said.

Being overly optimistic with time scales is one thing, but going on a suicide mission to trash your own reputation (and the sp as well) is quite different ! CB may be many things but he’s not an idiot.

I believe (and hope) that the delay in assay results is because they are all being collated to enable the open pit model to be compiled.

Quite a brief announcement and not containing the usual valedictory type of goodbye and thank you??

I'm probably reading to much into the brevity of the announcement - but still surprisingly short announcement considering the length of time he spent as a BoD with CB.

What will be interesting is the quarterly alluvial income. CB said they will be released early jan. Next week maybe ??

Last quarter was excellent and released 2 weeks after period ended. CB has a habit of releasing alluvial results soon after period ends if they are good so if we get them early Jan as stated, then we may be in for a nice surprise??

"I think CB saying that the cut off is likely to be 0.15 % will add a lot of tonnage to the outer regions of the pit and help hurdle over the 2MT barrier"

Caravel Minerals in Australia is also as porphyry deposit. At page 7 of their presentation it shows how the mineral resource estimates change as the % cut-off is reduced.

0.3% to 0.15% increase of 96% CuT
0.25% to 0.15% increase of 43% CuT

Obviously Racecourse won't be identical to these mark-ups but gives a good indication of the increase as cut-off % reduced

https://caravelminerals.com.au/wp-content/uploads/2020/11/2020-11-AGM.pdf

I've posted my calcs and thoughts before re manica Gold income (Below). My figures are much closer to IWTO than other figures quoted.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

556 oz was the direct cost quoted in DFS.
However, CB has said since, costs would be no more than $600, so I think it best to use that as worst case.

Assuming:

POG $1800
Production tax (6%) $108
Direct cash costs (CB said not more than $600)
Prod tax + Direct cash costs $708
Corporation Tax (32%) (32% of profit) $349
Net Profit per ounce $743
Margin % 41%

Xtract get 23% of Gold production.
We are not paying anything towards capex so AISC not relevant to Xtract just production costs and tax.

Two assumptions re possible annual Gold production:

1. Last year CB said he expects 100kg a month to be produced. IF so that’s 38.5K toz

2. I believe in the DFS it stated 215K toz over 7 year LOM = 30K toz a year..

At assumption 1.
(38.5K / 12 months) x 0.23% = 738 troy oz to Xtract. 41% margin =302 toz profit x $1800 pog= $544K a month = £400K approx profit a month

At assumption 2.
Same method but 30K toz = $425K = £320K approx a month profit

We know CB can be a bit “optimistic” with his predictions (ie 100kg a month) so £400K may well be a bit too high.

So maybe reasonable to assume £325k to £350K a month clear profit after all tax and costs.

Well, that’s what I’m expecting anyway.

I believe the link was posted before on 26 Nov. Still good to remind those who missed it how close we are to production at Manica.

We should have income of £350K a month by end of Q1

This BB has deteriorated a bit over the last few days. But its not gone feral like so many on Aim. This will be nothing compared to what will happen here after a rerate.

This BB will be like twitter, with many posts flying through with no doubt extreme polarised views and offensive comments. It will be Brexit debate on speed :)

Unfortunately that is the price we all have to pay for a substantial rerate.

I'll be long gone and counting my money :)

Worth noting that if we assume the same very low figures as in the Josemaria resource buy-out ($6614 POC and 1.65% buy-out).

That = 16.4p for 2mt con copper. I think its fair to say that 2MT will be lowest amount.

Add on 3.5p for African assets and that gives us 20p. I honestly can't see how sp wont go to at least 20p.

And if it only does that I will be very disappointed !

Re Josemaria resource.

Using their figures:

**** 1, 0 1 2 BT average grade---- 0 . 3 % cu copper---- , ----0 . 2 2 g/t gold ----& 0.94 g/t silver.*****
[Using $3/lb copper, $1,500/oz gold and $18/oz silver study]

And using our formula in our 24 Nov RNS to convert to Cu Eq
**CuEq Formula: CuEq = Cu% + 0.5884xAu (g/t) + 0.0078xAg (g/t)

That takes 0.3% Cu = 0.44%CuEq

0.44% x 1.012Bt

= 4.45mt Cu Eq

Using their 3lb copper price = $6614/t

At $485M buy-out = 1.65% buy-out %

Check Calc
(4.45mt x $6614) = $29.432B x 1.65% buy-out = $485M

Obviously this mine is in a less favourable jurisdiction than Australia so we may get a slightly better % buy-out and higher POC may get used. I think It does give a good indication of buy-out figures though.

I’m sticking with my previous 1.8% buy-out figure. I’m sure our POC will be higher. CB said the independent valuation will use different POC values in calcs - as low as $8K and upto a high of $12K. $8K would seem to be the lowest possible POC that will be used for our calcs?

So for us. Using very low $8K POC and 1.8% buy-out. Works out at 11p sp per 1m t cont Cu. I would think that would be the very lowest ratio. So 2mt (22p) + 3p African assets = 25p. Absolute minimum??

Please note. I believe my maths and methodology is correct for the above but please check and correct.