Member Info for Andrew4444

H202

It depends on how many holes they actually do drill. This seems to be subject to what they are finding but I believe the original number was 9 drill holes? (I think). One hole was capped so they may have to drill holes 6,7,8,9.10 (no. 10 replacing the capped hole).

It seems to take 10-14 days to drill a hole (on average) and as its expected assay results will out next week for first hole, then that would mean 8 weeks for assay results after drill complete.

So IF I’ve got the number of holes left to drill correct, the drill campaign should be complete by early May. That’s assuming they don’t try and extend due to results.

You then need to add on circa 8 weeks for assay results after each hole completed.

That’s my understanding anyway.

Shorn

I see you and raise you.....

19 mins 50 secs in

https://youtu.be/9wl3N_4Zzvc

Listening to the interview again CB also said...

'I'm not that worried .. (re assay results) because with the AA work there was some very nice copper, 0.5, 0.4 ,0.6'

Is that another hint he is confident they wont be significantly lower than 0.4%? (Hence his other comment, '0.4% is a win')

Maybe, maybe not.

Gixxer

I take your point re CB’s previous optimistic comments.

I’ve also been critical of his many failed predicted timings in the past, but I think this issue is so big that I would be surprised if he would risk results potentially disappointing shareholders with loose talk. Hence my belief that he may already have a good indication of grades – enough to proclaim 0.4%=win.

It’s a bit like his claim that ‘No news is good news’. If that had proven to be wrong then the fundamentals and his credibility would have been trashed.

It’s one thing to be wrong on a delivery or income date that can slip, another against a fundamental issue which affects millions of £ of MC.

Maybe I am reading too much into it as you say. But after his implication that 0.4% = win, then I would think the market would not respond well to 0.2% grades.

We should find out if I’m right or wrong very soon.

IWTW

He didnt state where the 0.4% came from but that is the figure he used and said

'that has to be a win'

So if we dont get that grade then he is setting himself up for a fall imho. How does he claim 0.2% cu is good when 0.4% was refenced as a win?

He may not know the exact grades yet but I bet he has an good indication. Enough to claim 0.4% as a 'win'.

Re your valuation ex bushranger. I agree. I think 5.5 to 6p is more realistic. 7.5p does seem excessive on reflection.

CB referenced 300 million to 400 million tonnes and 0.4% cu. Obviously that doesn’t mean that is what the grade will be but if it is 0.4% then against 350Million tonnes (average) , that’s 1.4Mt con copper and that would equate to an sp of circa 30p (using fully diluted shareholding).

I may be wrong, but I would think it surprising that CB would reference 0.4% unless he had a reasonably good idea what the cu % would be around that level. As assay results are imminent he may have a good indication of what they are? To say that we are looking for 0.4% and then announce, say, 0.2%, cu would be very disappointing imho.

CB’s no fool so why set yourself up for a fall unless he knew he wasn’t going to fall?

Or am I reading too much into his statement!? Maybe, maybe not. We should find out soon.

Also, Interestingly CB has valued all assets ex bushranger at current sp of 7.5p (that’s after all are producing anticipated income). That should be by Q4 latest and around $1M a month.

So whatever value bushranger reaches, then circa 7.5p should be added (after Africa income starts).

Unless we are about to have some very big disappointments re assay results (and assuming Africa income does happen as expected) the sp could be at circa 35p to 40p by Q4.

That’s unless the contained copper amount is no more than 1.4Mt ! If its more than 1.4mt then........

Of course AIMHO. Others will have different views.

Current Alluvial Q4 update due any time now along with GF and news on second alluvial contract. So could be a lot of news in a short space of time.

last few mins my broker quoted 7.48 then 7.68 then 8.22 !!!!! All in 2 minutes

wtf???

Being quoted 8.22 for £5K

Cyber

You could be right, but I was trying to be conservative and my thought process was that the mineralisation lengths stated were the longest achieved and so some would be shorter. I think others have thought the same as they have reduced the lengths recorded to get a more realistic average (in their opinion).

If your view is correct, and it may be, then the resource will be substantially bigger than the estimates that others have done. 2.7Billion tonnes at very small 0.2% Cu =5.4M tonnes contained copper or 9.5M tonnes contained copper at more likely 0.35% Cu.

That would make it bigger than Cadia East and therefore the biggest porphory in Australia. I don't think that's likely tbh hence why I think the more conservative values are more accurate.

PART 2 (After determining the contained copper values)

My methodology for determining the future anticipated sp is based on that which veteran Mining Journo John Cornford used. He has, no doubt, seen similar situations like ours progress to completion and valuation enhancement many times before.

I think it reasonable to assume his sp valuation methodology is credible and realistic.

His ‘formulae’ for want of a better word is:

(Contained copper mt (Cu) x Price of Copper (POC)) x % buy-out (BO) x $ to £ conversion / Total number of shares (TS)

Abbreviated and simplified:

(Cu x POC) x BO x $£Con / TS

Notes:

1. Cornford assumed 80% buy-out but the same principle and methodology applies for 100% buy-out. I am assuming its 100% buy-out which is consistent with CB’s comments in previous interviews.
2. Cornford used total number of shares in issue, but I think it’s more realistic to use fully diluted number including warrants and options. It is almost certain these will be converted to equity at some point in the future. I believe fully diluted is circa 835M shares.
3. Cornford thinks a 3% buy-out is reasonable, maybe even conservative.

Obviously the main issue in trying to determine the future anticipated sp, is the assumptions that are used. These variables are subject to individual opinion and changes outside our control (£$ exchange and POC). This will significantly affect the final outcome (sp).

For what it’s worth, I think it’s realistic to assume:

Cu =2.6Mt (from part 1 assessment)
POC= $9000
BO= 3%
$£Con= 0.72
TS= 835M

Others will have different views and opinions which will change the final outcome. That said, I believe this methodology is an accurate and realistic way to try and determine the future anticipated sp. However, the part 1 assessment is the most critical imho.

Of course, all imho. Others will have different equally valid views.

Cygnus

Good post.

I’ve also been trying to work out the volume against very limited drill results. The main problem is, as you say, is that the shape will not be a cuboid so by using the basic calculation of LxBxH would produce an inflated volume figure.

The link below has volume calculators for different shapes. I think the most likely shape will be one of: Ellipsoid, Capsule or Conical Frustum

https://www.calculator.net/volume-calculator.html?

If you use the cuboid shape as a base case (although it won’t be that shape) then using the same L B H values to determine volume for the cuboid shape. Using the same base values for the other shapes you can work out the reduction. The approximate reduction against other more likely shapes are as follows:

Capsule = 80% of cuboid
Ellipsoid = 60% of cuboid
Conical = 50% of cuboid

I am using a base case of 940 x 560 x 660 as cuboid dimensions of mineralisation. This means the total ore volume at 2.7 t cubic mtrs = 938,000,000 for a cuboid shape.

Adjusting this figure for a more likely shape we have:

Capsule = 750,000,000
Ellipsoid= 563,000,000
Conical = 469,000,000

After deciding which shape best reflects the mineralisation, multiply this by the cu grades % to get the approximate contained copper amount.

Obviously this is a very ‘rough and ready’ way of determining the contained copper, but it will give an indication. My view is that a Capsule shape is probably most appropriate and a copper grade of circa 0.35% is most probable.

So that’s a contained copper value of circa 2.6M tonnes against current drill results. Obviously that will change as more drill results are known.

Others will have different views.

I believe the biggest factor in trying to determine the future anticipated sp is the contained copper value. Once you have determined this, it becomes easier (not easy) to determine the future anticipated sp imho.

Ella

I think it should improve valuation. Being in the Vulcan state means Racecourse should..

live long and prosper :)

(Sorry. Beam me up scotty.....and quickly! )

The 2mt contained copper buy-out option was what AA stipulated. Not all majors would have the same threshold. CB has said in a few interviews last year that majors are not interested unless there is a minimum of 1 mt contained copper. He also said in a recent interview that our goal was to get to at least 1mt – which supports his view that majors would be interested in ‘only’ 1mt.

So it is likely that even if we don’t get to 2mt we will get majors interested. Don’t forget the 2mt threshold that AA stipulated was when POC was much lower (circa $6600). That would now be equivalent to 1.5Mt at $9000 POC. AA have first option to buy at lower than 2mt according to John Cornford..

All that said, from what CB is hinting at and from what has been reported from drill results, I would be amazed if we don’t get to at least 2mt against a cut-off point of 0.2% Cu.

Numpty5

There was 200;1 swap 3 years ago so your 62,367 share holding was converted to 311

sp value increased by 200 so your overall value did not change .

Unfortunately your buy price at the time now equates to a break even figure of £4.12p

Iceman

You may be right.

But we are certainly being encouraged (imho) to think there maybe a reasonable amount of Gold. Not only from the very pointed 25 Feb RNS, but also another interview comment by CB when he said, something like, ‘previous AA drill results showed decent Gold grades’.

In addition Boda keeps being referenced as comparison by CB, and that’s got reasonable Gold grades.

Even if it’s nothing like 1:1 but just a small amount of Gold, say 0.1g/t Au. Against 0.3% Cu, that small amount of Gold will increase Cu to 0.36% Cu Eq.

An increase of 20%, which would translate into 20% extra on SP valuation.

As you say, it will be fun finding out!

A few interviews ago CB implied that racecourse could have a larger than usual Gold content and maybe more like Northparkes or Cadia which have a 1:1 Copper / Gold ratio. This possibility was increased in the 25 Jan RNS:

‘The presence of a significant proportion of pyrrhotite associated with copper sulphides (chalcopyrite) at Racecourse suggests the deposit is a reduced copper-gold porphyry deposit - such deposits are known to have higher gold grades in comparison to copper grades’

Obviously this has not yet been confirmed and at this time is only a possibility.

However IF it is a 1:1 porphyry, then that means for each 0.1% Cu there is 0.1 g/t Au.

Iceman did an excellent post a month ago showing how to convert the Au to Cu Equivalent.

I’ve made an excel spreadsheet with this conversion formulae to save me having to keep working out Cu Eq against different outcomes. I now just have to input POG, POC, Cu %, Au g/t and it works out Cu Eq.

What’s interesting, well I think so anyway, is seeing how the Cu Eq increases if it is 1:1:

Assuming 1:1 Cu to Au and at current POG/POC values.

(Figure stated is Cu % and Au g/t ie 0.20 = 0.2% Cu and 0.2 g/t Au.)

0.20 Cu/Au = 0.32% Cu Eq
0.25 Cu/Au = 0.40% Cu Eq
0.30 Cu/Au = 0.48% Cu Eq
0.35 Cu/ Au = 0.56% Cu Eq
0.40 Cu/ Au = 0.64% Cu Eq

The Gold content will substantially lift the Cu Eq by 60% – assuming its 1:1.

So a typical Copper grade of 0.3%, will increase to nearly 0.5% Cu Eq

At lower Gold content, 2:1 ratio (Cu:Au)

0.20 Cu 0.1g/t Au = 0.26% Cu Eq
0.25 Cu 0.125g/t Au = 0.33% Cu Eq
0.30 Cu 0.15g/t Au = 0.39% Cu Eq
0.35 Cu 0.175g/t Au = 0.46% Cu Eq
0.40 Cu 0.2g/t Au = 0.52% Cu Eq

Even at these lower Gold levels, Cu % increases by 30%

Obviously this exact mark-up is also subject to ratio of POG and POC at the time, but it does show the noticeable increase in Cu Eq when a reasonable amount of Gold is also found.

Lets hope it is 1:1 ratio, or at least near it. My gut feeling is that there is going to be more Gold than usual.

We’ll see.

Shorn

I don't know how the mechanics of it works but, yes, warrants being exercised will create new shares in issue, hence the number of shares in issue increased from 735M to 740M.

My understanding is that brokers usually get the warrants, usually as part of placing, and Directors and employees get the options, as incentive to get sp higher.

Underdog

According to the Align research document on 5 October, there were an additional 68M warrants and options outside current share issue. I believe this had increased to circa 100M since 5 October. Please check subsequent RNSs.

Before the recent exercise of 5M warrants I was using 735M shares in issue and 835M fully diluted in. Its now 740M in issue and obviously the same 835M fully diluted. So 95M warrants and Options.

That's my understanding.

Many thanks Cyber

Appreciated