Member Info for Andrew4444

Morning BT

I've had quote of 6.8p for £5K for last 10 mins

CB will not want to use up all the £5M drill budget before we get FB making money. I suspect that will be later then current guidance of end of Q2.

So I would think CB will take the drilling program at a steady pace until he knows exactly when we will be getting FCF from FB and how much.

The last thing we would want to do is to run out of money and have to raise again. No need for this to happen if CB budgets drill money.

Pause for thought.....Our income at the moment is only from alluvials and it is circa £75K a month

Sorry shorn I have no knowledge on that issue. I suspect those that were / are in GGP will be better placed to answer your question.

I don't believe that life cycle is relevant to xtract re racecourse as CB has said before he wants to 'put a bow around the project' and sell to a major. That's what he's done many times before.

We wont be doing any construction or building the mine so no capex required. We will just sell the licence after revised JORC determined.

I believe this is correct from my notes:

Total Options: 20,000,000

3,333,333 at 1p
3,333,333 at 1.25p
3,333,333 at 2p
10,000,000 at 10p

Shares 10.5M

So 30.5M of options and shares.

Plenty of incentive to get the sp higher !

Cyber

I've looked at my notes and have this recorded:

Options: 10,000,000

3,333,333 at 1p
3,333,333 at 1.25p
3,333,333 at 2p

I don't think he's had any more options since then (obviously ex today)

CE

Commodity Discovery Fund

Willem Middelkoop

By my calcs that would give us 2.1Mt at 0.2% Cu

I'll take that!

It looks almost certain that we will now get to 1mt contained copper (probably 2mt).

Being ultra conservative:

1mt using very low POC of $8500 and also very low 2.5% buy-out =
$212M= £153M= 21p (excluding all African assets)

IF we get to 2mt, which is now getting more likely than not imho, and using a more likely 3.5% buy-out and $9500 POC = 65p

That remains to be seen, but if I was offered 25p now I’d reject it and take the gamble of much more later on.

The carrot turned into a cigar which appears to have turned into a cube!?

A very big cube.

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

Does anyone know what the economic cut-off % is at $12000 POC and $15,0000 POC....and $20,000 POC!

Worth finding out now as we may need to know before end of the year :)

CB clearly said that ‘no news is good news’ so he must know that the market thinks that any lack of news is good. It would be suicidal for CB to delay any announcement which was bad news or even average news, as his previous guidance implied that no news was good..

If the next RNS is not, at least, quite good news, then as well as the disappointment re fundamentals, this would destroy any trust or belief in his future comments.

I know CB can exaggerate things, and be very optimistic at times, but he’s not a fool and he knows what the market is now expecting due to his previous comment and this delay in RNS.

So I expect the next RNS to be good news.

Shorn

I've said before I think AA will move early and not wait for the 2mt to be reached. It has been confirmed that they don't need to wait until 2mt is reached.

As others have said, the POC is much higher now than when AA agreed the 2mt buy-out. I would think AA can make as much profit now at 1.5mt as they could when the 2mt buy-out was agreed.

From John Cornford article..

…..Bushranger contains the Racecourse deposit which, so far, has delivered an inferred JORC resource of some 690,000 tonnes copper equivalent……

I queried the 690,000 tonnes copper figure when this was first stated by Cornford in his article. The current guidance is for 310,000 tonnes copper (71mt x 0.44%) at 0.3% cut-off.

So why is a much higher figure being stated and contrary to the official figures?

I think it was James' who said the 690K figure may be because a much lower cut-off % than the 0.3% was being used. That makes sense and is probably correct, as we know the resource substantially increases by circa 50% when a 0.2% cut-off is used rather than 0.3%. Obviously it increases further when the lowest economic 0.15% cut-off is used.

I wonder if the 690K tonnes figure is against the lowest economical cut-off point of 0.15%??

Just a guess. But I think that’s a reasonable assumption,

IF so, that puts our resource at 0.69mt IF POC gets to $10K and the 0.15% cut-off can be used.

Obviously, that’s before any increase is factored in due to drilling.

My understanding is (I may be wrong) that the resource has already been increased by circa 50% on two of the dimensions. IF all three dimensions can be increased by circa 50% then I think the resource should increase by circa 3.375 times.

ie 2x2x2 = 8 50% increase of 2 = 3, so 3x3x3 = 27. 27 is 3.375 times greater than 8.

I know the resource will not be a perfect cuboid but the above gives an illustration of resource increase as the 3 dimensions increase..

So IF POC gets to $10K this year we could then use 0.15% cut-off. And assuming the third dimension increases by 50%,(like the other two), it could be argued that the resource would then be 2.33Mt (690K tonnes x 3.375).

To be clear, this requires POC to get to $10K and the third dimension to increase by 50%, which has not yet been confirmed. But I think the odds are better than 50/50 that those two things will happen imho.

Even if we don’t increase the third dimension at all (unlikely) , the volume should have already been increased by x 2.25 (2x2x2=8) (3x3x2=18) 18 is 2.25 greater than 8. That would put the resource at 1.55mt (690K x 2.25).

If we are very pessimistic and use the higher 0.2% cut-off (POC over $7500) and not 0.15%, the original 0.31mt resource at 0.3% cut-off increases by circa 50% to 0.465mt. Multiply this by 2.25 and we are at just over 1mt. That’s without the resource increasing from any new drilling results and using 0.2% cut-off – which we can reasonably do as POC is over $7500 .
So it looks like we are at 1mt now, and will probably go to at least 1.5mt after all drilling completed. Subject to drilling results, POC, and a bit of luck, we may go to just over 2mt.

Of course AIMHO

Others will have different views

Hello O and W

I was trying to determine the % buy-out that was paid for Northparks. It ranges from 1 to 5%.

Their grades were irrelevant. They could have got higher grades than ours but I was looking at % buy-out against total contained copper.

ie what can reasonably be expected re our buy-out %

Hello James

You could be right, so 4.25% may be too optimistic. That said, I still think we will be getting nearer to 4% than 3% buy-out.

AIMHO

In one of CB’s interviews with Zac, he referenced another porphyry Northparkes, and said that it was sold for $800M. As this is also a porphyry in the same area and similar to racecourse, I thought I would see if I could determine the % buy-out. Cornford used 3% in his calcs but said this was conservative for the jurisdiction and infrastructure.

From research, It looks like 80% of Northparkes was sold for $820M in July 2013 to China Molybdenum. 20% owned by another company. POC was circa $7000 at the time of the buy-out.

The link below (page 6) gives details of porphyrys in Oz and Northparkes is stated as 620M tonnage, 0.55% Cu and 3.4Mt contained copper

80% for $820M = 100% valuation of $1.025Billion
Using POC at the time of $7000 and 3.4mt contained copper the buy-out would have to be at 4.25% of contained copper.

3.4Mt copper x $7000 POC x 4.25% buy-out = $1.011Billion (near enough to the 1.025Billion 100% valuation)

The 4.25% buy-out does seem more realistic than the 3% Cornford used (he did say 3% was conservative). The range is usually 1% to 5% buy-out with 2-4% most common. Racecourse could not be in a better jurisdiction or have better infrastructure so 4.25% seems more reasonable than 3%.

Using the, hopefully more realistic, 4.25% buy-out figure we have a few scenarios:

Assuming 1mt of contained copper, $9000 POC= $382M= £275M= 37p (735m shares)
Assuming 1.5mt and current POC = 56p
And the more hopeful scenario of AA 2mt buy-out reached + $10K copper (later in year maybe?) = 83p

83p maybe too hopeful, but I think 4% buy-out seems more likely than 3% from looking at Northparkes % buy-out and from Cornford’s ‘conservative 3%’ comment.

So let’s be pessimistic. At just 1mt and at low POC of $8000 at 4% buy-out = 31p

Of course AIMHO

See page 6 for Northparks figures in table

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

H202

at 1.5mt (75% of AA target) valuation would be:

1.5 mt x $9000 POC x 3% of contained copper (may be nearer 4% due to location and infrastructure)

=$405M= £291M

735M shares in issue = 40p (excluding manica assets)

Even at 1mt and using very low 2.5% buy-out and using lower $8000 POC = 20p