Member Info for aprogerson

@Shorn Appreciated. It looks like new IC still has not been posted and I missed first few minutes of the call due to their technical problems so doubtless I've missed off some important detail somewhere but can always revise.

Interestingly it seems that the size of the intended plant has not changed since Dec-20 RNS, but very tellingly the Scoping Study was expected in 2 months from IC @15-Feb implying mid Apr-21, but update now expected a further 2 months later. I strongly suspect they are now accounting for recovery of the substantial Cobalt in the Kalaba/CE ore as mentioned on IC @5-May-21. By my calculation a possible 900t of Cobalt sounds trifling but at $45k/t it adds a whopping +75% uplift to the £37.5m copper FCF taking it up to £61m FCF overall when included ... that is some by-product credit, but is notoriously tricky to extract as it is a finely-tuned multi-stage process from what I've read up on so far!

Valuation wise I'm postulating that up to 2x the current £71m MCap could be supported by the 1Mt/annum Kalaba copper/cobalt production plant at todays metals prices and info gleaned/assumed. My numbers suggest Kalaba would generate £61.5m FCF probably from H2-22 as the ore throughput & process flowsheets will take some time both ramp up and tweak. Interesting IC @15-Feb-21 said that CE ore is soil & clay due to weathering so is more an earth moving than mining exercise implying easier to build mine and process ore keeping both CAPEX & OPEX modest as it is also relatively shallow so I am expecting an open pit operation with a low strip ratio when Stage 2 of the SS is issued. https://investingnews.com/daily/resource-investing/base-metals-investing/copper-investing/strip-ratio-western-copper-gold-nemaska-lithium/

Clearly the above absolutely no account of anything else that we do so is a starting point, but if ARC can get to production quickly into a rising copper/cobalt price and use this FCF to fund further exploration avoiding dilution then they have a very rosy future ahead of them as they have the means to self-fund and/or JV as equal partners as they can pay their way.
AIMHO & ATB APR

Has anyone done any fag-packet AISC & Koz production calculations and timeline on what:
(1) Kouroussa ... subject to licence I understood initial production within 18-24 months
(2) Dugbe ... guessing 2-4 years before any production may come through
(3) Yanfolila expansion ... understood current mine plan production drops in H1-21 but picks up in H2-21
Just curious
ATB APR

Given latest IC @ 6-May-21 plus latest $10k/t copper & $45k/t Cobalt pricing my initial 17-Feb-21 post deserves an update:
From 13-Dec-20 RNS plus Investor Conference 15-Feb & 6-May-21 on Kalaba/CE Scoping Study:

Scoping Study Assumptions:
Production: start planned early 2022 & cashflow positive 'TopCo' in 2022
Copper Price: $6,500/t stated in Dec-20 RNS
CAPEX: RNS states $5-$10m whilst latest IC stated $10m CAPEX & funded via Offtake or Asset-backed loan
Plant Size: RNS states 3kt/day ore processed or 1Mt pa & IC @May-21 stated 1Mt ore throughput pa so no change

Finances @$6.5k/t Copper: $45-50m revenue & $25m Free Cashflow (FCF) stated on IC @Feb-21
= Implied metal produced = $50m revenue / $6,500 = 7,700t/annum metal from 1Mt ore = 0.77% Copper effective
= Implied production costs = $50m revenue - $25m FCF = $25m sum OPEX for 1Mt ore processed

Implied Finances @$10k/t Copper:
Assumed $10k/t Cu & 7.7Kt metal from 1Mt ore processed with $25m OPEX includes any CAPEX loan repayments
> FCF = (7,700t x $10k/t) = $77m revenue - $25m OPEX = $52m or £37.5m FCF per annum

*New* Brucey Bonus = Cobalt stated on IC @May-21 @0.1% grade of Kalaba/CE ore
Assumed 90% recovery as per several papers, but highly dependent on local metallurgy & flowsheet used
Implied metal recovery = 1Mt x0.1% x90% = 900t/year
Implied Finances @$45k/t = 900t x$45k/t = $40.5m or £29m FCF as cost assumed picked up in plant OPEX above

Commentary:
It seems that CAPEX is now forecast near top-end of initial Dec-20 estimates @$10m and Scoping Study taking considerably longer to complete than envisaged even back on IC @Feb-21 of 2 months max. as now expected end of June-21. IC @Feb-21 stated significant works testing gravity, flotation, magnetic and leach flowsheet elements on a number of bulk samples was underway. Latest IC @May-21 stated 0.1% Cobalt in CE ore being used at Kalaba plant which at current price of $45k/t makes an enormous difference to the plant economics, but adds significant extra flowsheet complexities and doubtless to plant CAPEX and possibly OPEX costs due to add processing costs.

ARCM Valuation:
One valuation method is FCF multiples and using Junior African gold producers (PAF, HUM, RDG, SG et al) gives a range of 2x to 3.5x. So using a modest 2.5x multiple the Copper only FCF of £32.5m = MCap £81.3m, but if Cobalt credits also included Combined FCF rises to £61.5m so implied MCap = £153m. Value of other licences, exploration and/or JVs NOT accounted for in these figures !

This is looking more and more like a "Goldilocks scenario" where ARCM can scale up production and/or exploration and/or JV as it goes for one or more licence/project areas and be internally funded from its own FCF. I would then expect minimal or no shareholder dilution and a rapidly growing SP and MCap going forward over the next 12-24 months as this unfolds.
Comments & discussion welcome
Clearly AIMHO & DYOR APR

@Bonker I use a weekly gold chart to help cut the 'noise' out which shows a stunning clear gold breakout at $1,780 this week formed from the downtrend channel top at Aug-20 high and passing through w/c 4-Jan-21 close (not intraday spike high). If you use the spike high price then gold breakout should be categorically confirmed when it breaks $1,860 as some commentators are using.
Either way sentiment is now shifting very fast and everyday media is opening talking about inflation and the '1970s experience'. Even Powell is referring to transitory high inflation though I would be very interested to see his definition of transitory as persistent seems far more likely.
ATB APR

LOL @Bonker99 I think it is already underway if you look at Major and minor mining ETFs breaking out 4 weeks and this week respectively with gold only just breaking its Aug-20 downtrend, Miners have been leading once gold turned at around $1720 so gold breaking its downtrend is confirmation IMHO.
ATB APR.

@BushyTailed Thanks as you know I've been keeping HUM top of my watchlist. My only dilemma was do I double-down on gold with HUM or take an active position with silver?

Does HUM still hold a decent chunk of Bunkerhill shares? ... I hope so then I won't feel so bad!

As I've said before I tend to think of HUM as a growth story with Kouroussa and Dugbe, but the market seems to price it as a pure play single-asset, high AISC, junior producer with some production issues in a dodgy country at just £73m MCap. What has changed for me is the Gold/silver ETFs breaking down-trends with Majors 3-4 weeks ago and Juniors this week which put me on notice ... the clincher was the HUGE $100 drop in DXY yesterday and today breaking neckline resistance around $9050 today.
Brace positions?
ATB APR

Just bought back in again @22.2p so 10% above recent bottom so very pleased with that.
ATB APR

Interesting day ... here's what I posted at 11:20 on AAZ ...

"Talking of DXY its recent breakout in Jan-21 of downtrend from Mar-2020 looks like it might be about to breakdown as 3rd recent attempt to push up has failed. A very clean DXY Head & Shoulders pattern is forming at $9040/$9050 giving a downside target of $8725 if you are a 'chartist'. To say that would be massive for commodities is a mild understatement. DXY is £9075 and has dropped 60 pips in 3 days so far."

Just checked & DXY crashed through neckline and sat at $9045 and bouncing around wildly! Gold and silver is now waiting the outcome.
AIMHO APR

@JTD wholeheartedly agree with you on all points except gold goes UP when Dollar basket (DXY) goes down .. typo I'm sure!

Talking of DXY its recent breakout in Jan-21 of downtrend from Mar-2020 looks like it might be about to breakdown as 3rd recent attempt to push up has failed. A very clean DXY Head & Shoulders pattern is forming at $9040/$9050 giving a downside target of $8725 if you are a 'chartist'. To say that would be massive for commodities is a mild understatement. DXY is £9075 and has dropped 60 pips in 3 days so far.
AIMGHO APR

@Acorn The RNS was about spinning out BrokenHill tenements in Aussie as this is effectively a JV with other adjoining licence holders, but needs to be financed. Spinning this out on ASX with an IPO and cash raise is an very sensible idea with CCZ shareholders getting a stake as we currently own 100% of our licences, better 15-20% of something fully funded and focused than 100% of something that isn't going anywhere for lack of funds !

Zambian licences are a different ball game and to the best of my knowledge I have not seen anything from CCZ saying they will divest these as that would be mad given the big copper majors are looking for developed prospect to buy or JV and develop ASAP. CCZ looks well placed albeit with little funds to spare on these licences at present.
ATB APR

@Bonker LOL, I thought the time for those games was traditionally around 03:00 as it seems to have worked for them so far
ATB APR

@Marco I thought I heard 3 rigs, but who cares ... 18x deep holes at pace is all that matters!
ATB APR

@Graham Are you suggesting that one disgruntled ex-director maybe playing all this up just to get a better deal for their minority interests in Zaco/Zamsort knowing that a deal is nearing fruition and its easier on everyone if the are onside albeit at a more advantageous price (for them)?
Only in Africa ...
ATB APR

@Riseagain/Alyhels (hard to tell sometimes) I feel slighted to be missed off your list.

I like to think of myself as a more 'balanced' poster, but as I am heavily invested and an advocate of GWMO strategy, licences and prospects I guess by your definition that makes me a 'ramper'.
ATB APR

@catsize From my 23-Apr-21 posts, I still think GUNs approach to top slicing to manage risk and take some profit with "43% of Empress disposed of but only 7.4% of Eagle Mountain which was the standout performer" was the right thing to do but 'market timing' is absolutely not an exact science. The £218k cash generated equates to 54% of the 2x initial investments whilst still retaining 92.6% of the EM2 & 57% of EMP shares so they can "let their winners run" was sensible.
AIMHO APR
---------------------
Todays RNS outlines:
· disposal of 400,000 shares in Empress for total proceeds of C$186,515 (£107,810); and
· disposal of 213,169 shares in Eagle Mountain for total proceeds of A$198,035 (£110,257).
Total cash returned = £218,067

Commentary:
Initial Investments totalled £401k across these 2 investment in 2020 as follows:
Empress Royalty = GUN invested £146k RNS 23-Oct-20 pre-IPO
Eagle Mountain = GUN invested £255k in 3 tranches (Jul-20 to Sept-20)
GUN has effectively now top-sliced these investment to return 55% of their seed capital for reinvestment whilst retaining the bulk of their shares effectively now costing £183k of retained capital invested.

GUN have retained "600,000 shares in Empress and 2,500,000 shares Eagle Mountain." these are valued at:
> Empress Royalty 600k shares at CAD$0.42c = £146.2k
> Eagle Mountain 2.5m shares at A$1.00 = £1,380k
Total value remaining shares = £1,526.2k vs. £183k capital tied up and £218k cash released today.

Way to go GUN and another £218k cash available for reinvestment ... nice top-slice!
ATB APR

From todays CC ... Figures for Kalaba production concur with estimates on this BB and can be summarised as:
> CAPEX = $10m
> Production start target = Q3 2022 expected
> Expected £35m FCF @$10k copper
> Scoping study expected = Mid Jun-21

Commentary:
(1) ARCMs cash position extends 6 months past expected start of Kalaba production doubtless to cover ramp-up and commissioning so very prudent approach taken. Any CASA cash improves this position.
(2) Assuming $10k copper price then £35m FCF expected as costs fixed
(3) ARCMs valuation on £35m FCF basis alone would be £70m at an incredibly low 2x multiple. I would expect a higher multiple as production proved up and at least £150m MCap if/when copper gets to $15k/ton using a 2x multiple !!

NB: MCap based on Kalaba production figures take NO account of value of licences, JVs or anything else
AIMHO APR

Blown away by the CC and very informative with all directors extremely bullish on all fronts.

Figures for Kalaba production concur with estimates on this BB and can be summarised as:
> CAPEX = $10m
> Production start target = Q3 2022 expected
> Expected £35m FCF @$10k copper
> Scoping study expected = Mid Jun-21

Cash: Additional Placing means:
> Cash position topped up for 2.2% dilution & (again) fully funded to end 2022 (After Kalaba production onstream)
> Opportunistic Alvis Kalahari acquisition on excellent terms for top-notch licences following 2 years of discussions!
> Additional funds cover EXTRA deep drilling campaign
> CASA new deal excellent and cash is in ADDITION to revised budgeted position above

Exploration:
> Helicopter close IP survey of 5,200 line km underway for better resolution
> Soil sampling results honed with Copper/Scandium ratios indicate Copper Sulphide targets nearby existing drill sites
> Extra 18x holes up to 500m deep for 8,000m overall to locate Sulphides in "fluid traps" expected at depth
>

Licences & Legal:
Licences being reorganised and confirmed all in good order. Legal claim by ex-director confirmed as 'bogus'

Transaction:
Rothchild = On fixed cost basis for conclusion of transaction with AAL or AN Other ... wow deal !!!
NvS confirmed "incredibly good" discussions with Major & other suitors "lined up"

AIMHO APR

@JS Took same approach with direct investment on ASX @26.6c average and good holding in GUN.

Personally my game-plan is to hold for 12-14 months whilst the stated Hasties MRE plays out over the next 12-14 months as that is the main event with known good copper/gold mineralisation from 21km+ NCM historic drilling and NCM Telfer processing plant just 12km up the road. We know Hasties is shallow with little barren overburden so crossing my fingers for more decent grades and continuity leading to a maiden JORC resource being declared.
Target price? £24m to £30m over next 6m as drill programme plays out and then who knows
ATB APR

Yes same here pre-registered yesterday, logged in 10 minutes early and joined queue and won't let me on due to 100 user limit. Rechecked email received (again x2) and same thing so I know it's not me
Really disappointed!

Rincon still rocking ... up another 8% overnight now at 36c up 40% from 26c on Laverton drilling start news on 26-Apr-21.
Nice start to the exploration season in Aussie !
ATB APR