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I just feel very sorry for the warrant holders as this looks like it is going to end up with another 6p placing to raise the funds for the drill and test costs.

Time is running out now with only 2 months left till the spud date. I cannot imagine the Chinese will mobilise the rig unless EME can prove they have the necessary funds.

Also out of the warrants exercised so far only 100,000 (£12K's worth) have been owned by the management. If they are not prepared to lead by example then why should anyone follow.

This looks to be highly illegal and is obviously a last ditch desperate measure to try and extort money from the warrants holders.

These incentive warrants have only been on offer since 22cnd July - so only for the last 3 months - and all Covid restrictions were dropped before that time so the management here are talking a load of bunkum. Such illegal actions should not be allowed. And if the warrant holders haven't exercised their incentive warrants yet, why should they do so now during this pathetic two week extension.

Obviously they do not have a JV on the horizon or else why would they bother.

Finally the figures still do not add up. The original placing of £5.02M ($6.92M) was explicitly for pre drill expenses. If every single warrant was to be exercised - which is unlikely, that would only bring in another £5.02M, which is woefully short of the nearly $20M drill and test projected costs. To get to that figure these same warrant holders will have to exercise their bonus 12p warrants as well as the bonus 18p warrants.

Good luck to them, especially as this drill has only got a 40% COS.

Also from RNS dated 2cnd September 2021:

"The Company had previously been quoted US$18.5 million to drill the Jade well with testing of any oil column to be in addition to this amount. Following the well engineering and design work completed with AGR, the Company has been working diligently with COSL towards securing a rig and finalising costs for the well. To this end, the parties have reached agreement on a substantially reduced turnkey quote for the drilling of the Jade Prospect of US$12.3 million on a dry hole basis, an approximate 34% saving on the initial quote. On a success basis, testing of any oil column has been quoted at US$7.4 million.

The substantially reduced drilling contract quote has been reached without compromising the well design, safety or operational efficiency of the proposed well.

The Company is making good progress on other drill preparations including preparation of the Drilling Program, Geological Program, Well Site Survey and various pre-drilling permits.

The Company announced on 9 July 2021 that it had raised gross proceeds of £5.02 million (US$6.92 million) through an equity placing and that the net proceeds would be used to secure a suitable drilling rig and order long lead items, as well as for the Company's general working capital requirements. The Company will require further funding, via a joint venture, exercise of warrants or from an equity raising in order to enable it to undertake the drilling of the Jade Prospect."

Note the last sentence:
" The Company will require further funding, via a joint venture, exercise of warrants or from an equity raising in order to enable it to undertake the drilling of the Jade Prospect."

The warrants don't look like they are going to raise much, there has been little talk of any JV on the horizon, so it looks like it's back to the shareholders for the drill and testing costs.

Wow, another £66,000 raised from the 12p warrants towards the outstanding drill costs.

According to the RNS dated 2/9/21 this was previously $18.5M but on the award of the drill contract to COSL there is now a "significantly reduced drilling cost estimate of US$12.3m, plus a success-based testing cost estimate of US$7.4m"

Maybe a look at the small print relating to these 12p warrants is a good idea.
From RND dated 9th July 2021:

"Subscribers to the Placing will also receive 1 warrant exercisable at 12p each for every 2 New Ordinary Shares subscribed (the "Placing Warrants"). The Placing Warrants have a 12-month term from the date of issue. Further, if the Placing Warrants are exercised within 3 months Subscribers will receive a replacement incentive warrant expiring 15 months from the Placement settlement date with an exercise price of 12p (the "Substitute Warrants") plus a bonus warrant expiring 24 months from the Placement settlement date with an exercise price of 18p. (the "Bonus Warrants" and, together with the Placing Warrants and the Substitute Warrants, the "Warrants"). The Placing and the issue of the Warrants is being completed under the Company's existing authorities and is not subject to the approval of shareholders."

The share were issued on 22cnd July 2021 so the incentive warrants will expire 3 months from that date, which is this Friday. Without these incentive warrants any attraction to exercise these 12p warrants will quickly disappear.

As the initial placing was only for £5.02M($6.92M) and some of this will have been spent on several months general running costs plus the cost of the recently announced but not completed yet Well Site Survey then there is a huge shortfall on drilling funds. The incentive warrants have in the meantime raised only a meagre £250,000 out of a possible £5.02M.

Placing maybe? The last one was at a 29.4% discount to the then share price. Work that one out!

While some may think or post that they can just extend the incentive warrant period I do not think will be possible or even allowed. And what is still available under the existing authority for the issue of shares? Will shareholder approval be required?

Fair enough, Orchy.

I only brought this up as I feel that a back in agreement is going to be a disadvantage in EME finding a partner.

Back on the subject of funding, I do not think that EME are going to raise the required drill costs from the warrants.

I have held shares in several companies that have done well from warrants, POW being a recent example. Huge amounts of warrants have been exercised and this has provided much extra cash but it was noticeable that the warrants - priced at 0.07p and 1p - were only exercised when the shareprice was between 2p and 3p.

For these 12p warrants to be cashed in large enough quantities the share price would have to be much higher than 12p and probably nearer 24p or more.

With some of the last placing cash going towards the Well Site Survey, EME still need to find a considerable amount of funds. Bearing in mind that this drill only has a 40% COS any institutions participating in a placing will probably want to a chance to derisk before spudding because otherwise if this isn't successful they would stand to lose a large part of their investment.

With such a big drill EME need to make some decisions fast.

What was previously BPC - Bahamas Petroleum Corp - recently approached their big drill with inadequate funding and it was a bit of a fiasco, not made any better by the drill being a complete duster. Even with a 40% COS this is not certain to hit the jackpot.

No, Orchy, I think that you will find that CNOOC have a free carry up to the declaration of a commercial discovery, at which point they have a back in right which if optioned will see them pay 51% of development and production costs.

From RNS dated 30th May 2017:

"Empyrean has a 100% working interest in this asset, during the exploration phase, with the China National Offshore Oil Corporation ("CNOOC") having a back in right of 51% in the event of a commercial discovery."

Also this link explains how a back in right works:

https://content.next.westlaw.com/Glossary/PracticalLaw/Ic5f5ef3619ee11e9a5b3e3d9e23d7429?transitionType=Default&contextData=(sc.Default)&firstPage=true

with the relevant part being:

"The state maintains a comparatively high level of control under a PSC. It often has "back-in rights", so that it can pay to participate in the development and production phases, obtaining a working interest in the project."

So this is not a very attractive proposition for a farm-in partner as EME only really hold 49% of any discovery.

This looks like a pump with a minimum of warrants being cashed and these are mainly by the directors with the objective of getting off a heavily discounted placing to cover the drill costs.

Fine. Dream on.

From the drill contract RNS:

"The Company will require further funding, via a joint venture, exercise of warrants or from an equity raising in order to enable it to undertake the drilling of the Jade Prospect."

Fine. If they announce a joint venture then that will solve the costing problem but they have not announced one yet. One of the major problems is that the Chinese have a free back-in agreement:

"Empyrean has a 100% working interest in Block 29/11 during the Geophysical Survey Agreement period. Once the Company has signed a Production Sharing Contract ("PSC") with CNOOC, CNOOC will have a back-in right to a 51% interest in the licence in the event of a commercial discovery."

The agreement I believe is that EME pay for all the costs up to the point of a commercial discovery, at which point CNOOC have a back-in right for a 51% holding which will cost them nothing. That is not a very attractive proposition for a joint venture partner and probably why they haven't found one before.

The warrants have brought in £186,000 so far so dream on.

That leaves a placing, so EME should do that as it is probably the only option.

AJMO

to continue

No figures have been given for the Well Site Survey that is due to commence in late October but no doubt the cost will probably run into a million $'s or more.

The warrants, meanwhile, have raised £21,000 today!!!!!!!!!!!!!!!!!

Better they do a placing to raise the shortfall in drill costs. Unfortunately their recent placing history doesn't look too good:

"Reporting period
· Subscription to raise US$0.509 million (£0.411 million) completed in April 2020;
Open Offer raised US$0.511 million (£0.415 million) in May 2020; and
· Placements to raise US$1.074 million (£0.845 million) completed in September 2020.
Post-Reporting period
· Placements to raise US$6.92 million (£5.02 million) for China drill preparation activities completed in July 2021."

3 placings to raise sub £1M plus the larger one at a 29% discount.

Still, the preferred option would be to raise the rest of the drill costs with a placing. With only 574 million shares in issue the dilution will not be crippling and will probably give less than a 33% dilution even at a heavily discounted SP.

For share holders and placees this will be the best option. The share price will be able to rise pre-drill and will give II's a chance to derisk before the drill and PI's a chance to make a quick profit from the placing price.

Drill planned for mid-December 2021.

Projected drill costs with contract already awarded are:

"COSL proposal includes a significantly reduced drilling cost estimate of US$12.3m (previous estimate US$18.5m), plus a success-based testing cost estimate of US$7.4m" - so USD19.7 for drill and test.

"The Company announced on 9 July 2021 that it had raised gross proceeds of £5.02 million (US$6.92 million) through an equity placing and that the net proceeds would be used to secure a suitable drilling rig and order long lead items, as well as for the Company's general working capital requirements. The Company will require further funding, via a joint venture, exercise of warrants or from an equity raising in order to enable it to undertake the drilling of the Jade Prospect."

No figures have been given for the Well Site Survey that is due to commence in late

There are some very big dreamers posting here at the moment.

I don't know the exact figures but the shortfall of drill costs is somewhere around £10M and today's warrants have brought in £21,000!!!!!!!

The grand total from 12p warrants so far is only £186,000 and the bulk of that has come from the directors.

With drilling still planned for prior year end it is obvious that these warrants are not going to raise the required drill costs.

Nevermind, they can always do another placing. The last one for £5.02M was done when the share price was much the same as now though had to be done at a 29% discount to the SP. Post placing the share price sunk to 5.5p!!!!!

£21,000 indeed - that isn't even fantasy land, it just bonkers.

AJMOO

Steve4077

From RNS dated 1st June 2020
"Anglo Buy-back option

Under the terms the Bushranger Acquisition agreement, if a deposit of greater than 2 million tons of contained Cu equivalent (e.g. 450Mt @ 0.45% Cu equivalent) is ultimately identified, Anglo may buy-back 80% of the Racecourse deposit at fair market value as determined by an Independent Expert in accordance with the JORC and Valmin Code.;

so if the 2 million tons + is hit then XTR will then have a 20% share of the in-ground resource (and not 80%), plus the cash that AAL have to pay XTR to buy back in.

Your in-ground figures should all be in US$, so as of today GGP - 4.2M OZ gold equivalent X $1800 = $7.560B and XTR - 2M tons contained copper X $9600 = $19,200B.

Considering that Newcrest only paid GGP $65USD for their right to acquire 75% of the Haveiron prospect, then XTR look to be sitting on a much better prospect, providing that they can JORC up the required 2 million ton resource.

This is 100% all about the 2 million tons. There is no reason or point in even dreaming about finding a bigger asset than that as far as the share price and m/cap is concerned. That will be the peak.

"I'm pleased to hear you are not a troll. But you do seem to be impatient, a possible desire to get the 2Mt, grab the money and move on. Patience will allow that purse to grow bigger."

"a possible desire to get the 2Mt, grab the money and move on" - that, believe it or not, is just what I want to do.

And looking at the share price and m/cap of Greatland Gold that is quite the best way to play it. GGP was 30p+ and as high as 36p on the release of the maiden mineral resource estimate and now is half that, even after the release of a positive Feasibility Study.

And this target asset has an in-ground value of more than 2 times the GGP maiden resource estimate, so the sooner they can find and prove the 2 million tons the better.

And as for proving up an asset of more than the 2 million tons - I would imagine that would be a total waste of time and not increase the share price or m/cap by even 1 cent.

Any posts defending the questionable rate of progress and the depressed share price gets 5 or even 10 recommends.

And still no one has answered my simple question:

Is Phase 2 drilling going to give an increased JORC and, if so, is the target the full 2 million tons or is that going to need Phase 3 (and 4 or more)?

I've been through a few of these before.

No Cygnus7, I just want a share price that shows some life.

Bird keeps droning on about how exciting this all is but that certainly isn't reflected in the share price which is lagging around the 4.5p/5p level.

There's no saying now whether the share price is going to continue its very slow climb or fall back to sub 5p.

Yawn, yawn, yawn.

Besides all of the posts these days are about reaching a 4 Million ton target or a 1 Billion ton target.

We don't even need that. The buyback in clause is for a 2 million ton resource. That is all this needs to be doing.

If they were getting on with it fast enough then the shareprice would be higher than the placing to fund Phase 2 drilling.

If someone can please answer my original question (repeated below) I would much appreciate it - instead of wanting to pick an argument with my opinions.

Are we going to get an upgrade to the existing JORC as a result of Phase 2 drilling or not? If so are we looking at the 2 million ton target or will it be a smaller interim resource estimate?

Hi,
Can anyone who is following this closely tell me if Phase 2 drilling is going to be sufficient to come up with a JORC, or is that going to need further drilling.

Also, if this will lead to an upgrade to the existing JORC, will it be the 2 million tons target or is that going to need more drilling anyway.

Cheers in advance of a response.

On the subject of progress, the share price during Phase i drilling reached a high of 8p/9p. The placing for Phase 2 drilling was at 5.5p. The current SP is 5p - so something is just not happening here.

Mr Bird appears to spend far too much of his time talking on presentation and suchlike and nowhere near enough getting on with the job of proving up this asset.