Member Info for BigBiteNow

1/2

Morning all,

I posted this on Twitter on Friday but it is well worth sharing here.

It is the November 2023 version of the ECI for the Coringa project full license. Whilst it is in Portuguese sections can easily be translated via google translate in order to understand the extent of the issues highlighted by both Serabi but also the indigenous population.

The conclusions page (295) is particularly worthy of noting. The main issues are water usage/contamination, noise and influx of personnel onto or near indigenous lands.

Key points to understand here. The Bau indigenous land boundary sits 11.7km from the mine site. Normally this ECI environmental study process is conducted when indigenous lands sits within 10km of the proposed mine.

Furthermore, fig. 4 (page 18) shows the mine site in relation to both the Bau lands and the main highway. Figures 21 and 22 on page 28 also clearly demonstrates that the Coringa mine access road runs 100% independent to the access roads for the indigenous people.

Quote.

"After the ore is crushed and selected, it will be transported by trucks to the mine of Palito. As already mentioned, transport will take place via the Dois Coringas road to BR 163, towards Moraes Almeida. There will be no interference with access used by indigenous people, as shown in the figures below."

Note the references to crushing and transporting which tie in with the current trial license operation that has been running for over 2 years now. During which time all stakeholders have seen fit to sign off on another 3-year trial license. Supporting the belief that such an operation is of no concern or impact to the indigenous lands or their people.

In addition, there are details on the regular sampling that has been taking place in the river and at the inlets to the indigenous lands. No issues have been found with contamination.

Water usage under the current set up is also minimal because all processing is carried out at Palito. Also, blasting at Coringa has been measured and proven not to be heard in the Bau villages. This is understandable given the fact that the border is 11.7km away and the villages lie even further away than this.

The last two outstanding concerns of the indigenous people laid out in the conclusions were around a new village of two families and the " failure to carry out the ECI in the Menkrãgnoti TI" people.

These we can assume were part of the final update to the ECI which was issued on 8th February 2024. It is not difficult to conclude that the new village would have the same minimal impact that the others have been proven to have. Whilst the Menkrãgnoti TI live more than 70km" from the mine site which is way beyond what the law calls for on ECIs (10km max).

https://ox.socioambiental.org/sites/default/files/ficha-tecnica/node/219/edit/2024-03/2023-11-25_Anexo%20I%20-%20ECI%20PBA%20CORINGA%20TERESA_ultima%20versao05012.pdf

Read this and then perhaps this nonsense around yesterday's RNS will be put to bed.

The wording is a repeat of what was said by the same Chairman in the Annual Report. No more no less.

https://x.com/BigBiteNow/status/1790698269024166041

Here are my thoughts and analysis on today's nonsense.

https://x.com/BigBiteNow/status/1790382911947936149

I would need to look closer at the Ondine data but I know it's not approved yet in the US because it also hasn't yet commenced phase 3.

In addition, a successful product does not remove the market for other follow-on ones. There are many factors that decide market share including price, effectiveness etc.

I will rephrase that. Where is my added risk compared to late last year given the cash run that is still available?

This share price almost completely discounts the Sebela deal and traded as high as 84p based on the assumption the XF-73 nasal licensing deal would land soon.

If it does land then it'll go there and then some again. Making this a fabulous risk-reward set-up from here given the fact the company has no creditors and has the Sebela deal (plus Destiny platform) as a valuation leverage.

As far as I can see all we have lost so far is time but in that time we have gained a faster lower-cost phase 3 design with a more assured market realisation that plays to its clear market advantages (MRSA). More importantly, we have two products that now align with the current CEO's thinking and approach.

In hindsight, this process was always likely going to happen given his experience vs. the fledgling stage of this business.

He was incredibly professional in that presentation and very assured of where this is likely all heading. But as I say with the Sebela deal as back up where is my true risk here? Happy to hear view points.

4/4

In all of this, it is very easy to forget that DEST already has a $570m licensing deal with Sebela who whatever happens will carry DEST through a revised phase 2 study, plus phase 3 and pay them $19m along the way. After that and assuming success DEST can access the other $550m + royalties.

Additionally, with a cool head and a thorough watch of this presentation it is clear that Mr Tovey has now stamped his mark on the Destiny platform and two lead products. There were clearly holes in the Sebela deal around formulation and contract manufacturing. With XF-73 the market looks to have changed and potential partners clearly want more for less.

Mr Tovey and his team have spent many months delivering on that and have answered the queries set. By doing so they have reduced the risk of the phase 3 trial even further and compounded the business cased for XF-73. In time I expect more investors will grasp this and the share price will react accordingly.

At the current 15p a share the entire Destiny platform is being valued at (minus cash on hand) just £8m.

For a company with such a large licensing deal in place and two advanced-stage drugs that is beyond ridiculous even for this market. It becomes even more so when we consider just how good XF-73 nasal now is post this updated design. Such that a partner or an alternative path through phase 3 is highly likely going to be found.

I bought some stock back at 15p for a trade but now I am going to keep them and have even added at slightly higher levels. I will continue to add on any weakness because at these levels the Sebela deal (for a company with zero debt on its books) alone supports a far higher share price. But if/when they land the XF-73 deal later this year then (dependent on the deal structure) this is worth many multiples of its current valuation and that can be stated even if they have to complete a working capital raise at some point over the next 12 months.

3/4

They have achieved FDA QIDP status "which means FDA makes their decision in 6 months rather than a year."

This has "allowed us close engagement with the FDA" which has allowed "a new endpoint for our phase 3 studies which has really enabled us to shrink the patient numbers and therefore shrink the costs." hence why its 1,000 patients now and not 2,500.

All of that combined creates an "incredibly compelling" licensing deal and answers the questions set by potential partners in the first round of discussions.

Moving forwards.

"Already preparing to go back to those potential partners we've met already with whom we only got a certain way through the process of developing them as actual partners." So the discussions start up again almost immediately and DEST has the cash and so a decent amount of time to get a deal over the line.

Now let's cover that strategic review.

Post the above adjustments to the XF-73 phase 3 design DEST stated "We are now in a very strong place."

"We're not prepared to just rely on one approach to get XF-73 nasal into phase 3. It is too important a programme and the BOD has directed management to explore and evaluate a range of strategic options to further progress the programme and that is really about enabling us to maximise the value from XF-73."

"That is really about enabling us to maximise the value from XF-73 nasal. So the prime plan is still about developing a license partner who will fund the phase 3 but looking at other options to ensure that we do realise the genuine value that XF-83 nasal has got."

So plan A remains the licensing partner for the right deal and those discussions will begin almost immediately but with a much stronger, more cost-effective and clearly compelling drug and path to market.

In parallel to this DEST is reviewing its options and in my view, this is being driven by the new BODs (and in particular Mr Tovey) desire to,

a) spread the risk of a deal being closed out this year.

b) retain more of the final value of XF-73.

But I also believe the revised phase 3 design and the reduction of the cost by over half has opened up alternative partnering options. Be they strategic investment in DEST or a partial buyout of XF-73 nasal I don't know but what I a clear on is that the decision is based on DEST holding a heavily de-risked phase 3 programme for XF-73 and the significant potential reduction in cost to get it through this study and that is what is most important here.

The market is determined to see it otherwise led by poor sentiment around junior pharma companies. I too still question their ability to secure "non-dilutive" funding but at the same time a partial sale of XF-73 would answer that.

2/4

US peak sales could range from c. $540m - $1BN depending on pricing but the figures used to date remain "relatively conservative" both in pricing and market share.

"To get a premium price you need to make sure you have MRSA in the label." So this programme will now deliver a label in addition to the broad indication that calls out MRSA."

"We have treated every MRSA that we have ever encountered with 100% success."

"You can generally predict at an early stage whether your drug is going to succeed in phase 3 or not."

"We have demonstrated in phase 2 that we kill the bacteria and that we can get the drug to the right place to do that. The thing that usually derails antibiotics in phase 3 development is that side effects that haven't been anticipated turn up in phase 3. There are issues with liver. There are issues with kidneys because the drug travels around the body and you only see these things when you look at large patients numbers."

"That is simply not an issue here. In all the studies we have done and we've got recent studies as well with the dermal formulation where we put XF-73 onto (she stifles a laugh at this point because it is so ridiculously good) open wounds in animal studies and it still barely got absorbed into the patients. So there is a very very small chance of systemic side effects which really does increase our chances of success and de-risks the phase 3 studies."

"We have regulatory confidence. We've been in close discussion with the FDA."

Need to now get the final protocols signed off by the FDA before starting phase 3 but have a "high degree of confidence because it is building on previous discussions." "Not pulling something out of the hat that the FDA hasn't seen before and it's based on phase 2 data."

So far we have a drug that is head and shoulders above the existing competition. A requirement to kill MSRA to be more marketable and push higher peak sales. To date, XF-73 nasal does that 100% of the time. We have low-risk phase 3 failure due to this drug not being absorbed by the body and despite every effort zero resistance from the bacteria meaning it is highly effective increasing the chances of a large market share. Finally, we have evidence of front-end ongoing discussions with the FDA and other health authorities based on existing phase 2 results which lower the risk of the protocols being rejected.

The feedback from potential partners said this.

"We really like your drug but can you bring it to market more quickly, more cheaply and with fewer patients."

So what DEST has done these last months is reduce the phase 3 study down from some 2,500 patients to 1,000 which more than halves the cost of each of the two studies required to $10m each.

Carried out marketing research to include the above MRSA label which allows a premium price to be charged making XF-73 nasal a $540m - $1BN peak sales drug.

1/4

I am going to park this set of notes and quotes here because pulling the lengthier quotes together on Twitter loses their impact.

Having had a substantial holding in DEST which I sold for a loss I was immediately negative towards the wording of the front section of yesterday's RNS and demonstrated so through my remarks at the time. But I was wrong and the presentation told me why.

Care for their share price doesn't seem to be top of this BOD's agenda. Some may read that as callous or complacent. Others like myself may see it as confidence and a desire to focus on the job at hand. In the end, it doesn't truly matter if the result is positive and doesn't rely too heavily on the current valuation.

The task at hand for DEST is to extract the most value out of XF-73 whilst supporting Sebela through its shorter repeat phase 2 programme due to the change in formulation requested by practitioners in the field.

Now the general reaction so far to the update was to focus upon the strategic review assuming it is an act of weakness led by a failure to secure a licensing partner for XF-73 nasal But the presentation and quotes therein do not support that argument.

What is clear is that XF-73 nasal is extremely effective at killing bacteria associated with MRSA.

It has compelling differentiation "when compared to off-label use of Mupirocin."

"To have this much differentiation against a single competitor as you go into the commercial world is a great place to start."

"We have not seen any resistance build up and we have been testing and trying to produce resistance and haven't managed to do it yet."

"XF-73 is the first antibiotic in a new class of antibiotics."

There is no resistance to it. "This is not a 6th generation" product "which will be held in reserve by doctors because they are scared to use it because the bacteria has seen it before and resistance is just around the corner."

"Being first in a new class means that we have a very strong profile with respect to resistance."

Phase 2b results to date demonstrate that because it is designed for nasal use it is "a very very well tolerated drug and importantly doesn't get into the body. So there are no systemic side effects to be expected with this drug. Which is a huge advantage when you are thinking about the probability of success for a phase 3 development programme."

"Most antibiotics that fail in phase 3 fail because of systemic safety issues. That's not an issue for us because we don't have any systemic vulnerability. The drug cannot get into the body. So it can't cause problems in the liver or the kidneys which is a huge reassuring factor for us in terms of predicting success of our phase 3 studies."

Thanks, Thebold appreciate your input.

With the Shell drill looking like it'll be completed by mid-June, there looks to be plenty of time to complete all those items and still commence during July. But my main point was to demonstrate that first and foremost Q3 not only looks very much on (so no delays) but also that early Q3 is most likely.

The Shell drill began on w/c 8th April so at the same drill duration as their first well (c. 2 months), it would be completed by mid-June.

I estimate c.20 days sailing from the North East El-Amriya block to Anchois.

Looking at the latest information about Shell's offshore Egypt campaign the Stena Forth could be on-site at Anchois as early as July.

With on shore likely gearing up next week it is set to be a busy few months for CHAR.

https://x.com/BigBiteNow/status/1782370323284836570

Serabi closed at $1.44 on TSX yesterday equivalent to 84p a share. Up c. 33% on the day. Low volume but 150% higher than the daily average seen there. It will be interesting to see if it holds but it's a sizeable difference right now.

Perhaps they get how good yesterday's update was more than UK investors currently do.

Please bear in mind austrochris that in today's Crux interview the CEO indicated that they were looking to potentially bring forward plans for a ball mill installation at Palito. Currently scheduled for 2027 (which was news to me).

This could potentially increase production to 70 Koz in 2026 rather than the current 60 Koz. This still needs to be proven but high gold prices drive better options for producers who are in the expansion phase.

That aside today's update majorly de-risks the plans associated with getting to 60 Koz with a strong belief from management that close to 50 Koz will be hit in 2025.

Cash levels are proving strong enough to feed both the expansion at Coringa and exploration at Sao Domingos where in 2021 Serabi returned 7.15 metres at 258.24 g/t. It was one of the top 10 gold intercepts for a TSX-listed company that year. Since then exploration has gone dead because Serabi had no spare funds. So the fact they are returning there whilst also building out Coringa is significant. It says cash flows are strong. What it also indicates is that exploration news will ramp up which could be a strong additional SP driver.

The ore sorter clearing customs quickly should also not be overlooked. Brazil can be difficult on this front. It means the build-out at Coringa now sits entirely with Serabi. Hence why the end of Q3 is being earmarked for ramp-up.

So funding and equipment both de-risked.

Coringa mine development is next. Strong progress on that front means more confidence in forward production plans = more confidence in guidance for both 2024 and 2025.

USD/BRL is also favourable driving down costs and raising margins at just the right time.

Then think about just how large a stockpile of material must already be sitting at Coringa following 2 years of selective grade transport to Palito due to the 50,000-ton trial license transportation limit.

£44m enterprise value for a company with little or no debt that currently requires no further debt to reach 60,000 oz production and post today's update is much closer to achieving its initial growth goals than the valuation currently allows for. If they push to 70 Koz all the better, If they hit big on exploration it's a bonus. As is the signing up a large gold producer as partner to reall push exploration but it may end up being the beginning of the end. be it the SP should have a good run before it comes.

Strong hold for me this one.

If SDX do have the rig then as a frame of reference they took 24 days to drill KSIRI-21 which had a depth of 1,955 metres.

Today's spud is for a well that is said to be 1,450 metres deep. On a like for like basis that would be around 18 days give or take.

Sound Energy presentation from 14th Feb (4mins 30s) stated that they were expecting the Star Valley 101 rig (which since yesterday I have seen in the 29th Jan update was contracted by CHAR for their wells) "towards the end of March."

They are using it for chrome pipe installations on two existing discoveries that are being prepared for production. So not a drill. Exact timings is anyone's guess but indicates shorter timeframes. The wording of the CHAR tweet today strongly indicates that Sound already have the rig. Otherwise, they couldn't say they were next in the rig schedule. So depending on how long Sound have had it or needs it the rig mobilisation could come any day from here.

https://x.com/BigBiteNow/status/1775428781853069360?s=20

That is one solution onsolidground but is that your guesswork or is it more informed?

In very simple terms Chariot is planning 2 wells. One is ready to be drilled and the other is not far behind. Comparable drills by SDX in Morroco indicate that each one would take roughly 28 days from spud + transport and set-up time. So if CHAR are to employ said rig 101 then it likely would mean up to c. 2.5 months of continuous work. That takes them beyond the current Predator contract extension period.

I do also note that Predator has yet to announce regulatory approval for MOU-5.

Finally, CHAR said this in their 7th March on-shore webinar,

"Drilling to commence shortly."

So it looks like there is a plan in place.

Hi Bridgedogg1,

If indeed CHAR is/was planning to use that Star Valley rig then it's worth noting that the predator RNS on the extension of the rig's contract came out on the same day as CHAR updated on the EIA. In that update CHAR stated,

"We are on track for commencement of operations around the end of Q1 2024."

The Predator negotiations will have commenced sometime before the actual agreement was finalised wth Star Valley. Meaning Star Valley would surely have kept CHAR informed as to the possibility that said rig might not be available. Leading to alternative options being sought. This is further supported by the Predator Oil RNS of 12th Jan in which they state,

"Well planning for discretionary high impact Jurassic well commenced for April/May drilling." This being the play that rig 101 was subsequently contracted for and was announced on 5th Feb.

Whilst we cannot discount poor planning or poor communication the percentages say Star Valley and likely CHAR (if that rig is indeed relevant) both knew of Predator's plans before CHAR released that 5th Feb RNS. So the fact they still stated around the end of Q1 indicates strongly that they have a plan which doe not involve that rig.

I have done some digging around the Morrocan market. Star Valley count it as one of two main international markets but doesn't declare how many of their fleet are based there. Other firms may well exist also.

I just heard the news about PdUB and so felt compelled to add my condolences to the many positive messages I am reading here today. It feels appropriate that they are shared on this BB the place where PdUB fought another relentless and unforgiving battle despite his ongoing health issues.

Such moments really should place all of what we debate and chastise each other for into true perspective.

Health, family, and love are often proclaimed as being the most important things in the world but this investing game can also make us forget ourselves and our true reasons for being. But such sad news helps demonstrate that when they are lost the anger and hate that I have seen play out at times here carries no real meaning whatsoever. But the dignity and respect with which Pdub answered time and time again does. That sticks in the mind and has an old poster like me returning to show my respect for an approach and a man that is worthy of the time.

RIP PDUB. I never agreed with all your thoughts on BMN but as far as I am concerned you were the BMN BB and one way or another it is going to be a much emptier place without you.