Member Info for Boffin

To me it makes sense to use a relatively quick and simple test like metal detection to do an initial selection of "high interest" sample bags. These though need to examined carefully in several stages to answer what is a simple question. How much gold is present as nuggets and how much is present as very fine particles. If its virtually all in nuggets in all cases then there will be little to be gained from detailed examination of all other bags with no metal detecting signal as they probably have little gold. You would probably check a further small sample of them just to be sure that we don't for example have mostly nuggets down one hole and fine gold down another.

If however there is a more even split between nuggety and fine gold in the top priority bags then quite a few other bags will be needed to be checked as the pattern of gold concentration could be quite complex. We would really need to get some good info on how much is where in the ore body so as to minimise wasted second stage drilling. That could take quite some time, it's quite a lot of work.

Where you potentially have a wide range of particle sizes in a set of samples it poses some difficult questions about the best way to extract the most information from the samples you have. And with the quite large number of sample bags they have then the more detail you want the more time consuming and expensive the analysis becomes. For example they have 640 bags from 17 holes ie roughly 28 bags per hole ( it actually may vary widely). They could combine all the bags from a hole and just assay that. That is at least a circa 900kg sample which is at least a bit closer to the 5000kg that is the norm for ore which is significantly nuggety. Then though you lose any detail of how much gold is present at various depths and potentially also info on the shape and thus size of the ore body..It begs the question as to the best trade offs between quality of info vs speed vs cost.

Personally I'm quite encouraged that they are taking expert advice to draw up a well prioritised plan to get the maximum information as fast and as cheaply as they can leaving it open to gather other information later on. Thinking before you act is absolutely the best thing to do in situations like this

What I would like to have heard though is their initial thoughts and planning preparations for a subsequent drilling / sampling program to get ore body data that complies with JORC requirements.In my view thats the sort of info needed to drive the SP.

When the price is moving the allocation of whether the deal was a buy or sell becomes even more worthless than it is in more balanced times.

This is because the buy/sell allocation by a crude algorithm is made at the point the deal is reported which is not necessarily the same time as the deal was actually done. A time gap is often the case if the deal is relatively large. Take for instance the 1.75M "sell" shown a little while ago. If that deal was actually done 3 hours earlier and had been reported immediately it would have been reported as a "buy", which is quite possibly what it was.

The only real indicator that something is going on is the SP AND the total volume of trades being done. If the latter is significantly above normal daily traded volume and the price is moving one way or the other its always a reliable sign of a market trend. Just relying on reported sell vs buys being reported is may I suggest not wise.

Unfortunately its a bit more complicated than that. First the sample has to be carefully crushed or even milled. Then its put through a centrifugal concentrator such as this

https://www.911metallurgist.com/equipment/laboratory-falcon-concentrator/

https://www.youtube.com/watch?v=gGoOiB0PZ-4

Then dry the residue and fire assay because the resdidue isn't pure gold.

Not hugely complicated by lab standards but it takes time and you have to clean down carefully between each sample so as to ensure no losses or cross contamination.

And of course the labs may well have work for other customers booked in before ECR's can be started. Of course I don't really know the situation but personally not expecting results imminently but we could get lucky

Well you can sit and hope so but I see little value left here for shareholders. Orion as the senior lender will claim all cash proceeds from whatever the "fire sale" thats just been announced can raise. And I doubt that it will be enough to pay all of the debt due to Orion. And the assets are? A pit that has just been announced to have a LOM of 2 years rather than 11 Non operating mines "central ops" worth who knows what , but not a lot in a fire sale Berg Aukas where the revised pfs just announced gives an NPV of $74m which again they won't get in a fire sale. Its your money of course but I have taken what I could get as sorting this out could take forever with, in my personal view, little prospect of anything left for pi's at the end of it.

Question. Is anyone going to pay in excess of circa $120m for this? Because Orion will claim all of the money up to that point to repay debt. The rest of the shareholders will divide anything left over that between them.

And I really don't like the sound of this At current copper prices, the bulk of the remaining economic value of the Tschudi project is contained within Pit 5 due to relatively high strip ratios and generally lower grades in the pit pushbacks that make up the rest of the current reserve. Mining and stacking of the current Pit 5 will be largely complete by the middle of calendar year 2020. A modified design for Pit 5 is being examined which may extend this to the end of 2020. As more information is gained on the additional groundwater inflow rates into the expanded pit, it may prove to be the case that the cost of pumping the increasing volumes of groundwater increases to such a degree that much, or possibly even all, of the ore beyond Pit 5 cannot be economically mined and processed at current copper prices. It sounds to me that the LOM may be much reduced because of water flows. It could be the end of Tschudi as we know it.

Ci costs of $5600 per tonne , blamed on FX but in reality the FX rate is still better than used in the BFS. I knew this Q wouldn't be good but this is worse than that! TD2 was right that they may sell Central Ops, but they may sell the whole of WTI too! This is not good news and no wonder Craig resigned. Berg Aukas is the only bright spot but how are they going to fund that? Houston, we have a problem!

TD" I don't quite follow the examples you give. The last two show the Tsumeb smelter owned by Dundee precious metals. It has nothing to do with the Otjihase concentrator which is a couple of hundred kilometers away near Windhoek. And yes we know there were H&S issues when the Central Ops mines operations were contracted out. Thats why the current plan according to the presentations on the website emphasised the care that has been put in to train people appropriately before restarting the mines and also to better ensure the mine is adequately dewatered. I know this doesn't rule out the assets being disposed of but that doesn't come across in the presentation as being the objective. It looks rather the opposite and indeed they may get far more for it if they showed it could be operated profitably. The other option to my mind is the fact that part of the concentrator plant was suitable for zinc ore processing but at the time of mothballing hadn't been fully refurbished. It may be that they will wait until Berg Aukas is up and running again so they get enough ore to keep it operating 24/7.

Well the BOD made quite a paly on the Otjihase and other Central Ops properties in the presentation released early last August. To me it seemed obvious to get it going reasonably promptly. However since then if anything it has been rather downplayed but the BOD haven't put forward any coherent information as to why this is. I presume there are reasons, they just aren't being shared with us. Personally I'm not impressed with their handling of this.

Funds A couple of examples of the "noises" http://www.engineeringnews.co.za/article/mining-in-sub-saharan-africa-region-to-remain-riskiest-globally-bmi-2018-04-11 http://www.mining.com/investment-africas-mining-sector-rise-bmi/ Not always entirely bad news but it does alter the economics and the general sense of "what will they want next?" that is making investors nervous Re Kitumba though I was wondering what the situation would be if WTI were to acquire the whole Intrepid? I'm not familiar with the legal niceties but from a Zambian perspective there would be no change of direct ownership as Intrepid Zambia would remain an Intrepid subsidiary. Without a Kitumba deal Intrepid has no active projects and very little cash. Their strategy was, with the cash from Kitumba, to essentially be an investment shell looking for one or two projects to invest in. Now they have nothing so may be inclined to take whatever they can get from WTI/Orion as a total takeover. No idea if this is really the thinking, just my musings.

I went back through Intrepid Mines announcements re Kitumba and found the following release from April 4th https://www.intelligentinvestor.com.au/company/intrepid-mines-IAU-11882/announcements It won't allow cut and paste but essentially it says that Intrepid have been unable to get consent from the Zambian Ministry of Mines for change of control of the Intrepid Zambian entity to WTI. This is a facet of what I suggested yesterday. Zambia are making noises about a fundamental change to the ground rules on mining licences and tax. This may be giving WTI and Orion second thoughts on what Kitumba may finally be worth and thus what its worth today. The missing consent gave them a cheap way out and/or a lever re price to be paid up front.

It's clearly something that Intrepid needed to provide for the deal to go through and they failed to do it. At least to the satisfaction of the WTI side. The interesting question is where does this leave Intrepid now? They are essentially bust and with no-one wanting the Kitumba "asset". Perhaps WTI/Orion think the whole thing could be had even cheaper? Or perhaps its the new political climate and tax proposals that the Zambian authorities have put forward eg problems in transferring licences that have made it an unreasonable risk?

It's clearly something that Intrepid needed to provide for the deal to go through and they failed to do it. At least to the satisfaction of the WTI side. The interesting question is where does this leave Intrepid now? They are essentially bust and with no-one wanting the Kitumba "asset". Perhaps WTI/Orion think the whole thing could be had even cheaper? Or perhaps its the new political climate and tax proposals that the Zambian authorities have put forward eg problems in transferring licences that have made it an unreasonable risk?

Hedges have been announced in various RNS statements issued during the past nine months or so. I have ignored those that have expired but the following lists my current understanding of those remaining referenced to the relevant RNS publication. I think its complete but as always DYOR. RNS 31 Aug 1000 tonnes per month fixed January to March at an average copper price of US$6,464 per tonne and US$ to N$ exchange rate of 13.25. RNS 30 Oct 1,000 tonnes a month fixed April to May at an average copper price of US$6,474 per tonne RNS 27 Dec 990 tonnes fixed in June at an average copper price of US$6,880 per tonne RNS 19 Jan In addition to hedges previously announced, Weatherly has 990 tonnes fixed in July at an average copper price of US$7,171 per tonne

Certainly the open pit is easily the largest of three mining operations at Grasberg (with a 4th under development) and probably has the lowest cost. The total Cu output of Grasberg in 2016 was around 482,000 tonnes of Cu of which over 50% came from the open pit but this has been steadily declining for some years. My best guess is that they will lose something like 250k tonnes of Cu ( circa 1% of global production) when it closes next year. Its not entirely unexpected but certainly adds to the mid term hiatus in supply that most commentators think is coming

My own view and expeience in matters like these is that if it was Orion who wanted him gone then he would have gone immediately and the new person they would have already lined up would have been installed immediately. There is no way that a CEO who isn't wanted would be left in place for months with all the negative vibes that would inevitably impact all levels being allowed to fester. As for the Q results I really don't know. Actual sales revenue per tonne should have increased because the lowest level fixes expired at the end of Dec. However if volumes are down a bit plus the adverse moves in the FX since mid Nov together could result in a significant increase in C1 costs for the period, negating at least some of the benefits of higher realised prices. For me the numerous variables make it too difficult to call one way or the other

PadayachiS I think you will find that unfortunately that is the rate against the �. The US$ rate is 12.08. But dreams are free!

Whilst I'm sure Orion will negotiate hard ( and I certainly don't blame them for that) they do have to be careful.Even though they currently do not have a board position ( to avoid direct conflict of interest in debt negotiations) they still will be regarded as a "related party" because of their dominant shareholding as well as the major creditor. If they were to be seen to be unreasonably pursuing their own interests to the substantial relative disadvantage of other shareholders they could well be challenged. Plus it probably wouldn't help them attract future clients if they are seen to be " gratuitously opportunistic" in their handling of client problems. And lending is after all their primary business.

business section begins "A blizzard of weak economic data from across the world has begun to infect global confidence, indicating that surging loan costs and monetary tightening by major central banks are inflicting damage." Perhaps not so encouraging for manufacturing activity and thus Cu prices over the next year or two but could well swing the FX rates to WTI's benefit