Member Info for CaveatEmptor

Clearly not a surprise - just makes you wonder why it didn't happen before.

With the cash saved on LR's salary, Colin should be able to find a good addition to the management team with more of a 'can do' attitude.

I would have thought that the way is now clear for closer collaboration with Jubilee Metals in Kalengwa and that can only be a good thing.

Re-rate on its way?

He did say that he had 12 months to move things forward in Oz and would not spend money he did not have - we agreed it would not be a good idea to take on too much in one go...

Yes,

Both well under way. Just dotting 'i's and crossing 't's, but the devil is in the detail so may take a few more days to complete...

I hope you are right - that would mean no more selling by KPZ for another 6 months, by which time we should have some kind of significant production ( Fair Bride/ new alluvials/ gravity-processed hard rock/copper - take your pick!) so both the SP and trading volume will have seen a dramatic increase.

Hello Jamesiecakes, i have not checked your maths, but take your word for it.

Yes - 1.8kg in the gold bank, from memory.

CB has always said, alluvial production is completely unpredictable ( I remember we got about 1.5Kg in a single day, a couple of years ago.) So short term fluctuations (both good and bad) are part and parcel of the the whole alluvial scenario and so would not be RNSable IMO, otherwise there would be a continuous flow of RNSs with good production one week and terrible the next.

That way madness lies...

It's always difficult to remember all the details of a long conversation, but I am pretty sure Explorator got around $500,000 from alluvials over the last month, with about $80,000 worth currently in the gold bank on site. so alluvial production does seem to be improving in line with predictions made following receipt of spares in mid May.

Also means our current cash position will be pretty good. Let's hope cash burn is managed so it will stay that way.

With all that is going on over the coming months , additional expertise will be required in the management team so I hope there are a few high quality applicants out there . Good management will be key, IMO, if the company is going to transform a company full of potential into one that is delivering value to the shareholders.

All to play for over the next 12 months...

Hello Andrew,

Not much air between our positions. I guess the main difference is that I believe Kalengwa has the makings of being a bit of a wild card and will impact the SP a lot sooner than you do.

Sooner or later our views look like converging at some point. We both agree the SP will eventually be many times the current level.
I hope I'm right, but if not then I am content to live with your perspective, after all - better late than never!
ATB

Incidentally, keep an eye on Kalengwa. I am almost certain that Jubilee Metals will partner us as operators and they have massive experience in maximising profit, as well as a very reassuring Market cap of £80M - certainly one of CB's companies that is at a more mature level of development - maybe even a template for XTR in three or four years time?

I am sure it depends on borders being opened.

If construction can re-commence in June or early July then production by the end of October/ early November is possible.

Of course 'possible' is not the same as ' certain' and, as Andrew keeps saying, timeframes have a habit of slipping, so not a share for the impatient investor...

However I am as certain, as anybody without full BoD knowledge can be, that the SP will re- rate this year and my personal opinion is that it will be 5-6p by the year-end.

At which point, if CB needs to raise funds to take the company to the next level, he will have my full support.

XTR really could be one of the best performers on AIM over the next 6-12 months, just as long as CB concentrates on his housekeeping and focuses on the bigger picture. Only time will tell...

Yes.
Dam contract awarded, production contract to be confirmed. Hard rock income by October, assuming borders open this month

Orherwise, your guess is as good as anybody's.

I spent half an hour in conversation with CB yesterday. We discussed my concerns in detail and Colin assured me that he has no intention to raise funds for the foreseeable future. Colin has never directly lied to me so I have no reason to doubt his word.
Apparently there are lots of bargains out there, thanks to Covid-19 so this is a good time to acquire highly prospective assets with the intention of developing them once we have significant income from Manica and Kalengwa.
The most economic way of paying for assets is with shares, based on the premise that the asset will add value to the company rather than be dilutive. By voting against motion 5 it would tie the hands of the BoD, preventing them from taking advantage of the current fire sales.
I believe the current Australian deal will return to XTR many times the purchase price and that it brings with it people with a great deal of relevant experience - including helping to get the hard rock at Manica moving. As we have 12 months to meet our financial obligations there is no need to spend anything before we can afford to pay out of income.

This issuing of equity to secure valuable assets at knock down prices was something I had not considered, but it does make sense as we will soon have sufficient income to realise their value, to the benefit of all shareholders.

So, taking into account that I have a personal assurance that there will be no fund raising for the foreseeable future (which was my main concern) and that preventing the issue of equity would effectively be cutting off my nose to spite my face, I have now decided to put my trust in CB's judgement and vote in favour of motion 5.

How quickly things can change when you pick up a phone...

Has anybody voted yet?

I am thinking about opposing motion 5 which, if defeated, would mean that existing shareholders would have to be involved in any future fund raising.

My rationale for this is that the company should not have spent much money recently, due to Covid-19 lock-downs all over the world and will be getting additional income in the near future. So,IMO, with careful housekeeping it should be possible to last on existing funds (including the ca 90 oz unsold gold - this may be wrong as it is from memory of a post here several days ago?) and the anticipated increase in alluvial production now that the spares have arrived and processing is back up to full speed. Then there is the hard rock...

If, in the worst case scenario, it becomes essential to raise funds, the value required should be relatively low providing cash burn is being properly managed and I would prefer that existing shareholders are given a full honest account of the state of play so they can decide if they want to take part (each existing shareholder would be eligible to purchase new shares in proportion to their current holding).

This would mean that no third party would be able to purchase shares at a big discount and dilute the long suffering LTHs.

Having to go to existing shareholders for additional cash might make the BoD think twice as they would, quite rightly, be put under a certain amount of scrutiny and the current owners would be able participate in decisions affecting the future of the company.

Happy to hear/discuss other views.

Anybody have any idea what the repeated 68p trades are all about?

Hello Bob,

I hope you are well.

Are you at home now, or trapped on the open seas? How do the closed borders affect you?

Quoting a hefty premium for almost any quantity to buy - so bodes well for the SP providing another load of shares is not dumped into the market - the 500,000 seller hasn't been around for a while now?

POG is on a bit of a bull run at the moment - can only help if/when additional contracts for alluvials and the low hanging hard rock are announced.
Still a lot more positives here than negatives, IMO, providing the assets are managed properly and CB keeps a check on the cash burn.

XTR's prospective licences will still be around in a few months time, so waiting for hard rock earnings to materialise before we start exploration drilling on multiple projects would be by far my favoured route...

TW is probably busy loading up on cheap shares before he makes his views public - Either that or the exact opposite, of course...

Andrew,

With the additional gold sold in Q1 there was an overall operating profit of about £260,000 in addition to the £360,000 CIB at the end of 2019 - so about £620,000 in total.

Corporate costs are running at around £40,00-£45,000 per month, so leaving about £485,000 -£500,000 CIB before any other non- alluvial related expenses.

So yes, you are right. if we were just to concentrate on Hard Rock production the CIB would last almost a year, by which time we would almost certainly be cash generative.

However CB has decided to diversify the Xtract portfolio, with all the additional expenditure that this involves. Must say that I, too, am struggling to see the logic in this strategy as putting off the acquisitions for a few more months would not have made much difference in the great scheme of things ( OK we may have lost an opportunity or two, but we would still have plenty to be going on with and fresh opportunities pop up all the time).

Maybe CB is reckoning on Q2 alluvials being better than Q1 and with the additional $100k of stored gold and a second alluvials contractor on board, he may think he can get through to Q4 before needing to raise any cash - by which time we may have sufficient hard rock production to cover all expenditure, but that scenario contains a lot of variables so it does seem risky to me...
Maybe some sort of on-line Q&A to clarify things can be organised before the AGM?

All very much as expected.

The sale of stock gold in Q1 will have bolstered the CIB, whilst the increased production from mid May will help with Q2 figures and should make Q3 even more profitable.

Interesting that much of the exploration drilling has been carried out already - so hopefully all current expense commitments can be covered by reserves and cashflow as promised by CB.

If we could get some concrete news on the 'low hanging fruit' hard rock production, that would do much to help the continued strengthening of SP.

Has anybody kept count on the sold gold V production? Would be good to know how much, if any, is still held in reserve.

Don't even joke about it!