Member Info for CaveatEmptor

About 30% up now.

Some movement in the background or stake building?

This is AIM - we have no income, so what do you think?

The question is: When? And will it be accretive?

Hello Andrew,

I agree, but, as we have always said, alluvial mining is very hit-and-miss. At lease with the extra processing plants in operation it means that the work will be commercially viable, even at extremely low grades and, should Sino II hit a rich patch, we would make very good profit.

Let's not forget that Omnia were interested in our alluvials because they thought they had exhausted of their own, but then decided not to mine our Western alluvials because they suddenly hit a rich patch in their own alluvials close by - so they threw everything they had at their own production and made a fortune doing it.

That is what alluvial mining is like - a bit like Forrest Gump's box of chocolates.

At the current share price there is no production priced in, so I think that any significant SP movement - either up or down - will result from how the hard rock programme unfolds, unless of course we hit that illusive rich patch of alluvials...

ATB

Well, I would guess that anybody that has any confidence at all in XTR, and has some spare cash, would be buying at these levels - including whoever it was that rolled-over the 2.5M shares...

I hope you are right Andrew, but I won't hold my breath :-) ATB.

Hello Andrew,

It was only 8.5 weeks from Feb 1st to the end of the quarter and I got the impression that grades were even worse earlier in the quarter.

Of course we will have to wait for the official RNS to find out what the final result was for the quarter, but I was trying to limit expectation as I don't think there is any point in fooling ourselves and then end up being disappointed...

I think that if anybody is expecting Q1 this year to be better than Q1 last year they may be in for bit of a disappointment. The grades being mined were much better this time last year.

With grades of just 0.16g per tonne, even with two plants going at full pelt the operation will just about wash it's face from an XTR point of view.

No use blaming CB for this as he can not control the grade of the alluvials - it could be 1g/tonne next month for all we know and XTR could make a fortune , or it could be nothing at all!

Actually, had CB not ensured that extra processing plants were installed by Sino II, we could be making big losses at these grades.

The fact that the alluvials have covered the total cost of the Mozambique operation for the last year and a bit is to CB's credit. without them our cash burn would have been much more.

Yes, I agree that CB has been over optimistic with his predictions and he may even, on occasion, have been misleading. However lets not forget the state the company was in when he took control 2.5 years ago. We were up to our necks in debt, burning cash like it was going out of fashion and we could barely keep afloat whilst feeding the shark that was Yorkville.

We are now debt free, we are one of the most economically run companies on AIM, we have cash reserves of £650,000 and have production that is consistently covering operational costs.

We have proven hard rock gold reserves and several very promising unmapped sites, Total gold on the concession is likely to be in the region of 2 million ounces and CB is doing his best to start to exploit this gold without any further dilution to existing shareholders.

No, of course CB is not perfect, far from it in fact - He once told me he had received an email from a shareholder telling him that he was the worst CEO on AIM so he should s*d off and sell the Big Issue - except that he would probably f*ck that up as well!

So I think that CB in under no delusions about what people can think of him - however that same shareholder later made a lot of money out of CB's company and sent another email to him saying that he had always known that CB would come good! - such is life as a CEO on AIM.

Yes, people that put CB down probably have good historical cause to do so, but if (and it is a big 'if') CB can turn a reasonable profit without shafting the current shareholders and restore shareholder value then there will be a lot of happy campers on this website.

You are right, Stevensd, no big negatives came out of the woodwork and CB did seem genuinely excited about the near term prospects of XTR - however that is his job and prospects mean nothing unless the management team has the skill to realise them.

This has been the problem over the last 5-6 years - lots of potential and no success!

Of course I would love to believe that CB is about to close a deal that will result in an annual profit of over $6M per year for the next 7 years. Just think what that would mean - Even if one third of the profit was used to finance exploration to develop the Zambia copper project and another third was used to acquire and explore more land in Manica, that would still leave $2M to pay back to the shareholders and at the current SP that would mean a 50% annual ROI for anybody that buys shares at the moment. It would also mean that a market cap of £13M - £15M would be indicated.

Sounds great, doesn't it? So why are we languishing around at a measly market Cap of only £3M?

Of course the answer is obvious - the market does not have confidence that CB can deliver the utopia that I have described above. This is based partially on past performance and partially on a general depression of the AIM market.

However, if CB can conclude a favorable deal that commits a partner to spending $10M on plant and infrastructure and he can get them to successfully mine the hard rock so that the annual $6M profit to XTR becomes a reality, then the market will respond and the market cap will rise.

But first things first - we need the deal. After all the longest of journeys starts with the first step.

Following our meeting I came away content to give CB some time to get his house in order, but I think we will need to see some movement before the AGM otherwise CB will have a lot of explaining to do to some very disappointed shareholders.

Looking on the bright side, the deal could be struck by then and the plant could already be under construction - in which case CB might have his best AGM for years...

Sadly LR was nowhere to be seen on Saturday, but I had a long chat with CB.

A word to the wise of BAG - What we call "dilution" is often desperately needed funding by the company and that depends on finding people who are willing to invest. It's great to be enthusiastic but be careful not to throw the baby out with the bathwater...

Hello Bob,

Likewise it was good to see you again.

I hope your busy travel agenda over the next few months goes to plan

Fortunate that our combined shareholding and past history with CB warranted such a candid discussion.

Pity we can't share everything that was discussed, ( completely personal comments, I might add) but at least our comments seem to have been taken on board and we should find out how the land lies in the very near future. Don't forget that you promised to look at your vacation schedule so we could maybe meet up again before the AGM.

ATB.

In fact CB said that once we are covering the complete annual company overhead from just one month's income then we should have some very happy shareholders - I can't disagree there, providing it happens...

Hello Andrew,

Sino 2 has 4 operational plants in total and runs at least 2 of them at any one time so production throughput can be maintained at or above the required level. The number of plants in operation at any given time depends on the amount of overburden that has to be removed to expose the alluvials - very deep overburden results in reduced processing throughput.

The anticipated income is solely the XTR share.

The income is for the first part of the exploitation of hard rock - gravity-refined so cheaper processing plant and much faster to get going - there are several options available of how to do this and that one of the items currently being negotiated. This means XTR has no need to spend money on upgrading the existing Omnia plant to process the gold sulphide ore... That would be phase II further down the track once XTR has regular income and the company finances are out of the woods.

ATB.

Am still processing all the information, but in a nut shell.

Cyclone had negligible effect on alluvial processing. Currently Sino 2 is operating between 2 and 4 processing plants - production is limited by amount of overburden rather than processing ability. Alluvials are unpredictable and at moment there is a lot of overburden and relatively low grades - about .15g/t but could change for the better on the next section. But even at low grades operating expenses are covered.

Total corporate overhead is around £500,000 pa and current net cash position is about £650,000.

Share holders were shafted by JN and CB is determined that it will not happen again.

Hard rock exploitation plan nearing completion - there will be no risk exposure to XTR shareholders and projected income of minimum $400,000 per month and maximum $700,000 per month.

Getting the best deal takes time, but things now moving in the right direction. Details will be announce by RNS once negotiations have been concluded.

CB would not go into fine details as this would risk exposing us to insider information.

I got the impression that CB hopes to have everything in place before the AGM in June.

I left the meeting a lot more comfortable with my position here than I had been beforehand.

I hope this helps.

I expect to arrive around 11.00

If any of you will also be there, let me know via this BB and maybe we can meet up?

Maybe RNSs need to be certified by a competent person, but they can say what they like in a tweet?

Hello Andrew,

I have added the other 4 questions to my list and will report back after the show - providing CB hasn't caught a cold, that is.

My understanding is that CB is legally obliged to RNS any news that is likely to have a material effect on the SP.

If production has managed to continue during the rains then there is no news to tell.

If a short stoppage in production has resulted from the rains, this is unlikely to materially impact income from the alluvials, so no news to tell.

If production has been stopped for an extended length of time then this will materially impact income from the alluvials so it should be reported in an RNS.

If the third option is true and we have not had an RNS, does this mean that CB is open to prosecution? If so, then I very much doubt he would put himself in that position and one of the first two options is the more likely?

With CB you never can tell...

Hello All,

That is correct - I will be there and will want some very detailed answers to my questions.

PIs selling up out of frustration is by far the fastest way to lose money on AIM companies IMHO and I have seen it happen again and again.

The only way that I know of for PIs to get a fair shake is to organise themselves and then hold the BOD to account. After all we do own the company!

However this virtually never happens, as most AIM investors do not have either the will nor the knowledge on how to protect their investments, no wonder they can, and often do, lose a fortune.

I do not intend to join those that are selling out, nor do I intend to let the BOD continue to pull the wool over my eyes!

As many know, I own a significant number of shares in XTR and I am sure that plenty of others that contribute here on this BB also have considerable holdings. So between us I am sure we could hold CB et al to account. Where there's a will there's a way...

Almost £2.0M worth of 3p warrants out there - could be said that any amount of profit is better than a loss, which is where they will be if the SP drops below 3p?

Almost £2M worth of 3p warrants still outstanding - at least that suggests a support level at 3p, not much consolation for most of us though...