Member Info for Cygnus7

I hope it wasn't me referring to the video about the 1% quote from one fund manager that kicked off all of this excitement !
If so, then sorry, it wasn't meant to wind people up. It just threw me a little as my previous reading had suggested that BRs grades would be more than acceptable.
For the record, I topped up here feeling a little exposed as I had promised myself I would not get any more but had 50000 @6.27 which I thought was a great price. Went out to do a job and found that the price had fallen further...
Time will heal the hurt !

Despite having messaged the initial 1% quote, I feel the driver for BR is the size (all other factors considered) and the target that AA have placed in front of us. Although I think Xtract will exceed the 2MT target it does not guarantee a purchase but with the way copper is in such demand I think it unlikely they will pass.

Hi All,
Left my message about 1% grades and headed down the allotment Lol !
Yes, the fund manager did mention that there were a lot of other factors involved - of course but he did drop that comments about 1% which caused me some concern. I am also expecting some eye-watering grades inn the future following some of CBs comments. I think he said that some of the cores would ring like a bell if you hit them with a hammer. There is also the point that with ore so close to the surface from the latest holes it allows an easy start to mining and could facilitate at least some of the ore to be removed via open pit methods. I think size is going to be the winning factor at BR and would not be surprised to have a multiple system.

I'm wondering if the grades a little too low and that's stopping the big guys moving in? I was watching a Youtube video over the weekend by a Black Rock manager saying they like to invest in porphyries that have grades of 1%. Size will compensate for grades but at the moment - are we a touch shy of drawing the attention of these investment companies ?

Hi George,
I expect so. If not then I might just have one last top.
A week ago I did some sums with conservative assumptions about the physical size of the resource. One of those was that we were dealing with a single porphyry system. it seems that was a nice error to make as CB is now talking about multiple systems. If, however we were dealing with a single system my sums (using an average Cu eqv grade of 0.33 - nice to see a little silver - which is another appreciating metal, in there) then the single porphyry system would need to be 540 m wide and high to achieve 2 MT. Hitting pay-dirt in less that 50 m twice from the new drill site changes those sums completely. This suggests a different system and I have no idea how to model something when all we have done is pin-prick it at this time. But it does suggest that we have probably already hit the 2 MT mark. Could we double it?
Cygnus

Thebestisyet: The gold is incorporated into the Cu Eqv grades but yes, I'm hoping there will be a touch of other minerals like silver, some features like these are even rich sources of lead or zinc. Who knows until we see the the assays !

Shorn,
Yep, trying to be as realistic as possible with the figures but as you say, we could catch a perfect storm and if you plug those figures, in well - I don't like to publish those numbers as someone will accuse me of hyping or living in cloud cuckoo land. So, keep it real and hope for the best.
Cygnus

I posted some similar figures at the weekend to find what grades we needed relative to the size of the resource to break AA's 2MT limit. Although I used the figures reported I made the point that other than the length at 940 m, you need to be a bit wary of taking the other figures at face value because you are not drilling directly across the ore deposit in the other two dimension giving somewhat inflated figures. As such I simply assumed that those two dimension are equal (but smaller than your assumptions) and then worked out the sums for given Cu grades. I also used the 0.8 figure to take account of the rounded off corners of the resource. In short, if the two dimensions mentioned are each 500 m then we need
0.4% of Cu eq.
550 m needs 0.35%
600 m needs 0.3%
650 m needs 0.25%
So, my figures are not quite as exciting as yours but then we may have a double yolk or I may be wrong about the angle of the drill relative to the ore.
GLA

I think my shares are around 78p each !
As you say Matt, cash flow did for them but what I could never understand was why they were spending cash on further exploration when there was the rent to pay....

Hi, I'm another Arian Silver shareholder but I'll need to invest a lot more than £1000 to breakeven on a 10 bagger ! I've also been looking here with a view to averaging down but got my fingers so burnt last time that I'm very cautious !!

Been crunching some numbers. I've been looking at what size of resource we need when married up to different Cu eqv concentrations to get to 2M tons of Cu eqv - the point at which AA become interested. I've assumed that the depth of the ore body is 940 m as this is a pretty solid result and the figure may even be higher as it's unlikely the drill found the very deepest part of the porphyry. The other two figures are more difficult to estimate as the drill will not have entered the ore body orthogonally and we will not be getting a true width. So, I've assumed that the width and height of the ore are equal and I've been conservative. I've then multiplied by an assumed figure of 0.8 (as previously suggested by Andrew4444) to account for the fact that the ore will not be brick shaped (essentially rounding off the corners) and multiplied by 2.7 to convert cubic metres to tons. Other assumptions are that we are only working with a single porphyry system.
Rather than write out all of the numbers, many of which are irrelevant, I'll skip to the chase. Essentially if the width and height is only 450 m then we do not get to 2M tons even if the average Cu grade reaches 0.4%.
If the W & H are 500 m then we get to 2M T with a grade of 0.4%
If the W & H are 550 m then we get to 2M T with a grade of 0.35%
If the W & H are 600 m then we get to 2M T with a grade of 0.3%
If the W & H are 650 m then we get to 2M T with a grade of 0.25%

Although these seem like large dimensions/grades to be achieved, the good news is that if the dimensions around/above 600 m can be achieved and reasonable grades are reported in the assays then the numbers rapidly balloon to above 3 M T.
Cygnus

Yes Caveat E,
Even average copper grades with a touch of something more exotic combined with Hole 5 results in a few days could finally wake the slumbering investment community.

Shorn, it would make sense if it was located in the cleared track area to the NNW of the XXBR 006 & 008. The early encounter with the outer regions of the deposit may mean the ore body's Centre of mass has shifted in that direction (or rather our knowledge of it). Hence the increased volume/mass. If this does edge up to 3M tons then any reasonable Cu grade is going to be big news in the mining world.

Jwoz, it is a bit confusing. The last RNS said: "pad sited 250m to the northwest to drill hole BRDD-21-005 at -70 degrees towards the north-northwest with the aim of drilling across the deposit about 120m down-plunge from hole BRDD-21-003."
So, the pad is a step-out to the NW, which from my understanding is away from the Centre of the resource, but the drill is -70 degrees to wards the NNW (i.e further away from the resource). yet, the aim is to drill across the deposit. Surely the only way to do that is to drill in a general SE direction.
Maybe it means that the pad is to the NNW of the drill head - hence it is drilling back towards the Centre of the deposit. Anybody have any other ideas ?

Andrew,
Thanks for the improvement in the estimation of the shape of the ore load. I will incorporate those options into my spreadsheet.
Cygnus

Tam asked what the fair value in the ground was with increased size.
I posted a message over the weekend describing how to calculate this but it's difficult to describe the volume with 3 simple numbers. If one assumes the ore is a brick shaped objects then you can make a stab at it but you also have to assume the copper eqv grade. the price of copper and what AA would be prepared to pay if they decide to purchase the prospect. For example only, the simple sums suggest, based on the following:
800 x 500x 500 m (figures chosen as the resource will have curved edges and these figures will compensate for the simple brick shape chosen.)
0.3 % Cu eqv
Cu price per ton $9000
3.5% value to AA (i.e % of the value, in the ground to AA - this is a typical value)

If you use all of these figures which I think are generally quite conservative you end up with a fair value price in excess of 40p a share. The biggy is the volume - get that up and the numbers inflate rapidly.

It's a comforting thought that with increased size this will resource will be come impossible for AA to ignore. If it was marginal AA could find better investments in the local area but if it becomes the elephant in the room....difficult to ignore.

Vulcan Forest !
I hope this is not the reason AA sold it off at a cheap price.....

Shorn said "Simply put if we pass the 2Mt mark but with a lower -> average grade would the size be enough of a "investment" pull to the majors for the reasons above ?"
Good question. I think you would need to ask those with personal geology & mining experience. There is also the point that AA are not just sitting on their hands waiting to see how XTR get on. They will have potentially dozens of fingers in pies around the globe and anything XTR comes up with will be viewed in light of those other prospects. Bushranger being where it is though is an attractive factor.

Part 2, (continued)
The value to the mining company is in addition to the attractiveness of existing infrastructure, being in Aus and an experienced workforce. Consequently I think that grades are critical to the eventual value to shareholders given that we know the size of the resource is big (and I think we are probably safe to say that it is going to be bigger than the 2M tons required by AA).
If one wants to play with the affects of the variables I identified in Part 1 of this message then a simple spreadsheet can be constructed such that each chosen value is multiplied together (and divided by the number of shares) and one can choose conservative or outlandish values as one see fit to find the value of one share. It may look like:
Length width depth density Cu grade Cu price % asset value* £/$ No of shares/M
850 600 600 2.7 0.2 8500 2 0.71 810
900 650 650 0.25 8700 2.5 0.72 820
950 700 700 0.3 8900 3 0.73 830
1000 750 750 0.35 9100 3.5 0.74 840
* Value of in the ground Cu
I have chosen the number of shares as being over 800 million as I am uncertain how many warrants there are but seem to remember reading that it could eventually take the total share count above 800 million. It is, in any account a relatively small percentage factor to the overall value of each share.

By plugging some figures figures into this 'spreadsheet' you find that a resource volume of 800 x 500 x 500 with a Cu grade of 0.2 %, a POC of $8900, $/£ exchange rate of 0.7 and a buy out % of 3% gives around a value of 24p per share. I think you'd agree that I've been pretty conservative with all of my figures. Plugging what seem more realistic values in quickly gives eye-watering figures......
I think the geologic case for Bushranger (and us as shareholders) is likely to be made pretty soon. But I have been here before with other shares. The mill is being constructed, it's being painted lovely pastel shades and production is just around the corner. They are even spending money finding more resources and investing in new equipment when you get an RNS saying that the money lenders have not been paid and that the mill has been handed over to them - but not to worry, the BOD is working over-time to create value for shareholders ! Not saying that's the case here but if this does not pan out, it will likely be due to non-geological factors. Just trying to keep it real.
Hope this was of interest or use to others.