Member Info for Cygnus7

Part 1,
I'd like to add some thoughts to Andrew4444's posts. Maybe a share value sensitivity study is too grand a name but I thought it would be good to look at what factors drive the value of one of our shares. Just to set the baseline that Andrew set out about a week ago and assumes that AA or a similar miner is willing to purchase the asset.
The value of a share can be estimated from the follow calculation.

The volume of the asset (Length x width x depth) in meters - gives volume of porphyry
multiplied by the density of the rock (given as 2.7 T/cubic m by CB) - gives mass of resource
multiplied by the mass of copper per ton of resource (incl other minerals [Cu equiv]) - gives mass of copper equ in porphyry
multiplied by the market price of copper per ton - gives $ value of the asset
multiplied by the % of that asset value that a mining company is willing to pay XTR
multiply by the $/£ exchange rate - gives value in £.
And finally that £ value is divided by the number of shares in circulation.

As some posters pointed out, the volume of the asset is the biggy as it is a cubed function. If one uses a simplistic sphere as a demonstration, if one were to double of the radius of a given sphere then the volume inside the larger sphere is 8 time greater than the smaller sphere: so size matters! CB reinforced this view when he made remakes that implied he was not worried about Cu grades but I think this may have been based on the fact that (I believe I'm right in saying [as I'm no geologist])) that local porphyry systems tend to have similar Cu grades and hence grades should not be an issue (a feeling reinforced by the hand held X-ray device). Some posters have also made comments to almost suggest that as long as we get to 2M tons, grades were almost irrelevant. Personally I think a little differently. Take the almost daily comments about the price of Cu. If the market price were $8500 and one were to compare the effect of that to the company value when Cu is valued at $9500 then the % uplift would be around 12%. All well and good. It all helps but it's not Earth shattering. If however you compare the value of a huge resource at 0.2 % Cu to one at 0.4% Cu then the value to the potential mining purchaser is 100% greater - making 12% look almost inconsequential. Actually, I'd say 0.4% Cu is worth more than that. From the mining company's point of view, a 0.4% Cu resource suggests that cashflow can be doubled relative to a 0.2% Cu resource as for any given ore mined they would access twice the copper. Consequently, doubling the Cu grade makes the asset at least approximately twice as attractive as the 0.2% resource and the company would presumably reflect this in the offer made to XTR based on the fair market value. So, Cu grade affects not only the value in the ground but the relative attractiveness of the asset to the mining company which should be reflected in any potential offer. See next message.

News that the resource is so close to the surface suggests that the ore is a different shape to that previously assumed. End result being that it's larger and easier to get to pay dirt.

Andrew, my only reservation is that you can drill into a deposit and not get a true impression of the width because of the angle of attack leading to exaggerated figures. I can't get my head around quite what this thing looks like or the angles of the drills relative to that deposit, but the numbers are big and the more data the more confidence we can have. Exciting times.
Right - off to get my chips.....

Andrew,
I think your numbers are conservative so the value is starting to fall into the 'if it sounds too good to be true....' category. But I can't see anything wrong with the geology, drill depths, grades or numbers. And that's without Africa, or the potential for the other local deposits which, being so close are effectively parts of the same deposit and would in many ways be treated as such. I don't want to print the figures out as it starts to look like telephone numbers - and we wouldn't want to ramp.. would we!

Hope you're right but I feel the same way about Xtract. They are just discovering a huge copper/gold system in Aus and Anglo American have first dips on the prospect if they get to 2M tons of copper which it looks like they have. But the price is still low. I will now shut up about that company as this is the wrong board for that chat.

Thanks FiveCandles.
I see the copper market doing well and have been looking at suitable companies for fa while !

Well, I've just discovered Rambler which I find attractive as it's actually producing copper rather than hoping to do so one day. Bought 500000 as a toe in the water. Don't want to be accused of ramping but heard of Rambler while on the Xtract board which is another great copper prospect - I'll say no more.
GLA

I'm surprised how stable the price has been for the last few hours considering the activity on the trades board. Does this imply manipulation ?

Well, I keep topping up and telling myself that that's the last one but the price and RNS (or lack of) keep bringing me back.

Maybe we should hope for an RNS saying they have a big problem. They have had to send off for more drill extensions and that's causing a delay !

Very few posters - but why has this company that seemed to be doing well, now seems to be slowly drifting. Is there something I'm unaware of ?

Why would there be a 'Price monitoring' at this time of day unless somebody is looking to buy or sell big ?

Can I just add that you need to be a bit cautious about these estimates of width. We don't know the actual angle that the ore body drops with into the earth so we cannot know the true angle at which hole three intercepts the ore. It's very unlikely that hole three is perpendicular to the ore deposit so you would expect the drill to have to travel longer than the true width.

Prickly, like you I've been doing some research. A friend's son is a geologist and I asked for help. To my surprise the core is not the best area for recovering Cu. As you have said, it's the zones either side of the core although the central area is also mined as Cu can leach into the rock fractures (at least that's my basic understanding of the process).

George: If there had not been an RNS people would either be expecting an RNS that does not appear causing suspicion, or they would expect a great deal of depth to have been achieved which would have created disappointment when progress was reported. So, don't complain about being kept in the loop.

I think before everybody gets too excited about a quick return on their investment, it is only reasonable to expect that if the 2Mt limit is reached , AA will want a proper Jorc assessment and that will take time. The historic and current data is insufficient to fully access the potential we have here. That's not to say the sp will not reflect the potential, albeit somewhat lagging the latest data.

O.K Captain, thanks. I know these things contain other minerals but have not heard anything from the company in terms of generating cash out of them (if they are there). I guess we will know more when the lab analysis has been completed.

Do any of the geologists amongst you know if there are prospects for other minerals? We are told that the Racecourse porphyry type of feature tends to have good gold quantities relative to the usual copper-gold ores of this type. Does this imply that other metals may be present? I'm thinking touches of silver, zinc & lead - maybe some rare earth metals.
P.S - if this feature is relatively good in gold then the copper readings look better than one would expect.

I have a base investment that I plan to hold long term but I can see that if this is going to appreciate rapidly then the traders will have short term influence on the sp. So, decide this morning to have a top up and will use this to trade alongside them. Not my usual style but hey, every days a school day.