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Have not read the BB much at all probably flick thru a couple of posts a quarter until I bought more the other day, read the posts since my post and had a bit of a flick around, so have not seen more than CE’s 13p. Mainly post things to record my reasonings behind the trades that I do, (when trying to explain things in written form sometime errors surface).

Questions were asked of how the NPV changes with POG, I think my posts show (if correct) that the recent change is marked and hugely beneficial to xtr share value, of late the sp however has reduced and the mcap valuation has been running counter to the actually demonstrable value.

The POG has now surpassed the point at which MMP could have bought out xtr at discount to concurrent POG future earnings, now the decisions rest (among other considerations) on an entities speculation of the POG into the future.

None of my figures included todays gold price 1583.89 (from goldprice.org), those numbers are below.

Pog 1583.89
Buy out price 42.48m usd / 32.71m gbp (roughly 7-8x todays mcap)
Buy out price per share gbp 7.158p (based on 457m issue)
Future cashflow - project 156.65m usd
Cashflow attributable to xtr 36.03m usd
Cashflow attributable to xtr per year 5.15m usd
Cashflow attributable to xtr per year per share gbp 0.867p (very close to current sp btw, imo ridiculous)

Im not really well research specifically on xtr at the mo, but my understanding is that all the above relates to fairbride only, and flicking back a bit today I think I read someones post that FB represents a quarter (just from memory) of the manica concession which totals around 1.4m oz

The last date ard rock production should commence according to CA is this October, if so this company seems likely either to be generating yearly profits from one of its projects pretty much equal to its current mcap from a date less than 9 months away or be bought out at multiples. Meanwhile possibly generating cashflow from sale of gravity recovery amenable ounces and very likely tail end of alluvial recoveries. Its quite a big if but still.

Not to mention manica exploration upside, pog upside, or +++Zambia Cu - CB’s specialty.

So yes, agree, your figures and mine are not too far off (both multiples to todays valuation). Im not dismissing anyones valuations as they may, and probably do, know more than me and Ive not seen their assumptions, reasoning or calculations (or even possibly their actual valuation in the first place).

All im saying really is that the POG massively affects the XTR attributable value whatever the scenario that pans out, be it up or down, disposal or production. CB knows it, MMP know it. Theres been a bit of quiet lately and the POG is in a seemingly strong uptrend.). On the face of the very limited looking into it Ive done, the sp looks very attractive to go long xtr.

Got to make the T now so no more time Im afraid.
Good weekend to u & all.

AIMO ATB.

2/3

The difference that occurs in the NPV calc comes as it applies an assumed discount rate in this case 15% and the year out from production commencement is used as the exponent to the discount rate term used in the calc.

The basic equation is for each years cashflow, my maths is limited to doing it for each year and then summing (there maybe a quicker fancier way), is below.

Profit/(1+(disount rate expressed as a decimal(here0.15) to the power of the year out from production commencement.

For year one 19.8m/(1.15)^1 = 17.2m
For year two 19.8m/(1.15)^2 = 15m
For year three 19.8m/(1.15)^3 = 13m
For year four 19.8m/(1.15)^4 = 11.3m
For year five 19.8m/(1.15)^5 = 9.8m
For year six 19.8m/(1.15)^6 = 8.6m
For year seven 19.8m/(1.15)^7 = 7.4m

Total 82.4m

Then add the total to the capex expenditure

-40m + 82.4m so npv15 with above assumption is 42.4m

Doubt CB would sell for 20m when through CA he can ask for 80% of npv15

80% is 42.2m x 0.8 = 33.8m

Whether MMP would pay it is a different story as is would CB sell it whilst POG is doing what it’s doing.

Following exactly the same as above for various POG I get the following…POG (usd per oz) followed by 80% of npv15 followed buy price per share in pence (gbp) based on 457m issued and 0.77usd to 1.0gbp.

1262 9.2m 1.56
1290 12.3m 2.07
1500 33.8m 5.71
1600 44.1m 7.44
1800 64.8m 10.91
2000 85.4m 14.39
2600 147.3m 24.82

2600 is roughly the inflation adjusted previous high POG saw in the 1980’s. (CPI not true inflation (that would be much much higher)).

As far a cashflow to xtr goes if a sale is not forthcoming. The CA states xtr entitled to 23% as long as POG exceeds 1175usd/oz (seems a safe bet at this stage) so…

Taking a cut of contemporaneous operating cashflow as opposed to getting paid now for some future earning does not incur a discount rate so the calc is very different and is literally yearly, total gold sale value minus total production realised AISC.

Sticking with POG as 1500 and AISC of 862

The calc is 23% of 7((1500-862) x 31000) giving 31.8m

19.778m per year. 7 year LOM so 19.778 x 7 is 138.4m. 23% of which is 138.4 x 0.23 giving 31.8m usd or 4.5m per year or 3.5m gbp per year.

Following exactly the same as above for various POG I get the following POG (usd per oz) followed by LOM xtr attributable cashflow followed by xtr cashflow per year followed by xtr cashflow per share per year in pence (gbp) based on 457m issued and 0.77usd to 1.0gbp.

1262 20.0m 2.85m 0.48
1290 21.4m 3.06m 0.51
1500 31.9m 4.55m 0.77
1600 36.8m 5.26m 0.89
1800 46.8m 6.69m 1.13
2000 56.8m 8.11m 1.37
2600 86.7m 12.39m 2.09

The above can be seen as either what xtr could make or what MMP loses out on, on an ongoing basis through failure to buy out xtr.

AIMO

1/3

Firstly thanks for the interesting posts last couple of days esp CE (the 13p neglects to convert from usd to gbp, I think, just because my excel model brings up just >60m for 1575 amd usd13c on a ps basis) decided to have a closer look at the numbers. Im definitely no expert in any of this stuff, I previously held a very modest position here with limited and to a much greater degree, now very much outdated research.

My understanding of NPV calculations is that they all come down to the quality of the assumptions used to determine the parameters used.

A 15% discount is a good start most projects use 8 or 10 some even use 5, on relatively rare basis this is justifiable but commonly it's not. Gold projects are the ones that often manage to get away with a cheaper realised cost of capital & a lower rate. The unfolding PM bull market, imo, increases the chances of this. Maybe the fact it is written into the agreement at 15% increases the chance of it being used and the likelihood the potential buyers considered it a meaningful possibility.

So the discount rate is solid and if anything conservative project wise.

Next the LOM determines the amount the discount rate affects the NPV. The longer the LOM the greater the total discount to profits attributable, due to the increasing reduction in value of money as time stretches out into the future and the way the NPV uses the increasing exponential function upon the discount rate with each year of planned productive ops.

Then the AISC obviously plays a massive part, is it achievable. Again in our case with the fact we getting gold and the overwhelming likelihood that price per oz is going significantly higher over LOM means the profitability in terms of sensitivity to AISC is downside risk reduced, imo, i.e. if AISC proves in reality to be too low the chances of the assumed POG also being too low likely counteracts the discrepancy.

To use a 1500/oz would allow for the swing ~20% higher - just my feeling tho, no guarantees obviously – (not calculated it)

That takes care of the POG input, but really that could been seen as very conservative in an year or 2 so have to wait and see.

In all this I'm only using numbers roughly based on those given in the investor talk 2019 plus the RNS of collaboration agreement (CA) that I have only just read, so if FS says different then alterations needed but...

All usd unless stated otherwise

Start with capex 40m (roughly (CB expects less))

So cashflow wise start at negative 40m day 1

Below calc is for yearly cashflow, its made up of production in ounces of gold, this is then multiplied by the assumed POG (less the all in sustaining cost to produce one ounce or AISC)

After year 1 expected cashflow is 31koz x (1500 – 862) = 19.8m
Same for each of the following 6 years

AIMO

More than doubled my holding here today.

CB saw fit to add chunks >1p recently. He is back in his element with Cu in Zambia.

Watched the investor show presentation, thanks for posting it here, andrew4444

Looked through what's occurred since and like the look of eureka more and more especially his references to potential copper belt similarities. He was happy with historic intercept widths so how about now - have to see what the grades like, obviously.

Copper well out of favour currently and this covid19 looks like it could create a real shock to the teetering global situation - govts chucking funds at markets to feign normality. It'll pass (at some point) could create some crazy bargains on it's way tho.

Step up manica in the mean time to give xtr the buffer it may very well need. Looked good at 1262, seems that vid is from end of March 2019 when gold about 30 above that figure. Re - transition material - if hes right, that profitable recovery requirement is tumbling away at the mo.

FS numbers
31koz/a at 1262 - 862 is 12.4m

Time of Inv show
31koz/a at 1290 - 862 is 13.3

At 1500
31koz/a at 1500 - 862 is 19.8m

Today its 1570 odd nearing in on double the paper profit.

Simplified and optimised, full of assumptions and jv cut, teething issues, dilution etc to consider, but against mcap of ~4m & LOM of 7 yrs.

+++Zambia.

The likelihood imo is that the macro that causes the sustained/further demise of copper (short term) see-saws with gold as a safe haven asset. Copper we exploring for vs gold we producing - buffer.

He has kept holders waiting but there could be a swift reversal of trend when earnings and potential add ons do arrive.

Lows around 08/01/2019 and may 2019 seem to line up pretty well to today so took my chance at 0.88p.

Think CB has one more resources cycle left in him, hope so anyway, imo, deserves it. He's stuck at it through these tough times of late.

I also hold bzt and glr and I can see what hes done/doing, yes slowly, but surely, he positions things and times his moves. Takes risks and does/says what he has to. Happy to pay a very very small part of his wages, personally.

AIMO GLA

Bloomin well hope so Gloster!

Would do the pf a world of good. Start with sweden for me, then Spain, then kyrgyzstan.

Thing is re terraframe, they already mining and the uranium otherwise goes into the tailings and has the potential (however mitigated that potential maybe) to be leached out into the ground water and cause wider contamination.

I've read research where bacteria have been found to breakdown (convert really) the uranium over time and that is imo the second best option for maximial mitigation of long term risk (on top of all physical containment measures that maybe specified project by project).

The best option however, once you accept the material containing the uranium will in fact be mined and broken up, is to extract as much of the stuff as possible. It can then be stored/sold as yellow cake etc.

Point being if companies are incentivised by profit they are more likely to leave as little in the waste as is economically optimal which is likely to be very little. States get their cut through taxes etc (even ignoring any state stakes that already exists eg TF 70%) which increase in line with U price.

Talvivarra has a very troubled past environmentally but the case study proves that mining companies can and have changed, and through public/state pressure (in their case involvement) now see environmental concerns as economically important if not crucial depending on jurisdiction.

Although any refusal would be counterproductive in terms of likely environmental consequence, and this is quite different to allowing a new potential contimation risk, the granting of permission is non the less, imo, a step in the right direction.

As the article states these things move glacially.

Once uranium price gets going, imo H2 this year and beyond, I expect the decision making (pressure upon) to get more balanced, wheels slowly but surely to be greased and the dominos, as you say, to begin to tumble & maybe hasten.

Really hope so anyway.

https://www.newscientist.com/article/mg23431211-300-radiation-eating-bacteria-could-make-nuclear-waste-safer/

Soluble to insoluble basically back to being how it was insitu (pre-mined) I think.

More on the same lines....

https://ensia.com/articles/bacteria-water-contamination-pollution-cleanup/

https://sputniknews.com/science/201810081068701682-nuclear-waste-neutralizing-bacteria/

Bottom line is U is quite common in low levels in certain areas of the world and if said rocks are prospective primarily for other, potentially 'critical minerals', what is to be done? This decision sets an EU precidenct for uranium production, logically, with salami tactics in mind, next would be allowing commencement of a new operation where the uranium production would be as a biproduct. Then allowing full blown blatant mining of U (Salamanca) after that.

Just my thoughts anyway.

AIMO ATB

Tough call. Imo they will stay with geo & proceed.

So far as they have expectation of achieving the full tenure, I think the prize will keep the team in place (it has so far).

If its confirmed as certainty tenure is 'only' kbe and damb (note rns uses the term 'key'), more unknown if geo can retain the team. They were mentioning aquisition outside license, once/if cashflow established they have options. Once/if govt see successful speedy transition from deposit to mining (start of tax/royalty income for govt) they may decide to release further chunks to geo (remembering the attractiveness of the their western knowledge, experience and connections).

Some may wonder if maybe this whole time, someone wants into geo, delay & delay occurs & price fades gradually down ending at pretty much shell value. News has now created huge liquidity at deep lows (maintainable - in part based on tenure reduction letter). In recent days significant stake building was possible through whatever vehicle/s, full tenure may eventually be granted & mcap would likely return to previous ballpark (sp - dilution dependent).

Possible result (not implying any causal link) - coverted stake achieved at fraction of cost, interests aligned and freedom to operate unleashed for geo. The ownership of the jv partner is very interesting as you know from a transparancy article ML provided you in 2018 (I think). The entities behind it & the interactions with the people who wield influence within & upon the Georgian govt are complex &, for me at least, any development in that dynamic is very opaque. I can only judge developments from any indications / outcomes geo experience - so far mixed.

The bod have perceiveered, emboldened by the potential prize, if the prize reduces only they know if they will still consider geo the best place for them to be. Sunk personal capital, time & effort will likely have some influence on their decision but the resource bull market is showing signs of kicking in for Cu & is confirmed for Au, what opportunities are on each individuals radar.

If you asking if geo the company (not geo the bod/team within/connected to the company structure) then yes it will continue with the 2, much more certain about that. In their own right the assets look very promising and kbe scale has increased greatly since geo came on, now with their own sulphide 'discovery' / reintepretation of scale & nature of Cu (& some Au) sulphide deposit & attached potential.

Have to see what indications present themselves over the next 3 months or so.

Will all the 'permissions' land, will placing occur & on what terms (bod participation?), will bod begin leaving for better opportunities.

Just ponderings/wonderings & thinking aloud only, no insinuations of any kind meant.

from 5.20....

https://youtu.be/Gc1qDPLItUI

Not in africa or CA but anyway...

Ai only way to avoid/minimise that. No, also access to pre existing Soviet era expl database.

AIMO ATB

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