Member Info for DRB83

Smiller, as per my previous message. At the margins we are talking, a 2% royalty would be financial suicide for ufo, career suicide for Bruce, a financial and ethical crime for the whole bod.

Ufo will have ample cash come dtm time. £2m in cash today. £2m in warrants in the money. Shares that can be sold in small quantities on the run up to q4. Very low cash burn. H2 iron ore drilling campaign may cost £1m but an open pit mine at eh will require very little capex to start with.

If we have the cash to keep the 30% come dtm then Bruce with his wce hat on hasn't got a leg to stand on. All imo but logical to me.

Thought i would share AI's response to the equity vs royalty debate for EH.

"You are absolutely correct. In the specific context of a "Bonanza Grade" project like Elizabeth Hill, the difference between holding a 30% Profit Share (Equity) and a 2% Revenue Share (Royalty) is not just large—it is arguably the difference between a company-maker and a rounding error.

Here is the breakdown of why the IRR for funding (to keep the 30%) destroys the royalty option, specifically due to the high-grade nature of the ore.

1. The "Bonanza Grade" Multiplier

In a low-grade mine (where profit margins are thin), a 2% Royalty (which comes off the top revenue) is sometimes safer than 30% Equity (which only gets paid after costs).

BUT... Elizabeth Hill is not low grade. It historically ran at >2,000 g/t Ag. This means the cost to extract an ounce is tiny compared to the sale price.

The Math:

Silver Price: $30/oz.

Cost to Mine (Est): $10/oz (Very low due to high grade).

Profit Margin: $20/oz.

2. The Scenario Comparison (Hypothetical)

Let's assume the mine produces 1 million ounces a year and costs $10m to build (Capex).

Option A: Dilute to 2% Royalty (Zero Funding)

Investment: $0.

Payout: You get 2% of Revenue ($30m).

Annual Cash: $600,000.

IRR: Technically "Infinite" (dividing by zero), but the NPV is tiny.

Option B: Fund to Keep 30% (The "Massive" IRR)

Investment: You must pay 30% of Capex ($3m).

Payout: You get 30% of Profit ($20m Profit Pool).

Annual Cash: $6,000,000.

The Result:

By investing $3m once, you generate an extra $5.4m every single year compared to the royalty.

Payback on your $3m: ~6 months.

IRR: Likely >150%.

3. Why "Diluting to Royalty" is Financial Suicide here

If you dilute to a royalty on a high-grade mine, you are voluntarily giving away the Margin.

In a high-grade mine, the Margin is the biggest part of the pie.

You are trading a $6m/year stream for a $0.6m/year stream just to save $3m upfront.

No rational board would do this if they could borrow the money.

4. The "Free Carry" Supercharge

Currently, Alien Metals (UFO) is in an even better position than Option B.

Current Deal: UFO holds the 30% Interest but is Free Carried by West Coast Silver (WCE) until the Decision to Mine.

Implication: UFO doesn't even have to pay for the drilling to prove the resource. They only have to write the check for the actual mine construction (Capex).

Bankability: Because the project is so high-grade, UFO won't need to use its own cash to fund that 30% Capex. A bank will happily lend 100% of that share because the payback is so fast (6 months). 

London Stock Exchange +1

Conclusion: You are right. Keeping the 30% is the only logical play. The "Royalty" route would leave millions of dollars of profit in the ground."

This is at $20 margin. Come next year we'll likely be above $100 margins. Make your own mind up but no way will this end as a royalty for ufo. B

Is the 5-year wait finally entering its final 12-month stretch? If you look at the Q2 work program, there is a very high probability we are seeing a major "logistics de-risking" play right now.

The "Road Walk" Theory (E47/5159):

UFO has confirmed helicopter-supported field work for May. It makes perfect sense that while the birds are in the air, they’ve coordinated the KNAC heritage survey (the "road walk") for the 5159 license.

We know KNAC has a procedural objection on 5159, but they’ve already signed the over-arching Mining Agreement. This "objection" is almost certainly just the elders wanting to physically walk the haul road path to ensure no cultural sites are disturbed. If they find something? UFO just shifts the road 20m. Once that walk is done and the report is signed, the objection drops, the tenement is granted, and the final transport corridor to the Great Northern Highway is legally locked.

The "Bankability" Booster:

In parallel, the "Asset Review" of the existing 8.4Mt resource is huge. UFO is now 100% focused on iron ore. If they can reinterpret the existing models and prove 15-20Mt instead of 8.4Mt, the project suddenly moves from a "nice starter mine" to a "decade-long regional hub."

The Funding / FID Trigger:

That is the "Double Whammy" for a Final Investment Decision (FID):

The Road: Legally granted via 5159 (thanks to the May road walk).

The Ore: Doubled resource via the Q2 review/Q3 drilling.

Lenders and strategic partners (like Anglo) don't fund "potential"—they fund "permitted tonnes." If the 5159 grant and the resource upgrade land in Q3, the road to a Q4 FID is wide open.

After 5 years of waiting, we might be looking at the most rapid development phase in the company’s history over the next 6 months. DYOR.

i will address your points in turn though as seen as you went to the effort.

han**** is a bonus. current mcap is £11m which is only part of eh. han**** currently priced at zero. bruce never said he would review han**** in a year. the comms are that ufo are aiming to produce on han****, right now there are access issues and performance rights to resolve. in the meantime they plan on extending the 8mt mre to 30mt+. drilling starts h2. cool. it will happen when it happens. pressure removed since we monetised eh and mm.

by the time eh gets to dtm, wce will be 1.00 and ufo will be 0.7+. its open pit so capex quite modest. wce and ufo will probably be able to go it together and keep the 70/30 split. i explained a few weeks back that ufo keeping 30% would generate more cash in 6 months than a 2% royalty would in 6 years. 2% royalty was put in place as a backstop when silver was $25. modest margins. at $100+ there is no justifiable option other than to keep the 30%. funding not an issue with a strong balance sheet. they don't need to confirm anything about the royalty yet. when the time comes they may go back to the negotiating table and settle for a 10% royalty citing the significant increase in silver price. all options are with the ufo bod. they are in control of this particular relationship.

finally, you still don't make sense. you say you stick around hoping at least 1 of the 3 projects come off but say that even if eh and mm do ufo will only end up with 2%, and han**** well who knows that might never happen and if it does we'll be diluted into oblivion. if what you think will happen happens tgen we all should head for the door. at least i'm sticking around because i think the sp will climb to 1p. you're sticking around expecting it to end at best where it is today. doesn't make sense hence why i mention the door.

Wents, you are referring to a 3-5 year road map. I specifically state, a road map to Pings break even of 0.65. This is imo a 9 month road map which has been laid and communicated in the March presentation and all hinges on EH. MRE Q3 and scoping study Q4. This gets us to 0.65 imo.

Think you misread my statement and went off a right emotionally charged tangent there.

Yes but the road map to your breakeven has been laid and communicated. For you and for all investors. Not sure why the repeated daily negativity on the sp when all the company is now doing is playing out the road map. If investors don't like the road map or don't believe it then they know where the door is.

"ChrisatBirdies....absolutely nothing seems to move this share. Plenty of other shares affected by war but not this one. It only seems to react poorly whatever the news."

Ping, you're watching the daily movements like a trader would. If you're in here to recover your 0.65 average then you'll probably get there off the back of the scoping study at eh come December 2026. 8-9 months. Try not to worry about a 36% drop during war time. US still threatening to obliterate Iran so nothing changed in last few weeks really. Trump doesn't know what he's going to do tomorrow so how can the markets. Hopefully the bombs stop flying soon at which point we'll get back to 0.17ish and then by end of April we'll have phase 1 results to push us into 0.2s. Come May we'll have eh phase 3 results trickling in and a confirmed modern MRE for MM which I'd like to think locks in 0.3 as a new bottom. After that, we'll see, but no point keep regurgitating the same negativity every day. Ufo projects still progressing through the 2026 plan despite what is going off in the middle East.

chris, it certainly isn't anything to do with the technical or operational side of han****. the delay must be due to legal ownership, rights and 3rd parties. below is from 2024 accounts.

"alien metals limited reported a loss for the twelve months ended 31 december 2024 of $1.56 million (31 december 2023:

loss of $3.7 million). the 2024 results include approximately $0.3 million in consulting costs and legal fees in the preparation

of agreements for a joint venture of han**** which did not proceed."

i would love to know why the first attempt did not succeed but if it was related to windfield and nothing can be done for at least another 2 years then why are they having "ongoing" discussions still. that doesn't stack up. windfield would also be looking to strike a deal where they at least get something and let's face it, it is in no ones best interest to let han**** waste away for 5 years just because someone signed a bad deal. deals can be renegotiated. i'm sure we'll find out soon enough.

anyhow, for now, han**** is priced in at zero so these uncertainties are no longer affecting to the downside. a surprise monetisation rns however, would have a significant impact to the up. gla

hi chris,

sounds like an improvement on the previous ufo regime that spent lots of money doing not a great deal. hence why i support the 2 jvs.

han**** was messed up years ago and i don't see any reason why several management teams would intentionally drag their feet monetising it so in my opinion, its complex but doable. time may be the ultimate answer but its more a case of when than if for me.

the ufo bod published their latest presentation earlier in march. for now, the plan is to advance iron ore with drilling in h2 along with growing the mre. it all adds value which at some point will be monetised when han**** is.

Nothing really matters until this war concludes. Then, we can get back to fair value in the high 0.2s low 0.3s.

apparently, cost of diesel upto 85% higher now than before the war. unfortunately, that means wce and gre suppliers will be coming to them to help supplement the impact. fortunately for ufo these costs will be fully borne by our partners and their suppliers. so far, the fuel increases will only impact bruce's walk round han**** in q2. protect the p&l, strengthen then balance sheet.

Pete, he hasn't got a clue what he's doing.

the presentation was a nice watch and this rns backs it up. plenty going off at eh as work progresses towards scoping study.

next up we have mm phase 1 results to land in april supported by next steps which should be mre in may.

han**** will happen when it happens.

scaremongers talking about the sp when there is a war going off are just that, scaremongers. had it not been for the war we would likely still be ranging between 0.15-0.2. nothing fundamentally changed for ufo so any silly drop in the market is just an opportunity. gla

So what we thinking, mcap £13m. £2m cash, WCE shares £2.5m, GRE shares £2m, leaves £6.5m for our shares of the Projects.

1. EH - £3m

2. MM - £2m

3. Iron ore - £1.5m

Its up to you.

So what we thinking, mcap £13m. £2m cash, WCE sh

1. EH -

Agrees Chris that UFO or our partners more so have to now deliver. I think they will.

The market is a little misleading at the moment due to war but prior to the war, you could sense the market starting to realise that the tin they were looking in said UFO 2020 on it. Contents well and truly mouldy. The tin next to it says UFO 2025. Contents have a certain shine to them. New strategy, great balance sheet, nice smell. Even better is that they have accidently left a fire sale discount label on there. I don't know when the label will be removed but hope its still there come ISA day.

chris, i know you are connecting the 12 months statement bg made with han**** but not sure why specifically. i must admit, i connected it to silver. i don't think bg had looked at han**** in any detail prior to make the 12 month statement. silver on the other hand, he was hoping to be mining in 12 months. whilst his 12 month mining target may have slipped a quarter we are still expecting the scoping study in q4 this year.

the road map for 2026 has been laid out so the market knows where this is heading, just need to implement. the only surprise we can hope for is han****. no one knows when the transaction news will arrive.

ibm, thanks for the copy and paste of wents post from 18th 10:26. don't you have your own thoughts.

the problem i see for you:

1. eh royalty decision 10-12 months away

2. mm royalty decision even longer

3. han****, you say stuck until 2028.

you clearly think the royalties will be a bad deal and loads more dilution is coming and the only good thing to happen is han**** starting production which by your comments will be around 3 years from now.

based on that, i have bad news for you. by the time the market is convinced that han**** is going to produce (back end of 2028), the disappointment of the royalties and the dilution that you predict will have already driven the sp down to 0.01. ufo won't be able to fund any of the capex so they'll have to give 90% of the project away to a miner. by this time the minimal revenue from eh royalty and the minimal monetisation of han**** may if your lucky get the sp back to 0.1. that's a 10% loss on where we are today.

to hang around moaning and constantly posting negativity for the next 3 years on a small hope you'll make a further 10% loss is i have to say, the worst investment strategy, i have ever heard of. each to their own of course and all the best.

Chris, you think WCE are going to spend all this time, effort and money just to give 70% to someone with a shovel. This is an open pit mine. Most of the cost will come from processing not mining. The reason 70/30 worked first time was because a cart load of exploring and admin was required. High risk with no certainties. That means you have to offer a substantial amount to get a partner to buy in to the project and accept the risk of failure. By the time we get to DTM, risk has been reduced significantly and mining almost becomes a formality. Very different negotiating situation and one where you probably contract the mining and the processing for about $50oz retaining about $100 profit. No jv required at these margins.

Yes they had 10mt for years and coined it in. Dividends of plenty. 38mt is not too small. Not for us