Member Info for Gray1

Project M and G has all been a bit "suck it and see" since they bought them.

Never raises valid points about drill, exploration and defining a resource.

Artisan mines are artisan mines because they aren't explored, defined etc. Jlp will have to do the hard yards and are currently doing so this takes time and money and impacts delivery to Sable unless they can define a section of resource they can deliver to Sable whilst ongoing exploration etc. takes place. maybe they have that is why they are looking at producing 200T/month from October we shall see.

If G doesn't start down the same path until Jan 2026 then it could be 6 to 12 months until it starts delivering on a consistent basis. Again we will have to wait and see.

How many thought on here we were going to end up being an exploration to mining to processing company when all this started with copper?

Edzi,

I agree Leon has made some big mistakes. I posted ages ago that chrome was high volume and low margin and made little net profit especially the toll side making the company busy fools.

$12 a ton for 1.6 mill tons gross margin which will reduce over time as the contracts lapse isn't great by the time you take overheads out, interest payments which are substantial because they have to borrow at a high rate and then tax will leave a lot less especially with ever increasing costs.

Pgms have been loss making but I would assume at todays price they will be making a profit. If they drop then because of the above it could leave little net profit at some point in the future.

It isn't ideal I would have been much happier if copper was another 12 months on but I am not sure without the sale they would have been able to progress copper as they want without further dilution.

Unfortunately the deal is the deal at this moment in time. If we were doing 10k to 15k copper I am sure we would be delighted with it but we are where we are. They will be all in on copper now so they either deliver or we go bust.

Absolutely Happy you know me I have not been happy about the progress of copper pretty much since they started and have often criticised them you are right 384T for 1 month means nothing until they are churning it out every month for 12 months just to start with then they have all the other stuff to do as well that we can judge them on.

Some of you aren't looking at the bigger picture. They have got a good price for a business that is chrome dependant and if the ROM suppliers pull the plug or want a better margin when up for renegotiation that would squeeze an already weak margin even further so it is possible they could be processing 1 mill tons a year for very little margin. We would be at the mining company's mercy and quite possible could have no chrome to process.

They need chrome to produce pgms. Yes the pgms price has risen at the moment but no-one knows where that is going to be over the next 3 years. They can't process more than 38k because the 3rd party is full and the stockpile needs some remedial work before they can process it.

In 2 years time it is quite likely that they would get a much worse deal to sell it.

Agree with most on here about copper it has been a disaster so far but now they will have money to progress it. Time for Leon to deliver. They have outlined what they want to do in the immediate future with copper. I would have been happier if they had put some costings and timelines in the circular.

I don't doubt for a minute there will be pitfalls and I still struggle to see how they can reach 25kT/year with existing assets without further capital outlay (LWP would help).

Originally I was against the deal but taking the $56mill debt was a game changer for me. Do I like it that there is only copper left absolutely not especially with their track record. It would have been much better if copper was already doing 10k a year but such is life.

Papaki the purchaser has taken the $56 mill debt on some of which will have been borrowed to purchase the ROM so they have accounted for it.

Agree Northern I mentioned in an earlier post it is important to get it right.

You may well be right nevertogiveup. I was using the term loosely.

Seis agree it is what I have been saying earlier project M has been more of a problem that they thought.

I remember when they got M an off the shelf mine supply sable job done. Well it hasn't been that simple. Hopefully G will be quicker but processing copper and mining it are two different beasts and JLP are not miners so have to buy that experience in.

Before you say it is 4.5k to 8k a month they haven't done it yet. Leons favourite word targeting. Here is hoping they exceed 212T/month but don't hold your breath until you see it in the financial reports.

"Munkoyo open-pit operations began ramping up, targeting to reach 15 000 tonnes of run-of-mine ore per month comprising 5 000 tonnes of 3.0% high-grade copper ore delivered direct to the Sable Refinery while the sub 1.0% lower grade copper ore is being stockpiled at site for further processing"

September 24 it was supposed to be ramping up to 5k at 3%. What happened to that? Now it is 3.5k at 2.5% this after all the exploration they have done.

3.5 k at 2.5% is around 70 tonnes a month. 12 months production is 840 tonnes assuming it ran at that rate for 12 months which it didn't. In the whole scheme of things Gotreal at the moment it is bugger all.

Because if it had Gotreal we would have had a lot more than 2k tonnes of copper last year.

The problem with Project M is it hasn't produced material to be processed at Sable over a consistent length of time. It doesn't mean they can't but they have been side tracked with the drilling and exploration which has been more disruptive to production than they originally thought.

They do seem pleased with the results so far so they have brought in mining experts so they can utilise it as best and efficiently as they can and they have told us from October we can expect it to produce around 200t/month.

It looks like G will also be a lengthy process to start delivering material in consistent quantities but it is important to get it right they also have the equipment to upgrade on site which they can do whilst still drilling.

I will take the extra year repayment to clear the debt on it. Yep Gotreal purchaser doesn't matter as long as they pay it. All about the cash they need to progress copper. They have no more excuses now.

You also need to factor in the debt and interest repayments Papaki it isn't as straightforward just discounting the repayment schedule.

Papapki,

Year 0 $25 mill

Year 1 $15 mill plus royalty and extra payment in production parameters exceeded

Year 2 $10 mill as above

Year 3 $10 mill as above

Year 4 $10 mill as above

Making $70 mill if royalty paid over 4 years add in another $12 to $15 mill. $82 to $85mill plus any overpayments majority will be paid in 4 years.

Chester they have given you a projection for FY26 including the uplift for pgms (although not applied to the full year but no-one knows whether it will stay there either) and the price drop for chrome.

They are utterly dependant on third parties for chrome which could easily evaporate or margin squeezed and they have stated what the uplift in pgms need to be to offset any chrome reductions. More and more chrome miners are looking to do their own processing. They have got over 146 mill for it don't underestimate the debt going with it

Yes me too Seis. Apologies in my earlier statement it is a $15 mill payment on first anniversary not $10 mill so they have a little more cash to play with than I first stipulated.

The debt going is huge Seis no one should underestimate that it was crippling the profits with interest payments between $6 mill and $10 mill a year. That was a massive concern for me I voiced it at the time it was announced.

Thought the case they put for the sale of chrome and pgms was a good one.

The payback isn't as bad as it first seems $35 mill within 12 months. Then over the next 4 Years $10 mill per year plus the royalty payment each year also if certain production parameters agreed are exceeded then they receive a little more of the repayment each year. 5 year payment plan at the worst but could be 4 years at best.

I don't care how they are paying as long as they are paying it.

Copper,

From the proceeds they are going to pay down $8 mill of debt reducing debt to around $23 mill. To be fair copper production barely supports that debt at the moment.

It leaves them with $27 mill to invest in copper over the next 12 months plus $18 from sales minus $11 mill to pay for LWP.

Wish they had put capital requirements in for what they have to do for copper. It looks like they need around $15 mill to complete the things they currently have to do with Sable, Roan, M and G. This leaves then around $19 mill assuming production covers all expenses currently so not needed for working capital.

Anyone for a module at LWP that would be nice.

Overall the amount received for Chrome/pgms is good. The repayment structure is ok it would have been better with another $10 mill upfront. As long as they can deliver on copper which is a massive unknown it is a good deal.

Forget dividend or share buyback that is highly unlikely to happen and Tjate is worthless. They cannot afford to develop it and at the moment no-one wants to buy it.

The problem with artisan mines is not just the cost of purchase but then the cost of drilling, exploration and infrastructure. We have had M & G for some time now and whilst they may have provided some material to Sable it hasn't provided enough quantity on any consistent basis. Over the next 12 months that may change but it just shows how long it takes and how much extra money they have to pay out before they are productive.

Sable will produce copper Adriaan from the oxide sent from Roan. Then at some point in time it will receive material from M and then G. How much that is we won't really know for some time. They are forecasting 2300T for the first half. Roan at 350T/month is 2100T so they are not expecting much out of M unless they are being cautious. nothing wrong with that after constant failures.

As the amounts are quite small at the moment for Sable then costs will be disproportionate until they can scale up the oxide delivered to Sable for processing then economies of scale will take effect.

It doesn't really matter what they put in the circular about copper (unless they have a deal for the LWP signed and sealed) because the real proof will be actually doing it on time and in budget. My concern is how bad will chrome/pgms have to look to make copper look good and the best prospect. I think Seis alluded to chrome/pgms is there something they aren't telling us?

I am not sure the circular will answer all the questions and there will probably be different interpretations of it especially if it is to their usual quality of RNS but won't be long now.