Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Worth pointing out that there will be quite a significant difference to the task of defining a resource this time round from the Zambian licences to what was required on Bushranger.
The different characteristics in the types of mineralisation that are evident in Zambia, will not be disseminated or spattered in nature and difficult to follow any trend like BR porphyry’s did. Where it constantly thickened and thinned and meant was unpredictable and so needed more intensity of drilling to define a resource. Those earlier drills were simply to just try to ‘delineate’ or outline an ore body.
So if there is a find, of which there seems to be a firm belief from others directly involved that they expect results. It will not follow the same exploration path as BR took. A resource can be more confidently defined with far less drilling intensity.
So when you hear Colin state that the plan is to loosely define a resource to sell it on there is not technically any reason to disbelieve him or accuse BS in that respect.
Thanks Bob was part in jest of course, but it does open up some questions, like were those artisanal workings mined for copper or are they associate indicators that coincide with a trend? Have Xtr already commissioned any of their own air or ground surveys in that area yet that supports that starting location? Or are those the first steps?
Any thing else you can recall mentioned from GM however insignificant?
I think we are all thirsty for more news around what is already known now.
Not being cynical when I say that, if after months of expert analysis and geological mapping to determine the architecture from all historical and all other more recent data, the highly experienced geologist team have decided to just drill near where there are artisanal workings evident. I hope that’s not what you are implying Bob 🤔😉
‘Laughs nervously’
Hi James
There are different processes that can and cannot be controlled, toward bringing a deposit into an operating mine as opposed to running an efficient mining operation.
A start up is initially determined as a result of the geological processes that have been carried out along with environmental and social governance and all the other hurdles that simply have to be overcome first.
Generally most of the issues that can prevent a mine ‘toward’ getting its permits are outside of the companies hands and the due diligence that can be done at particular stages. Which is why there is a low success rate, it’s not often down to economics either.
The difficulty where Colin’s experience and skill set come into it is, with what can be controlled by the company that lie with how to keep an operating mine running whilst keeping creditors, partners and shareholders all happy and then you have the mines sustainability to consider on top.
Just as has been seen with Manica, although with Xtr subsidiary with a non controlling interest. It is Colin’s experience in mining that led to knowing when to walk away. He has spent his career running mining operations so that is where his experience and skills comes into it. I do understand your point of monetising in the first place though James but I believe there are no skill sets that can help overcome those hurdles. That is why this is such a risky sector to invest in.
The previous deal with KPZ had arguably soured for any number of the reasons that were previously touted on here that led to them being impaired. The company gave plausible reasons for Kalengwa and eureka but it clearly wasn’t a sound partnership in the end as KPZ were supposedly in financial difficulty. So it’s arguable if was down to poor due diligence or those projects were just not viable.
I think as a company and like any in any sector, there still needs to be evolution to grow. Small to medium scale Joint ventured, in line with its laid out strategy to mine and with the expertise and experience there is in the company (particularly Colin) is the one way they can take active control toward its evolution as a company. The larger exploration plays have that control taken away as are reliant on other parties desire to aquire them at a later date.
So equally there are no guarantees, but at least they can actively take control toward being a sustainable company.
It may not mean much to shareholders short term but sustainability is ultimately what any company doing what Xtr do will work toward. Xtr will continue with a successor so for CB to make rash decisions now that may have detrimental impact on the companies financial standing later after he has parted, would not be passed by the rest of the board.
If these small mines can get working and running the ore. Will they just be mined for revenue or will there be ongoing exploration to increase LOM towards being sustainable for longer?
Any indications from GM or other?
Appeared from early indications that Kakuyu could see it being developed ‘toward’ a larger operation with mine longevity.
hi again iwto
there’s a reasonable assumption a sale of br will happen at some point, copper price is the ultimate driver of course. the economic model is currently going through the simplest and cheapest optimisation first i would say, of cap/op costs including further metallurgy to increase recovery rate as first round had an anomalous low reading from one high grade sample.
tomra ore sorting wasn’t amenable to the important higher grades that are crucial to have the most profound effect on the economic model as will ,
• reduce processing and operating costs
• reduce pre-production capital expenditure due to a significantly smaller concentrator
• improve concentrator recoveries due to higher feed grades
• generate more co**** dry rejects that are easier to manage
• reduce the size of the tailings dam due to less concentrator feed.
other sensor based tech is highly likely to be looked at as it can reduce concentrator capacity down front 20mtoa to 10mtpa, whilst we wait for interest rates to come down that will see fuel, power, materials etc costs all come down to increase the economic performance. there is still option to increase resource to nw so can’t rule out more drilling while we wait.
seems likely the buy back agreement was exploited as a marketing tool throughout as now it has been suggested that there is an inexpensive exit strategy as decision to mine to trigger the buy back process is not an option.
as for value, away from valmin a dcf model can maybe then be used, so with viable economics at conceptual study level, an acquirer should pay for what is in the jorc but will be largely discounted as the resource will not support ore reserves. only 50mt is indicated rest is inferred.
think that is a fair ‘objective’ view overall.
short version…. no one has a scooby doo
It was important to drill the bit in middle, the main reason being to establish if there was enough continuity of viable resource to join RC and Ascot up. It was these subsequent grades that was the main disappointment as it meant that Ascot was required to now be standalone as a separate entity for its resource to be exploited. As we have now seen will need a further extensive explotation programme to increase and establish a viable resource there now as it would not be viable to be reached through a series of push backs from RC. This down to the grades being just too low and outside of the stripping ratio tolerances that would allow it to be mined once the CapEx payback phase was completed.
A point of interest.
A comment Martyn C made whilst speaking about another of the groups projects, may explain why those high gold grades from Ascot drilling of 14m at 1.96g/t Au and 2m @ 15.5g/t Au were not followed up.
MC….“Can’t lose focus on their goal by chasing narrow high grade veins as it would be far more difficult to put a resource together, with the main focus concentrating on the bulk tonnage.”
This would so easily be the case for the work that was required to build the BR resource. Makes good sense now and could explain why, as at the time it was so frustrating that it wasn’t investigated further with a hole or two at the end of phase 2, choosing instead to test mineralisation at depth below hole 35 If I recall.
Sorry bit random but I’m sure others may have had similar thoughts at that time. 🤷
No need for apologies Analytical, input which is both relative to NW Zambia and informative is very welcome if is helpfull to build the overall picture for shareholders and ‘generally’ should not under these fairly unique circumstances be seen as any kind of cross ramping
Thank you for sharing, is all helpfull information if encourages much overdue quality dialogue. 👍
(I’m not invested in GLR)
Does feel is the right direction to go now, to focus efforts. There is an obvious and very clear advantage to having a group of companies in the CB stable, with multiple licences and ability to share expertise, and data within the group to help understand the geological trends.
Also to consider with our access to self fund, the expertise and experience of Xtract people and ability to create revenue from the opportunities that are definitely out there. Been saying for some time now that there will be countless project or small mine owners out there in this economic climate that are now unable to get their mines to final production through inability to self fund. With the added bonus that production facilities are also needing ore to process. Xtract are in a strong position to pick and choose.
What is so encouraging is that we have now had others directly involved supporting Colin’s early optimism over the Zambian venture.
In the Zambia copper special with Tolai Sikumba, the CEO of their JV partners is really positive and ‘expects’ to see results
https://audioboom.com/posts/8450336-midweek-takeaway-zambia-copper-special-with-colin-bird-exec-chairman-xtract-resources-and-tol
More importantly we hear from Martyn Churchouse, a senior consultant geologist across the group in the mining Indaba podcast who gives real credibility to the reasoning behind concentrating efforts there, to back up Colin’s earlier efforts to sell the idea to shareholders.
https://audioboom.com/posts/8454846-midweek-takeaway-mining-indaba-2024-special-umr-maru-neo-afp-xtr-atn-glr-ura-k
If shareholders are not keen on getting onboard with what Colin says, believing it to be just chasing the next big thing! it is a little more difficult to ignore MC.
It’s no surprise Alex Terry has increased his stake
Commodities live in the now unfortunately, prices are not affected by sentiment or long term outlook. Copper is falling against a strong US dollar and pessimistic industrial sentiment and macroeconomic headwinds in China. Their warehouse inventories have also soared by over 120% ytd to nearly 70,000 tonnes.
Wonder how long they can hold copper furures back so they can build up their inventories cheaply?
Could well be the reason there have not been any operational updates on those other projects already Bob, including Chongwe it seems too???? That until there is resolution to the disposal of Manica it would have been unwise to fully allocate treasury funds to advance the other projects beyond just technical work.
Donna feel there is a lot of news to come it’s hotting up.
Cyber
A good rule of thumb is that the average of a good deposit grade should be at least double the cut off grade across the whole resource.
So with current racecourse estimate of 512Mt @ 0.22% with a cut-off of 0.1% is clearly within that range.
Not to forget that the cut off only takes into account mining costs and not any CapEx outlay. So generally the ratios do compare with similar projects, also with currently operational high tonnage low grade mines. Take aitik in Sweden for instance.
It’s not about the grades, it’s about what they can initially show what can be economically exploited.
Those smaller open pittable operations being targeted will potentially be the bread and butter that will cover ongoing operating costs and fund those larger exploration projects. Those smaller projects will not require large expenditure to get them into production which will be assigned a project manager to run so the take up is not too limited.
The company has a clear strategy for growth to bring online small to medium open pittable operations to bring in revenues under equally joint ventured deals giving far better operational control and risk mitigation and that target copper projects that are central to that strategy. Taking a step back now in principle, paves the way with financially security to fully commit the treasury to progress better options for medium to the longer term.
There are no guarantees that a second phase will actually happen. Full economic feasibility will be required to warrant underground mining, it really isn’t as straightforward as open pit. A lot of the deposit becomes sterile and unmineable due to the need for large supporting pillars to be created. The economic risks are far too much to commit to buy into.
Billy, if we keep Manica, it is a high probability that a fund raise will be needed to just progress to the next feasibility study toward a plant extension or new plant. It has been made fairly clear that it is not an option to just carry on receiving 23% profit share as a minority partner.
Copper needs to hit $6.26lb just to be worth the same value once you take into account inflation adjustment alone since the $4.62lb high of 2011. That is without any of the expected demand needs that copper is central to, for the world to decarbonise and reach net zero.
$4-$5.lb is well within reach.
>>>With no covid, no fall in POC, no change in economic conditions, no war the sp would still have fallen as reality and results was seen to be nothing like CBs comments and predictions. .
The above has increased interest rates, fuel and power costs, labour, construction. Just about every aspect that has increased CapEx and Op costs that have had a profound negative effect on the updated economic study.