Member Info for howezap

Dani
Yes is highly likely a PFS will be commissioned as is a minimal study level that determines whether a probable mineral reserve ‘is’ economically viable. Only mineral resources that are drilled to at least an indicated JORC can be included in a pre feasibility study. It is only indicated, or measured resources that can be converted to a probable mineral reserve for this.

So the likelihood is that the PFS will be based only on the initial shallow higher grade mining phase to return CapEx without any of the remaining inferred resource included at this time.

Infilling will eventually be required within the majority of the 225Mt but this can be quite progressive as are shallow boreholes. So the JORC statement can be updated again with all the additional resource included from here on.

I don’t see it likely a partner will come onboard up to that point, xtract should be in the position to fund any of the ongoing drilling and other technical work including the additional mett test work planned at Ascot, if Ascot is included in the initial mining phase, also the cost of a PFS too.

Now they have made a commitment to mine all the work will be aimed toward that commitment. So a slog to PFS, see if AA want to take up their option. If not then they will look to sell to others still, with that commitment to enter into a Joint Venture. But that does ‘not’ mean that a deal for the whole project will not be struck by AA or any other interested party.

What is worth pointing out amidst all the speculation today, is that it is not this, updated conceptual and financial study that really matters. it will be the resulting Pre Feasibility Study.

When the updated study is released it is just the next step and a decision point that the company will act on, from the direction that’s given toward maximising the NPV

There is huge scope to improve on and increase what there is already.

What it says in the highlights of the interim RNS -

- 16 economic pit shells were modelled in the Interim Report from an operating cost perspective only with capital cost requirements excluded and to be finalised on completion of the Study. The 20Mtpa and 25Mtpa open pit options potentially generate significant operating cash margins dependent upon mining rate, copper price and cut-off grade.

‘Potentially’ implies that once the cap costs are included. As further down it then states -

-A total of 16 scenarios were run for open pit mining of the Racecourse and Ascot Mineral Resources, with economic pit shells being generated for all of these scenarios.

Is still a waiting game but to bear in mind there is still a further optimisation phase of drilling that will improve economics even further, from direction that the updated mining study will point.

Hi LW it would certainly be arguable that reported rising revenue would support an increasing market cap. But we may also see a consolidation period as the market has been made fairly aware that the increased revenues will likely be used to support the Oz drilling efforts which is still a priority for xtract. So, until some clear direction with expenditure is known to see BR ability to be ‘actively’ marketed, one way or the other, the share price may recover to a degree, but could see some stagnation until that expenditure can be factored in.

It’s quite a concern is it Cela?
I spot an obvious agenda considering you sold the last of your Xtract holding chasing the short lived rise in AFP.

Fact is, the whole junior sector including all CB companies have generally gone into ‘limp mode’ to ride out the downturn, the lack of comms albeit a steady trickle, is a distinct result.

Not sure what you expected.

Hi Dani just to be clear I am ‘not’ paid in any way for posting on this or any public bulletin boards.
NicetoMichu and I were sparring partners back in phase 1, I respect his views as a LTH and enjoy their unique writing style and ‘humour.’

Would call myself a mining enthusiast that simply has far too much time on their hands and normally too much to say.
Keep your posting up Dani all members contributions are valued.

No I’m not a ‘paid’ basher Dani, It is an absurd suggestion I might even get 5p a word too. We had already established that the agreement is, If I get to 2million words, (they have to be ‘joined up’ words btw) or I make a decision to mime, Colin said he will let me have the use of his old office swivel chair!

Hi Eastern every single poster has their own agenda, I suppose I am no different! but be assured I always try to post objectively, and always try to support with some reasoning behind.

It’s posts like that from Andrew that shows the underlying confidence there is from the gaffer that drives me to keep digging and continue to try to “second guess what the company are trying to do.” Having a healthy interest in the whole BR story helps too.

Ta NtM although I feel sometimes I just annoy people, but if something seems to fit, then I’ll put two and two together.

If he was me, and he was quoting on here, who is he?

"I wouldn't say I was in the top ten posters. But I was in the top one.”

“We discuss it for 20 minutes and then we decide I was right”

“I’m a little bit of an idealist, I do believe in fairies, and that is my outlook.”

Ok here’s the giveaway,

“The River Trent is lovely, I know because I have walked on it for 18 years”

Hi lucky, thanks for, and from your posting

>>Although the primary incentive for these installations is increased plant capacity and reduced capital and operating costs, bene®ts are also realized for waste management.<<

We would then assume that new scenarios will be formulated showing initial mine lives between 10-20 years. If there is a solid case at BR for increasing plant capacity with the appropriate technology if is suitable. As well as reduced tpa plant and 20-25 year mines and whatever else is in between.

Another serious consideration as to why modern ore sorting tech is being assessed is if AA are to be interested, in taking BR on it is a ‘necessity’ anyway, to have the ‘concentration study’ in place, showing potential to use the technology, as will need to satisfy their own ‘ambitious’ Sustainable Mining Plan targets of a 30% improvement in energy efficiency and a 50% reduction in fresh water abstraction by 2030.

There is probably not a mine in operation that doesn’t employ some form of ore sorting or another.
It is a given that whoever buys it ‘will’ utilise ‘modern’ bulk ore sorting.

As much as 50% less of the 20% discount ;-)

It would be safe to say the company still intend is to sell on BR. The hurdle being the buy back agreement with AA. What is required is to put a package together ‘with just enough,’ that triggers the buy back for AA to make a decision.

It would be counter intuitive to think that the company would have to show they are heading toward 100% funding to develop BR. A junior, getting up to a billion to finance a project! No never.

My understanding is that they would need to show a capability to fund their 20% that is relative to terms of the agreement. The importance of NPV and an IRR to show viability is of course essential toward that.

Generally, once an NPV is known, unless a company with an intent to mine it, already has the financing in place to take the project into the development stage some of that NPV will be given away in either huge dilution, or to a partner to achieve that. Where Xtract have a sell on, there will be a further 20% discount to the acquirer, on top of the discounted cash flow that takes into account the cost to build the mine basically. Colin mentioned in an old podcast whilst discussing how if would be valued if it went to third party valuation.

So if xtract can improve NPV/IRR whilst also lowering CapEx with reduced capacity plant, that further discount could be as much as 10% less, toward a higher valuation if AA decide to take on the project.

HZ
>>These techniques are designed to give economic advantage, to primarily drive down energy consumption per ton of ore with smaller plant and to save on water and chemical usage.

The cutoff grade is the grade at which the cost of mining and processing the ore is equal to the desired selling price of the commodity extracted from the ore.

So basically, the extra recoverable copper ‘is’ a result of a lower cut off grade due to the increased economics which lowers the cost to process the ore and not necessarily directly from any advantages that a higher head grade has making extraction more efficient. Duh!

The lower the grade the higher the cost to extract the minerals.

So, it’s not the technology that allows recovery at lower cut off but the increased economic benefit it produces ‘allowing’ the economic extraction of the lower or marginal grade ore without displacing any of the higher grade, which in itself is a resulting benefit that the technology improves with better mill feed.

Thank you James for the number crunching on the 71mt study.

>>We lose some of the metals due to concentrator but gain a little in the recovery process which is my understanding of how this works)

Yes I agree James, but on the understanding I hope you meant, “but gain a little back, in the recovery process.”

A cleaner crush, although supporting more efficiency from the processing, surely could not then make up for its initial losses from the bulk ore sorting in terms of end copper content?

The 10-15% losses from ore sorting would need to be returned and further gains from the processing losses would need to be made too, All from the increased efficiency of the processing stage to retrieve more copper including lower grades that would upgrade the JORC as CB implied at the end of the podcast with the roasties.

These techniques are designed to give economic advantage, to primarily drive down energy consumption per ton of ore with smaller plant and to save on water and chemical usage.

It’s a really interesting subject and one that I hope I am wrong and Colin is not just being Colin again!

What are others understanding?

Glad you are seeing the positive side of the bigger picture lucky.
Definitely at the business end now with the optimisation of what what has been circled by phase 2. With a PFS in sight the main focus now is concentrating solely on the ‘initial’ mining phase that will support the DtM with a positive economic evaluation. Hence why the talk now is centred around an 11-14 year ‘initial’ production run.

Even taking into account recovery losses from the ore sorting and production process there is a decent margin still.
Xtract only have to show there is reasonable justification starting with economic viability for a buyer to take the project on toward the next stages.
There are many hurdles ahead for the acquirer and this study and the next are just hurdles this company has to get over.

Hi Dani if for example the whole 225mt that is ore and waste rock all together, it is not just all grade ore, contains an average grade of 0.33%CuEq and is all workable that obviously equates to about 742,500tonnes of potentially recoverable contained copper eq. Ore sorting, generally separates the waste rock that has no economic benefit, say by 50% but about 13% of the good grade ore is lost n the process.
So the same 742,500 tonne has lost 13% of that total but all the remaining is concentrated into what now becomes 112.5m tonnes of the more economic ore. Hence increasing the mineable ‘average’ grade contained after. There is also still a further loss at processing recovery of 10-15% that was determined by the metallurgical testing. Neither of these are to be confused with ore grade control either.

These losses are no doubt outweighed by the increased economic potential of a subsequent smaller plant and lower running costs

Copy paste AA link into browser and replace the asterix with ar se making coar se

They would have retrieved representative examples from stored core from previously drilled holes from phase 2.

Sorry if above is too dumbed down, easiest way to explain.

Hi Stevem
>>>considered to be below viable mining grade." Would the new technology change that?

Had considered that potential myself Steve to reduce cut off grade as result of ore sorting, but would doing that then start to erode any of the economic benefits achieved in the first place. So I’m not so sure.

Also I would say the potential to increase the chance of joining up Ascot is more likely to be dictated by strip ratio tolerances that CB mentioned at some point previously.

“In surface mining, the strip ratio is the amount of waste rock that must be removed to release a given ore quantity. “

As pre concentrator ore sorting increases average head grade and reduces waste ore being processed, is there a correlation to potentially support a higher strip ratio?

One to get your head around but in my opinion the answer is no in that respect

It won’t allow the word coa rse in the link that’s all

https://www.angloamerican.com/futuresmart/stories/our-industry/mining-explained/bulk-ore-sorting-and-co****-particle-recovery-leading-the-way-in-mineral-processing-innovation

Hi ma no it does not increase the JORC as the tech only increases the efficiency of the processing phase of that same material. It is used to drive down energy consumption per tonne of concentrate produced and reduce water and reagent consumption.
It is a reason why you often see higher head grades quoted well over the mineral resource av grade on current producing mines.

There are many different methods of ore sorting that are suitable for different ore type. That I do know.

Lastly that is rather subjective to answer, but, to illustrate the point that major mining companies ‘will’ be adopting these technologies. AA themselves are leading the way.

https://www.angloamerican.com/futuresmart/stories/our-industry/mining-explained/bulk-ore-sorting-and-co****-particle-recovery-leading-the-way-in-mineral-processing-innovation

A projects low carbon footprint which includes, from using renewable energy will trump projects for majors, that just have higher grades and are off the grid!

Fully get where your coming from 3cardbrag got sucked in myself but my own research has led me now to believe that it is quite normal timescales we are experiencing to prove up to a saleable state a large scale porphyry project. Worth pointing out though that 0.6%Cu is an average across all mineralisation types of deposits. The average for porphyries is stated as being 0.44%Cu in the ‘21 presentation. Being economically mined down to grades as low as 0.15%Cu. Blah blah yeah I know ;-)

One last point regarding pre-concentrate ore sorting if is of any consolation. After just some minimal research it is apparent that this technology has been used in many large, low grade mines of which has ‘made’ many projects economically viable and not just enhanced those that were already viable.