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Is assuring to see the Oz government is actively encouraging new large mine development with its minerals strategy. Potential stumbling blocks in obtaining permissions down the line for open pit mines due to increasing social and environmental acceptances around the world could put potential buyers off in ‘less’ politically friendly and more environmentally sensitive jurisdictions.

Worth a read through although the relevant note of interest is the foreword from the minister for resources. Is from 2019 but is still current.

https://meg.resourcesregulator.nsw.gov.au/sites/default/files/2022-06/NSW-Minerals-Strategy-2019.pdf

I am now surprised, that folk are still referring to the previous over optimism from CB. Let it go, move on. If you were confident enough in what it was you were buying into originally, ignore anything previously verbally stated in podcasts or other, trawl back through the key RNS releases for BR such as ‘21 concept study, projects summarised in the audited reports and the interim exploration summary. Watch the BR presentation again and possibly the team webinars and I’m sure you will feel more content with where the resource sits at present and what may need to still be done without having the heightened anticipation of the targets that had been set.

Without yet the BR economic study and revenue from full production reported at Fairbride, this is arguably not far from where the market cap could or should be anyway considering the economic downturn. But….. and it’s a big but, without CB ramping the hell out of it, the £6million fund raises and options would have seen possibly far more than double the dilution to shares already in issue.

Flip side being the many investors including myself that bought in at a greater share price that are now sitting on a paper loss. I personally 100% do not blame anyone but myself for my timing.

Ultimately though, in that respect, he has achieved greater value for many shareholders particularly the LTH’s who ironically, do seem to be shouting the loudest ;-)

Hi egg it was ‘measured group’ the independent consultants that applied the cut off of 0.1 %Cu to the resource. To determine the COG you need to know how much it can be mined for from industry comparisons from similar mines, a basic recovery rate based on the one Met test work sample taken from Ascot previously and what the concentrates can be sold for. So ‘they’ would have worked from and applied a realistic determined saleable price.

But yes, now it is all about the high grade early recoverable ore that the PFS will be based around to show realistic economic viability. But it is wrong to suggest that grades down to 0.1 will be disregarded as they would not have been included in the JORC.

Hi Roggy hope you are well, there is no doubt the previous financial restraints that have held back the company from growing its portfololio has been down to the delayed plant development at Fairbride. Port restrictions/closures, Covid and whatever else occurred it’s easy to blame the BOD.

Must ignore the current share price and look at that potential of those assets and projected market cap.

Hopefully we will see an adjustment soon.

A strong Chinese economic recovery is looking more evident that will be the main driver for copper futures

>>>Copper futures rose above $4.15 per pound, approaching the seven-month high of $4.27 touched on January 26th and tracking the increase in other base metals amid persistent supply concerns and strong demand expectations. Investors continued to monitor the extent of improved Chinese purchasing after the country’s economic reopening, as new home sales grew for a third straight week in 16 major cities. Industrial demand is also expected to pick up as the government is set to announce further stimulus measures at its National People’s Congress in March. On the supply side, a series of production and export disruptions by major South and Central American producers compounded concerns about low inventories in the US and Europe, adding to worries that copper markets could be heading into a severe deficit.

* tradingeconomis.com

You cannot ignore the effect that higher commodity prices will be having on the ongoing economics of the currently held projects. Bushranger is one thing, that will only become more desirable on top of the political and geographical jurisdictional landscape there is in Oz.

Then there is Fairbride, which I consider as, still being the primary asset, as production now will be a spring board for the company. Along with its current, proven mineral reserves, there is huge scope to increase its life of mine as the ore body is open down dip and to the west. But beforehand within a four or five years when all the oxides and transitional ore has been mined, the higher grade deeper sulphides can be processed on site too, with the planned plant upgrades talked about.

Elsewhere across the concession, with the well known geological understanding there is, taken from an earlier scoping study -

>>Importantly, the concept study indicated that much of the Manica Project area would be readily amenable to low-cost surface mining techniques, and that it exhibits no particular technical or economic risk issues that could undermine its operational viability.<<
The later PEA for Fairbride is based on gold price of only US$1.250.

All other small to medium scale mining operations that have already and will be taken on under the current growth strategy, can be easily accommodated in the project portfolio. There is no long term limit as to how many projects can be taken on due to how these JV’s are structured and individually project managed.

Xtract resources is in a very strong position if you have a longer term outlook, notwithstanding a multi million dollar short term potential return from BR.

I continually look elsewhere to compare as I re-evaluate Xtract at every key RNS and have not yet come across a better investment opportunity that offers both short-med term high return and investment longevity under a solid ‘growth’ strategy that I understand and can relate to that will only get better and better as prices rise.

I’m just wondering what history has to do with ‘current fundamentals’.

So for 7 years the majority of that, Manica with the Fairbride plant under “development” was the primary asset, and you decide to sell up just before any meaningful revenues from it are reported.
I don’t understand the logic. You had waited this long.
Best of luck to you too.

Is encouraging they are doing all the technical work to increase Kakuyu run of mine and to maximise tonnage for delivery of ore. Regarding JLP Sable plant, noticed in the podcast that he mentions they have sent ore to various processing plants for testing! Likely due to compatibility , but maybe there is opportunity to utilise various plants concurrently to maximise revenue so outlay by the mining contractor can be paid back quicker?

Kakuyu JV agreement
>>reimburse US$90,000 to Oval in respect of stripping and mining to date on the Kakuyu Project, to be settled from cash flow by the reduction of Xtract's percentage share of net profit from 60% to 20% for the period required to reimburse Oval.

Feel Kakuyu will do really well, particularly if targets are met then an on site processing plant can be built.

I have far too much to say at the best of times iani ;-)

Futures forecast has been updated recently and is quite apparent that although there is not quite yet that imbalance in the supply v demand metrics to see copper price break and push higher, you get the feeling that it won’t take too much to see that tipping point. Is a case of just when. At present with interest rates being hiked that are tightening financial conditions, there are concerns of a sharp slowdown in leading economies. But on the flip side there is speculation that copper markets are heading toward a ‘severe’ deficit manly because of difficulties in South American supply lines.
So it may well be on the supply side that it starts to really tighten first, with the ‘certain’ to increase demand being tempered for now.

>>>CB having a PR drive of his various companies, with podcasts in fairly quick succession-
Kendrick 1st feb
Galileo 3rd feb
African pioneer 6th feb?Then another Galileo podcast. who’s next?? <<That would be Bezant then about an hour ago!
CB with Zak talking bullish on copper in general for the fist 8 mins of a 12 min podcast.

That completes the round up of his other companies. Although it doesn’t mean Xtract will necessarily follow but it would be welcome.

https://podcasts.google.com?feed=aHR0cHM6Ly9hdWRpb2Jvb20uY29tL2NoYW5uZWxzLzUwNTExMzMucnNz&episode=dGFnOmF1ZGlvYm9vbS5jb20sMjAyMy0wMi0xNjovcG9zdHMvODI0ODM5OA%3D%3D

Not invested in Bezant either!

The way I see the next phase planning go will no doubt be determined by the updated model, which will likely involve extensions to RC to increase tonnage, similarly growing Ascot and hopefully the bit in the middle can show continuity to potentially join up both starter pits into one.

Dependant on what it shows, will determine if any infill drilling to the high grade crowns of RC/Ascot will be done in ‘this’ phase. Otherwise, they may remodel the assay data from the next phase first before the decision is made to end up with the infill programme after that.

CB prefers to say concentrate on areas of resource where too much tonnage is relied on with limited drill hole information! But that is basically infilling. Wether or not this is what was actually hinted at in the Ascot MRE podcast is to be seen. But ultimately they will ‘end up’ with the extra work on the high grade crowns to upgrade the resource.

Infill is not a dirty word, but is necessary, it will only be a shallow programme, so will be quite progressive and could even switch to cheaper RC drill, but depends if they need to show consistency in the geology model as reverse circ drill core is basically rubble straight from the hole that is bagged up on site for assay and not analysed beforehand. ( which is where the extra cost comes from)

With you Joeman, updated mining study first though and hopefully soon.

LW it may appear so, but is not the case, I suspect the PFS will only be based on the higher grade material as this is what will pay back all capital outlay and initially what an aquifer will be interested in first.

Only indicated or measured resources can be included in, and support a PFS so potentially will see further infill drilling to convert some /more or all the higher grade to indicated.

This remaining lower grades will only carry their variable operational costs to be mined after CapEx is paid off estimated to bring in approx $200m profit yearly thereafter. Which was discussed in a previous podcast.

Just as an example if you look at haverion PFS it statutes that the inferred resource not being included in their study

https://greatlandgold.com/news/project-updates/havieron-south-east-crescent-pre-feasibility-study-released/

# I am not invested in GGP ;-)

Haha I really am trying to turn a new leaf gixxer but old habits die hard. I have always said though that sometimes you can understand more from ‘why’ CB has made a particular comment rather than what has actually been said. That was a good example in hindsight.

Recently though since the RC JORC he has noticeably been very pragmatic in interview, certainly in the Ascot MRE podcast sticking to facts and being just more informative with what a further targeted drill programme will achieve for example.

Worth a listen again and here’s another quote from CB referring to the 2mt
“Viability is worth more than quantum”
Now that is a fact.

https://audioboom.com/posts/8217460-midweek-takeaway-with-colin-bird-executive-chairman-of-xtract-resources-aim-xtr

Is understandable that CB has his sceptics, but the way I see it, is that if Xtract could afford to take the project to a DFS they would be in a position where they would not need to sell it.

Remember one of CB’s old comments, “only a major could take this on.” That is what he was referring to.

Hi Steve, the level and intensity of infill drilling seem at cadia hill is exactly the level of drilling that would be required at RC/Ascot to have the open pitable resource at least, which is currently only 5Omt indicated resource , It would ‘all’ need be converted to indicated and the majority converted to a measured JORC that finally can be converted to a proven ore reserve along with detailed engineering and mine planning with permissions and any other studies such as an EIA that will all be required to support a final or definitive feasibility. Xtract could never afford to take it there in any reasonable timescale. Newcrest had 9 drill rigs operational at Haverion on their way to feasibility!!!

Yes there could be some clarity from xtract but common sense can prevail if you take on CB’s comment that AA just need to see that we are heading toward finance and a PFS is the first study that shows a realistic valuation that a conceptual or a preliminary economic assessment does not. If I recall correctly CB stated at an AGM that we do not actually have to get financing for the DtM.

>>>Well if there is no more drilling then we only have a decision to mine. Will this just be a, we are going to mine or would a full viability study be required.

Hi monty there will be more drilling to come that will target areas where the updated mining study will recommend to increase resource, improve economics and how Ascot will play a part in mine planning of the early years. As far as we know the project will go to a PFS as has a higher degree of confidence than the conceptual study, that supports the economic model which AA wants to see. Xtract do not need to have the capital funding, they just need to satisfy AA the project is viable to pay back CapEx and show profitability. Xtract do not need, or could never afford to take the project anywhere near a DFS if that is what you refer. They are not at the mercy of AA who are not calling any shots btw.

Estimated to be an early mining phase of high grades at both RC and Ascot of about 9 years after checking

Outdated is all you can really say about that one from ‘21 that shows rough valuation calcs based on a 2mt resource at RC ‘alone’.

From ‘21 article
>>>At today’s $8,000/tonne copper price, and valued at 3% which is probably a conservative margin to pay for what will be a cheap-to-mine resource, that would be worth $384m – or 40p per Xtract shares now in issue after the £5m raise.

RC looking to be in region of 1.3mtCuEq after this next drill phase with hopefully the updated model showing either Ascot potential to join up with RC or even partially to be in ‘addition’ to RC tonnage, that at least the high grade at Ascot can be mined initially too in a second starter pit in the next mining phase, once RC high grade has been mined for first 8+/- yrs paying back CapEx after first 4+\- years of those.

The 3% in ground value is certainly debatable but never the less there is good potential to show from the awaiting mining study and to where a valuation is looking, from how Ascot can or will contribute toward NPV after further targeted drilling there too.

The updated mining study will determine potential profitability and where to target best, the next drilling to maximise further potential.

They are either waiting for the mining study to be returned or it is in hand and are holding off until funds are in place from revenues to cover the contractual obligations of the next drill phase and other technical work as was the case for phase 2.

CB explains what the mining consultants Optimal are working toward and does mention they are waiting for them. As per RNS thanks to gixxer

https://audioboom.com/posts/8217460-midweek-takeaway-with-colin-bird-executive-chairman-of-xtract-resources-aim-xtr

What can be expected in terms of cost and time to complete the next drill campaign?

From ascot MRE podcast, CB quoted that drilling will be targeted toward adding to the resource, targeted toward adding value, …..‘or’….,targeting to parts of the resource that need further infill.

Say an 8k metre campaign, 10-20 holes dependant on depth at cost of $250 per metre drilling and a realistic drill target of 2,000m per month that would cost about $500,000 per month for 4 months then another 2-3 months assays and modelling. so about $2m plus other costs associated for a further drilling phase taking approx 6+ months.

We can assume assay labs will be quieter relating to the market values of companies in the mining sector being down affecting that ability to generate funding to progress projects. There will be a slow ramp up in activity in ‘23, I would guess.

The …or… comment is the interesting one. I expect infilling to the higher grade 0.33%Cu parcel for early CapEx pay back that will be subject of a PFS so is potentially required to be converted to indicated on top of the 50mt current indicated resource that is only at 0.25%Cu

Initial mining phase for CapEx payback stated as about 4yrs so 20mtpa x 4yrs = 80mt indicated resource is the minimum that needs to be converted to a probable ore reserve from the high grade crown that a PFS can be based to satisfy AAL we have the ability to head toward funding.

As for cost of a PFS, a simple search would imply anything from 0.5% up to 2.5% of overall project value and can take a further 3-5 months to complete.

Is only my opinion of course based on what is already known so far.

Any thoughts?