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Eastern
>>>If delivered, what is the likelihood of them showing either 2mt or a viable mine ?

This is another example of comparing the ‘potential’ reality of where the resource now sits at RC ( estimated 500mt @ +\- 0.3CuEq) to what the target was to add to the already positive result of the original financial model.

Particularly what Jeremy Reid explains at the beginning to understand this and to realise the potential of what reaching this objective means now for the updated financial model in view of his comments on how the original pit model of the 71mt JORC resource would already pay for infrastructure and plant etc.

https://youtu.be/AEIwR_0S7SE

Hi eastern investor, where timescales are concerned, they are too subjective to make an informed comment to be fair at this time.

What we do know though, from what Colin has said, is that hey have had a RC resource model since about April / may that was being updated with results as they came in so with the very last hole into RC, hole 54 with assays reported on 27 July. Conceptual study to follow, that is outsourced including new pit design/plan. But potentially could be just an updated conceptual model, but nether the less, still independently compiled. So it would be fair to say RC and its supporting conceptual model has already been completed and by now, Ascot MRE too. There is a very good chance the process has been started already to determine AA’s intent.

The perception that the decision to mine is the lesser of the two options to trigger the buy back is wrong IMO. To have gained a greater geological understanding of the whole deposit outweighs just a specific contained copper value.

On top of that , there is far greater value in proving that a resource of ‘X’ will be potentially, economically recoverable ‘toward’ its viability as a mine, than alternatively showing a resource of ‘X’ with its contained copper/gold equivalent value.

Whilst having s listen back over early phase 2 podcasts it’s a good way to gauge Colin’s optimism back from then, against the realities of what or where the project sits at present in terms of the geology. Way back in July ‘21 before Ascot was identified as a separate porphyry, at the time the geophys pointed to it being the other side to the saddle of racecourse. Potentially to join up with RC to make one big open pit. Now thankfully IMO with what we now know, it turned out to be separate and were able delineate and close off the southern extremities of the open pit, otherwise they could still be drilling it now! Nether the less, way back then he was dreaming of a large open pit of 20mt over 20 years at 0.3-0.35CuEq.

I does just show that grades from RC that are perceived as being below expectations. Where in fact perfectly within their expectations to be quoting that copper equivalent.

So I think not only will he have his dream come true, phase 2 has clearly been successful too, in demonstrating a multi porphyry system beyond Colin’s optimistic view and exceeding companies expectations.
Ironically he made this comment too, “Who wants to back a chief executive that’s not optimistic?”

It’s a really good old podcast in understanding where it sits now and why.

Insert v o x m a r k e t s

www.**********.co.uk/articles/traders-cafe-with-zak-mir-colin-bird-executive-chairman-xtract-resources-ac8863c/executive-chairman-xtract-resources

Hey ZM I was just speculating of course, just wanted to come up with a more feasible reason than, ‘could well have been just giving investors what they needed to hear at that time,’ when responding to why Colin had said there would now, ‘not’ be a phase 3 in most recent BR podcast.
it was reported back from AGM that there ‘would’ likely be a phase 3 after possibly getting a no from AA……
Just offering a reason as to why, if it is the case, there has been a change of plan since AGM

Been doing a bit of digging back to pre phase 2 when they had the raise to fund the exploration phase. There was a requirement to secure the necessary funding to have it in place to sign the drilling contract. They needed a couple of rigs that could work round the clock 7 days a week etc. “You cannot make those sort of commitments, unless you are sure you have the money in place to drill the required contracted metres” which I believe was 20k metres to start with?

So if a phase 3 were to be advanced then we could arguably assume that they would need to do the same thing. I don’t see that a third phase is in their consideration when assessing working capital requirements for next twelve months, as in the audited report statement. It is a big ask to rely on revenue from a new mine so early on in its initial production stage.

If that is the case it’s not likely the company will want to have a fund raise at these levels. So that may be the reason as to why Colin appears to have changed tact from what was implied at AGM to do a phase 3 to now, what was said in last BR podcast where he was distinct in saying that there would ‘not’ be a phase 3.

You can make plans based on what you have at any given time, But you cannot make plans based on an anticipated share price in the near future.

I suppose a lot would depend on the availability of drilling crews going into the first quarter of ‘23 and what flexibility there could be generally in mining contracts. But also to bear in mind is the capital outlay that will be set aside for strategic growth from that increased revenue, in looking for small, low cost start up, near production ready, minimal risk, safe jurisdiction Joint ventures that are important for the medium to long term longevity of the company

>>……….should trump today's short term market affected copper price. <<
?You would think so ZM
It’s a fair guess that Colin is hoping for a buying frenzy. To finally get to be in the position to trigger the buy back to be free from the restricting agreement will open up the project to, “The other interested parties that are watching on.” Potentially more suitable than Anglo if they do decline their option. It has gone eerily quiet, due to final modelling and then the process that needs to conclude with AA.

If it was interpreted right at the AGM “to get a no from AA,” that process could likely happen at any time as there would not be any advantages in waiting any longer than necessary would there?

The economic contraction and worsening fears of recession that has caused copper prices to drop 30 odd percent since last March looks like it’s finally showing some bullish signs. Another good day’s trading currently just over 4%up at 3.60 from as low as 3.29 in July.

>>> Concerns of tight supplies in the long run are prevalent, with industrial players flagging increasing risks of shortages. Commodity trader Trafigura warned that global copper stocks have fallen to record lows, with current inventories enough to supply world consumption for just 4.9 days. Freeport-McMoran was also vocal about shortage risks, stating that the current low prices do not reflect the tightness in the physical market.<<<

Looking promising, with hopes that demand may improve amid the possibility that the Fed could slow its tightening momentum.

CB was wrong about a quick resolution to the conflict in Ukraine, but will be a bit happier to see copper rising. Looks promising.

* Trading Economics.com

Colin quoted once in an old podcast with Zak. “It’s better to go into negotiation with a strong market cap than apologising for a week one.”

I suppose having a poor market cap, could be perceived that we are at a dead end, with a lot less option to take the project any further with more of a need to sell, as any further raise now will have too much dilution. It would potentially put AA in a stronger position at the negotiating table, but as we will now be getting meaningful income contribution now from fairbride, which has been confirmed it has now gone into full production, so would assume that means they are now running the high grade ore through the plant, and not the low grade material to run up the plant they found whilst stripping off the overburden. So now, that wouldn’t necessarily be the case as we could self fund any further exploration. So not having a stronger market cap will not necessarily matter.

it’s a waffle theory at least and the only one I can come up with.

Yep must admit Oliver I thought that was a bold statement for CB to make at the time, but I’m sure it was more wishful thinking than an educated view.
There is a certain irony about being bargain of the century back then, how much more of a bargain does it make it now the share price has drifted down, with odds on that most ‘investors’ are already positioned without decent funds available now, coming up to the silly season to grab the opportunity to average down.
Grrrr..

astute or lucky punters need not reply :-(

>>>we know a lot of Racecourse that was previously considered to be waste in the original conceptual pit model is now converted to ore……<<<

Particularly to the north eastern side where hole 17, which orientation was to the north east, away from the main defined resource. Incidentally, a hole that also intersected a deep zone of copper mineralisation that points to a further porphyry. Good value in that hole and one that the acquirer will certainly develop further to extend LOM far beyond the 20-25 yrs of the open pit, where these deeper systems will be easier to gain access to underground from and when pit is depleated.
Huge implications for future economics with all plant and infrastructure already paid for.

So the typical grades of porphyry deposits are in the region of 0.2cu+ down to .0.15. The quality of the ore is more than adequate at BR, with long runs of mineralisation in the hundreds of metres, but there are many other factors that will determine profitability potential and being open pitiable is the main one.

In most cases, the strip ratio is partially used to measure how profitable a deposit/project may be. A higher strip ratio generally translates to higher mining costs.

It is basically used as tool to determine open pit slope angle when mine planning, with the local geology determined. Geology determines the slope angle of course, with every extra degree of angle added to the slope of the pit wall due to the type of waste, it increases costs massively. So once the slope angle needed, is determined it gives you the strip ratio which is then used toward working out mining costs against anticipated copper price and ultimately if the mine is viable

Mining costs take into account the type of waste material, which we know a lot of Racecourse that was previously considered to be waste in the original conceptual pit model is now converted to ore as it was going to be mined anyway, so will have the potential to reduce the overall strip ratio in the new model. (which was already favourable) Mining costs also take into account the quality of the ore and the recovery rate at separation which metallurgy results have shown to have no issues at separation with 89-90% recovery rate. All in all determining the economic cut off grade which is expected to be 0.15%CuEq now.

To sum up it is hard to see where any nasty surprises will come from and with RC resource increase ‘estimate’ of 500mt@ 0.3Cu @ a cut off of 0.15Cu, up from 74mt @0.44Cu with 0.3 cut off. To what effect will economy of scale have on improving NPV?

I think where BR is concerned, there is still only the current JORC and an exploration phase to base toward value. I think it’s quite clear that there is a distinct lack of understanding of porphyry deposits too, from PI’s generally, particularly within uk markets. As most Xtract investors are mainly PI’s then this market still sees it as too speculative at present until the updated and maiden resource statements are released, along with a positive mining study which will be the deal breaker toward a positive rerate.

Back to basics, great simple overview of the different deposit types and the typical grades expected from ‘quality’ assets.
Worth a butchers to swot up anyway, but particularly relevant from 25mins for the doubters that have the opinion that grades are poor across BR

https://youtu.be/tTlf9t2OAoI

Thanks Steve knew I’d heard it at some point was prob a repeat quote of the comment I read more recently I was thinking more of.

Agree ZM nice way of putting it. To just comment on fact from RNS if Colin didn’t do these podcasts would make for a very dull sterile bulletin board.

Count me in as being on that same page Cygnus. CB’s recent podcast quote of no phase 3 regardless, implied a sale sooner rather than later but, could well have been just giving investors what they needed to hear at that time. No worse than what Colin has done to keep investors interested previously along the way. So, I’m in no hurry for this to be sold early. It still remains potential to be a once in a lifetime opportunity.

JS. Maybe it was before the AGM then I did make it clear I wasn’t certain as I didn’t attend.

CB suspecting they are not interested in a lesson in futility where a legally binding agreement is concerned. They will nether the less be crossing all the T’s etc to still put the most quality data pack together conceivable. Nothing will be taken for granted leading up to hand over of the all the data.

Basic business and engineering practice.

A reminder that there are two parts to the agreement, the first is AA can come in early with an offer before, 2mt is declared by xtract. If that happens all work will stop and a sale will be based on the current asset. Not much attention has been paid to this option but I’m sure it’s there for a good reason, and certain xtract have given this consideration since maybe the latter stages of phase2. Hence, not willing to give any running totals of rock mass or CuEq as the phase went on, ( something else that was confirmed they couldn’t do in previous podcast with Zak) with the agreement in place. Without the binding agreement this would have played out so differently and there would not have been the perception of CB holding back because results were bad, as any junior would be actively marketing their project throughout an exploration phase giving ongoing rock mass estimates etc

Colins comment in interview regarding do we do a third phase to get to 2mt, could well have been a bit of smoke to keep AA guessing to potentially give the company a last bit of breathing space to get the conceptual mining study completed as this would not be started until after the updated mineral resource (JORC) was completed for RC.

At AGM (I believe) it was noted that Colin said ,“if I were AA, I would make an offer.” (Words to that effect without checking)

I can only come to a conclusion from this that if they came forward with an early offer, they would pick up BR cheaper than if all the modelling and pit studies were complete. So looking at it in that respect further weight is also added with the, “we are number crunching so you can’t talk about it.”

There is also a much bigger picture now than wether or not there is 2mt proved up. Early indications are up to further 2 maybe 3 porphry below RC with either an extension of the main body now to the north east or a further porphry. Then with Ascot and having indications there are 2 separate gold centric systems below. There is also Footrot with further potential that the 7km corridor between them is fertile.
Another reason, and why the IP and Em have not been shared with the market no doubt.

Chin up

>>Some positive posters are probably also seeking reassurance. Some are simply comfortable with their investment.<<
Here here ZM

Originally we were told to not be surprised to see the drilling to extend the IRR before the end of the phase which would make total sense. Now with the Initial recovery rate at racecourse not being increased with more infilling, from what I understand it is odd, as surely they would want these results to be included in an updated resource statement. Then from feedback from the AGM was that they would see what AA wanted to do first, after a decision is made, then complete the IRR infilling and then other phase 3 targets sequentially.

Generally, during ongoing exploration you would only update the JORC to understand what to do next geologicaly, so maybe in this instance, with one or other buy back option to trigger it seems fair enough in this case, to then understand better what will be needed to be done next. But, the high grade early recovery is a critical component of the NPV model that supports the decision to mine. So in that respect they are going to the extent of having a potentially less than optimal financial evaluation completed or updated, no doubt by a similar or the same independent consultancy firm as before.
That’s the interesting bit.

Is ‘now’ strongly implied from that podcast, that there will not be any phase 3 drilling, regardless of wether AA want back in.

It certainly appears to indicate there is potentially a satisfactory model to show its viability already, with the objective to trigger the buy back mechanism as soon as possible as has always been that objective. So I’m more of the opinion now that this will unfold to a conclusion sooner than later when there is a window of opportunity and certainly if the financial model comes back adequate with scope for the acquirer to improve.

It’s not that bad an idea lucky, think about it. Br sells now and the bloodsucking wife will only want to redecorate the whole bleeding house, again, and guarantee make you feel guilty for treating yourself to that Harley you always promised yourself. Besides, the brats will get it all in the end, so I say have the last laugh and make ‘them’ see what it feels like to have the suffering of actually having to wait for something.
Where’s all the money? It will be paid out imminently!
But I really do want a Harley

Can’t believe John Cornford wrote that piece that Andrew shared. Made he sound rather ill informed.
In his capacity, I would think he would have a better grasp of the buy back agreement. Placing emphasis on the 2mt with no consideration there is actually another option that xtract are now pursuing! He was tempted to sell but didn’t, because it’s difficult to understand what other investors will do???? Appears to be putting the drift back down into the 3’s due to the drilling results and Colin not helping with fewer excited blogs!! What about Covid, war, global economic instability. Are they not contributing factors?
Assuming investors are thinking that in their own right it will still be worthwhile even though they are assuming 2mt won’t be met, as there is still unexplored ascot and footrot! He obviously doesn’t listen to the ‘excited blogs’ anyway!
And 400mt of contained copper!
Come on!

In his position he should just stick to journalism and not commenting on his own investments.

Before any such work is to be started, to create even the initial groundwork to develop a site compound , it will require ecological and environmental impact studies to obtain permits, let alone a permit to mine.
A permit to mine, certainly will not be issued until after full detailed mine plans have been submitted. Detailed mine planning and engineering will not be carried out until after there is s ‘proven’ ore reserve and the means to provide capital expense.

There is not a requirement to break ground and show you are on the way to creating an open pit mine. That is just ridiculous.

It has been reported that he has said at the AGM (I believe) that there isn’t a need to show the capacity or ability to fund the capital required to support the DtM.