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>>The current debt problem and the geopolitical risk tell us that gold is a safe bet in a volatile world.
Sure sums up xtracts particular economic outlook thatâs been discussed.
A point worth a shout is in relation to the whole negativity behind having multiple CB companies in the stable. On subject of financing, Andmillsy pointed out from Galileo financials that a loan of 45k was paid to xtr. If this was a bridging loan then there is a good point to be made in favour of being in the position to loan/borrow funds between his various companies in time of need to keep working capital working. It benefits both companies and as a group they can work together. Absolutely nothing unusual in that respect.
Agree on the âreduced dilutionâ Ben, and letâs not get lulled into a false sense by thinking there will ânotâ be any further raises. Maybe, maybe not, but if there is, we can be relatively confident it will be used for sole purpose of advancing projects and not to pay debtors and keep the lights on. There are two types of raise, one is the latter, the other is where there is a genuine growth opportunity. So should not be frowned upon if need be.
The balance is wether you either raise money from the market or give away some of your projects NPV to bring in a partner, which can be kinder on the treasury short term but can see a far worse financial hit than a raise in the long term.
CB is keener on an equal partnership JV, itâs going in with a major with a far more controlling interest that he would less likely want with being at the mercy of their timescales and potential to be diluted out which can often happen.
Itâs the positioning of the company when we come out the other side of the resource sector 5hit storm that should be more seriously considered than any shorter term outlook now.
Hi flipper, overall I think his interview had some positive reassurances, I donât think thereâs any denying the long term outlook, with his point on the recessionary culling of many parasitic lifestyles companies like you say, interesting. Iâve prattled on before about it being an ideal time ahead to go after projects that fall within xtracts criteria, that their owners have or will face an almost impossible task of progressing assets on their own without significant dilution with xtract in prime position to negotiate with a really strong hand where feasible. That hand could be even stronger.
Many consider Colin bird companies to be lifestyle, but I would consider xtract is somewhat different now with the ability to easily cover its operational costs with surplus to progress its assets in whatever limiting capacities, but opinions will continue to vary until we can see results and forward spending can be aligned. Besides, spending ÂŁ10m on an exploration phase is pretty fudging serious!
Think it will get worse in China as major property developers have massive debts and I read somewhere recently it could cause financial contagion for key resource buyers in Asia. Inventories risen sharply up 50% too.
Agree joeman đ
Any takers on the Rick rule interview? Few relevant segments on resource classification, funding, optimisation and touched on ore sorting.
Makes interesting point if we suffer a year or two of recession and subsequent capital discipline it could see many many lifestyle resource stocks wiped out with no way of raising money or any take up if they could no doubt. Leaving the select few to progress that have that ability to raise or an income stream.
Optimisation is quite normal and not a dirty word.
Ok with ore sorting if whoever was applying it had done so before successfully on the same type of ore body.
Early days so far in what will still be conceptual but Optimal had found a âsimilarâ project that has successfully incorporated the tech with good 50% waste rejection while retaining 80% of the copper. Same ball park with BRâs lower grade ore, to be seen if they will need to further âoptimiseâ with increasing the resource to NW at RC and or looking into other ore sorting companies that could maybe improve the economics of the high grade if it were necessary.
Darn study is due but Colin did say donât hold him to it as he has been let down by consultants timescales before đ
Ntm the directors have been awarded 24,800,000 warrants between them exercisable at 10p as performance related bonus.
Employees get a further 8,800,000.
https://www.lse.co.uk/rns/XTR/award-of-share-options-m86nqgci5sa5gs0.html
Really good interview with Rick Rule.
https://youtu.be/SDOgfrgtA7k?si=nEQfrm2Y6nVOaT4M
Reassuring interview I thought, there is a clear enough plan to progress assets within the limits of the treasury for as long as practical. Like I said, work has been non stop and will continue throughout any further down turn , whilst others have seen their projects parked up due to funding difficulties to progress he made the point on that xtract are on their way already.
Nothing changed at BR, they will wait for full study to see âifâ further drilling will be needed to increase resource as and where necessary. They wonât be drilling to 2mt or more thatâs not what he meant. Viability over quantum to repeat one of his other previous comments. It was always going to be new age mine supported by higher copper price, thatâs not a recent revelation, $4/lb was benchmarked in â21 study.
Hope Kakuyu will see progression toward something that can bring in some cash, confirms they are not running any ore to plant in a small op to generate cash flow toward that bigger exploration prog short term. Plus side is looking to be a far bigger proposition.
Seems genuinely optimistic about the new Zambian ventures.
Donât know what you mean Dani didnât invent to give impression my verbal thrashing was aimed at you other day.
Xtract are looking for not only brownfield projects within a couple of years to production but greenfield large scale exploration projects too. Hence the 2 new Zambian licences acquired recently.
So why look any further?
Under buy back to AA, all 4 licenses will be sold back
Freed from the agreement, away from AA on the global market, no binding agreement will be in place to keep grouped together, however, an acquirer would likely âwantâ to negotiate on them too though.
The other reason they could want to get a no from AA. If they decide to take it back then it would likely go to third party consultancy valuation where it would be valued in accordance with the VALMIN code, which as part of the broader Australian regulatory environment, which places certain constraints on the valuation process and is very specific on how such values are presented. â¨â¨Understandably, Xtract would want to present BR in the best light and to want its value aligned to those inflated expectations on copper prices to return the best value to shareholders. I think is less likely to happen under the Valmin code if sold to AA
If xtract can get a no from AA by negotiating out of their contract one way or another, then there would be no binding requirement other than immediate financial gain to sell on the other tenements along with EL5574.
Lachlan belt is a highly prospective region
Just 10km north west of BR Legacy minerals hold a tenement called Rocky project and had undertaken preliminary test work there last year.
From Legacy
>>A recent assessment of Rockley-Gulgong Volcanics by the Geological Survey of New South Wales (GSNSW) found that the ground within EL8926 is some of the most prospective for porphyry-related copper-gold deposits in the Rockley-Gulgong Volcanics.
Is just another reason why they could want to get a no from AA
Regarding CB pay rise.
From H1 report
>>Segment results represent the profit earned by each segment without allocation of the share of profits of associates, central administration costs including directors' salariesâŚâŚâŚâŚ
Could that mean his salary is linked to profit share
It may be that they are confident pre concentration alone will be enough to get the economics to where it needs to be. He also said (from other attendees) that there are other ore sorting companies out there that they could look at. Iâm sure the hope would be to increase economic return of the higher grade too, which could reduce the CapEx payback period.
One thing that I have realised just recently is that they had gone to the trouble of testing Footrot, knowing that it would not join up, so is unlikely it would have played a part of any initial payback phase being standalone some 7-8km away. Yet they havenât tested the large western lobe next to Ascot with either a reconnaissance drill or from extending the IP lines when the survey was carried out in phase 2.
https://www.rns-pdf.londonstockexchange.com/rns/8649O_3-2021-10-12.pdf
You would think there would be increased impetus now to understand what is down there as not only would it dictate how a conceptual mine design would be planned around it, but it could also, If there is the potential there, similarly to Ascot and RCâs shallower high grade zones, to be included in any CapEx payback phase if needed.
Still too many questions we donât know the answers to for me remain. But importantly there is clearly that continued optionality.
Building a new mine has become an increasingly difficult proposition anyway with new environment, social and governance requirements which have added significantly to CapEx costs.
Recent volatility has made it worse with higher interest rates pushing up the cost of capital and increasing Op costs. As has been said, rates will come down.
Canât stress enough the challenges that new projects around the world will be up against to meet newer ESG requirements which are likely to include electrification, green energy and low water usage, toward getting its permits and financing. A new mine will need to be carbon neutral and will likely only be allowed to be developed if there is green energy supplied. This is where the significance of the bulk ore sorting comes into play, the advantages of it include improving resource utilisation, reducing environmental footprint, increasing feed grade, reducing energy and transport costs, reducing water and chemical reagent usage and minimising tailings.
The other relevant factor toward wether BR will go on to be developed is jurisdictional. The NSW climate and energy action plan is seeing a boom in the energy system change to 100% renewable which already has around 53% transition of total generation capacity in the state.
These are the factors that will help make BR very desirable when a decent enough economic performance can be shown with the influence from BOS , that will utilise the resource and the bulk low grades.
>>It did change after the real situation became apparent. â¨
Hey Andrew just banter on my part in that post. In response to the above part of your reply, can assume is in relation to BR missed targets and timelines he gave.
I am of the firm opinion that the pathway that the project has actually taken, along with the updated RC JORC where the lower peripheral grades have been added to make up the bulk tonnage, are ultimately more within the project âmanagementsâ expectations when you consider what they would have known from all the available early AA data and the outcome and recommendations from the âpreliminaryâ conceptual study for phase 2, particularly where toward resource optimisation was concerned and the forecast of requiring $4/lbCu
Yes, there is always going to be some disappointment from hopeful expectation of grades. But the single most significant factor that contributes the most to the viability of a project has, and always will be the future value of copper.
What Iâm getting at is that, although CB has not been completely honest âpreviouslyâ, it doesnât mean to say that BR hasnât lived up, more in line to management realistic expectations. I know many have written it down off already and shouldnât.
Peddling a porphyry project on a UK indices was always going to be difficult knowing how long and how much money is required. He would never have got away with it on ASX.
The downturn in global economy hasnât helped his cause.
>>i also had a similar top up today. i will do so again if ask falls below 1p â¨
was wondering why you had been more vociferous in ****ging cb off recently andrew.
silly me, and i thought you were just chasing likes đ
CB has the right individuals in place across all his companies with the specific capabilities, values, and experience to manage and move projects forward. If he couldnât keep on top of his own workload across his various companies, he is astute enough to do something about it. If it were at the detriment of any those particular businesses. As an example, he stepped down from jubilee metals as at that time he felt a more suitable candidate with different set of skills would be better for them in the next phase of their evolution as a company. CB admitted his skills were more appropriate to companies which are at an earlier stage of their development. â¨â¨He has vast experience needed to grow xtract into a âsustainableâ mining, exploration and development company, now that the company is at a pivotal point in its own development. There will be increasing, positive cash flow to sustain that growth now.
The market will catch up when investors looking for value return when interest increases finally in the sector and the company can start to push the PR again (when all the ducks are lined up) have some patience and letâs stop blaming the little fat chap. (His words)
Many thanks for the clarity through the Empress royalty Andy, it would make sense then that delay relates in some way toward operating costs and ultimately Xtracts eventual net profit share. As xtr would be the last to get paid and through MMP we would be at the mercy of their accounting for release.
There is a 3 month reporting window, but there would no doubt be a cut off period for âfinalâ payment to be received with full operational breakdown so could it be that there is not sufficient time be able to report the full quarter analysis within that window? Could be a future precedent set there for ongoing full audited results and HI. It wouldnât affect quarterly production reporting.
Would assume payments are staggered throughout the quarter and not just one lump sum.
Just offering a less cynical alternative view with one which tallies with the comment in H1 that ââŚ. projected figures for this second quarter on target. â¨