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So we ‘may’ or may not have a podcast this week after a comment posted on telegram from Kev Hornsby about catching up with Colin.

What could we expect if so?

Decent update on Fairbride for starters, and from the other producing mines would be well received.
Comment on last year report and financial position.
Projects in the pipeline maybe.
There will not be much he would be willing to divulge that we don’t already know from Oz. Maybe confirm end of drilling, and go over again what they need to do next.
Reiterate target. (Bites lip)

Not expecting any prior RNS, then to be backed up with interview. Not expecting an interview tbh but a general update would be welcome to steady some nerves if there is.
But certainly news on initial start up progress from Fairbride.

Thanks for sharing that, on Xtract, sounds like kev Hornsby is in agreement with non diversification of your portfolio. Maybe he read our previous discussion Andrew on the subject, he mentioned in last 12 months.

Hi jezoo your comment

>>> AA could buy this almost as a tax limitation purchase based on their profits last year, sit on it until they need it or the price of copper goes up. <<<

The last point you make, although for me , more through reasons from their own internal politics, has been a concern of mine for a while, but from a different perspective. AA, if for whatever reason they think at this point in time it is not for them but want to keep that option open in the future, they would not necessarily need to buy it to sit on it would they? With the legally binding agreement still in place it’s not going anywhere! If, xtract leave any kind of wiggle room in the legitimacy of their supporting evidence that AA could dispute that the criteria has not been met that forces them to exercise their option when Xtract are ready for them to do so.

I’m no expert but I say what I see, I think it is essential the company need to get this right first time. Hopefully with 2mt and the decision to mine options to eliminate that possibility.

It is then easier to understand why, they have needed to complete the extra work, and is taking time to put a solid package together hence the comment regarding the quality of the data pack they are putting together that would satisfy any major!

What I mean is, it’s a fine line between pitting quality against quantity in building an asset. If Xtract have got that balance between quality, always quality first! and quantity, then we will be rewarded.

All great comments, thanks Bizzy a sensible reply that I know supports Andrews reasoning he has previously given.

And this from Bizzy >>> Of course this doesn’t mean they won’t use the current situation to bid a cheeky low ball price.

That’s a really good point, as with the terms in the agreement, that would see a third party evaluation lay down a marker, (if internal estimates differ too much) to help negotiations to reach an agreed asset value. It certainly helps prevent that scenario that would see xtract bullied so to speak, to accept a low ball offer from a business point of view once that major shows them the colour of their money.

It’s that binding agreement once again, that is restrictive. But, has given the company not only the protection against all the other big fish while building the resource, as I’m sure this would have been sold by now without it in place, but some protection from our buy back partners that have first refusal that will ‘hopefully’ assure a fair value is reached.

Bushranger is a quality asset, now how about that quantity?

Sorry, meant to add, what do others with any business acumen particularly, think.
Is a little presumptuous at this point I know, but for arguments sake.

How committed, to actively pursuing a sale of Bushranger will Xtract be, once it is ready, complete with models, studies, increased JORC resource etc?

There has always been a clear objective from acquisition right up to recent events in global market that have increased uncertainties one can argue the latter. That objective is not based on, “let’s see where we are in two years.” It is based on a business model, a genuine growth opportunity, objective driven by the terms set out in the buy back agreement, an investment strategy that funded the exploration and saw incentivised share options and bonus schemes for its staff to reward when the project is successfully sold. There is an experienced team that have been contracted in, to no doubt bring the project to its conclusion. They will all want their just rewards, shareholders will too, but we generally get the **** end of the stick and will normally have to wait or move on. But I’m sure the BOD will want, or maybe even be committed to actively marketing Bushranger as soon as feasible.

As far as where the last comms from Colin are concerned, the plan is still go, wether his timescales are optimistic or not to approach Anglo is not my point. Since he announced to extend by a couple of months to complete necessary work for the models, the impending downturn was already well under way!

With current prices that will affect the NPV model, that will have a negative effect on that one aspect of a valuation, there are still other factors that will not be affected by current economics in determining asset value. So, with other commitments scheduled and budgets assigned they simply cannot afford to keep throwing any more at Bushranger while they wait, also consider for how long that could potentially be? Let alone sitting on an asset ‘still’ potentially worth many multiples of the investment that grew it.

Over the next 6-7 years of Fairbride income, the focus will be on sustainable growth in the business, that cannot be done with BR on its books.

The business comes first, and then business, not the other way round.

Anyone considering Ted may have actually been paying me a compliment, think again as he insulted me last year by calling me an ‘enthusiastic liar’ :-))

Who me? No surely not never

The point of drilling Footrot was to confirm it is mineralised. Wether a hole or two, show weak to medium or medium to strong mineralisation will not have any real bearing on its additional value.
It’s certainly not a dud.
I would be very interested to see confirmation as to where exactly the hole shown being drilled in the photo that showed the power line in the background. (Page6 of the report) that could very well have been testing a further anomoly, otherwise Ascot is way way bigger than the signature from the EM sweep that was done early on across the whole area to footrot. The EM by drone signature was the one that showed the parallel zone and the south east anomoly (Ascot) in the conceptual pit presentation last year.
Latest IP lines were only laid across southern extension of. RC and Ascot, not to say that further anomalous targets were not shown nearby of course.

Hi flipper I would think by not releasing the updated/completed resource and pit concept models, it will only compound the opinion that, as you say the lack of belief that the 2mt target has maybe not been met.
More so if we then go into a third exploration phase.

I don’t see the 2mt not being met, even if RC is short then there will be a decent resource modelled from Ascot too, that will push the overall resource estimate up. I had the opinion originally that the 2mt had to come from RC alone but am more open minded now. However the decision to mine would cover it. I’m not suggesting we need to eliminate AA from the table, I believe with the quality of the data pack the company are putting together AA will not want be turn it down.

Steve4077 may be able to share his opinion on a company takeover but a agree with others opinions that it’s more doubtful than not.

>>>Come on Colin ..... get the model out..... the time has come...

If they are collating all information covertly into the models as and when it comes in, once complete, if, the plan has not changed as to approaching AA then would it be more likely the resource and pit models would be released to the market without the need then to release all the individual aspects.
If this is ‘arguably’ what we are led to understand, from CB’s comments, then one important question is at what point, before or after approaching Anglo will the final models be shared?

Just an observation point of view on some suggestions the company should just carry on drilling while we wait for the market to pick up. If the strategy remains that is seeing xtract wanting to enter into negotiations with a closed deck, then would have to wonder how the next year of drilling will to be played out in terms of reporting with that strategy in place. That’s why I can’t see that scenario being played out while Anglo have first refusal, the priority is to get them to commit to one or both the options. If the buy back is nullified, through whatever legit means, then further exploration could maybe then be a possibility thereafter.

SL. Phase two early holes averaged 8-10 weeks from completion to assays back. But soon the average dragged out to many more weeks 16-18 odd without checking. Then we had the ascot discovery hole that was no doubt prioritised and was turned around in under 6 weeks!! Compare that, to most recent batches and…. Still confused?
Me too.

Better numbers porv?

What we do know is Infrastructure and utilities are just as favourable, nearby dam and HV power line crosses the site. Racecourse will have low overburden to strip, stats show is from near surface and due to the inclined orientation of the ore body to surface too. Rudimentary mine planning will offer a central processing site that could serve two potential tier 1 open cut mines. With potential for both those mines to access the deeper porphyry/gold systems that lie below the main surface intrusions when the mines are depleted. Massive financial advantages for the extended LOM for both, as to finally access the deeper ore will only carry its own ongoing OpEx with minimal CapEx as the plant would have been payed for. Racecourse is copper dominant and so separation issues are less likely and so more of the copper concentrate will be recovered. Met test work tbc but reported to be inline with expectations for Lachlan fb.
‘Anticipated’ to be using a 0.15 cut off certainly if $4lb is used.
Lots of real data being held as resource building and models are being covertly compiled before going into negotiations as the project is not being developed by xtract but sold onto a major. Final grades and total tonnages, will, if as implied on many occasions will see the potential of a serious tier 1 asset.
That’s just racecourse, the primary asset in terms of fulfilling the requirements of the buy back agreement. Ascot will be a big influence and could add huge value, even more so if the deep gold system is shown from this very last borehole of the (current) programme. It could be what makes this project a ‘lot’ more economical.
Final comparisons will be interesting though, I’m intrigued as to the extent of the mine planning they will have done. They are looking at the projects as separate entities and as they are just putting together a starter project to show its viability to a buyer, will mine planning show that joint processing capability, or singularly to support RC for benefit of the buy back, as Ascot will not have a pit concept due to a completely open ended resource model.

Numbers are being crunched as we wait im/patiently

Next level plant planning super high tech
HPGR- https://youtu.be/L-pM8BtIw5s
Interesting read thanks

Hey Steve CB has said many things,it took me a while just to check over some of his past comments. He did in fact mention how a third party would consider 3 different scenarios of copper growth rates , but it was at the same time he spoke of taking advantage of these heady copper prices. So I certainly wouldn’t doubt your opinion now.

Will repost the interview when im back home if anyone wants to hear it. Just say.

Cut off value s a changing variable that is influenced by prices and mining processing costs that will be different for each block of ore that makes up the resource. Obviously going by an overall average.

The conceptual pit study (71mt) concluded that the Racecourse deposit contains significant low-grade tonnes of copper and gold which can be economically recovered at a copper sales price above US$4 per lb and
can deliver a positive NPV return at a 0.15% Cu cut-off with a production rate of 20Mt per annum at a copper price of US$5 per lb

Just need the extra ore from all drilling to get the LOM up to around the 20 year+ mark and either a long range forecast in copper price when it’s ready to go on the market or, we have to wait until copper recovers to do the rest. The latter is a question we can hope to understand soon.

Footrot has already been drilled Joeman and they were onto the ‘last’ hole into Ascot to investigate gold at depth. It may be the ‘extra’ infill to increase the high grade crown will not be required from financial evaluation. Likely they will not decide that until the models are updated I would have now thought.

Whilst trying to turn a new leaf and consider a worst case I have been trying to understand the reasoning behind such a scenario. There just isn’t enough information released to make a call either way tbf.

I keep going back to this statement in the RNS for the annual report. From Colins comments,

>> In general, our exploration activities in Australia have been extremely encouraging and without a doubt we have discovered a major system, well beyond our original expectations.

That’s not a comment that suggests underachieving in their mission. Viability, particularly financial, on the other hand, is a different thing but worth remembering the original starting model from the 71mt JORC resource, from memory, showed a scenario that had a positive cash flow at 0.15 cut off. All of the typical porphyry ore grade rock that has been added since to the resource model including infill work through phase 2 to bolster the high grade crown will only increase and improve that viability.

Will add to my opinion on valuing, that economics are ‘far’ from being my most informed topic, and is based purely on my interp overall.

I fully understand and agree with Andrews ‘realistic estimate’ i believe his conservative methods of valuing are correct, I think we are just divided in the size of the resource!

So apologies to all the pre BR investors I no doubt pi55ed off with my unjust comments, I was trying to hit home with a hard point through frustration, that back fired on me by alienating some no doubt well informed investors. That wasn’t my intent, just passionate, and wholeheartedly support some contention between some of the big hitters to give good healthy discussion. Sometimes there is a distinct lack of that as many don’t like to appear confrontational if their own opinions differ. Nothing wrong with that either.

I think there has been some good come from Andrew and myself’s spat last week , it has cleared the air of much negativity born from frustration/ anger etc. Time for a bit of harmony as we near knowing where the project finally sits on the world stage, but not too much harmony though, it won’t be much of a discussion board if we all just go around patting each other on the back!

Steve, I think the main thing that needs to be addressed first is to inform the market what they actually have, keeping cards close to their chest cannot go on for any longer than necessary. It will destroy any remaining confidence the market has in the company, let alone its very own shareholders. I don’t know how the market will react to the meaningfull income, if that income is seemingly all being thrown into exploration that has no directive anymore.

At present, the changing geology, particularly at Ascot has seen further exploratory work needed that could not be ignored. Causing the delays we are into now, otherwise, the plan has not shown any deviation from what we have been told, that the project is in a final definition phase. So until we have a viable asset that is ready for the market, I cannot see the plan changing, that will firstly see either of the options. triggered, to eliminate the binding agreement one way or another. After that, it may change of course, but until then I see it being business as usual.

Where the valuation is concerned, yes it may have been better to have taken advantage of surging prices, but it was only through 21 that saw the big gains, on early discussions there was a clear path to valuation that a third party consulting firm would likely take. Value would be determined using three projected copper forecasts, a low, medium and a high forecast that anticipate these sort of fluctuations. Then there is the Valmin code that looks at previous acquisitions etc.

So a scenario that would see a valuation and agreed sale price at the heady copper prices we have recently seen, may have actually been a lot lower than many anticipated leaving some actually disappointed! The same thing could still apply to your suggestion to a degree that “no major is suddenly going to be generous enough to a small-cap miner to accept an NPV based on significantly higher copper prices (than now)” prices that had surged over just four consecutive quarters.

The biggest factor will be the willingness to buy, not necessarily our willingness to sell.

I certainly think it’s arguable either way steve as you suggest. I personally don’t see a downturn in the economies of major nations now, would affect a sale of an asset based on long term projected copper/gold values though.

The statement regarding no further raise in the next twelve months along with, previous comments that would see revenues from African mines and small JV’s that would pay for exploration, on only one occasion was it said that the JV’s would pay toward the drilling efforts in oz, that was during the last AGM I believe.

Of course there are two ways of looking at that, but I see it as the opportunity once BR is wrapped up the sooner the better, that then the exploration in Zambia can get going.