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Really good thread idea Cygnus. The current fundamentals are well known and considered to be solid enough. In the back of minds I would guess some are concerned the grades at racecourse will not be up to it. But it really does not impact the agreement as there is not an average grade requirement to form the basis of the 2mt threshold. CB has said himself, “we are not worried about the grades.” And besides, the decision to mine covers the event that 2mt threshold is not met.
Ascot has massively changed the dynamics but if a previous comment from CB when discussing footrot that, “the 2mt needs to come from racecourse” is right, then although Ascot is huge, it may not be in CB’s legal armoury to manoeuvre past Anglos legally binding hold on the project if the 2mt is not met and anglo wanted to stall and play political games. So the decision to mine is crucial along with the African income that secures non dilution.
So we hope that if Anglo don’t want it, they will be decent enough to let it go.

Subdued end to the week. If one could put a finger on as to why, I don’t think it was the disappointment of not getting a Thursday RNS but more the fallout after Steve’s hilarious post. Difficult to follow on from that! You set the bar so high with that Steve, was up there with the one where you were showing your mates in the pub the size of racecourse, …….with beer mats! Not forgetting the trans’aurus Rex joke too. We all look forward to what your next post will be ;)
Brilliant, keeps us all going.
Incidentally steve are you a balloon fetishist?
A ‘looner’ , can be defined as someone who is sexually aroused by the balloon in all its different forms!
May explain where the erections harder than Sheffield steel comment came from.

Yes I googled looner, why wouldn’t you?

Atb Guy

Ted, you have completely missed the point once again, with your rationale if i am correct, then the the higher the grades and bigger the resource along with the smaller the market cap, to you, more value is attributed to it.
I originally thought you were a fairly knowledgable fellow but I’m not so sure after your recent posts.
Best of luck

Ted it’s how that value is likely to be returned back to shareholders. Investing in xtract resources will have a very strong likelihood bushranger will be sold by last quarter of 22. If you really feel the need to chase grades then that is your right. I don’t know these other projects but would be interested to hear if any are under offer of sale or likely to be soon.

No I think it’s definitely eureka Ella. Just to recap, the last comment I had noted that I could find was from the 18th of January interview saying that they have a working face now and they’ll start delivering the ore for processing. Just to clarify, back in September they were sending bulk samples in the trucks and would be production ready if results were positive. So eureka is looking really good, that will be good news.

Ella-
Eureka is no doubt producing, they were production ready back in September blasting andrunning 30t loads for processing. I remember them being really keen to get cash flow generated from there.
Be a pleasant update, might be some good gold too

IWTO have been trying to find the bit of chat where the 6-8%!ref came from but at a loss at present. Beginning to think I dreamed it ;) I believe it was a part of conversation from someone at the presentation night after the camera was off that cb was gauging the low end price that investors would be happy with, followed by at the agm the talk was about a top end price and I think this was where was mentioned.
Thanks Andrew that’s right, my mistake, just wasn’t thinking about mechanics of the sale, the intention was more to highlight the very favourable geographical and geological advantages that will impact valuation.

Good new angle there Cygnus like it, here’s another for the, ‘what it’s worth’ pile.
Referring to something theiceberg had suggested on 04/11/21 @18.57 where an ‘overall’ discount is used to determine the value over a measured down to an inferred resource.

Iceberg>>……for those interested a discount of 50% is applied (industry standard) for inferred-indicated over measured with a PFS.

You can see how ridiculous it is, how an ‘industry standard’ can be used for all the type of resources in the many far ranging, politically, geographically, environmentally and ecologically different regions of the world. So this too, has got to be range bound and would surely have a contributing factor from the type of deposit, method of extraction and geographical location of the resource ‘before’ (and not to be confused with, ) the percentage of the overall resource that will be agreed on. (Which of course is where these factors are evaluated but just another way to look at it.) This will be the biggest factor negotiable anywhere from 2% up to Colin’s ‘opening gambit’ of about 6-8% of total resource that will be agreed on in a valuation.

So, if the industry standard of ‘up to’ 50% discount is used, considering also that a large part of racecourse inferred resource will have converted to indicated due to the infilling that has been done. Then, you can start to see that the 6-8% value of total resource that Colin will be asking for is very well justified.

2mt needs to be from racecourse alone if the agreement is to be taken literally

Colin could be simply following good engineering practice
Makes no sense to declare an under estimate at anytime sooner than at end of the projects target for completion. Would be no point in doing the JORC to have to do it again later.
You would only normally do the JORC early as a guide to what to do next geologicaly. But as it’s clear cut why would they?

The factors that will determine how valuation is estimated all seem to be difficult to anticipate at the moment. Cut- off grade for one , levels of discounting, how rising copper prices will be factored, they will only be going one way in the future, ……let alone the size of the resource.
Agree lucky, metallurgy results will be a factor in the economic cut off, which could well be below 0.15, but as with any other factors, it’s frustrating not to be able to put any firm figures toward estimates until all assays give us the resource estimate, along with the metallurgy results to do the financial modelling.
Ultimately the cut-off will be the only pre determined factor that will not be range bound. With the exception of the resource estimate.

If we assume Anglo show their intent to buy back in, not in a million years can I see a deal being struck without going to third party valuation. To me there is so much scope to negotiate a better deal with an open market free from the binding agreement. The more you look into it the more you can understand that the BOD of xtract would be keen to take to open market knowing the ranges they will have to negotiate with to play one major off against another. Discounting, being no doubt the factor that will show where Colin’s business and experience in negotiating his previous sells will shine.

Been looking into how the interp model is compiled and going over interviews where Colin has discussed it before.
He mentions the huge amount of data that has to be input into the model, increasing the size of the resource as they know they have the rock. Hi goes on to mention that they are not worried about the grades.
I think the part that takes up most of the time is compiling and building the model from scratch with the visuals of mineralisation from core sample the part where they apply the grades once the assays are in is a little easier.
So now we are starting to see the assays starting to come in it may not necessarily be the suggestion that they are being collated and applying to the interp model to be released when it’s completed. The 3 to 4 months turnaround that we are now seeing is still a little hard to swallow so maybe there are a backlog along with some manipulation going on who knows.
You can’t argue that Colin has not done all he could to drive the share price up with the big news items there have been. I guess now coming to the end of the exploration, a different approach is needed as that clearly was not hitting the fickle market as expected.
Remember he’s done this al before he knows what he’s doing.

As with Ascot drilling, the objective is to outline it showing it is open ended in all directions, potential strike length,dip and depths. Along with the geophys will support an inferred Resource. I would say the plan is to do similar with the southern extension to racecourse, maybe fewer. There is no need to drill it any more intense than that. The geological confidence will be gained from comparisons with the soon to be, indicated/inferred main part of racecourse, as will be done with Ascot. The second rig might not be bought back, Colin seemed indecisive, it may depend on IP results from the bit in the middle. No idea on that one, but with remaining budget a line will be drawn soon on drilling.

IWTO take a look at this overlay it shows rc swinging south/south west
https://www.rns-pdf.londonstockexchange.com/rns/8649O_3-2021-10-12.pdf

Hole 20 has added to the resource nicely, can expect steady flow of assays to come in now.

If we could offer some advice to potential or new investors that are not, or have not familiarised themselves with a porphry type deposit, they should do so to understand the significance of this discovery. In a region that is very well known geologically. Most geologists go through their whole careers without making a discovery, but to find one in New South Wales is special. Get to understand the low grades that make up porphry deposits, look at what racecourse started with, the existing (inherited) inferred resource of 71mt at .44cu and, soon to exceed 500/600 even 700mt! Just for racecourse. Then compare with cadia ridgeway, 70 kilometres away. One of the largest and economical mines there is.
The penny will finally drop

Assay data

https://drive.google.com/file/d/1clcMSSBk1ucbv-HpnVQjlbXi1ZVknPC6/view

David-
There’s about 20 holes up to hole 40 still to be received back. Hole 14 I’m not certain of, it has been questioned.
The next batch chronologically are well overdue and is a suggestion that assays are being collated into the interp model as they come in. There is a huge amount of data to process, leading me to believe the case. The recent hole 35 that was received back to confirm copper, gold and every other mineral at Ascot was turned around in 6 weeks.
There is a strategy in play it seems

Data courtesy of andymills

4_6001054504995261378.pdf - Google Drive

Is an enviable position for the BOD to be in, having any number of major mining companies showing interest. But, also to have been in, having the agreement in place that has kept these majors at bay allowing xtract to build a decent sized resource with a clear objective to reach a target. Who knows, hypothetically, without it in place this may have been fought over and sold already for potentially less than the company could command now. But as is has been inherited with the acquisition of Bushranger it has left us in a very strong position. We can only hope we are hearing right that Colin is suggesting over majors are interested and would wonder if he already is aware of Anglos intent, or can turn down the third party evaluation to be free from the agreement.

Let’s look at the facts that are the foundation for the compelling investment opportunity that bushranger alone is.

The switch from fossil fuels to renewable energy and electrification of the planet. It’s not a dream, global warming is the driving factor.
The need for more copper, with a rapidly decreasing supply from source that will see unprecedented demand for a generation that will drive copper prices up beyond all the time high. Which incidentally, if you take into account the previous high of $4.62 per lb in 2011 the inflation adjusted price will be over $6 per lb to reach that same level. Analysts expect it to exceed this!
Bushranger is in the Lachlan transfer zone in New South Wales, it hosts world-class porphyry copper-gold deposits such as Cadia-Ridgeway.
There are similarities in porphry deposits across the belt.
Porphry are generally found clustered and not isolated. If one is found to be copper mineralised in a cluster, they will generally all be.
There is evidence now bushranger is a multi-mineralised porphry system like cadia ridgeway.
Racecourse deposit is unique, its dip is inclined and shallow to surface, so more copper will be accessible from open pit mine. Ascot is looking to be similar in dip.
A central processing facility that can serve 2-3 ore bodies will make the prospect very economical with CapEx shared.
There are open pit mines throughout the region.
The region is not ecologically or environmentally sensitive although Australia has some of the most stringent environmental legislation.
Grades are average and in line with expectation for viability.
Xtract already have a buyer that has first refusal.
An Australian government that has recently said it will actively support copper mining in one of the most politically stable and safest mining jurisdictions in the world.
A mega high voltage power line runs through the area. Water can be diverted from a nearby dam (not checked) Major road and rail networks nearby. Large city with port and towns nearby that are supportive of a workforce with their expertise and experience in a mining nation.
( All the latter support the likelihood it will be developed for mining and so has a high chance it ‘will’ be sold )
An experienced management team in Jeremy Reid and Dr Quentin Hills to build the resource
A chairman that has the experience in bringing to market and more importantly selling a number of resources before.
A strategy in place that will see the resource bought to market at the end of this current exploration/definition phase.
Sufficient funds left in the treasury from fundraise in 2020 that had the objective then, to prove up the 2mtCuEq required to trigger the buy-back agreement.
That objective has not deviated and is on track.
As Colin has stated, they are beyond the exploration phase at racecourse, they are now into a definition phase.

This just for the Australian asset and does not include the African operations

The agreement is legally binding, the only way we can be freed from it is if Anglo pull out. I believe Colin said this at one point. I don’t disagree that xtract can turn down all offers from Anglo though.
I believe this is why they are persuing ascot, racecourse extensions and no man’s land to produce a significant resource package too good for Anglo to pass up.
In interview Colin has mentioned the majors will be happy if we outline Ascot. Then quickly back tracks and says, “we have to deal with Anglo first”
I had wondered if Colin was posturing for Anglos benefit to let them know there are other majors showing interest.