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Worth relaying this message posted on telegram from Phil carrol on the 8th after the cancellation of silverking license. For those not joined telegram group.

“They are having a current issue with the Cadastre system with accurate reporting on licenses.. they have had sight of this problem and are working on resolving it.. but for all intents and purposes the licenses are well protected”

Then posted

“Aiming to talk to Cooperlemon Tomorrow for more on this”

Not had a response posted there yet from Phil.

Let’s assume it is successfully appealed and all’s well, silverking mining license was recently issued and mining operations are expected to start in no later than 18 to 24 months, which should see a resource estimate circa 10mt @ 5% being half a million tonnes of contained copper. Assumption is copper equivalent grade as very high silver credits. This, stated by Hunter, who is one of XTR, GLR and AFP geologists on Zambia special.

Will be worth the wait.

Looks like 2500 have been cancelled with a suggestion that some officials might redistribute them to foreign companies instead of benefitting local miners.

https://www.globallinkscorporate.com/post/govt-cancels-2-500-mining-licenses-in-zambia-transparency-concerns

Bankrupty

Is very normal for all the initial hype of the discovery to fall away as now being proven, it will need huge amounts of capital for construction. Risks now going foreword are both economic and geological and if f the company are looking for institutional investment they are going to have to give most of that NPV away to get it built.

Am curious though, what project are you referring to?

Yeah I agree on that front NtM, it will need a steady flow of news to drive it on, the resource sector is generally seen as being anywhere up to a year ahead of global economics trend being seen as a precursor toward economic recovery. It will need all the ducks to line up so Colin can get the big guns out! It will move quick but timing needs to be right.

Don’t know what folk are worried about, he rallied the market in ‘21 that see a value of £50m + market cap reached. With far less evolution of the main assets at that time and without any kind of significant income that with what came in from alluvials, didn’t even cover co running costs.

There will be no shortage of news.

There will also be latest audited report to show up to date fundamentals and cash position to the market.

News flow may follow after that report is out so investors can make a good case for buying in. ??

Is expected to see a 4X correction from current level across the resource sector when it turns.

We have certainly had the fall back, over the past couple of years it seems +/- some would say ‘crash’.

With clear shoots of recovery being seen across the main economies, the next phase is going to be ‘up’. The trends are usually very predictable

The crash is done!

There is a difference in comparison between the buy in JV terms of the two western foreland exploration licenses and Silverking with Cooperlemon

For the two WF licenses, is for an initial, but not less than US$2m spend for a 65% interest. Furthermore if first phase warrants the second phase then will see a further US$3m spend.

A sale before phase 1 is complete will see Xtr receive 55% then would increase to a 65% return into and during phase 2.

Cooperlemon are without option to increase or retain their present or adjusted interest with this buy in deal.

However, the structure of the Silverking buy in terms has the allowance for Cooperlemon to maintain its interest after the phase 1 buy in period by Xtr in the Licence through an option to earn back up to 70% by participating in the ongoing expenditure of phase 2

If they do not decide to contribute toward the US$1m spend toward phase 2 then xtr interest increases to 70%.

On face value, both WF licenses are clearly looking to be sold on, or at least there is an expectancy that it will be of high interest for M&A activity with any exploration success.

With the Silverking mine and surrounding areas of interest, Cooperlemon clearly has high hopes too for SK. Which on face value is looking to be a longer term mine development proposition to receive cash flow from.

What are others opinions on why the deals are structured differently?

Would value your opinion too BizzyLizzy

No Andrew, although strategy and what’s stated in company mission are no doubt echoed.

My point being, an investor has to have the confidence to not only just understand the supply and demand side of copper, but also be able to agree with their mission to exploit that need for demand. We are seeing the company ‘actively’ follow that plan with new acquisitions.

There is a good and very experienced management team , a plus for any backer with the biggest positive toward backing Xtr or any of the other in the stable of CB companies in fairness. An investor will, or should want to back someone that has previously defined a large resource and sold it.

It doesn’t matter if the sale of kalumbila was years ago, it is a rare occurrence. And one that the market should be reminded of or made aware of. Anyone that thinks he should be stepping down I think should reconsider on that basis.

Every analyst I’ve listened too recently are repeating all of those same things, that investors should be looking for when picking companies for their portfolios.

What we got?

The company have a good plan and a real opportunity to fulfil its objectives from free cash flow. If you have the belief that copper will see huge demands placed on it against increasing supply headwinds, then you can get behind that plan and now knowing it has breached US$10k.

You can clearly see the strategy in play and the path the management are taking with recent acquisitions through JV buy ins. For a junior, having significant cash flow guaranteed until ‘27 to cover operating expenses to further develop projects including drilling, sets Xtract apart from most of its peers without exception. This is being achieved and looking likely they will continue to do so without diluting shareholders unnecessarily.

With the wide spectrum of risk and the different types of company from across the whole resource sector, from pure exploration plays through to major producers. What that income means for Xtract attracting new investors, is that the company have moved out of the bottom tier of junior explorers that must make up 80-90%+ of all companies in the resource sector that ‘rely’ on raising capital from shareholders via allocation of new shares.

With positions prioritised in the highly prospective Western foreland, having that full operational control toward increasing license values, free from any controlling senior partner. Positions will be more vulnerable as prime targets for M&A activity when it intensifies.

Then there is BR and other exploration plays in Zambia that have huge upside potential and the chance for Xtr to have further cash flow from mining operations under their small mines strategy.

I’ll take the Pepsi challenge.

Top form NtM, that was a quick witted response.

Hey Dani

Theoretically you would think a higher Cu price would lower the economic cut off grade but generally it comes down to the selected or required processing method used with the goal of giving the least dilution or extracting the cleanest concentrate before a different method of extracting the copper is required

Methods generally vary as the grades reduce. Hence why a high grade resource tends to have a higher cut off grade.

So many different factors can determine the economic cut off grade, but will have its lower limits as methods to extract also become increasingly more expensive the lower the grade.

Spin? Just offering a rational explanation based on what has been put out and said.

My understanding is that what started out as a small scale ready to mine development project that revenue will pay toward a small sustainable mine that its cash flow will pay for to increase LOM

After evaluation the project has turned into a much bigger proposition that now first requires an initial major exploration programme that needs paying for likely through a fund raise.

CB has also said that any fund raises will only come as a result of major exploration.

There was talk that the potential scale of operation could or will warrant it ls own processing plant…..Now consider Manica’s development.

Kakuyu does not have a defined resource so exploration is potentially starting from scratch to create any kind of business case.

It could take far longer and cost more to monetise than the licenses positioned in the highly prospective western foreland where M&A activity will intensify.

Just for info

- “Samples sent to external consultant for metallurgical testing -why no news on this?”

From Feb 23 presentation

-Mett test work was completed through Jubilee metals.

This before agreement would have been made with refinery, indicating positive results were returned for compatibility of ore.

Hi Ben

Not to overlook from the FeB ‘23

Corporate presentation on Kakuyu.

-Agreement ‘reached’ with Kabwe refinery for treatment and sale of ore.

-external contract miner engaged.

-Geological contractor and grade control team employed on a permanent basis.

-Full-time in-house mining engineer employed to oversee operation.

Clearly then states that regional exploration is underway targeting further life of mine extensions.

So you would be led to believe that operations have been underway.

However, with the priorities lying now in the western foreland, it may be that a mining operation at Kakuyu that was stated that the project would be payed for from its cash flow, may have been shelved for now due to no guarantees can be made at this time toward fulfilling project development from outcome of any significant discoveries to continue a sustainable mine. Best to wait until they can be fully committed.

Alternatively, Colin also said it would be reckless to start a mining operation without first fully understanding the geology.

Take your pick on theory, but the project being shelved is almost definate imo with the projects exclusion from the latest corporate presentation. But it certainly doesn’t mean it is another duffer.

A very notable point from your comment Banzai - “Most of these outsource suppliers get fully paid when contracts complete.”

Yes, in hard cash and not in shares!

Manica disposal payments will allow them to prioritise the potential and prospectively of the Zambian licenses without dilution, which now the disposal has been passed it will see the phase 2 earn in of a further 3million ‘if warranted’ also be funded from treasury. (RNS’d)

Very positive projection going foreword.

Looking across the various projects Jez, it would appear any news from the company in relation to progress or planning is at the mercy of the timescales of various independent consultants.

Appear to have outsourced technical studies with the exception of the Western Foreland licenses to concentrate all their manpower on. News from here next, could be the only one they have actual control over.

BR may have 3 different consultancies working on the optimisation, maybe a fourth later if they do more drilling.

Optimal mining, Lycopodium who are processing experts and, likely an alternative pre concentration tech being trialled. So could literally be next week or another 6 or 9 months.

Silverking data has been referred to an external geophysical consultants only last month to refine targets for follow up drilling. Could be some time before any action plan is announced.

Kakuyu parked up for now as warrants major exploration??

Hi Andrew

You may well be right. I am of the understanding, an eventual valuation will be on the projects NPV, using current or hopefully updated mining scenarios including being based on a smaller mill and plant with copper prices ranging across all scenarios from 8-11k. These ‘will be’ the copper pricing ranges used that NPV will be determined from, and eventual valuation will be based on, not 12-15k!

However, my only reservation is that the economic model being only supported at conceptual level when complete, the economic model will not be robust enough to use a discounted cash flow model across the projected LOM.

Away from Valmin code and on global market, a DCF model can usually be used toward a higher valuation than one determined by Valmin. But have a feeling it needs to be supported at pre feasibility for DCF to be used. Need to look into it a bit more. Still early days.

Copper spot price is not going to have a direct effect on a valuation for BR so it wouldn’t matter whether was sustained above 11k or 12k or whatever price. Is more likely a conservative estimate of 10-10.5k will be used for LOM.

Capital and Op costs however will, as they come down with an improving economic climate and optimisation. These will directly affect the NPV ongoing.

Nothing will happen until the fully updated conceptual study is complete which may include an updated JORC if they decide to increase the resource to the NW toward improving the economic performance of the financial model. They will want to include every bit of defined resource in the JORC as this is what anyone will pay for on top of the projects NPV.

One minor thing I picked up on from one of the other of the group’s podcasts was CB stating they ‘have’ to report on each drill hole under AIM disclosure. I questioned this approach to marketing in an earlier post suggesting a saturated PR drive may be indicative towards a fund raise coming. So that simply may not be the case if reporting on every hole and associated technicals is seen again.

No doubt due to the volatility of AIM stocks with regs in place to protect investors from wild swings in share price.

Roast PR are using this new ‘preferred’ format with Charles Archer asking the questions to cover each of the companies in the group. Should be Xtr to follow to hopefully start reporting on the new campains particularly with updates on older ones too.

AFP podcast yesterday with Colin and Martyn Churchouse discussing AFP in general but reference the whole group of companies. Western Foreland chat is quite XTR relevant, with a couple of interesting comments, first on their Ongombo project that ‘could be’ a hint at XTR contributing toward financing a small mining operation start up. A reminder he mentioned Ongombo by name at GM as a further project the company are looking at.

Other comment was BHP offering a US$1B to Ivanhoe for their DRC copper project in the western foreland in ‘21.

https://podcasts.google.com?feed=aHR0cHM6Ly9hdWRpb2Jvb20uY29tL2NoYW5uZWxzLzUwNjQ0MzcucnNz&episode=dGFnOmF1ZGlvYm9vbS5jb20sMjAyNC0wNC0xODovcG9zdHMvODQ5MjgyMQ%3D%3D

Worth a listen.