Member Info for howezap

Net ‘present’ value unfortunately Jez

CB has been so clear in reiterating that they have no intention of or want to go into underground mining for good reason. It presents far more dangers in comparison to mining on the surface. You don’t have more serious issues such as air loss and cave-ins, workers don’t have the extra regulatory processes of operating machinery UG.

There is risk of fires, floods, collapses, and toxic containment. Fires can be caused by short circuits or friction from defective bearings; collapses can result from induced seismicity or blasting, with toxic containment being from ventilation issues.

Far too risky for xtr to be going into, without any input into design and mining strategy operation as a minority partner. This just the long shot , there’s no guarantees they can keep a consistent feed going from the transitional ore with current set up to make the upgrades needed.

The droughts in Zambia, which should mean there will be no delays to drilling schedule, had an impact on Copper futures with a surge to above $4.27 per pound in April,

“”the highest in 14 months, lifted by increasing supply risks and signs of some traction in demand for top consumer China. Disruptions in major mines in Africa were the latest to weigh on growing global supply issues, with logistical problems in Congo and droughts in Zambia hampering activity.””

From Asnalysts report.

Do it do it do it now Jez, then dip your hand in your pocket and buy some more to top up to your allowance threshold 💡

If not done before, to bed and ISA always call your broker line, they will execute trades for you to get you the best minimal spread. Don’t try to trade yourself online

Off the back of the news release 7feb re Ongombo it could well see the final nudge to development stage with a potential new partner and cash injection from XTR.

Ongombo (by name only) was mentioned by Colin as a further project that XTR was looking to JV at a recent GM to vote on the disposal and sale of their Manica mine.

Ongombo certainly fits the criteria at this point in time in its evolution for XTR’s acquisition strategy. Would benefit both AFP and XTR if this is not one of Colin’s name muddle ups as the project described at XTR’s GM was just west of FQM Sentinel mine.

Could be interesting.

Just trawled back a little further March ‘16 update and an in house PEA was done the previous year to update economic metrics for the ongoing feasibility study.

Key metrics for it were in 2015-

Project Net Present Value ('NPV') (discounted at 10%) increased to US$70 million (PEA NPV: US$50 million) with an Internal Rate of Return ('IRR') of 50% (PEA IRR: 58%) assuming a gold price of US$1,250/oz

· Life of Mine ('LOM') increased to 12 years (PEA LOM: 8 years)

So the offer price for disposal was US$17.5m would have been based based on that economic assessment which is considerably optimistic in light of the eventual DFS

Compare to the actual bankable feasibility study.

After-tax Internal Rate of Return ("IRR") of 41.1% at a gold price of US$ 1,262 per ounce

· Project life of 7 years with average gold grade of 2.62 g/t producing 215,293 recovered ounces

· Project payback within 2 years

· Direct cash cost ("C1") of US$556 per ounce

· All-in sustainable cost (including royalties and capital)("AISC") of US$862 per ounce

· Total capital expenditure of US$43.68 million

· The Net Present Value ("NPV") of US$ 42 million at 8.4% discount rate

Can clearly see the disparity that reflected the higher offer in 2016.

“our main asset has been sold for less than previously offered”

To be fair on valuation now, the price is reflective in that the first stage ‘mineable’ ore has already been depleted by about 50%. With many more millions being needed to be spent to tap into the sulphides and transitional ores.

It’s a completely different proposition now, to before when the feasibility study wasn’t even done. A lot more difficult for a project to be valued without an NPV.

Could well argue that the price offered in 2016 was over valued as was just based on potential and what the buyer was willing to pay and how much they wanted it.

Https://www.lse.co.uk/rns/XTR/disposal-of-manica-gold-project-for-us175m-e2l0lbeow2nube4.html

I fully agree with the decision to sell Manica. Even with the reasons given regarding, the various risks and being a minority partner aside, xtr are not in a financially viable strong enough position to buy into the next mining phase with the current level of market capitalisation and the dilutive effect that raising at these levels will have on the ongoing share price for current shareholders.

A small correction for your post News, re XTR Zambia

The licences in the western forelands were not subject to Glencore initiating an internal MRE from drilling, that was at the latest Silverking project acquisition.

The previously acquired 2 licences in the western forelands however, have seen

Exploration initiated, with the recent acquisition of a major historic database created by Anglo American plc which has enabled a cost-effective and fast-track programme estimated to save as much as US$1.5m in early exploration costs.

Silverking is in the same localised region as Kakuyu so there are now 4 highly prospective licences which includes both in the western forelands nr KoBold and other Tier one miners.

Could be another to follow that was mentioned at GM that captainbob relayed. Watch this space.

Lucky, Glencore were targetting for tier 1 projects, and so the orientation of, and drill target spread were not optimal to what would have been seen for identifying a snaller resource. Glencore had just drilled each of their targets with 1 hole.

The drill data spacing for the mineralisation style does not need to be as close or anywhere near as deep as seem at BR where mineralisation spread was very unpredictable due to porphyry typical dissemination or spatter of mineralisation.

Outlining an inferred resource on Zambian licences will be far simpler and cheaper in a nutshell as Breccia, Skarns etc are easier to predict.

Likely the staged equal payments will just start as roll on in quarterly payments with immediate effect as the deal is done for disposal.

To answer Gordonb

“When does the 15mil payments begin to roll in?”


Xtract Parties are to be paid a further US$3.325 million in cash to settle all monies due under the Mining Collaboration Agreement from MMP to Xtract of which US$2 million has already been paid.

The $15m will be paid in cash in regular staged payments by the Buyers over the period to 1 March 2027

As for Linconlite you need to do your own research to understand that you have described the business model of just about every junior in the exploration mining sector.

So with significant income from staged payments up to 2027 and at the least $2m cash in bank you cannot put xtr in that same basket.

Xtr can scope these projects and advance them along from treasury funds. Major exploratory work will potentially warrant a fund raise, but it will be off the back of a major discovery. That’s how I perceive the current situation. If xtr would have kept Manica then a definate raise would have been needed even prior to buying into the second mining phase. And probably then some…It would have severely hampered the Zambian efforts to delineate any resources from reduced availability of any guaranteed revenue funds

There is a difference between raising market funds to keep the lights on or to pay debtors than raising toward a genuine growth opportunity which Xtr ‘will’ have a choice on doing.

Unless you were told the above who don't no it to be the case. Unless they are CB's words! 🤔

Or billy I actually bother to read and note these important points from what is already in the public domain through RNS

Did think - “Back the 50D MA figure”.was the 5hittest attempt to ramp the bejeezers out of it jez that was more like it 👍😆

If this latest acquisition is the final piece in the portfolio jigsaw for ‘24 following the disposal of the Moz gold mine and importantly confirmation of the amount Xtr will be receiving up to 2027 with the staged buy out payments, circa $15m over that time.

Xtr can now fully plan to allocate expenditure toward its projects to advance them further through its own treasury funds.

BR could see a final drill campaign to add resource to the Nw at Racecourse by continuing to follow the high-grade plunging zone of the mineralisation and hopefully

test the IP Chargeability/Resistivity anomaly 500m west of Ascot. Could be dependent on outcome of optimisation toward a desirable IRR and NPV. If xtr can push the project further up the value curve without big expense then that is what they will do.

Kakuyu could see a mining operation start to bring in some funds to contribute toward a larger exploration programme as unlike the other Zambian licences the deposit type and mineralisation mechanisms are not clear enough from initial work that’s been done at Kakuyu, so the plan is to to understand further the type of deposit and mineralisation potential there as it has the potential to be far larger than first thought which can justify its own process plant.

Other recent Zambian licences are about to have drilling commence after the rainy season ends anytime now.

Tons of exciting news due to drive MC up and onward as well as raise the profile to the market as xtr can get the jump on other companies with projects lying static due to unavailability of funding to progress them.

Hey NtM I would argue all day that current share prices across all of, not only bird companies, but the whole resource sector in the midst of a global economic 5hitstorm have no relevance to true values of project portfolios that companies hold, there is a clear disconnect apparent now and has been proven historically in the midst of previous downturns to be the norm. So as for a benchmark I would counter by saying it does not speak for itself.

Historically though, through downturns, copper inventories have always built up, but the difference this time round is that with overwhelming supply headwinds that is not going to happen and so the expected demands will very soon far outweigh supply pushing copper to unprecedented highs. There is a far bigger picture in play to be excited about. This is why the company is positioning itself now to benefit later.

18months or $500k whatever comes first if to fast track Art. Agree it’s not particularly exciting but is a good project with a good buy in deal.

On completion of the earn in period, or as such other time as Xtract has spent US$500,000, Xtract may then advise Cooperlemon of its intention to increase its interest in the Licence to 70% by agreeing to spend a further US$1,000,000