RE: XTR: Bushrangers Copper & Gold, Australia [John Cornford]25 Oct 2023 17:21
Just before JC goes into the xtract piece in his article he talks about the impending difficulties that owners could face in getting the necessary funding for their projects to final development phase. There is a clear trend growing from reporters, fund managers etc echoing exactly my previous point that it will be prime pickings over next couple of years for a company like xtract with its experience, expertise and a revenue source to step in to assist in bringing those small operations that will not be too heavy front end loaded and importantly that have already been largely ‘de risked’ online. These will be the bread and butter that will further underpin the growth and sustainability by bringing in that much needed increased revenues.
………Yet customers, bankers, and government want to know – exactly ! So to get the job, the prime contractor will err on the cheaper and most confident side. Then, when part way through it becomes apparent that eventual profitability won’t compensate for the amount still to be spent, an agonising decision whether to abandon has to be made. It’s a common story in mining, where a half-built project, abandoned because costs have risen or commodities have fallen, leads to bankruptcy for their owners, and remnants which are later bought up cheaply by new entrepreneurs who raise the cash from equally new (and trusting) investors on the likes of AIM. I’m afraid that, in the current highly inflationary environment, with commodity prices going the other way, not a few of those newbies I’ve covered here might be in that position. No wonder news about them has dried up.
But HUM doesn’t look like being one of them – and neither I think will be Xtract Resources (XTR)…….
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