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James, the share options to directors and staff were ‘awarded’ to them in early ‘21 with the option to sell ‘from’ 10p

Not required to buy them.

Probably my mistake for referring to as warrants as otherwise they would have been issued to a broker.

With respect

Guy

https://www.lse.co.uk/rns/XTR/award-of-share-options-m86nqgci5sa5gs0.html

Hi James, when you consider with that early saturation of promo he managed to drive market cap up to £60m. Things could have been a lot different if it were not for Covid and the subsequent economic fall out since. Covid had significantly delayed FB development with its restrictions and port closures that held up the modules being delivered. The economic headwinds since have only increased leaving the resource sector heavily down.

Without any of those headwinds and a plant that would have been producing revenue a potential 12-18 months sooner in a period that analysts in ‘21 were then predicting a bullish market ahead. Can easily see the potential to have continued that push beyond 10p with a lot of the better news available for promo.

I believe there is some validity in my theory certainly earlier on, but that theory i would say in general is more heavily weighted toward what was in that early study when I talk of the ‘perceived disappointment’.

Ultimately, the anticipated bulk low grade tonnages between 0.1 and 0.2%cueq that were deemed pivotal for the viability of the resource is one critical statement in that study.

>>is it any wonder why he was super keen on optimism………

Shows there was an ulterior motive behind exaggerating targets and timescales.wouldn’t you for a £1m bonus? Which begs the question again wether those targets that were given were actually then a genuine expectation? With what there is now being more in line with more realistic geological expectations of quality and quantity of BR’s resources and its optimisation which both aspects were all alluded to in the preliminary study prior to any of the phase 1 and 2 drilling and other technical work being input.

So in that respect, maybe it shouldn’t be looked on as though the project has fallen as far short of those targets, but more in line with what could have and has been achieved from the study recommendations so it should be leaving a far lesser degree of disappointment, if any than the amount currently being perceived by shareholders.

Some positive news at least is that all the warrants that were issued along with the last placing in ‘21 will expire 2yrs after the date they were approved at the ‘21 AGM which will be on Tuesday 24th. About 55 million ‘altogether’ with 49m+ @ 8p

What with the incentivised 24,800,000 directors and staff warrants at 10p that CB would still get of those 10m, is it any wonder why he was super keen on optimism using targets and timeframes to continually try to rally the share price up toward the strike prices.

Early on got close, but no cigar! Which is somewhat ironic.

Also to repeat one of the other points from the RR interview in response to bens good post there.

From 8.57 “When price is not indicative of value and the board have gone quiet, what do you do.” …..I BUY

And to add a variant on Bens point that,

>> Right now, most AIM companies do not offer dividends so there is simply no guarantee of a ROI. 


The significant variant to this is,

Right now, most AIM natural resource companies do not have sustainable income to underpin their market cap.

What will see xtract excel, once global demand increases, will not necessarily be only from its own level of promotion that it can put out, but the stability and encouragement that its income will offer through its own continued exploration potential compared to its many peers in the sector that have had to park up their projects through that lack in funding, or even worse.

The longer the recession grips, the stronger xtracts position should be when it turns.

No! I am Colin bird

>>The current debt problem and the geopolitical risk tell us that gold is a safe bet in a volatile world.

Sure sums up xtracts particular economic outlook that’s been discussed.

A point worth a shout is in relation to the whole negativity behind having multiple CB companies in the stable. On subject of financing, Andmillsy pointed out from Galileo financials that a loan of 45k was paid to xtr. If this was a bridging loan then there is a good point to be made in favour of being in the position to loan/borrow funds between his various companies in time of need to keep working capital working. It benefits both companies and as a group they can work together. Absolutely nothing unusual in that respect.

Agree on the ‘reduced dilution’ Ben, and let’s not get lulled into a false sense by thinking there will ‘not’ be any further raises. Maybe, maybe not, but if there is, we can be relatively confident it will be used for sole purpose of advancing projects and not to pay debtors and keep the lights on. There are two types of raise, one is the latter, the other is where there is a genuine growth opportunity. So should not be frowned upon if need be.

The balance is wether you either raise money from the market or give away some of your projects NPV to bring in a partner, which can be kinder on the treasury short term but can see a far worse financial hit than a raise in the long term.

CB is keener on an equal partnership JV, it’s going in with a major with a far more controlling interest that he would less likely want with being at the mercy of their timescales and potential to be diluted out which can often happen.

It’s the positioning of the company when we come out the other side of the resource sector 5hit storm that should be more seriously considered than any shorter term outlook now.

Hi flipper, overall I think his interview had some positive reassurances, I don’t think there’s any denying the long term outlook, with his point on the recessionary culling of many parasitic lifestyles companies like you say, interesting. I’ve prattled on before about it being an ideal time ahead to go after projects that fall within xtracts criteria, that their owners have or will face an almost impossible task of progressing assets on their own without significant dilution with xtract in prime position to negotiate with a really strong hand where feasible. That hand could be even stronger.

Many consider Colin bird companies to be lifestyle, but I would consider xtract is somewhat different now with the ability to easily cover its operational costs with surplus to progress its assets in whatever limiting capacities, but opinions will continue to vary until we can see results and forward spending can be aligned. Besides, spending £10m on an exploration phase is pretty fudging serious!

Think it will get worse in China as major property developers have massive debts and I read somewhere recently it could cause financial contagion for key resource buyers in Asia. Inventories risen sharply up 50% too.

Agree joeman 👍

Not surprised Andy, are a well run outfit, he invests in management that have history in what he knows. Wonder if he is aware of Xtr in any capacity through Manica, certainly Colin Bird.

Any takers on the Rick rule interview? Few relevant segments on resource classification, funding, optimisation and touched on ore sorting.

Makes interesting point if we suffer a year or two of recession and subsequent capital discipline it could see many many lifestyle resource stocks wiped out with no way of raising money or any take up if they could no doubt. Leaving the select few to progress that have that ability to raise or an income stream.

Optimisation is quite normal and not a dirty word.

Ok with ore sorting if whoever was applying it had done so before successfully on the same type of ore body.

Early days so far in what will still be conceptual but Optimal had found a ‘similar’ project that has successfully incorporated the tech with good 50% waste rejection while retaining 80% of the copper. Same ball park with BR’s lower grade ore, to be seen if they will need to further ‘optimise’ with increasing the resource to NW at RC and or looking into other ore sorting companies that could maybe improve the economics of the high grade if it were necessary.

Darn study is due but Colin did say don’t hold him to it as he has been let down by consultants timescales before 😂

They are a performance related incentivised bonus, awarded immediately when the share price hits 10p they are not exercised at a discounted rate beforehand.

Ntm the directors have been awarded 24,800,000 warrants between them exercisable at 10p as performance related bonus.

Employees get a further 8,800,000.

https://www.lse.co.uk/rns/XTR/award-of-share-options-m86nqgci5sa5gs0.html

Really good interview with Rick Rule.

https://youtu.be/SDOgfrgtA7k?si=nEQfrm2Y6nVOaT4M

Reassuring interview I thought, there is a clear enough plan to progress assets within the limits of the treasury for as long as practical. Like I said, work has been non stop and will continue throughout any further down turn , whilst others have seen their projects parked up due to funding difficulties to progress he made the point on that xtract are on their way already.

Nothing changed at BR, they will wait for full study to see “if” further drilling will be needed to increase resource as and where necessary. They won’t be drilling to 2mt or more that’s not what he meant. Viability over quantum to repeat one of his other previous comments. It was always going to be new age mine supported by higher copper price, that’s not a recent revelation, $4/lb was benchmarked in ‘21 study.

Hope Kakuyu will see progression toward something that can bring in some cash, confirms they are not running any ore to plant in a small op to generate cash flow toward that bigger exploration prog short term. Plus side is looking to be a far bigger proposition.

Seems genuinely optimistic about the new Zambian ventures.

>>Unfortunately not HZ it was base salary.

Thanks Andy am trying harder to understand more on the corporate side.

Don’t know what you mean Dani didn’t invent to give impression my verbal thrashing was aimed at you other day.

Xtract are looking for not only brownfield projects within a couple of years to production but greenfield large scale exploration projects too. Hence the 2 new Zambian licences acquired recently.

So why look any further?

Under buy back to AA, all 4 licenses will be sold back

Freed from the agreement, away from AA on the global market, no binding agreement will be in place to keep grouped together, however, an acquirer would likely ‘want’ to negotiate on them too though.

The other reason they could want to get a no from AA. If they decide to take it back then it would likely go to third party consultancy valuation where it would be valued in accordance with the VALMIN code, which as part of the broader Australian regulatory environment, which places certain constraints on the valuation process and is very specific on how such values are presented. 

Understandably, Xtract would want to present BR in the best light and to want its value aligned to those inflated expectations on copper prices to return the best value to shareholders. I think is less likely to happen under the Valmin code if sold to AA

If xtract can get a no from AA by negotiating out of their contract one way or another, then there would be no binding requirement other than immediate financial gain to sell on the other tenements along with EL5574.

Lachlan belt is a highly prospective region

Just 10km north west of BR Legacy minerals hold a tenement called Rocky project and had undertaken preliminary test work there last year.

From Legacy

>>A recent assessment of Rockley-Gulgong Volcanics by the Geological Survey of New South Wales (GSNSW) found that the ground within EL8926 is some of the most prospective for porphyry-related copper-gold deposits in the Rockley-Gulgong Volcanics.

Is just another reason why they could want to get a no from AA

Regarding CB pay rise.

From H1 report

>>Segment results represent the profit earned by each segment without allocation of the share of profits of associates, central administration costs including directors' salaries…………

Could that mean his salary is linked to profit share

It may be that they are confident pre concentration alone will be enough to get the economics to where it needs to be. He also said (from other attendees) that there are other ore sorting companies out there that they could look at. I’m sure the hope would be to increase economic return of the higher grade too, which could reduce the CapEx payback period.

One thing that I have realised just recently is that they had gone to the trouble of testing Footrot, knowing that it would not join up, so is unlikely it would have played a part of any initial payback phase being standalone some 7-8km away. Yet they haven’t tested the large western lobe next to Ascot with either a reconnaissance drill or from extending the IP lines when the survey was carried out in phase 2.

https://www.rns-pdf.londonstockexchange.com/rns/8649O_3-2021-10-12.pdf

You would think there would be increased impetus now to understand what is down there as not only would it dictate how a conceptual mine design would be planned around it, but it could also, If there is the potential there, similarly to Ascot and RC’s shallower high grade zones, to be included in any CapEx payback phase if needed.

Still too many questions we don’t know the answers to for me remain. But importantly there is clearly that continued optionality.