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Https://www.australianresourcesandinvestment.com.au/2023/06/20/how-to-spot-ma-before-it-happens/

Long life, low cost ore body ✅

Logical acquirer next door ✅

😂that is ‘your’ opinion LW, so you cannot possibly be wrong!

You still haven’t read the book yet that I recommended then Dani lol

I really wouldn’t worry about what anyone else thinks.

‘Ello Ma

>>>Can you give me an example of Why ascost tonnage not be included in with rest of RC tonnage when calculating NPV? 


There is only a need to produce an economically viable study for an initial start up mine to ‘trigger the AA option’. There are no mining rates per month/annum stated in the agreement for a decision to mine. RC may tick that box alone as all resource optimisation talk is pointing toward RC at present.

Being free of the binding agreement i still, I believe the main objective as has always been.

Previous talk back in March of developing Fairbride plant to treat all ore types and potentially to increase throughput with those higher sulphide grades, was mentioned by Colin they would need to make a decision in the next few months.

The mods would need to be in place before the defined shallow oxides have been mined so there is a smooth transition of ROM feed if plant capacities are to be maintained. There are no doubt further exploration potential from current activity around the existing pit to increase the oxide/sulphide material and 4 further areas with defined reserves that can be put through the plant.

But, to exploit fairbride pit first of all gold bearing ore to maximise return, as per DFS, the ‘defined’ oxide material will be depleted within two years and fresh material will gradually be introduced until year four, thereafter only fresh material will be processed.

The plant mods would need to be in place before then for that transition to exploit any ore feed particularly the deeper higher grade ore in the current defined reserves.

I think what has largely gone unnoticed is that a feasibility study has ‘already’ commenced to extend the plant. (Per 6th April RNS) This is a really positive and exciting step.

Back in 2017 the project had After-tax Internal Rate of Return of 41.1% at a gold price of US$ 1,262 per ounce and NPV of US$ 42 million@ 8.4% discount rate.

The rise in gold price since will have had a big impact on mine economics that includes those defined sulphides, so is difficult to see how upgrades will not be a viable case when that study is returned shortly.

5️⃣8️⃣0️⃣0️⃣8️⃣

Copper futures rose toward $3.9 per pound in June, the highest in over one month amid a softer dollar, mounting supply concerns, and hopes of a pickup in demand. Major market players continued to flag worries that copper supply may not keep up with expectations of strong long-term demand, since the metal is a critical raw material for the transition to renewable resources. In the near term, weak macroeconomic data from China continued to underpin bets that the government will roll out stimulus measures to support the country’s industrial sector. Additionally, the PBoC cut short-term borrowing costs to improve property developers’ liquidity. On the supply side, copper inventories at the London Metals Exchange were under 72 thousand tonnes in June, the lowest in one month. Also, Chile said this year's output is estimated to sink as much as 7% after the 10.6% decline in 2022.

•trading economics.com

Not relayed forecasts for a while due to the gloomy outlook but this rebound is an early hopeful sign. It’s difficult to not see how all time highs will not be passed once the major global economies are reporting growth.

Goldman Sachs to expect the global shortage of visible copper inventories by September.

That perfect storm is bubbling away nicely.

>>NOW do you all get it?

I get it Dani

As a fact, I read the market is much less forgiving in general of junior mining companies. So I think what we have seen with Fairbride plant, it was not up and running much sooner, and since start up they haven’t been able to demonstrate from much earlier offset, near ‘nameplate’ production figures, the market has been overly sceptical. But once those figures are confirmed with actual income stated, it will largely de risk.

Was taken from the RNS Da, apologies for not making that clear. But if to speculate, looking at their website services they provide ‘now,’ they appear to have scaled back their business for whatever reason. As on recollection, when they were appointed approx 18 months ago at a guess, the website ‘had’ stated they specialised in M&S’s and working with mid cap companies.

I remember that specifically as it caused a brief moment of excitement

Why change auditors….,

>>> Jeffreys Henry LLP, the Company's former auditor, has advised Xtract that Jeffreys Henry LLP does not have sufficient capacity to satisfy its regulatory requirements in respect of its audit engagement with Xtract and on that basis will therefore resign as auditor.

>>>Delay in finalising the financials

Delay in audit reports due to non-availability of auditors because of resignation, death, incapacity to sign or such other valid reason

The auditors were changed, reported 29mar. Wether a couple of months since is enough time for them to finalise their report, could that be one/the reason?

Interesting vid on cut off grades

https://www.youtube.com/watch?v=eClNGc2nWY4

A key point to take from it is that the average grade should be at least 100% more than the cut off grade across the ‘whole’ resource. So with current racecourse estimate of 512Mt @ 0.22% CuEq with a cut-off of 0.1% CuEq is clearly in that range.

Compare with 2018 scoping study from caravel with a then resource of 662Mt @ 0.28%Cu with a cut-off of 0.15%Cu. Just shy of that. Obvious difference is caravel is predominantly a copper deposit, whereas Racecourse is made up of other precious metals, but, has the higher grade shallow parcel that will be subject of an initial CapEx payback mining phase that caravel doesn’t really have.

BR also has Ascot and does not allow for any of the improvements from resource optimisation yet.

Have been looking across many other high tonnage low grade mines in operation with many of those sharing similar ranges in their average resource/reserves being around just a 100% higher than their cut-off grades. Not forgetting that when these mines were started the price of copper was a lot lower with taking into account inflation since too.

CB’s past comments that BR compares favourably with other projects around certainly seems to be a fair one.

From change of auditor RNS only a couple of months ago.

…… The re-appointment of MAH for the financial year ending 31 December 2023 will be subject to approval by shareholders at the next Annual General Meeting of the Company to be held in 2023.

‘Natural calamity’ 🤦‍♂️😂

I can only offer you a comparison Ma,

My go to example is Caravel, who without any income have seen their project progress from share placements through to pre development stage and with the latest $15m fund raise to get to DFS and final funding, making it almost $30m raised since their scoping study in 2018.

After, that initial scoping study showing Au$1.1B NPV and IRR of 20% leading up to their revised study in Nov ‘21study, there was stagnation in the ‘share price’ (not MC) due to that overhang and dilution, for some time it was as much as 50% down. It wasn’t until the March of 21 that see the share price really start to appreciate once it looked clearer there was a strong business case for the project.

Resulting in approx 300% increase in their ‘share price’ since then, with a Au$115m current MC ( not allowing for dilution)

The ability for Xtract to fund exploration through income will no doubt have a positive effect on an investment case from much earlier on in the projects evolutionary cycle in comparison

Certainly think the key to a rising share price will be driven by income initially. The awaited conceptual study for BR is similar to scoping study level. A positive economic assessment would give the market some confidence to finally base an investment decision on. We don’t know for sure if the mining model will be based on 191mt or inclusion of Ascot high grade making 225mt or with or without the effect pre-concentration could have on economics through resource optimisation. What will hold it back is if there remains the perception there is still financing overhang to progress BR.

So dependant on NPV and an IRR of around 20% would hope, a clear strategy will be given on how the next phase will be funded without, or at least minimal further dilution.

It may well be they can never say never in that respect where the usual disclaimer applies. So the market is left still unconvinced.

It may well be they can never say never in that respect.

About that radio silence conspiracy……

In a past BR podcast CB was pressed by kev if they were ready to talk to AA now. CB,s response was “No as they will say show us you got a feasibility study.”

What was noticeable, in the more recent company presentation, for the first time, the long awaited ‘updated conceptual study’ which has been referred to as, many times previous, has now been referred to as the conceptual feasibility study! ???

As I am not one to ramp, 😇 even I would admit it’s a bit thin to start a stampede.

Hi joeman, Manica can now be considered primary asset by the very definition, “a main asset that paves the way for acquiring others.” Not necessarily of priority or immediate importance, of which BR I believe is still, as has always been of highest priority to trigger the AA option one way or other.

Bizzy & billy I do get ya, are no doubt good and valid points you also make.

Xtracts primary asset is now considered to be Manica, with its ability now, for potential to bring in, and fund initial development of ‘other’ assets for those to then become solely sustainable under a solid growth strategy. Although the core business, is of course exploration. So to marry the two together to exploit that income, through joint ventures to mitigate risk and that are not heavy front end loaded, that ability to grow assets and ultimately increase revenues is basically exponential if investors can appreciate it will not happen overnight. But ‘now’ is the time to jump at a time when project owners will find it extremely dilutive, if at all possible to take their projects to production without support that xtract can give.

The company could potentially be stuck between a rock and a hard place in wether to throw the kitty at BR or to pursue other projects.

That’s not a bad thing right?

Billy and Bizzy the exercise of Dani’s workings (thank you for your time and effort Dani btw) was to get an idea of the current cash flow that could be available to progress the next phase of drilling and resource optimisation from treasury as opposed to the need for a further placement. So unless you would like to dispute any of those numbers, you are missing the point. Which is to potentially help dispel the markets concerns that maybe there is still a financing overhang on the company to take BR further.