Member Info for iWantThatOne

You make a good point about increased fuel costs eating into the benefit of a rising gold price. However I simply can’t believe that half of production costs relate to fuel. Costs of production were $93m. That’d be a hell of a lot of diesel!

Well, after encouraging AFC yesterday to “say something” about the HFC/S series, it’s great today to see the Peel Hunt video confirming how much cheaper AFC’s fuel cells are over their lifetime than PEMs. 4x! That’s huge. It’d be nice to see independent corroboration of that rather than from the house broker, but still. Also today I see Maersk wants to convert its shipping fleet to run on methanol, on the way to adopting ammonia. They don’t say that the methanol will input into fuel cells - if not, are there other ways methanol can power a ship? Anyway, more support for AFC’s proposition.

There’s a lot of moaning that the L series hasn’t sold yet and may even be obsolete. I don’t agree with that but we should consider how much of this may be due to the HFC / S series being absolute killer products. Back in 2019 our new director said that PEM-level power/energy density from alkaline fuel cells was the “holy grail”. It might just be that the new products are so good we should be salivating over those rather than bemoaning the Ls. I certainly wish the company would do something to change the narrative, because right now it’s allowing the vacuum to be filled with tales of woe. Come on AFC, say something.

Rob, if you were CEO of a junior miner would you recommend the purchase of a 71 Mt resource whose profitability depends on POC being at least $11000 per ton for many years into the future - when the spot price is below that? I certainly wouldn’t. The tailwinds for the POC may be good but it’d be a huge gamble. Still, let’s hope the price does indeed soar!

Rob - afraid 71Mt @0.44% wouldn’t make a nice project for a minor. It only made a profit when the copper price was 5$ per lb.

Having said that, the SP would re-rate to reflect the expectation of future dividend income at a certain rate, discounted for time value of money and risk. So the SP could still rise to a good level, once the contractual arrangements are sorted out with the company doing the mining. And there might be a multi-year lag before any mining is done.

CE, that’s a very good point. The only thing I’d say is that the divi would be less than 5-10p - at least according to my own financial model. 20% of operating profits, say, in line with African assets, is more likely to be 2-3p at best. And at that level, I suspect most would far prefer the upfront cash.

Andrew, respect your opinion but I’m not so confident myself. CB has often talked about a definite Tier 1, but in respect of 2Mt I think I’ve heard more “I hope so, Zak”s than “definitely”. There’s also the comment about Ascot “being critical”. He may have been overly optimistic about 2Mt before some of the grades came out a bit average. He’s been consistent about 500-600Mt, but at 0.3% that’s only 1.5-1.8Mt. (That grade seems to me to reflect the holes announced to date). BUT, RC is still open to the south so we’ll see. I think there may be enough wriggle room for CB to argue he hasn’t definitely promised 2Mt from RC alone.

The decision to mine could be interesting. Having made this decision, AA then have first rights to make an offer. What if they don’t agree that XTR have made a “serious” decision to mine? For its part, XTR would say “look, we have developed a model; a pre-Feasbility Study (high level, with an NPV etc, essentially an enlarged version of the conceptual open pit model RNS from July; an MRE. And if you don’t want to engage, we’ll look to sell to another party”. Could AA block that? I don’t think so - and to what end, in any case? So either way - 2Mt or less with decision to mine - I see no real issue with XTR progressing the sale.

In the unlikely event that the whole pipeline is turned into sales, $50m x 50% margin = £18m pa or so, whilst the mcap is only £27m. Feels like the world is finally starting to catch up with what CPX offers.

Howezap - did you mean a 0.75-1 strip ratio or 3-1 or 4-1? Wasn’t quite clear. I’ve certainly not seen a figure of 0.75-1, which would be very low. The conceptual open pit study had 4.37-1 - whilst based on the 71Mt resource, that is far too high and needs to come down substantially.

Can I check something - if RC proves to have less than 2Mt, XTR can make a “decision to mine” and AA gets first refusal. If they say no, XTR don’t actually have to proceed to mine themselves, they can instead seek another buyer. (And we know they don’t actually intend to mine). And provided the “three year” conditions are met, which could imply a short wait, AA would not be eligible for 50%. Is that where we ended up? What if Ascot (being a different tenement) is needed to exceed 2Mt in total - how does that then change things - just a different waiting period?

Very bullish comments on here recently. Whilst I’m a supporter, what people are “missing” is that NEL is only producing revenue of c£20m per quarter. Its mcap is c£1.5bn, and to justify that valuation on a traditional PE basis would need about £600m sales pa, IMO. That’s 600m x 20% margin x PE 12.5. Or alternatively, sell 1.2GW annually at £500k per MW. NEL is a long way from that at the moment, despite the 12GW “pipeline”, which is actually just a list of projects that the company can bid for, and which in any case would be fulfilled over a number of years. New factories will ensure it loses money for many more years yet. I recognise that first mover advantage and establishing market leadership can be a reason for seeing beyond the above points.

Porv, you know as well as anyone that several Mt of copper means nothing when there’s a billion or more capex yet to pay for that could involve enormous dilution. XTR is expected to receive $4m pa from alluvials plus other hard rock and $6m pa for six years or so from Fairbride. With no shareholder dilution required. I don’t believe the alluvial income will last much longer but $36m from FB alone is worth 2.5p+.

Haggis, do you know where we can find the latest shorts on the US fuel cell stocks? The figures you posted as at 31/1 were (from memory) very similar to those near the start of the year. The UK companies had very few shorts on them even then so you can’t compare UK to US now and say they are reducing.....

Howezap - when did CB state that 6-8% of the copper revenue would be the right factor to apply in a sale? That is fanciful thinking and flies in the face of everything else we’ve seen. As an example, the Josemaria project in Argentina that was referenced here a few weeks ago has gone for about 1%, a little more. And that’s for a fairly well defined resource. Ok it’s Argentina but it’s hardly Ecuador up a mountain. Ascot has what - just four holes drilled to date? There’s so little confidence about the resource there that the percentage will be low. Too high and the buyer will get too low an IRR /ROCE to make it worth their while.

Well recovered, Andmillsy, the video does indeed talk of a strike length of 3.6km, though the open pit discussed at that time only formed part of that length. Perhaps it’ll extend as the SW is drilled further. Joeman, you’re right, perhaps that further drilling in the N is simply that off the existing pads. Well, all to play for.

Granted, Howezap, if RC extends SW coincident with the IP then it’d be 3km long. We haven’t done any drilling there though and time’s running out. Not quite sure why CB mentions further drills to the N when the SW needs so much more work.

I’ve got my ruler out and from the top of the red line around RC down to hole 38 ( the farthest south) that’s 3km according to the scale of the map. But by then we’re well into Ascot and/or the intermediate zone. 3km seems reasonable for the whole area under consideration but I’m struggling to see RC alone being that large.

Racecourse is 3k long, Andy? Really?