I think the fact it ties is a coincidence, the $1m per month includes our 2 Zambian projects. The royalty agreement will be just a straight 2.25% of revenue (for the first 95k oz then drops to 0.75% for ever) while our 23% is revenue less direct cash costs which from memory works out around $500k per month.
On the one hand it’s a bit disappointing that production will be from Q3 in FB, especially as I got a bit excited looking at those pictures on the website. But on the other the fact MMP seem to have sold a royalty agreement with the understanding that with production in Q3 gives me confidence that we will get production then.
As you say I think MMP have just raised a bit of money against the project, whether this is because they were short of funds to complete construction or they just wanted to derisk a bit who knows. But I doubt this has anything to do with the option (I’ve never been convinced they would exercise this)
I kinda agree that’s it seems to good to be true. But the agreement is between Empress and MMP the GF area is being operated by Longhau Tianci Mining Co Ltd so would be odd for empress to show this plant? Also from memory the GF plant was around 60tpd, the plant in the photos looks much bigger than that (granted I am basing that on watching gold rush, so don’t quote me on that!)
That’s a great find thanks! Looks to me like MMP entered into this agreement with empress in Feb (although it’s not yet closed). As the agreement is between MMP and empress (and this is the first we have heard about the agreement) I assume this will have no bearing on XTR share of cash flows.
Looking at those pictures i can’t believe that plant is for GF or alluvials due to the size of thing! Which makes me think that FB is much further ahead than I believed. Hopefully we get an update in this in the week.
I calculated the average grade of the XRF for hole 1 at around 0.25% copper, I assumed the mineralisation which wasn’t specifically mentioned but was in the 900m of continuous mineralisation was at 0.20% and then just applied a weighted average to this. I am hoping I made a mistake with my numbers as your grade is much better!
Incidentally not sure how much weight we can put into the XRF results based on the reason CB gave for stopping them for hole 2 onwards.
RE: Going for news by close of play Wednesday01 Mar 2021 12:59
Should be hearing about Manica soon as well (weather is looking better), Kalwenga and of course the Alluvials q4 numbers which will hopefully include a bit of information on how GF has been progressing.
I’ve listened to it a few times, but I came to the same conclusion that the geo’s decided XRF wasn’t appropriate for the rock type we have (eg it’s not spread evenly) which i assume invalidates the hole 1 results. Having said that the results seemed in the range of what we we have been told to expect (0.2-0.5%) so perhaps my conclusion is wrong.
RE: XTR: Colin Bird, Executive Chairman New Interview, Hole 3, Tues, 23.2.2123 Feb 2021 21:05
Even if we assume the shape is a cube ( which based on what we know/been told I don’t think you can) you cant estimate it at 1k * 1k * 1k for the obvious reason we know the mineralisation of each hole E.g. hole 1 940m, hole 2 approx 560m and hole 3 approx 665 so approx 1 bn tones.
So regarding 2021 production this just means which ever phase of development we are in (1,2 or 3) 2021 production should be inline with the October business case of 1325 tpd (again this must be average rate not exit rate) as there was no incremental production added from Ore sorting in 2021? Now I’m even less clear on what’s has changed from business case to 2021 production guidance.
Fair point on metal price assumption, but why not hedge the remaining 50% of production if this could reduce the size of the raise and remove any doubt of being able to complete development plans.
Thanks, but looking at the business plan assumptions for both scenarios (slide 20) they show 2021 processing rate at 1325 tpd this would be the average rate not exit rate.
I know there has been a 5 week delay in financing, which then took the rebuild into Xmas. So call this a generous 2 month delay. However by my (albeit crappy) maths this still shouldn't reduce planned production from approx 10k to between 6.6k -7.4K we should still be at at least 8k, unless there have been other delays which I am now aware of (or TB is going for the under promise over deliver type of guidance).
What I am trying to get at is based on what I understand the price increases should offset and more the production decrease, hence 2021 cash flow based on the other variables should be better than the forecast $8m loss and some of the dilution (at what I perceive a crappy price based on business fundamentals) could have potentially been avoided.
Looking at the deck, I can see there is a processing rate of 1325 tpd in both scenarios with a grade of just over 2%. So unless I’ve made a typo this is approx 10k tonnes per year of copper, other than the delay in financing has there been any other explanation as to why the 2021 forecast is now 6.6k-7.4K tonnes per year?
It seems that the $8-$10m loss for 2021 was based on copper at $2.9/lb so at today’s price with 50% hedged so say $3.75/lb average our revenue should have been 20% higher than the business plan which would have covered the forecast 2021 loss (at the original production rates) hence mitigating the need for the raise (or at least so much dilution).
RE: Buy-out %. Racecourse v Northparkes20 Feb 2021 19:52
Interesting analysis, however I thought Northparks was an operational mine when sold? If so the acquisition obviously includes both reserves and infrastructure (mine etc) meaning that we should be more pessimistic than 4.25% of contained copper. I also understand the category of reserve will impact the %, right now we are inferred which will again attract a lower % than if this moves to indicated etc.