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Does anyone have any thoughts on likely capex and opex (usd/tonne) costs for an open pit mine based on the current Jorc, trying to set my expectations for what we may see in Julys report.
Cheers
James
Hi Jwoz
Perhaps I’m missing something but wasn’t that graphic basically what XTR were expecting from hole 5 & 6? While yesterday’s Assays showed the mineralisation to be significantly less than expectations (maybe there was mineralisation but it was below the cut off)?
https://www.rns-pdf.londonstockexchange.com/rns/7404C_2-2021-6-22.pdf
Cheers
James
Hi Andrew
I had in my head from previous Empress interviews that first income was schedule for Q3 (according to Empress) so Fall seems like a little slip to me. I don’t recall them mentioning Q4 but could easily be mistaken.
As you say it’s a little frustrating that we are trying to piece things as material as Manica together from 3rd parties!
Cheers
James
Hi Captainbob
We won’t get 10x empress as income, as they have a royalty interest while we get a % of operating income (e.g. our revenue stream will be revenue - cash costs).
I wouldn’t say they seemed particularly upbeat on Manica (I wouldn’t say they were negative either). My take is that there has been a slight slip in timeframes from Q3 to Fall (appreciate fall is September to November so could still be Q3).
Cheers
James
Few snippets of information in the below link, sounds like first production in fall (comment at back end of interview)
https://www.youtube.com/watch?v=4Tysy5tpy80&t=1236s
Hopefully there is an update from XTR on Manica and all other African assets progress before the end of the month. I’d also like to hear from CB what has caused the delay from his previous guidance.
Cheers
James
Hi Howezap
Regarding your statement “ The intention being to drill some test holes at Footrot although he previously stated was not actually budgeted for within phase 2 but the hope was to do some test holes there”. From memory I think CB was saying that footrot wasn’t included in the tonnes needed to meet the 2mt criteria, I don’t recall anything about it not being budgeted? Let me know if I’ve missed something on this.
Cheers
James
Hi Andrew
I heard the same as you but to be honest I just think CB made a mistake, wouldn’t be much of an option to AA if xtr could just reject the offer outright.
I was also a bit surprised about how CB explained the sale price would be arrived at, a 15% discount rate with a further 20% reduction to the NPV seems quite aggressive to me (also identical to the MMP option in Mozambique) I would hope/expect the discount to be more in the 10% ball park considering the jurisdiction etc.
Cheers
James
Hi littlewing
It maybe is a bit optimistic, i calculate this at 0.825% based on 8000 copper (my guess at what long term price would be used for a buy out). However this price of $0.03/lb is generic and doesn’t factor in different extraction costs (Capex/Opex), fiscal regime (Royalty/Taxes) etc which will all obviously impact price a buyer would pay.
Hi All
On another point I’ve been interested to read all the speculation on CB holding back assays. With CB having just raised £5m + I cannot get my head round (other than not wanting to give bad news) why he would further delay releasing “bad” assays as he now has enough cash to do what he wants over the next 6 months so in many respects the SP isn’t relevant to him until he either raises money again or sells his shares. What am I missing here?
Cheers
James
Steve
The fact he’s not learnt and started calling it a down day makes me suspect he’s actually the best deramper on these boards!
Cheers
James
I think the part about price to grab attention, but I actually thought the section on depletion and cut off grade was the most interesting part of the article.
https://www.mining.com/new-bull-chart-for-30000-copper-price-porphyries-nearly-mined-out/
Hi Andrew
I don’t think anyone would sanction a project requiring $10k /tonne copper to be economic, so for me I don’t think you can assume the cut of grade is now 0.15% due to the spot price. Don’t get me wrong recent price rises (and what’s being forecast) sure help.
Maybe I am wrong on this but that cut off grades you quote come from an old feasibility study at bushranger for what was a much smaller development? With BR now looking like a project of serious scale maybe there are some economies of scale which could reduce the unit development costs and therefore decrease the cut off grade.
Until there is a feasibility study complete I guess we can only speculate, but for me I think we still need to assume 0.2% cut off grade (based on the companies RNS) for any buy out calculations etc
Cheers
James
Hi Steve
I accept that CB has his faults, good news seems to flow more quickly than bad for example. However if you look back through the last 4-5 months RNSs, interviews it’s hard to believe a solely dedicated CEO would have kept us investors better informed? So for me I don’t get how you conclude “CB is simply spread to thin” other than frustration that the assays haven’t been released or we haven’t been told that the hole 2 results are now expected a little longer than shortly.
Cheers
James
Hi Andrew
If you look at the XRF and Assay RNSs you can perhaps see why XRF wasn’t released to market (or possibly carried out at site). If you look at the XRF results 110-150 & 171-319 are at 0.3% copper, per the Assay results 110-266 were 0.48% copper.
I wonder if the assay results are released to the company in batches, with the first 200-300m or so being received after hole 2 completed?
Cheers
James
Hey Ella
I’m no geologist so maybe I’ve misunderstood but my take on what CB was saying was that XRF isn’t appropriate for racecourse as the mineralization isn’t evenly spread throughout the rock (although hole 1 assays weren’t a million miles away from hole 1 XRF), I believe Kalengwa is a different type of resource which I guess is appropriate/reliable for XRF readings.
Or are you getting at something else?
Cheers
James
Hey Andrew
Just to make it clear, my estimate on monthly income below was only for FB.
I estimate approx $75k per month for GF, $50k per month from Alluvials, Eureka at approx $350k per month (much less visibility on the inputs for this calc so it’s more of a guesstimate based on what CB has said previously and then adjusting for price updates etc) and Kalengwa at maybe the same as Eureka.
Even if both Eureka / Kalengwa don’t happen (which is unlikely now), XTR should still be generating $550k+ per month from Q4 2021. With the Empress news yesterday I’m more confident than ever that XTR will see money from Manica this year!
Cheers
James
Hi Cyber
My understanding of the monthly cash flows XTR would be due would be approx $425-450k. This is based on the following project assumptions;
Production: 31k oz pa (from DFS but still seems reasonable based on plant being installed and the grade)
Gold Price: $1,750 oz
Royalties: 6%
Direct cash costs: $556/oz (from DFS so could be out of date)
Tax: 32%
XTR share of net profit: 23% (% changes based on gold price)
https://empressroyalty.com/site/assets/files/6157/emprnr2021-13_manicaclosing.pdf
For those interested in one of the legacy projects
Hi Phil
My understanding of how fair value will be defined would be by benchmarks (there was the recent new mount acquisition in Canada, not sure if there have been any material deals in Oz recently?) and cash flow analysis (NPV) which we simply don’t have the inputs e.g. capex, opex, copper price forecast (I would guess they would use the copper price forward curve), fiscal regime etc etc.
So in short, no idea of what fair value is of 2mt at his stage, but I like the approach in the article due to its simplicity?
Cheers
James
Hi Phil
If you listen to the most recent interview CB states that footrot isn’t required for the 2mt (or something along those lines). As they expect the P2 drilling schedule to prove up the 2mt it wouldn’t make sense to do the IP survey or drill a couple of test holes at footrot if they weren’t going to see any of the potential benefit e.g. XTR can decide when to get the reserves in the license JORC (this is my take as I haven’t seen the actual details).
Cheers
James