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I must have misread your post Steve…
That last one I fully agree with though!
not sure how you can be so confident that Opex won't increase by 100%, based on MRE we would be processing 3x the amount of rock and if processing cost are roughly 50% of total opex (this could of course be wrong) it would make sense that the opex cost roughly doubles from the conceptual study.
As you say time will tell
Hi Stevemocal
The presentation you posted seems to show the Opex breakdown for an underground mine? My understanding is that this breakdown will be vastly different for an open pit mine?
For example if you look at the Caravel or the EVA copper project feasibility studies which I believe are reasonable benchmarks (although fully appreciate each project has its own idiosyncrasies’) you can see that processing costs make up approx. 50% of the Operating costs. Based on these benchmarks I would expect a material increase in Opex, from the conceptual study (I’m sure there will be other incremental costs as well).
https://caravelminerals.com.au/wp-content/uploads/2022/09/2022-09-20-PFS-Optimisation-Study-Update-and-Results.pdf
https://cumtn.com/site/assets/files/3661/ni_43-101_eva_copper_fs_update_final_07-may-2020_2.pdf
Cheers
James
Hi RWT2
Perhaps a dumb question, but how do you know this?
Cheers
James
Ben
Better than bloody 144th!
Cheers
James
I’ve done pretty much the same thing as Steve, and agree more or less with his numbers. What I see is that the outside the “high grade” material it’s sub economic (Opex costs are higher than revenue)
However I don’t believe Steve numbers incorporated upside from Ascot, a few years of high grade material which is easy to get to changes the story. If Opex can be reduced on a $/t things again look much better. So a few ifs and fingers crossed but I don’t think the deposit is without hope
LW
I understood he was saying the incremental value of each tonne (once Capex was paid back) would be $10/t or approx $200m gross profit a year. However I think it should be taken with a pinch of salt as I’m sure it’s the optimistic view and my understanding could of course be wrong.
Cheers
James
Hi Andrew
I don’t think we will hit 100kg either but I’d expect us to be at 70kg or there about, as they should be running the higher grade ore by then so income should be nicely ramping up.
CB is certainly not an idiot but at the same time if there isn’t income from FB he might not have a choice than to go cap in hand to the market. FB is a share of net operating income, if the operating costs are greater than gold generated our share would be 0 (different to the empress royalty agreement). Obviously XTR could be receiving income from FB already but I find it strange that XTR wouldn’t have announced this even if it wasn’t material.
Hopefully FB hits serious production before year end and we don’t need to find out if a raise is required or not
Cheers
James
Hi Andrew
My understanding is they are running low grade ore through the plant at the moment to jam any holes (not the technical term), once they are satisfied that the plant is operating efficiently then the better stuff will be run through which should get us to this 100kg a month or so. Not to look an idiot for the 67th time believing CB deadlines but until otherwise advised I think we will still hit commercial production by year end “(Commercial production is defined in the Collaboration Agreement as a being installation of a processing plant with a throughput capacity of not less than 29,000 tonnes per month (being 70% of the planned 42,000 tonnes per month throughput).
If they don’t start generating cash from FB shortly I think they will be back to the market with their “begging bowl” just for working capital purposes which would be very frustrating.
Cheers
James
Steve
Current share in issue are approx 850m, however with unexercised options/warrants the fully diluted figure will be around 1bn (assuming the share price is above 10p)
Cheers
James
Hey Ian
Without checking they have issued approx 250m shares since the intra day high.
Cheers
James
Hi Andrew
Looking at the below, which we know was sold for 170m upfront and 60 deferred consideration.
I get copper revenue of 6.3bn, using 8k per tonne, and gold revenue of 0.5bn using 1750 per oz. So 6.8bn total, if you then take the Eva project sale price you get between 2.5%-3.5% of in ground value (170-230 sales price).
https://cumtn.com/operations/eva-copper-project/overview/
I think the Eva project is more mature, but good to see there is so much headroom between your 1.75% (I use a similar figure) and what Eva sold copper mountain for assuming I’ve not messed up on the calc.
Cheers
James
Hi Andrew
Thanks for posting, aren’t the grades much higher than what XTR are likely to have? It’s 0.49 g/t AU and 0.27% CU, or around 0.6% cueq (unless my maths are bad).
Interestingly they are quite conservative with the prices used.
Cheers
James
Nothing to do with expectations in my opinion, the premium is broadly the same as the 10p options so more likely just policy to issues options at 50-60% premium (round numbers on the option price)
I actually take the fact that Joel has taken shares intend of salary as quite positive
Banzai
The issues is that if the operating costs of the ramp up are greater than the revenue generated then XTR get 0 from FB. I would imagine that is currently the case as we know the plant is being tested, XTR haven’t declared first income etc. My impression from the AGM was without FB income this year a small raise would be required (obviously this wasn’t explicitly stated)
I agree there is lots to be positive about, FB is going to start generating serious income shortly and BR a fantastic asset with huge potential
However there are also some concerns largely around missed deliverables (time and time again), CB has a history of kicking the can down the road when there is bad news. As mentioned above without FB coming online shortly I’m worried about finances. There are also larger macro issues, not that the company can do much about these.
I do find it a bit frustrating when people on here just whinge, however as investors we also need to understand that there are issues with XTR.
Cheers
James
Captain
No one was summarising that by keeping the 20% raises will be required, unless I have missed a post.
Clearly if/when EL 5574 is sold, then a material amount of that cash will be distributed back to shareholders. Stevemocal was suggesting that because AA would want 100% of the asset they will pay a premium for the 20% not in the buy back and other licenses (which makes sense to a degree). However my point was that as the buy has a clause that if XTR can’t fund there share of development costs there working interest in the asset is diluted and they end up with a 0.75% NSR, hence they are not going to overpay for this as they will know XTR won’t want to keep the 20% nor could they pay (as the cash would have been distributed to shareholders) so would likely end up with the 100% of El 5574 regardless. Obviously this is just speculation on my part but that’s what we are all doing anyways while we wait for actual news.
Cheers
James
Wasn’t disputing that, more your comment that they would have to go at the pace of the junior.
I fully agree they are likely to want 100%, but obviously they have the ability to buy 80% at fair value and then dilute XTR down with cash calls etc which could be there preferred route if XTR try to push them to much on the 20% they don’t have the option on.
Steve
I don’t think that’s quite right, assuming AA only brought 80% then the partners are required to pro rata the funding, if XTR can’t do this there WI is diluted down and they will ultimately end up with a 0.75% NSR (the power point doesn’t make it exactly clear how this works).
John
The buyback is clearly for 80% of EL 5575, CB just aspires to sell 100% of it and the other licenses.
Cheers
James
No doubt we should, however with the delays experienced to date I’d feel much better when it’s confirmed.
Without Manica coming online before YE I can see a small raise being required (my understanding is that the director cash forecasts are based on the assumption that Manica comes online pre 2023). Which in these markets would be less welcome than usual.
I won’t hold my breath for one of these so called news bombs but I will remain quietly confident of getting good XTR news one day
I’m a simple guy and just want confirmation that FB has started commercial production and XTR are actually making money from it!