Member Info for Jamesiecakes

The full report is on website, looks like cash costs for Manica will be 800/oz

Steve

I think that’s a little unfair on Howezap, he correctly in my opinion pointed out that AA have an option over BR so don’t need to do anything until XTR meet 2mt or announce a DTM so can sit just back and see what plays out while with ARCM they needed to put some money down to get an interest in the license.

Cheers

James

Maybe part of a negotiation strategy ahead of a huge Australian acquisition (just in case it’s not clear I’m joking).

Did the AA guy give any indication on where they see Copper going eg 3.5-4/lb long term ?

Hi Howezap

Don’t forget that the prelim study was without Taxation and a discount of 8.4% was used. I understand that they have used this rate as it was suggested by the consultant however it’s clearly not realistic to how a buyer will asses the project. I do not work in mining but at a guess I would assume that the buyer would run their model at 3-3.5/lb copper long term, 10-12% WACC, include tax in the calc and still want to see robust economics.

Point I am trying to make is that we might see a reduction in the break even copper price (NPV8.4 = 0), if they update the original model with new technical inputs with the original assumptions but for me we are going to have to see a drastic improvement to show BR is viable or at least a clearer pathway to viability. Based simple on the MRE it’s hard to see a big change in economics from conceptual study so for me we really need to see a big improvement from the ore sorting and the fact CB has gone silent suggest it’s not quite the result he hoped for (this assumption is based on his history).

That said I hope you are proved correct

Cheers

James

Hi Howezap

I think we can make a reasonable assumption that BR is reasonably high cost, you can draw that conclusion from the prelim study. Flip side of that is we can hope to benefit from economies of scale, and maybe the ore sorting study proves a success.

Let’s see

Cheers

James

Hi Howezap

I’m not convinced you can say BR is low cost, zero evidence of that to date? Similar comment on mine life (although MRE supports reasonable life)

Cheers

James

Hi Guy

Ok got what you mean now, and agree they will be included in the economic model (assuming successful). I would also like to see some commentary from CB about the impact on the project eg reduction in processing etc

Cheers

James

Hi Howezap

If I understand correctly you are suggesting that the Ore sorting won’t go into the updated economic model? The following quote is from last BR update “ Therefore, we have initiated a study to determine how effective ore pre-concentration could be at Bushranger and will then feed those results into the final open pit economic modelling”. Granted it’s a CB quote but ones in RNS do have a bit more weight to them.

I agree that the economic model won’t have the incremental economics of the Ore sorting released though (if this is actually what you were saying)

Cheers

James

Hi Gwynwin

Why would anyone buy the asset from XTR with the Anglo option hanging over the asset, unless it’s another small company who think they add a bit of value and then flip it in which case it’s hard to see it being an attractive price for XTR?

I hope/expect fairbride will be adding more thank 250k per month although I’m not optimistic on anything material from the other asset (kuwali or what ever the heck it’s called).

Cheers

James

Isn’t it simply that the assets as they stand don’t warrant a market cap of more than 15m (or what ever it is currently)

We are still waiting on Manica to prove itself, as forecasts have a big element of CB in them people are clearly applying a discount here on future cashflows (I’m still optimistic on this asset). Basically once cashflows hit in a meaningful way via RNS I’m sure the SP will respond positively.

It’s hard to see how BR has added significant value from the conceptual study of July 2021 (I think), maybe the Ore sorting will drive the economics to a point a deal could be done. But again CB needs to prove this via results rather than nice words.

Why would anyone apply a value to the Zambia assets when we don’t know enough information to even come up with a crude value, history would actually suggest this is a liability.

Hi Trek

Agreed, their PowerPoints are superb and really insightful (I need to go back through this one tonight to let it digest).

I think the Opex reduction makes sense and was partly expected, royalty/production based taxes are linked to spot prices not hedged prices (so our effective royalty rate has reduced when spot is less than hedged prices). Was good to see economies of scale on the other components of the Op costs.

I would have liked a bit more information on the Solar/CCS story, it’s not currently that clear to me how they benefit and feels a bit like they have just chucked a few buzz words in to get some market attention.

Results looked good to me and I’m surprised to see the price down a touch this morning.

Cheers

James

Hi Andrew

End of the day if either of us are right, XTR appears under valued!

If we assumed that the plant can process 42ktpm, let’s assume downtime of 10% (I don’t recall seeing anything on downtime in any deck) meaning approximately 450ktpa is processed. At the stated average grade 2.62/gt this equates to 1.19m grams or approx 37k oz pa. Assuming a recovery factor of 95% (what I’ve seen for the oxide material) would mean 35k Oz pa for the first few years, using a average 78% recovery for the transition/sulphide material and this drops to 29k Oz pa for the next 5 years or a total of 215 oz over the 7 years so pretty much inline with the dfs production (hopefully my calc is reasonable and this isn’t a coincidence), Slide 9 of the below shows the metal recovery ive used.

https://xtractresources.com/wp-content/uploads/Manica-presentation-12March-2017.pdf

I’m likely going wrong by using an average grade, but don’t believe I’ve seen anything on grade by material type etc, despite this and my knowledge that CB believes a glass with a drop of water in it is in fact half full I’m still reasonably comfortable to expect between 2.5k - 3k Oz per month especially in the first few years of the project.

We are certainly aligned on the rest of the calc, I also think we will have some relief on the corp tax as well but don’t have the information to base an assumption. I tried to ask this question at the AGM but didn’t get a clear answer from Joel (could have been an unclear question in fairness to him).

Cheers

James

I don’t think we will get to steady state production of 2500-3000 oz per month for a little while yet, we ended Q1 2023 at around half of this production level. My hope/expectation is that by H2 we are running at 500k per month profit all in (at current prices). Based on my understanding of the satellite deposits I think XTR net 13% of revenue in GF and then less in Boa (funny calc depending on the depth mined) and production isn’t going to be material in comparison to FB (based on a quick glance at the q4 production update these will add about 250oz per month combined of which we can assume say 10%-13% net to XTR)

Under the terms of the Collaboration Agreement, MMP will receive 77% of all the operating profit produced from the permitted area through the performance of the contract by MMP when the prevailing price of gold is greater than US$1,250 per ounce. MMP's entitlement increases to 78.5% at a prevailing gold price between US$1,175 and US$1,249 per ounce, and to 80% when the prevailing gold price is less than US$1,100 per ounce. For the purposes of the Collaboration Agreement, "profit" is calculated as: Revenue on Sale less deductible costs (excluding non-cash items) and corporation tax. Any royalty payments due to any third parties (such as royalty and streaming payments) are for the account of MMP and will be settled from its entitlement under the Collaboration Agreement.

From July 21 RNS

Hi Theiceberg

Obviously any forecast is all about the assumptions, but assuming 3000oz per month, 6% production tax, direct cash cost of 700/oz, 32% CIT and an ex rate of 1.25.

At 1700 I’m getting around £4m pa while at 2000 this is around £5.3m pa so clearly their is a nice bonus at higher prices but nothing like 200-300% upside from 1700, plus cash flow is still material at 1700.

Let’s see how the numbers look when we start getting to steady state production

Cheers

James

He certainly says towards, with CBs history of "word choice" who can blame anyone for nitpicking.

In my opinion until something is put in an RNS you have to consider it bull s$$t as whats said in podcasts/or interupted from CBs words don't seem to match up with what happens.

I’d be pretty amazed if any of the pit shells weren’t economic excluding Capex, if you look at the conceptual study from July 2021 and focus on the worst NPV which is 20mtpa, $3/lb and a cut of grade of 0.25% you can see that the NPV8 is -1.3bn AUD we know from the same study that the Capex is 1.4bn Aud so the worst case of the previous study would be positive cash flow without capex (obviously this is a silly metric, I guess done as part of a screening process). I see no reason why this would have drastically changed.

Having said that I also find it odd that they didn’t publish the interim report showing NPVs as I’m sure they have a good idea if the capex for the conceptual development, so I’d be inclined to think that they are broadly inline with the previous conceptual study eg needs a high copper price to work when loaded with capex.

Hi Howezap

Yes add back, the initial conceptual model Revenue would have been after the recovery factor, so my logic was to apply 90% to this amount to reduce it for ore concentrating and then add a little back for a better recovery factor (taking the 87% from yesterdays RNS as the starting point). I’m making very high level assumptions which might prove to be pie in the sky but it certainly demonstrates the potential impact on the economics if this ore concentration works how I understand it.

Cheers

James

Hi LittleWing

if you focus on the conceptual mining study from 2021, what we know is that case 10 generated the following (all in AUD);

Revenue: 6,627
Capex: 1,454
Opex: 4,152
BTCF: 1,021

If we then apply some super simple assumptions to this, these are finger in the air to give an indication of impact

Revenue: Assume 90% (We lose some of the metals due to concentrator but gain a little in the recovery process which is my understanding of how this works)
Capex: Assume 85% (I am making this up, assuming everything is smaller but offset by cost of concentrator)
Opex: Assume 75% (I am assuming 50% of the opex relates to processing and this cost is cut in half)

This generates the following

Rev: 5,964
Capex: 1,236
Opex: 3,114
BTCF: 1,614

These numbers and assumptions will obviously be drastically wrong and don't consider any of the new material from drilling campaign but give an indication about the potential upside from this pre-concentrator. *** packet calcualtion on this increased BTCF would be that it adds 400-500m AUD to the NPV8.

I am a bit more optimistic about BR than I was last week and looking forward to the conceptual economics being released baking in the pre-concentrator and hoping for a breakeven price sub $4/lb

Cheers

James

Howezap from the annual report;

"Post year end the Company decided to withdraw from the Kalengwa Project in Zambia and fully impair
the carrying value with a consequent charge to the income statement of £0.36 million"

based on the above id say its foolish to hold any hope in kalengwa contributing anything to XTR, obviously we are speculating on Eureka following a similar path but based on past experience of XTR I know where my money would be on