Member Info for JDAU

TW
…and what sort of cashflow could that generate?

CB
It could generate $1m a month over 6 years
- Goes on to explain about concerns re availability of power etc.
Small upgrade might in fact be route I take because if you take 1% copper on a 10 factor upgrade with standard transport costs you can make quite healthy returns without too much technical risk.

TW
How quickly could you get that up and running?

CB
In a couple of months (the simple method), approx 6 months if you invited in another company / went the more complex method

TW
Ok so if you went down the simple method, in theory you’re not a company generating $4m a year, your a company generating over $10m a year

Cb
We could be in that scenario, yes

Oh CaveatEmptor, whilst I have you, I got round to writing up some notes on the TW interview for you as discussed :)

RE Manica -
CB (Paraphrase) Modest budget for drilling other resources in- gradual drilling program, deposits known, cost max $1.5m (50-50 split)

RE Eureka -
CB (Para) very good results, attracted major company interest already, old RST results combined with Caledonion results with our new results, looks like a corridor, nearly 1km long anomaly running east west (call it north -> west) - very excited as modelling results show mineralization
Another anomaly (villagers pit) - roughly another km

TW (Para)
You’re sounding like a geologist.. How do you monetise it

CB (Para)
If they’re as big as you want them to be, there comes a stage when you sell them. Majors are going to be looking, looking in 2021 for things to acquire - chief execs would sooner pay over the odds for something that’s been derisked than to take a career decision to buy something that’s still quite speculative.…as soon as it starts looking real, the telephone rings.. So how do you monetise it? You outline it, because they (majors) realise there’s a competition on so if they sit until it is proven, the value is increased out of sight and your competitors might be in there as well

TW (Para)
So for this project the monetisation event is either JV or outright sale, but that’s not going to happen for 18 months, how much are you going to have to spend to dress it up for the shop window?

CB (Para)
I don’t think I’m for JV - Hang in for dear life, do as much work as you can and prove the dimension

TW (Para)
How much is that work going to cost?

CB (Para)
A couple of million dollars spread over four years will take you to where you need to be

RE Kalengwa
CB (para)
2m T at 1% copper which separates quite nicely
The Waste rock, there’s 2 dumps: About 1mT at 1.8 & 700kT/750kT at a similar grade but refractory - think we have a plan for the refractory material but the rest of it is quite easy.

Can upgrade them without spending a lot of money by gravity, finding an 8 - 13 upgrade factor so we needn’t build a sophisticated plant if we feel it’s not appropriate, there’s places to upgrade / send the material to

TW
So lets go back to the hard dollars here, how quickly could this asset be generating cash for you

CB
We may/may not employ own capital and work it ourselves, or may bring in someone else to put the plant and equipment in, take the execution/operating risk and give us a net cash flow return, at the moment busily debating those two options

TW
What sort of capital cost are we talking about, roughly?

CB
If we kept it to ourselves and did the upgrade route about $1.1m, if we build plant ourselves its nearer $6m

Respectfully CE, I didn't post my workings, I stated CB was correct in what he said in the podcast and explained how to work it out in exactly the way you just have, and even after seeing your figures, I'm not sure I agree that I'm wrong.

For clarity: 100,000,000 / 557,000,000 *100 = 17.95% (2 dp.)

CB on the podcast @ 5.29 mins
"...I think it was 16-17% dilution for this acquisition"

Reference: https://audioboom.com/posts/7597070-xtract-aquire-copper-gold-project-eastinco-mining-update-and-glen-goodman-goes-long-bitcoin

I reiterate my statement, what CB suggested the level of dilution was is correct and the information posted by certain posters is wrong.

N.b CB was making an off the cuff comment about amount of dilution and arguably could have said 17-18% dilution for accuracy but without being too much of a pedant, his 16-17% dilution statement stands as correct.

@ Blueballsnall - Hilariously, while trying to trip me/CB? up you are wrong.. again.

See what I'm betting you've done is you've worked it out using the current number of shares (circa 457m) whereas what CB stated / what you should have done is worked it out as a % of the new total number of shares after the acquisition, i.e. % of the company that has been exchanged for the asset.

For clarity, you are wrong, CB is right.

Demanding for your statements to be factual instead of intentionally misleading isn't exactly a big ask.

You are absolutely entitled to have your say, just expect to be called out on it when you post nonsense.

Thanks for posting that H50, good interview by Colin there, gives a little more detail / his thoughts on the project, funny how the interview echoes exactly what I was saying yesterday about CB having Manica cash flow being sorted and thus wanting to get on with other projects to push the company forward.

Well done Colin, looking forward to your next announcement(s).

Blueballsnall - it seems like you've turned up pretty recently out of the blue saying basically anything you can to try and give a negative slant on the company, I've already had to correct you several times due to you misrepresenting (imo intentionally) what was said in the RNS.

Now you're chastising the head of a copper-gold company for having a desire to find more copper?!?

Get a grip.

@Leo sayer - good research, could you share the link/reference so I/we can take a look?

Thanks in advance :)

Gixxer
Xtr have agreed to settle outstanding liabilities, I.e directors loans - that means the directors have loaned the company money and XTR have agreed to settle those loans, I.e pay the directors back...

I’d suggest you might need to understand the RNS before you throw around slanderous comments.

Blueballsnall, that's incorrect. I'd strongly advise that you re-read the RNS...

Here's the relevant bit(s), if it helps your understanding:

"Background

The Acquisition Agreement has been entered into today by the Company and ProspectOre, an Australian public unlisted company.

ProspectOre acquired the Bushranger Copper-Gold Project from Anglo American Exploration (Australia) Pty Ltd ("Anglo") in December 2017 ("Bushranger Acquisition Agreement"). Under this agreement, Anglo has a "buy-back" option, as described further below. ProspectOre also entered into an Exploration Farm-in and Joint Venture Agreement ("JV") with Anglo at the same time to farm-in to the surrounding exploration tenure covering 3 additional exploration licences: EL8305, EL8306 and EL8585 ("Anglo Exploration Tenements"). Subsequently, ProspectOre has agreed with Anglo ("Anglo Acquisition Agreement") to acquire outright the Anglo Exploration Tenements, which supersedes the JV agreement, for a cash consideration of A$50,000.

The total consideration is apportioned as to £10,000 in value for licence EL8305; £10,000 in value for licence EL8306; £10,000 in value for licence EL8585; and £1,220,000 in value for licence EL5574 (the Racecourse resources lies entirely within EL5574).

In addition to the Consideration Shares, Xtract has agreed that on notification by the Seller, prior to Completion, to settle from existing cash resources, a maximum amount of A$200,000 (£108,000) in cash relating to outstanding liabilities of ProspectOre, primarily being the cost to acquire the Anglo Tenements as described above, and Director loans of A$25,000 (£13,500).

Ref: https://www.lse.co.uk/rns/XTR/bushranger-copper-gold-project-australia-ruch7998ffjy5a3.html

@Blueballsnall.. it does...

Under "Key terms of the Agreement" - issue price of 1.25p per Ordinary Share
(Ref: https://www.lse.co.uk/rns/XTR/bushranger-copper-gold-project-australia-ruch7998ffjy5a3.html )

CE - have you listened to the TW podcast I recommend to you yet?

Some good info on the potential costs of the projects you're questioning - can't remember the exact figures off the top of my head so don't want to misquote them...

For what it's worth, I took away from that interview that the bottom line was that the costs for what we have planned are definitely manageable, I think CB had a couple of different avenues for potential ways to fund the copper project(s) to production, one relatively cheap, one more costly but the potential returns obviously relative to the expenditure.

N.b. subject of selling projects once proven was also discussed as an alternative to funding further progression/production etc.

FYI - we're talking circa £1-£6m (I think), not stupid money considering our likely income, I don't want to be more specific in this post because whilst I have numbers in my head, I'm not 100% confident without a re-listen so don't want to misquote.

If you don't want to pay TW 99p, which I wouldn't blame you, I can re-listen and transcribe the relevant bits at some point soon... I'd rather not transcribe the whole interview though as it's over an hour long!

Also @Blueballsnall - worth noting that the people who buy/sell when it comes to acquisitions aren't stupid, they're dealmakers.. the likelihood of shares increasing in value would no doubt be factored into the deal.

As a hypothetical example:
I want to sell you an asset I value currently at £5m as i don't have the funds to progress it.
You want to buy the asset and have the funds to progress it from your other ventures but don't have £5m sat around.
I might agree to sell you the asset for £1.25m in shares in your company if I thought that you could progress the asset (which I'd benefit from because of the deal structure) and if I thought that your company was currently undervalued due to your other projects etc. subsequently meaning I would likely get that £5m target in value in due course (and perhaps more based on the success of not only my asset but the assets of your company)

In that instance it would be unrealistic for me to ask you for £5m in shares today because that's what I valued my asset at, and you obviously wouldn't give me those shares if you thought they would be worth substantially more in the future, you would make your business case and I would either agree and follow through with the transaction, or think you were full of...

The point I'm trying to make is that it's worth remembering that it's not as simple as a 'the price we pay is the value of the asset', especially as far as buying assets with shares goes.

CE - "...committing to considerable medium term expenditure on multiple fronts before having any sustainable income.."

I'm not sure I agree with that part of your statement:

- The sustainable income from our various projects looks nailed on- at least CB is confident enough to act on that basis.
- The cost of development of the projects we're acquiring is significantly lower than our projected income - i.e. I would suggest that spending circa £200k on development of this new project in the first year whilst making several hundred thousand pounds a month from our other projects barely constitutes "considerable expenditure"

I do appreciate your concerns re other costs, plant construction etc. but CB has openly stated in interviews that the aim for these "blue sky" projects would be to prove them up and sell them to a bigger player / JV them in a similar style to our current FB HR operation with limited Capex.

I understand the cynicism but this is an aggressive shareholder value creation plan backed by income that is running along expected timelines.. for what it's worth, I'm behind it.

As far as I see it Andrew, the "additional risk" (aside from initial investment) is this:

"Exploration Programme
Xtract has agreed to spend at least A$350,000 (£189,000) on exploration drilling and resource definition drilling on the Tenements within twelve months of the date of Completion. The exploration costs will be funded from existing cash resources and future cash flows."

Reference: https://www.lse.co.uk/rns/XTR/bushranger-copper-gold-project-australia-ruch7998ffjy5a3.html

Appreciate your want for the SP to vastly increase though, we're on the same page on that one.. I'm just not sure how much more "focus" Manica needs when the cogs are already turning, like I said in my post below, we have the agreement in place, we have the plant being built and we have the timelines being followed.. what else would "focus" bring to the table?

ps. for what it's worth, I'm expecting news on other revenue streams in the not too distant future that are likely to originate from the projects in Manica - hence me not being too worried about the amount of "focus" in that area, I'm confident we're pursuing an aggressive timeline (whilst managing cashflow) with our other projects in that area and considering the next steps (as far as I see it) will be letting the operators get on with the work so they can pay us, I personally think that now is a good time to line up the projects of tomorrow.

Horses for courses though, and I appreciate your view and it's completely valid for you to feel the way you do.

Depends on the drill results I suppose.. a new discovery / extension of existing plays could be worth mega bucks..
I'd be foolish to speculate too much on the basis we don't know much about the assets and a development program/potential operational plans/costs would be required to have any really useful numbers to work from.

However...
"The Bushranger Project hosts the Racecourse deposit, a JORC (2012) compliant inferred resource estimated at 71Mt @ 0.44% Cu and 0.064g/t Au using a 0.3% Cu cut-off, which is open down plunge and along strike"

Fag packet, that's circa 312,400 T copper (71Mt @ 0.44%).

Considering the spot price is currently $5,500 and is likely to increase (especially as far as CB's view is concerned) then that's a lot of potential $'s sat in the ground.

I'll refrain from speculation on the potential SP effect as we don't have the project economics needed to even remotely estimate what that might be.. suffice to say, I feel that the projects we have on as a company really are looking interesting.

CE - Absolutely agree with that statement. Recommended.

Same question as I've asked CE directed to you Andrew, would you rather CB sat on his hands and did nothing whilst waiting for HR income when there are good acquisition opportunities? (importantly, opportunities that we can afford...)

CE - what would you suggest CB does to monetise the HR any faster?

We have an agreement in place with an operator, the plant is being fabricated to timescale as per RNS's / photo's on XTR website: ( https://xtractresources.com/photo-gallery/ ) and production is (aside from the pandemic effect) there or thereabouts in terms of the timelines we're expecting.

Would you rather CB just sat on his hands and waited for income?

Personally I like the aggressive style we're taking as I see it as adding strings to the bow for relatively minimal cost/minimal cash flow requirements and providing us with more avenues for potential positive news and several projects that have great potential - spreading the risk and increasing the chances that one of them could be a world class asset/complete game changer for the company.

Strike whilst the iron is hot I say...

We've both been around this bb long enough and I'm genuinely interested to hear your view though?

Sort of understand where you're coming from Andrew, but there's certainly an argument that would suggest this is relatively low in terms of cost (both acquisition and development costs) and the reward could be huge, so why wait?

If we wait until HR is up and running to acquire anything the ship may have already sailed on assets we want a piece of, it's not going to cause us any cash flow issues so where's the problem?

On the basis that other streams of income are (imo) imminent, why not acquire projects for knock down prices when the market is uncertain? The payback could absolutely dwarf the investment.

Colin clearly knows a lot more than us in terms of what the company can afford and how close streams of income are so I'm happy to sit behind him and let him get on with it.