Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Hi LW..... can work it out easily on the basis of say an 8% rate.... but the answer isnt going to tell us anything. Particularly as the plan would be to process the higher grade ore in the early years to pay down the original investment.... so cashflow and revenue against OPEX will vary wildly over those 25 years....
It has to be viewed as part of an NPV calculation to be any use to us.
But fun fact Cost of 1billion .... not paid back at all over 25 years at an 8% rate is 6.8billion...... ouch
The proposal in the RNS and the podcast made sense to me. Frustrating that this has pushed out again and that there isn't a definitive timeframe given for the extended work (It could have been couched in terms of months imo).
Contrary to some comments ,I don't think this announcement can be used to say either way if the project is/isn't/was/wasn't economic. If there is a flowsheeting opportunity to reduce CAPEX and OPEX by halving the amount of ore that goes through the main plant then only an idiot wouldn't consider it.....
Say 20% better NPV might be another 2, 3, 4 p on the eventual shareprice.
I would be good to know how long it will be to deliver the study now though.
LW,
When do you think it's been suggested the mine life is reduced from 25 years to 9?
The 7 to 9 years is referring to the targeted higher grade deposit and we would like to think that the study will show the CAPEX paid off well before this is exhausted, so the remaining years could be at a lower grade but would on a marginal OPEX only basis and so would likely remain very profitable...... more so with the high copper prices being slated for at least a decade.
So that narrative hasn't changed.... its just the POC that will return an attractive NPV that needs to be bottomed out.
Roll on the mining study.... cant come soon enough in my opinion
The only thing I would comment Andy is that he described the study just before christmas as "Recently commissioned".
Now there must be time savings made by using the same consultants to prepare this as they used to prepare the first model on the original JORC as all that information stays in..... but is 3 months enough time to refresh the original JORC with all that new drilling and assay information? Im going to maintain some hope that it is delivered by the end of Q1 but I can understand why you might think Q2 is more likely.
GLA
Absolutely Gordie....
What's funny is Manica header has been updated to show the new plant, but the photo gallery still shows the plant in bits just delivered to site. Real opportunity missed to promote this story and highlight the improving cash position of XTR.
Kalengwa is still listed as a major project and no update on Eureka or any of the other bigger projects... And Bushranger being pointed to April 2020 project presentation isnt good enough considering that all the work has gone in since then.
If they are going to operate a number of smaller scale existing mines then these could do with their own subfolder, updated on an annual basis as a minimum.
The cost of contracting a company to do this, to keep the page up to date will be relatively inexpensive.
Yes.... a producing plant more than 10 years in the making..... at least it is MMP and XTR that finally benefit from this in the end... now the plant is up and running the opportunity is there to exploit what is available within the permit..... instead of just talking about it.
If the economic model shows say an NPV of 500million requiring a POC of say $9500/te, then the saleability of that will depend on the potential purchasers idea of what the average price will be once in production.....
To be able to declare a decision to mine though, I wonder what NPV and IRR would be considered suitably robust...... and with all these expert predictions of YEARS of deficit and POC >$10K/te, what will be an acceptable POC basis.
I'm guessing that figures used in PFRs and DFRs in the last couple of years might be quickly becoming out of date.
Feels like a bit of a moving target
The findings of the DFS/Technical Report are laid out in the RNS of the 21st April this year. The next issue will be another DFS that includes more detail on the Tioxide portion of the ore as this part wasn't completed to a DFS level at the time.
As of now I'm not sure that that has been completed. If it has I'd agree, it should be issued without delay.
Anyway..... would be nice to have an end of year statement
I think it must surely be possible to accept the potential benefit of the new JV on the basis of the small investment, local processing and near term cash flow......... without sticking our heads in the sand wrt Kalengwa. (I'm still waiting for something official regarding the reality at Eureka).
At the minimum the hope has to be that it is another bolster to cash flow and exploration funding, with the potential to open up something more interesting..... but if it is just the first it will still have been a positive investment.
Colin said in that last interview that website pictures would paint the picture of Fairbride operations.
I would also suest the website is tidied up to to remove Kalengwa and perhaps outline the narrative on Eureka. That one has been kicked down the road too often.... at least we need to see if it is still a can ....
Couple of difficult questions raised there. On the whole im positive.
Might add a little more if the funds allow
Howezap... I believe 8% might be the figure you can reverse calculate once the economics have been bottomed out, when you have a project with amazing economics and low CAPEX and risk and therefore an NPV calculated compared to the resource in ground is extremely attractive.... and the low risk means that the purchaser will pay a high % of NPV to secure the project.
When using in-ground resource value as the basis for estimating a sale price then it seems foolhardy to use a % that would be attributed to only the best opportunities that anyone is liable to find.
In particular for Bushranger our positives are jurisdiction, access to utilities and distance from large population centres.... but we know at the least that the high CAPEX represents a risk and any sensible investor will recognise the risk associated with being likely tied to a relatively high (although widely predicted) copper price.
I dont think 8% should even be mentioned at this stage .... im pointing out its overly rampy.
Dani,
We are going to have to drop the notion of 8% of value in ground....before there has been any economic assessment. .... particularly as it stems from an off the cuff comment made by Colin.
Seems more of a consensus to use something lower than 3% unless the NPV assessment comes back with fireworks attached.
Suggesting 8% at this stage just makes you sound overly rampy.