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Well this is good:
The Directors have assessed the working capital requirements for the forthcoming twelve months and have undertaken assessments which have considered different scenarios based on exploration and mine development spend along with a number of production forecasts until June 2023.
Upon reviewing those cash flow projections for the forthcoming twelve months, the directors consider that the Company is not likely to require additional financial resources in the twelve-month period from the date of approval of these financial statements to enable the Company to fund its current operations and to meet its commitments. The Group will continue to monitor corporate overhead costs on an ongoing basis.
Timing of any equity raise *if it happens* will reveal a lot.
If we raise equity at depressed SP and before revealing what we have at RC, then this suggests to me that revealing RC would have put the SP in an even worse position. If RC is "in the bag" or even close to that and we need equity for further drilling and can't wait for Manica then I would hope CB would reveal as much as he can prior to raising any equity on the expectation that the reveal would get it off at a higher price.
CB is the direct source of frustration. He was incredibly vocal about the 2MT being hit and about timelines for declaring either that or decision to mine. An equity raise anywhere near the current SP would be horrible, and would make little sense if the revenue projections for Manica are accurate.
Taking CBs comments at end 2021 and even in Q1 of this year at face value and this share was a screaming buy, even in the 6-7p range. I know CB already holds a substantial number of shares here, but I would have liked to see him back up his statements with purchases. The comments he made on XTR are more bullish than any other share in his stable imo, yet we saw directors dealings in some of the others but not XTR.
I can see others here are clinging onto the idea that all IS on track and that CB is holding it up his sleeve in order to not have to sell too cheaply but I'm not buying that. My belief is firmly that attention is turning from RC to Ascot/Footrot because RC has not lived to the lofty expectations CB set for it.
If RC really was "in the bag" then I don't see why we wouldn't want to do a deal for that with a contingent component tied to Ascot/Footrot success, which could be funded by sale proceeds.
The statement "why sell now and be kicking ourselves if it turns out to be worth more later" can be made for almost any asset sale and is a convenient way of kicking the can down the road. I can easily make the case that I am prepared to take less now on the basis that I can deploy this elsewhere in an environment where other good opportunities exist, rather than taking the view we "might" get more later.
Ultimately I am annoyed over timelines but ok to drill a few more holes provided it doesn't come via. dilution at a depressed SP. Still waiting for the RC update which was promised in the RNS on 27-May and hopefully it won't be a summary of already published RNS with no new information, which is what the Ascot update amounted to.
What is your interpretation Iceberg? A definite shift of focus from RC to Ascot and despite comments about the overall project growing and potential resource getting bigger, my view is that this is only with reference to Ascot. No more talk of 2MT at RC, and IMO no comments to support previously made statements about RC.
Racecourse he thinks is now closed to the south and probably not commercial between RC and Ascot.
Two more holes to go at RC he thinks and more to do at Ascot. Mentioned Footrot again.
Sounds to me like RC may only be a near surface mining operation for 6 years.
My view is surface drilling to try to make it more attractive to a buyer because they are nowhere near 2MT. I said the other day Colin was talking about 400-600MT of rock. Somebody else said they heard 800MT at one point. In the interview this week he mentioned 20MT x 20 years. To me that suggests 400MT, possibly, and perhaps not even there yet. With a 0.15% cut off what sort of average grade are we talking about, 0.30%? Which would suggest only 1.2MT.
My feeling is that they expected more from the assays released this year, which have been disappointing, and although the gold at Ascot is interesting, the lack of copper is not helpful.
Some of suggesting Colin has 2MT up his sleeve but quietly advancing the plan while Ascot is proved further. I don’t believe that at all. If he had it he’d be screaming about it from the rooftops, and this interview failed to address or support statements made previously re 2MT and very strongly indicated timelines.
I think he has no choice to provide an update if nothing is imminent. He set some ambitious timelines and was very certain about them being met. Now that it doesn't seem as though they will be he will be under pressure to set out exactly where we are. I expect we are well short of 2MT currently. I'm sure he referenced 400-600 MT tons of rock previously so on that basis we would need average grades of 0.33% to 0.50%. And obviously the lower the grade and cut off rate the lower the value of the project.
We need to understand exactly what else is required re Racecourse before the model for this can be completed.
- Is it just assays or is more drilling required to close it off, and if that's the case how much drilling, when and at what cost?
- Where are we currently on modelled size, grade and cut off?
- What average grade and cut off would be required for a major to be interested? Is 2MT even enough if the grades and cut off are low given increased capex and sensitivity to prices?
- If Ascot is primarily a gold system with low amount of copper, can this be separated so we can do a deal on the Racecourse copper but hold onto Ascot and use some of the proceeds to explore further (even if the buyer of the copper project retains an option to buy Ascot / pay more if certain targets are met)?
philtered1 - I did notice the approx 1M sold today, but that was not me. I have millions of XTR shares (including an aggregate 1M purchase at 4.7p this week) and to date have not sold any. If that changes I’ll let you know. Still holding out for Colin to generate a seven figure profit on my shares, though I suspect stated timelines have not been anyway realistic and that CB has probably been overly optimistic and premature about the 2MT target no longer being a nail biter following the discovery of Ascot.
No doubt interesting, but very expensive to keep exploring Ascot for a company like Xtract. Not sure how much value a major would attribute to it if throwing it into the Racecourse deal. As for SP, what has changed between December and now on Racecourse? Back then we were expecting modelling to be complete around March time with discussions and possible sale occurring within a couple of months of that. Since then assays have not provided additional confidence re Racecourse so one (or at least I) wonders if statements made around December time were based on assumptions that the outstanding Racecourse assays would be better than has been subsequently proven. I expect most here were very much hoping for SP appreciation and a sale rather than interesting results warranting follow up work and questions over how that will be funded against a declining SP.
Have to say I am not as excited as others here and surprised the SP reacted as it did. I think most likely market reacting to a during hours RNS which was accompanied with very positive comments from CB. After being digested the SP began to fall back.
What am I missing? No copper, very deep gold but not much of it. Why the excitement?
On a Jubilee Metals chat he spoke a little about Xtract:
"Going into gold production any minute".
"Developing the Racecourse asset into what will hopefully and has all the makings of a big major new open pit".
Not suggesting this is a likely scenario, but consider:
Xtract modelling is showing 1.8MT + Ascot. Talks begin with another interested party who is prepared to pay good price for the license realising its potential at substantially more than 2MT, perhaps even more than the amount an independent party may fair value the 2MT at for AA. AA meanwhile believe with a few more holes 2MT would be achieved, giving them the right to purchase at the independent party value.
Could AA block the sale of the license to the other party?
Have to say I think there's an element of rose tinted glasses here.
This is a large holding in my portfolio, and I also own more than 1% of AFP (another CB company).
Assay results were late. Recent batch of results were pooled together and not particularly impressive, given the previous optimism about the area between Racecourse and Ascot.
Modelling progressing "satisfactorily" is also a far cry from the bullishness in podcasts a while back where there were suggestions we were already there or almost there with the 2MT, even without Ascot. I came away from that thinking the 2MT was a done deal, with Ascot a bonus on top, but not so certain now. I've no issue with results showing we are hitting boundaries of the deposit and understand we need to have that to be able to model correctly, but hasn't been anything recently to boost optimism.
With regards selling to AA or any other party, what would be the required average CuEq of the modelled mine to make this really attractive? Could we be hitting 2MT or thereabouts with a cut off grade of 0.15% and the project still not be seen as economically viable?
Really hoping CB can pull this off, but in the meantime I would love to hear him give another podcast update.