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On your first point about cherry-picking, the company’s published info does refer to a high grade core of the deposit. According to my understanding, it would be normal to design a mine plan on the basis of mining the high grade material first, so that you pay back the capex quicker. Then later you mine the lower grade stuff, but by that stage you’re funding opex only so lower grade is fine.
As to your thought on the release of the deep drill result, I’m afraid I simply don’t know
Levi, I think you’re right that the predictability of quarterly updates is having an impact here
Excellent results from FQ. So much going on here. Looks like we have economic grades of shallow mineralisation at Turaco. Plus two more exciting prospects. And then the Sandfire JV, the Nambia projects…
Such an incredible package for a £7m market cap
On 2, what grade you need depends a lot on how you’re going to mine it. If we’re talking open pit, then Panton is a fairly high grade resource and some of the new drill results are fairly high grade results. For example, if we take the PS408 result, 0.49 g/t PGE3 is worth about $25/t and 0.25% Ni is worth about $75/t so a total of $100/t. Open pit mining only costs about $2.5/t, so there’s plenty of scope to make money there. Obviously you end up having to dig up other tons of dirt that don’t pay as well or at all and there are other costs etc. But it all depends on how much mineralisation you’ve got and how a mine can be designed around it. That’s why we need the scoping study which is coming up soon. My sense is that for exploratory drills outside the main resource the new results were pretty good
Was briefly annoyed about these options but actually it seems they only vest if we get back to 6p, so not too bad
To be fair to Darren, the problem on this occasion is that the drill bit didn’t come up with the goods. It’s actually pretty unlucky in my view to discover a VMS cluster which then turns out to have no valuable metals in it. Can’t see how Darren was supposed to know that except by drilling
I’m afraid I think Obonga is dead for now (note Darren’s only comment about next steps in the Stockbox was that he wants to chat to the First Nations again). I expect the company will try to pivot to the nickel prospect at Dotted
It only derisks the licence if you think that a bigger company will come in off the back of these results. Can’t see it myself
I’m extremely disappointed with today’s results. The 3.6m of “commercial” zinc is clearly not commercial at that width and at 120m depth in the middle of nowhere. In other circumstances you’d be tempted to say “well, there could be much more to be found” but we’ve now drilled 7 holes into Wishbone and this is the only snippet of proper mineralisation we’ve found - basically the rest is iron. Survey we’ve only done one hole but what we’ve found is clearly not commercial - it’s just a very low grade drill result. I had the highest hopes for Awkward, yet it seems all we’ve found is some graphite. Oh dear
PS I wonder if Anglo themselves might subscribe for $5m worth of shares in UFO. Would fit with the theory that they might be interested in Munni Munni down the line. Prob not but you never know
I don’t know what difference it makes to Anglo: I’m not in their heads. Nor do I know what they may ultimately accept. However, I am very good on what words mean, and without question “new equity raised by Alien” does not include Alien borrowing money.
I agree that, if a loan were to be acceptable to Anglo, getting one shouldn’t be a problem. Think it would be normal for a lender to want security over the mine, though, which may be the root of the stipulation for equity. We’ll see.
Agree that an equity raise doesn’t preclude a big SP rise soon after - of course it doesn’t. All depends on the terms and then the extent of the upside unlocked.
There are lots of positive points to be made on this topic, but arguing that “new equity raised by Alien” is a sequence of words which includes a loan is completely untenable and not adding anything
“it doesn't say new equity raised by Alien can't be a loan”
But a loan just doesn’t fall within the ordinary meaning of “equity”, still less “new equity raised”.
I have always wondered if Anglo might agree to a variation of this condition to allow a loan, but I don’t think it’s realistic to interpret the existing condition (as RNS’d) as allowing a loan.
To be clear, I’m not thinking it’s going to be a typical market placing. Something with a cornerstone investor maybe? Would be good to have a bit more visibility on the plan
Max, I agree about the website and the FOB costs. Why do you think raising the $5m by way of loan will be acceptable? The 31 Aug 22 RNS stated:
“Conditions precedent, customary for transactions of this nature, including but not limited to:
i. new equity raised by Alien, and evidence that such amount has been utilized for Han**** in this case, of US$5 million”
Well it’s good to have an updated time line, but the slip back from Q2 to Q4 for Hanc0ck entering production is a bit grim. The other question is where the $5m is coming from in Q2. Nice looking website. Seems Anglo deal still on the cards which is good
Thanks BBN. I’m in for £6k at 34.25 just now. Interested in more, will see how we get on
Thanks guys, appreciate your time
Anyone know enough about Madagascan geography and/or company ops to know whether the recent heavy storms in Madagascar are likely to have impacted the company? I have asked them on Twitter but no reply
No it just means they’ve paid the lenders an extra £33,000 in order to extend the repayment date by about a year. Decent deal in the circumstances, in my view
Well, it won’t come as a surprise to anyone that I live in a different universe to our resident disgruntled trader. I thought the interview was good, once you get past the obvious disappointment of the fact that we are unlikely to make a big discovery in the present drilling campaign.
1. All of us who have invested here have invested in a company whose entire proposition is relying on geophysics to explore land which is not favourable to non-geophysical exploration methods. That is a high risk proposition. It is for that reason that we have such an extraordinary land package at a low cost and market cap. It is also a high reward proposition: that’s why we’re here. What we witnessed in 2022 was the difficulty on geophysics-led exploration. We missed B1 by a hundred metres or so. The ring structures at Ditau turned out to be (probably) not carbonatites (although they may be IOCG deposits). The Dkar/NGP contact at 082 is deeper than hoped. All these are bad outcomes and they explain why the SP is where it is. However, they are not outcomes for which the company is particularly culpable. They are the manifestation of the risks we all invested in, plus a bit of bad luck. I continue to hope and believe that our luck will turn and the risks will start to pay off. If they do, the potential is simply enormous (that’s why we’re here).
2. I still believe in the risk/reward trade off, and I think many LTHs do too. However, there’s no denying it’s seriously demoralising to see the SP where it is, and dilution occurring at much lower levels than where many of us invested. Thus the prevailing sentiment among shareholders is “we need a discovery ASAP; then we’ll get back to being excited about the tech and the potential and how far we might fly”.
3. For these reasons, I’m actually in favour of “expansion” if that means what Ben described in the interview, namely picking up low hanging fruit at bargain prices which are only available because capital for exploration is currently hard to come by. Obviously any given project has to be judged on its own merits. But if we could get something with an existing known resource but with potential for major extension, I think that would be a good fit. Even better if it’s amenable to some crude mining in the short term. No idea if this is the sort of thing they’re looking at, but if it is, my feeling is that it would improve the balance of risk and certainty and allow shareholders to relax a little more, and give the high risk play the time it needs to come good.
Shame as there doesn’t seem to be any real reason why Burwell couldn’t have been progressed and completed, once the National Grid upgrade is sorted out. Not sure I understand the reason for disposal, unless just to bring in a small amount of cash to reduce debt?