Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
aprogerson I was reviewing the June Corporate presentation once again, and whist I'm pretty comfortable with the information it contains, I was seeing if it was possible to tease any more details from the relatively broad brush figures, in particular page 11, KILIMAPESA PRODUCTION FORECAST
Here are a few observations for what it is worth (?):
1. The total ore that will be processed by the time the 24,000ozs/a steady state is reached will be 924,000t, blindingly obvious I know, but I was curious how it divided up between the plants.
2. At steady state production, Plant 4 yield is approximately 4 times Plant 3,
i.e. 5 identical sized pads between them
3. Plants 1 & 2 will both process a projected 30,000t/m - so no surprises there.
4. So if we look at the 924,000t of ore and try and attribute how much is going to be used in each Plant, the best fit seems to be:
600,000t/a for the 5 heap leach pads and 324,000t/a through both Plants 1 & 2.
Which in turn gives 50,000t/m through Plants 3 & 4
or 5 x 10,000t for each HL pad.
Leaving 27,000t/m through Plants 1 & 2.
Obviously if the 'blended' gold grades for Plant 1 and the HL's were known the recovery efficiency could be calculated, or perhaps more interestingly if the recovery efficiency figures was known, the required Gold grades could be calculated.
Why bother you might think, but even playing with a few possible combinations, it seems to indicate that the actual grams/t figures for the required ore is actually quite low, to produce the required 24,000ozs/a, which makes me feel even more confident of a positive outcome.
ATB & GLA
@Gribble74,
Hopefully, you will be able to afford several cases of the stuff in the years to come Gribble74. I'm sure we will all be raising a glass at that stage :0)
ATB & GLA
@aprogerson,
On the Kenyan Mining portal the situation is currently unchanged, from what I posted previously, see below.
'Yes the picture does not look promising, but also it is not completely hopeless as the Exploration permit PL/2018/0072 for Bao Gold hill was granted 01/08/18 until 31/07/21 covering an area of 10.4633 sq kilometre, but the Mining license application ML/2019/0072 applied for on the 23/07/2019, covering 4.7808sq kilometres, does not appear to have been granted yet (assuming that the Kenyan Mining Cadastre Portal is reasonably up to date).
In both licenses the area appears to cover Red Ray, Natingile, Alpha Ray and half of Blue Ray.
Additionally, there are four artisanal licenses, each 0.2846sq kilometres granted to Farah Awad Gulet on 25/08/2011 until 26/07/2015, shaped in a square totalling 1.1384 sq Kilometres (1124/1-9, 1125/1-9, 1126/1-9, 1127/1-9), none of which cover a prospective target. what is unclear is whether the Kilimapeasa Gold exploration license applies to this area as well'.
https://portal.miningcadastre.go.ke/Site/CustomHtml.aspx?PageID=d7f3f61d-4689-4280-a59a-b865f002dd60
As you say the company are particularly and consistently bullish on this matter, which hopefully indicates that the situation is moving to successful outcome in Caracal's favour.
ATB & GLA
@RPdard
Yes it's a little disappointing to have the waiting extended, but if memory serves me correct, it was a monster batch of cores that was sent off to be Assayed, so presumably that extends the time until results are announced.
The main thing is that the Assay results are all processed in time for inclusion in the MRE.
If we can finish H1 2022 with an increased JORC for Kilimapesa Hill, with as aprogerson said, the numbers to back a minimum 5 year LOM, at the increased output levels to support 2,000ozs of gold per month, then Caracal will IMO have nailed it, and anything else found within the wider Kilimapesa exploration license will be the icing on the cake.
Whatever happens I'm sure that this will be just the start of an interesting and potentially exciting 2 years, as the long term plan of 50,000ozs/a in 18 - 24 months unfolds. Possibly turning the Kilimapessa hill processing plant into a hub to process ore extracted across the whole exploration area wherever Franck and his drilling team can find it - and that is without even thinking about what Tanzania might add in the same time frame.
ATB & GLA
Silly me just wishful thinking and commenting in the 2 minutes left before I left home, Doh.
Still at least we do know that Gary James McConnell is a follower of Rick Rule and his comment in the recently posted interview, when asked 'How do you know you don't necessarily have to panic if it's about $2 and goes to to a dollar? - Lets be Greedy (says Rick)' ....'If you think something is worth $2 and it falls to a Dollar, lets buy more'.
So Mr Gary James McConnell, please feel free to indulge your greed, as an object lesson to all those individual PIs whom have been looking at Caracal and as Rick Rule said, 'confusing SP with value'.
ATB & GLA
Obviously someone's talking about Caracal in Jersey, with our second HNW individual carving off a nice juicy slice just in time for some uplifting news?
So in gold prospecting terms, if we get a third in the same place does that make it a 'patch', that we will need to excavate fully. ;o)
@Suggins
Personally I still believe it will happen towards the end of 2022, when Caracal can set out their stall with all the positive things that have already been achieved and already be sitting on an SP which more accurately reflects the true value of Caracal.
Additionally I would expect the timing to coincide with a need to raise cash for a new mine in either Kenya or Tanzania, to fall in with Robbie's broad statements that any placements will be offset against significant added value. Obviously another mine based upon a BFS in the ipo prospectus should IMO, keep the SP steady or even elevated post NSE listing.
I did smile though when I spotted this report recently ...
https://www.african-markets.com/en/stock-markets/nse/british-gold-mining-firm-caracal-gold-to-list-on-nairobi-bourse-s-sme-segment
Which is let down by some of the more glaring out of date reporting, like. 'The gold miner will also buy a 70 per cent stake in a joint venture interest in Congo Gold SARL for interests in the Kakamoeka Gold Project' - an option that they have already walked away from previously.
Even if the listing doesn't happen this year, I do believe it is only a matter of time as the Caracal initial prospectus stated there was a three year window to do this, as such we still have over two years to complete this step, so IMO, it is obviously about choosing the most opportune moment to jump in.
ATB & GLA
Sound advice JerseyCrew, I just wish I had received it 6 months ago. ;o)
Right now I'm so far under water that you may see me in the next Aquaman film...
But thankfully I am still confident of the long tem position for Caracal and I've seen a few Rick Rule presentations that seem to speak directly to the Caracal situation. Certainly H2 of 2022 should be significantly more enjoyable than H1 - Roll on those next assay results, the JORC rerate and the Q2 results to set the scene for the rest of the year.
ATB & GLA
Well JerseyCrew even from my poorly informed worms eye view it's been clear that Caracal has been a long suffering pawn in someone else's chess game, ever since our SP came under 'attack' before the end of the financial year, which at least seemed to be explainable by adjustments to the year end tax position.
But now I'm willing to guess that certain deep pocketed individuals have managed to make money and possibly simultaneous lower the average SP of their holdings, by taking advantage of temporary uncertainties in the Caracal message.
Personally I believe that the messaging side has now been fixed, and the stream of Assay results (the latest due next week), followed by a JORC re-rating of Kilimapesa and then a Q2 report, that details the progress made so far, and the indicates the way ahead, should undoubtedly stop the bobbing around at these levels and start the march back up. The question for me though, is what game is being currently played? I mean, we have already seen one HNW individual appear out of the smog, so I'm wondering when number two will appear and possibly possibly number three, because one thing is for certain, the MM won't be accumulating without knowing where they are going to be selling them, and at a profit.
ATB & GLA
@Beholder
I'm glad you clarified your comment Beholder, because , to draw the conclusion that aprogerson is a ramper. is demonstrably ridiculous, as anyone on this BB should be able to follow simple arithmetic and find the base figures used to derive them. As for Mickey, IMO he is just an enthusiastic cheerleader for Caracal - lets face it, if he were a ramper his track record would be terrible, as our SP trajectory these last few months will attest. Personally I believe for the most part this BB has had more actual problems with prolific de-rampers, who clearly recognise the potential here, but actively seek to erode PI investment by negative spin.
I can however understand that you might think aprogerson's analysis of what would underpin a 100kt/m HL is a little fanciful - not the analysis, but the proposition that it is currently on the table, as clearly Kilimapesa has neither the production nor the processing capability to run such an undertaking currently.
But, and this is the big BUT,
Does it actually matter, as the only target nailed down and on the table is 2000ozs of gold per month by December 2022. Thankfully this target is easily reachable, just based upon what we know, what Robbie has stated and indeed what aprogerson and others have analysed for us. The only debate remaining IMO, is around what steps currently still need to be started/completed or just plain reported as completed, to actually demonstrate our progress towards that endpoint.
Personally I don't get excited by the prospect of a future 100Kt HL, but only because I'm happy to savour the concrete steps that will, almost certainly take us there one day. My confidence in this is not driven by this sort of analysis, encouraging as it is, but rather by the emerging evidence that Robbie is no longer responsible for running everything, This is not a criticism, but actually a recognition of his ability to expand the Caracal team by attracting and recruiting talented individuals who can each focus on part of the work, whilst Robbie gives overall direction, and approval of the decisions that arrive as expert recommendations on his desk. Franck clearly directs exploration, Likewise Riaan decides the pace and direction of the plant upgrades, but overall Paul orchestrates the whole operation by controlling and modelling the company cash flow. This final point is why I have no worries that Caracal will deliver, because a company who's CFO cancels Ā£5M of debt in favour of a Ā£2M share placing and is allowing Caracal to spend $300,000/m on exploration whilst stumping up $1.5M to pay for an acquisition is not concerned with where the money is going to come from to pay for production plant upgrades, that in turn will dictate the company cash flow.
So aprogerson, and others keep the analyses coming but as you say, keep your eyes on the prize and DYOR.
ATB & GLA
@Bebeto
I think I follow what you are saying Bebeto, but may be missing the the specific point that you are making. Clearly the deal has been extensively re-jigged to reflect the altered positions of both parties, and to be frank Caracal are effectively paying more upfront and in cash - only time will tell how many more shares might be necessary to fulfil the paper side, but hopefully the Caracal SP will improve somewhat before that detail needs to be calculated.
Old deal
'Caracal will acquire 100% of the share capital in Tyacks from the existing Tyacks shareholders in return for an up-front cash payment of US$500,000 and the issuance of US$2.5m in ordinary shares'
plus
A 0.5% gross net smelter return royalty will also be payable to the existing Tyacks shareholders from future hold production.
Also if Nyakafuru Reefs license had been available....
Further payments will be made on the granting of the Nyakafuru Reefs license and confirmation of a minimum JORC compliant resource (up to US$1.0m in cash depending on the resource and US$1.75M in shares) and on completion of a positive updated Bankable Feasibility Study (US$2.5M in shares)
New Deal
The cash element
On or before or before 31 May 2022, Caracal shall pay an amount equal to USD 500,000. (Tranche 1 Payment).
On or before 31 July 2022, Caracal shall pay an amount equal to USD 1,000,000. (Tranche 2 Payment).
plus
The 0.5% gross net smelter return royalty remains as previously announced.
Also a shares element, but unclear as to whether this is just the initial tranche equivalent to $2.5M in shares (The share element of the transaction will be finalised in due course upside but is not expected to be materially different to what was previously announced).
So the deal is not as favourable as when it was first proposed in terms of the upfront purchase price (e.g an extra $1M in cash), but unfortunately it reflects changing circumstances, but on the plus side preserves the exploitation timetable and removes the commitment to purchase Nyakafuru Reefs at this time. which hopefully accounts for Robbies comment, 'The revised SPA, which follows due diligence by Caracal, allows for extended completion timing and agrees interim process steps to allow work on the ground to begin immediately'.
IMO still a very good deal for Caracal, which hopefully we have assembled just the team to unlock the resource and apply for a mining license in H1 2023.
ATB & GLA
@Bebeto
I think the fact Bebeto that, 'the particular wording of " Caracal shall pay an amount equal to"', actually comes in a section headed 'The cash element', should IMO be axiomatic, as whatever form of cash used should at the time of the transfer have a cash equivalence to $1M, which could be any currency or indeed one of the oldest cash equivalents, namely Gold itself.
And like Suggins so succinctly stated, 'The purchase deal has only just been renegotiated'. Which IMO means that the CFO would be in a position to assure the BoD that the renegotiated deal that they were signing was completely affordable based upon all known commitments and revenue sources.
So yes I wholeheartedly concur with Suggins - There will be a plan in place. In Mr McCrea we trust.
ATB & GLA
@Bebeto
To be frank Bebeto, I'm not going to disagree with your, 'TBF I don't think the company will have the available cash for the above payment' statement, because clearly like everyone on this BB, I don't have access to the information that would indicate where the money needed is going to come from.
But, I would point to some of the indicators that we have as to where and how, the revenue stream from gold production should be increasing, even against the backdrop of upgrading and reconfiguring both the Tailings 'production plant' and the Milling 'production plant', simply because the HL 'production plant' was fully funded and either complete or well on the way, with either two, three or more pads in production.
We also know that there was an initial gold pour from pad 1, just 14 days into the process. Now I'm not suggesting that gold is being produced in quantities every 14 days, but Robbie did state that over half of the 2,000ozs/month gold target would come from the HL 'production plant'. Currently we have no concrete facts on where we are with this process in terms of both low grade ore production or indeed the contribution to gold ounces produced regularly each month, but I'm willing to bet that tuning and sustaining this side of the production at Kilimapesa is a number one priority. So even with the somewhat intermittent output from the Milling 'production plant', pre-upgrade, I'm happy to suggest that we may now have a regular +1000oz/m production figure nailed on.
So without trying to guesstimate some actual production figure, I would still suggest that funding the end of July $1M from cash flow is not beyond the bounds of reasonable possibility, particularly if there was a hiatus in any new 'improvements' being carried out until the End of July timeframe.
As I say just an alternate view of the situation.
ATB & GLA
Snap!
@aprogerson
I totally agree with all your comments on what the FED should be doing and despite the speculation at the moment it looks like a 75 basis points rise on Wednesday looks, IMO like a given, but the questions everyone seems to be asking is will it be enough to have any effect and how long can the FED continue down that path before they bankrupt themselves or indeed the US economy starts to implode. So when I spotted this interview with Rick Rule, at a mining conference, where amazingly he makes no mention of gold but offers his own insights and rationale on why the FED will not tame inflation with rate rises, but interesting also talks about the intrinsic value of stocks and how it should shape buying patterns, which I think would resonate with many people invested here.
https://www.youtube.com/watch?v=Zs3R-fzqL7I
@aprogerson,
Yes the picture does not look promising, but also it is not completely hopeless as the Exploration permit PL/2018/0072 for Bao Gold hill was granted 01/08/18 until 31/07/21 covering an area of 10.4633 sq kilometre, but the Mining license application ML/2019/0072 applied for on the 23/07/2019, covering 4.7808sq kilometres, does not appear to have been granted yet (assuming that the Kenyan Mining Cadastre Portal is reasonably up to date).
In both licenses the area appears to cover Red Ray, Natingile, Alpha Ray and half of Blue Ray.
Additionally, there are four artisanal licenses, each 0.2846sq kilometres granted to Farah Awad Gulet on 25/08/2011 until 26/07/2015, shaped in a square totalling 1.1384 sq Kilometres (1124/1-9, 1125/1-9, 1126/1-9, 1127/1-9), none of which cover a prospective target. what is unclear is whether the Kilimapeasa Gold exploration license applies to this area as well.
https://portal.miningcadastre.go.ke/Site/CustomHtml.aspx?PageID=d7f3f61d-4689-4280-a59a-b865f002dd60
If you haven't already, have a look and see what you make of it ?
ATB & GLA
Somehow I can't believe that any of us here are surprised at today's SP level after the worse than expected CPI figures in America last Friday - unfortunately the old adage 'When America sneezes and the world catches a cold', still seems to be broadly true.
Personally though I feel quite heartened to know that the more I look at the fundamental's of Caracal the more secure I feel in both the sector, and especially Caracal's H2 2022 plans.
Obviously like many others I currently can see clear blue water above my head, and would love to be starting my investment in Caracal today, so I could take advantage of the opportunity to to purchase at these levels - way to go Trek, but I'm not despondent, in exactly the way I doubt our 77M PI is today either.
Let's face it, Inflation or Recession, sitting literally on a gold mine is not going to be a bad bet, but a 15 year cycle of under performing commodities, and even worse for Junior explorer/miner companies who are still not receiving the attention that reflects either, intrinsic value or earnings potential, is not going to change over night.
Strangely though I was particularly pleased to see our very own HNW PI wade in so strongly, even if perversely the market reacted unfavourably, as I had recently spotted and watched this video, which actually indicated that HNW PIs were gaining an appetite for precious metals and Junior Explorers at the moment:
https://www.youtube.com/watch?v=3ObZh12SyP0
Obviously if it had mentioned Caracal I would have posted it before, but clearly as videos go it is pretty boring, as it doesn't give that sort of investment specific information, but it does seem fairly apposite to Caracal, none the less.
Thanks itsyou, I always seem to miss when those presentations get revised and as you say page 12 gives more detail on the location of the drilling targets, and it seems that plans have even moved on since that updated presentation, as we have transferred to a designated target, but not our previous number one, or number two destination, but if the artisanal workings are correctly depicted, it seems IMO a more prominent target than the others at a glance.
Obviously Franck Bizouerne is working hard to understand the details of the locations and his presence is showing a visible difference to the decision making, so I don't know about calling him 'Face Book', as he seems more like Franck 'Bizzy', at the moment :0)
I also particularly liked page 11, as I didn't realise that more detail on the Kilimapesa Hill exploration drilling was available - an impressive amount of work has gone into really pinning the Kilimapesa Hill resources down and like you and aprogerson, have been saying, that apart from a much more resilient and increased resource estimate, having a LOM figure that demonstrates clear support for the 2,000ozs/m production target is an import deliverable. Undoubtedly though, a decent LOM figure will supercharge the credibility of all Caracal's plans, by having that unequivocal financial foundation in place for all that is planned to follow.
ATB & GLA
@Suggins & aprogerson
If I understand Suggins correctly, the question is how Caracal will separate any future mining licenses from the existing one which was granted under the old mining laws and therefore exempt from the 10% free carry situation, that would exist on any future mining licenses granted under the current mining law, when the existing prospecting license is also owned by Caracal (PL/2018/0189 was renewed under the current mining laws - RNS Number : 6017S, 17 November 2021 ).
Obviously I'm no expert, but I would have thought that the situation is analogous to a company having multi jurisdictional interests, so the 10% share would be calculated on the profits generated from a specific mining license, rather than a 10% share of the company.
https://portal.miningcadastre.go.ke/Site/CustomHtml.aspx?PageID=d7f3f61d-4689-4280-a59a-b865f002dd60
@aprogerson
Sorry aprogerson, rereading your post again today, I realised that I had incorrectly conflated your final two sentences and mistakenly thought that you meant that the regional campaign was necessary to provide the resource for the 2Kozs/m - which of course you were not.
Interestingly though your response did crystallise for me what IMO is missing from the Caracal quarterly reports at the moment. Continuity on the reported metrics. Hopefully you don't think this is some major criticism, as I fully understand that Caracal has a growing number of talented individuals hard at work, but there are various signs that internal administrative policies and procedures are still being formulated, as exampled by the reorganising of the Assay procedure, which hopefully will now produce a regular well ordered stream of information - some of which may indeed bring us a great deal of pleasure.
What also struck me though, was that the Q4 2021 report was so information rich, possibly it had too much information, but I believe that at least during this period of extended change that a broad set of metrics repeated in successive reports would paint a much more vivid picture of what is going on, as clearly when ore production is rising at the same time gold production has fallen, there must be so much more to tell that we can still celebrate. IMO It would even be great, just to see a few before and after pictures, in an odd tweet now and again just to see the steady progress taking place.
Obviously the big positive going forwards is the HL, but I would like to know how the stockpiles of ore are faring, are they being depleted or are we seeing them being replenished even as they are being used? Perhaps most importantly a status update on the individual items being upgraded or replaced would be very interesting.
So whilst we know that July should see us exiting this extended period of change, it seems strange that all the stages and the work done will largely go unrecorded.
Just a thought, as although I personally enjoy seeing Assay results and especially look forward to an updated MRE, so much more of interest is happening at the same time.
ATB & GLA