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Continued from previous post...
Funnily enough though, I do find considerable merit in the 'something has changed argument', now, as clearly the new administration has a much more focused renewable/sustainable agenda than the previous one. But most telling are two bits of evidence - the first which strangely appeared in June 2021, but went unconsidered by me at the time, because it seemed irrelevant with the ESIA approval seemingly being at hand.
Anyway, here is some evidence and indications of what I believe may be contributing to the lengthy ESIA approval timetable, but obviously, I'm not suggesting that these are the only factors in play here.
First is the changes to the 2016 Mining Law, most of which have not yet been tested on other projects:
https://www.moroccoworldnews.com/2021/06/343018/morocco-announces-new-2021-2030-mining-plan
I personally cannot track down much explanatory text, but for me these add some flesh to the announcement:
https://uk.practicallaw.thomsonreuters.com/w-018-4123?transitionType=Default&contextData=(sc.Default)&firstPage=true
and more specifically:
https://moroccantelegraph.com/economy/the-mining-legal-framework-is-getting-a-makeover/
I only re-focussed on these changes when they were linked with the latest Mining License approval:
https://www.moroccoworldnews.com/2022/04/348313/morocco-grants-altus-strategies-10-year-mining-license
The Altus Strategies website doesn't indicate clearly the status of the required ESIA approval, but does contain an interesting map, which appears to show every current Mining project, including Khemisset - of which there are surprisingly few.
IMO, the work satisfying the changes to the Mining Law and ESIA related issues are what have necessitated employing our own F/T Agronomist Engineer, Hajar Alaoui, as a Permitting and Approvals Manager. I'm sure that the challenge of guiding the Emmerson project through the remaining obstacles to a fully permitted mine, helping develop the mine abandonment plan and mapping out an Environmental Sustainability Framework, going forwards, was enough to lure her away from her previous demanding role. Personally I believe we are lucky to have her, as her unique skillset is a perfect fit for this new but pivotal role within Emmerson.
So whilst I believe that the ESIA submission stage was completed successfully in 2021, the work satisfying the new Mining Law provisions and answers to ESIA related issues, are still very much a work in progress.
@Ideas
I'm glad to see that someone remembers to re-listen to previous to presentations, at least we could hear that GC was completely neutral on any dialogue with OCP, indicating that whilst the door is always open, Emmerson will continue to chart it's own course to commissioning the Khemisset Mine - certainly there was no mention that equity and offtake are co-dependent, but rather that offtake was thought to have been necessary to attract an SI, but clearly it wasn't, although it might be useful in sealing a deal on the final tranche of equity.
When meeting Ministers, in my experience they are usually very busy right up until a suitable photo opportunity comes along, that enables the credit for progress towards desired ends effortlessly fall into their laps. Lets face it Potash isn't top of the Ministerial pile at the moment as hydrocarbons are probably sat on the top of her In-Tray, but no doubt Khemisset's 30 minutes of fame will come one day soon.
As for the ESIA approval on track for approval during June 2021? I sometimes wonder 'ideas', if you just delight in making mischief by raking up information that even you know that your two earlier items superseded. Also it is well known that June 2021 was a false start due to further information being required - 'The water authority discussions necessitated the production of an additional study, adding time to the permitting process that was not envisaged earlier in the year', as notified in the 30th September 2021 RNS.
Still at least you haven't got the youtu.be video showing GC announcing that Emmerson are giving away 10 - 15% of the company to, 'the government / royal family', AND, 'OCP getting an off take agreement at profit for EML but well below current market prices'. I must admit I still cannot work out if you are actually serious with the suggestion, as apart from the 'Tanzania' effect it would likely have, where introducing a 16% Government free carry into their previously thriving mining industry, and following it up with spurious tax demands, all but shut down foreign investment for years.
This situation persisted until a change of administration has started interpreting their own rules sensibly. But for me that is the clue, as all investors have to know the rules are playing by before committing themselves. Thankfully we are governed by the well understood Moroccan Mining act of 2016, which is actually quite generous and is pitched to attract investment and certainly makes no mention giving away a share of the project to enable it to progress.
What surprises me the most though is that if you truly believe this scenario is likely, why you would not already have sold any investment you might have had, and quietly closed the door as you left?
See next post....
@ID78
'With the drilling strike extended from 1875km to 2575km I think they have drilled about 1/4 of the strike'.
That ties in with what Robbie said about, 'increasing confidence that we will grow and upgrade the total resource at our flagship project - by drilling 25% of the known reserves'. Now I look forward to the Resource figures, which because Robbie continues to mention it, the 1Moz target is clearly in sight, even before the planned drilling at Red Ray begins.
Mostly though I agree with AG1989,
'Good results all in all from the samples submitted. We’re now a production company so all I’m looking for, are those results good enough to increase the resource/upgrade further inferred oz’s, yes they are' - my sentiments entirely.
No need for stellar results here, as we just need the confidence that Kilimapesa can produce the ore to drive and sustain the 2,000ozs/m gold production target, and on this showing, yes we can, and further still that eventually the HL component may well push us past 2,000ozs/m, assuming that plenty of low grade ore will continue to be generated as well.
Highlights
· 12,000m RC drilling programme and 3,000m DD programme commenced in December 2021 to grow the 670,000oz JORC resource at Kilimapesa, increase confidence from inferred to indicated/measured category and confirm both the strike and depth extensions of the mineralization on Kilimapesa Hill.
· RC drilling commenced 400m to the east of active underground mining and opencast pit operation at Kilimapesa Hill, with a total of 52 holes (5,194m) of RC drilling completed and 1,780 samples submitted to Nesch Mintech in Tanzania, an external lab for analysis.
· A strike length of 1,875km has been identified and drilled with the remaining drilling expected to extend this strike 300m to the west and 400m to the east for a total of 2,575km.
· Assay results for the first 27 RC holes (KPGRC 005-KPGRC 032) have been received with all holes intersecting veins currently being mined with comparable gold grades.
· Best results include:
o Hole KPGRC005 13m @ 2.09 g/t Au including 3m @ 3.06 g/t Au from 33m
o Hole KPGRC014 7m @ 5.43g/t Au including 2m @ 14.47g/t Au from 51m
o Hole KPGRC017 3m @ 3.13g/t Au including 2m @ 4.11g/t Au from 40m
o Hole KPGRC030 7m @ 5.04g/t Au including 2m @ 12.05g/t Au from 74m
o Hole KPGRC031 6m @ 3.48g/t Au including 3m @ 5.57g/t Au from 43m
o Hole KPGRC032 3m @ 2.93g/t Au including 1m @ 3.69g/t from 46m
· Second batch of RC assay results expected later this quarter.
· Six holes (1,241m) of DD drilling also completed and 583 samples submitted to the lab with assay results due imminently.
· Updated resource from the Kilimapesa Hill deposit expected at the end of Q2 2022.
· Drilling part of a two-pronged approach to increase the overall Project resource to >2Moz, which will include a regional drill campaign on the broader Prospecting Licence with seven prioritised targets due to be drilled later this year.
whoops...
A pivotal third quarter. On this BB there has been a lot of discussion about what and when will trigger a requirement for extra cash, and we have the strange spectacle of both sides quoting your interviews Robbie, to prove the point, so please clarify the situation once and for all.
Also whilst we are all pleased that such an intensive drilling schedule is underway in Kenya, so if possible can we have a broad based timetable on when regular assay results are going to be published, even it is just a monthly roundup, and something similar on gold production, as at the moment until we are regularly producing 2,000ozs/m this is I believe, information that will deterine the SP.
Thanks Robbie, and GLA.
Other than that just tell us as much as you can when you can, as we are hungry for news, even though I believe that we are generally content with the performance of Caracal so far.
Personally, whilst I am keen to see the RNS(s) asap, if it takes a week or even two longer, I will not worry because what is most important to me is that we recieve full and concise information that answers all the questions that have been circulating endlessly on this BB.
So Robbie, if you are reading this BB, please heed all of our various queries, answer the questions raised here, and set the set the scene as we aproach a pivotal
@AudibleEnergy
Whilst I fully agree with your assessment that OCP are a prudent company, I disagree strongly that OCP is not interested and never was, as I'm sure that with their push to increase their share of the Global fertiliser market, they would welcome an additional source on their own doorstep, where a mutually beneficial deal could be struck, as shipping cost are significantly reduced.
The blocker, rather than indiference on their part is the fact we currently have no potash to sell, and IMO that would make buying future supplies speculative on their part and possibly rule it out as a Muslim company, but even they must eye the prospect of a mine in the middle of their two Potash claims, as a big opportunity. As we know that their two claims would require two seperate mines to exploit them, but Khemisset in the middle might allow them ecomomic access in both directions.
Obviously not something that can happen immediately, but any prudent company IMO, would be looking up to ten years ahead, when clearly it sees a path of continous growth ahead.
As you say StockDetective, the current SP whilst frustrating long term, should be seen as an opportunity for PIs to increase their holdings at a price that is unlikely to come again, once the anticipated changes, upgrades and newsflows arrive.
ATB and GL
As Robbie said the Assay work was delayed whilst a new more rigorous methodology was put in place, but now that system will yield regular reports. We also know that part of the drilling at Kilimapesa is to turn infered results into indicated, but with an overall aim of increasing the Kilimapesa reserves up to at least the 1M ozs level. We also know that the gold grades from the trenching are higher than from parts than the mine itself, so much so that the BoD brought forward the phase 3 process plant upgrade, introduced the capacity to run up to four 10,000t heap leach pads for the lower grade gold, and to ramp up production from 1,000 to 2,000ozs/m. So IMO the BoD are already certain that the Kilimapesa mining license area will sustain this level of production, unaided, going forwards.
So the Assay results may or may not be stellar, but for me so long as they can deliver the 1Mozs of reserves, plus 2,000ozs/m of gold going forwards, then the job will have been done and those drill rigs can move on to Red Ray and start improving the on the 22 holes already drilled and the 140,000oz already reported.
@AG1989
I must admit I don't often disagree with what you say, and even this time it's nothing to complain about, because like you 2,000 ozs of gold being produced on a monthly basis will be so compelling that no-one will be able to ignore Caracal, as those ounces of gold will put an ocean of clear blue water between Caracal and every other junior explorer who is sitting on 2 or 3M ozs in the ground. Which is why for me the production is number one factor, because we have our own rigs and more excellent prospects than they can shake a stick at, that will up the gold in the ground tally - some like Simba, where the 320,000ozs are already paid for and only when 750,000ozs are confirmed, do we need to pay more, with the expectation that 1M+ ozs may well be in the ground there.
I'm also not bothered if the Kilimapesa mining license can yield enough to allow 50,000ozs p.a. or not, even though I would be overjoyed if it does. Why is that? Because we have another 9 drilling targets as well as Kilimapesa, in Kenya, 3 of them priority and another 6 well worth a detailed study. So as long as Kilimapesa can drive 24,000 ozs/m for an acceptable amount of time, then I would expect Kenya to easily end up yielding between 50 and 100,000 ozs p.a. which may possibly end up being processed at an expanded Kilimapesa processing plant in a 12-24 month timetable, because even if we have 2 years worth of drilling in the Kilimapesa exploration license, I'm sure that as soon as a suitable prospect is found a BFS will be produced and an new mine commissioned, but the good thing is that another processing plant will not be necessary unless the new mine is huge, because the Kilimapesa plant can be upgraded once more as the new mine will be close at hand.
Strangely though our new PI's seem confused as to whether a 50,000+ ozs/p.a. mine is going to be commissioned in Kenya or Tanzania, even though apparently they have read all of the RNS's, whereas most LTH's will just direct you to
https://caracalgold.com/wp-content/uploads/2021/12/Caracal-Gold-November-2021-Tanzanian-Acquisitions-December-2021.pdf
where on page 10, Acquisition Fundamentals the statement,
'updated development studies to commence on the Nyakafuru Gold Project for conventional open pit 'mine producing +50,000ozs p.a.'
was written, and later explained in presentations, that a project team would produce a report on how to proceed to open up the Nyakafuru Gold Project for conventional open pit 'mine producing +50,000ozs p.a - I cannot recall the exact words but I remember Robbie answering questions and stating that the Tanzania Mine developments would require separate funding that would not be covered by Kilimapesa income, and might need an equity raise, but like you AG1989, IMO it does look like some form of debt financing might be a better option now. The report that Robbie mentioned in his last presentation was definitely going to be the first stage of the process to open the Tanzania Mine(s) tho
Interesting theory chisler, whether it is tomorrow or a Thursday very soon - obviously though my personal preference is tomorrow.
ATB and GLA
@CleverThoughts,
If I were a betting man, I would bet that if we saw 8 you would be hoping for 7....
Of course all of us LTH's are just one day closer to the next catalyst for change, be it Finance, ESIA approval, Government grants finalised, offtake agreement reached or possibly even a takeover bid announced.....
If I were a betting man, I'd bet that then you'd be glad to see only a 9 was in front of the SP. ;o)
@ aprogerson,
What we can be fairly certain of, is that Caracal are starting to have more options for raising cash than normally apply to pure junior explorers - having a producing mine where production is increasing to a plan, is a strong negotiating position. Clearly in previous the various aquisitions the stength of the Caracal operation was evident, because the sellers were happy to take paper, rather than cash.
Interestingly though, it was after our new CFO took over the finances that the CLNs were cancelled. I don't think the CLN route was necessarily a bad option, but I would hazard a guess that the Nyakafuru reefs part of the Tanzania aquisitions has been adjudged to take a bit longer than initialy anticipated, so that IMO the CFO suggested that a better deal could likely be struck when the outstanding balance finally needs to be paid.
@ headder
I didn't actually work out how individual items were funded from the raise, but if you look at,
https://www.londonstockexchange.com/news-article/GCAT/appointment-of-joint-broker-clarification/15327602
The full raise information was initially muddled, but as I understand it, the raise itself was to fund the purchase of longer-lead items, but the full funding includes the use of cash flow;
'The funds will assist the Company in its ability to increase mine production to 2000oz a month'.......'The proceeds, and cashflow from operations, will be used by the Company to embark on the recently outlined Phase 3 Development Plan'.
I don't know if you had already spotted this information yet? Certainly though, I have not heard any suggestion that a further raise will be required to complete elements of the phase 3 upgrade at Kilimapesa.
It may just have been a coincidence, but you may have noticed that the raise took place in short order after the arrival of Paul Reeves as Chief Financial Officer ('CFO') on 1 February 2022. Personally I am gratified that Caracal now have an experienced CFO in post to monitor and control the purse strings.
Hi Legalwolf, I not sure if you misheard what Robbie was saying, as I believe that he was actually referring to the Tanzania Mine development requiring a fundraising, rather than the production uplift at Kilimapesa to increase from 1,000ozs/m to 2,000ozs/m.
As far as I am aware the necessary fundraising for the production uplift at Kilimapesa has already successfully taken place, as detailed in two RNS's released in February :
https://www.londonstockexchange.com/news-article/GCAT/q4-2021-operations-update/15320878
and
https://www.londonstockexchange.com/news-article/GCAT/strategic-placement-to-accelerate-mine-expansion/15326529
I hope that this clarifies the situation?
@StockDetective
Whether it's 3 - 5p SP or a whopping 20p, you will definitely make money here, StockDetective. There are so many factors though that could act as springboards to the SP of a gold explorer/miner. Lets face it for a start, with with a list of ten drilling targets, and four of them priority there is huge potential here for significant increases to proven reserves - as Robbie said, he is following the artisanal miners and dropping a bore hole where they have been previously. I'm sure there is a bit more to it than that, but the principle of gold on or near the surface originally migrating from deposits below, is a given.
Obviously though finding where the surface gold migrated from is as much art as science, and then mapping the extent of deeper deposits is a costly undertaking that can easily bankrupt the explorer - unless of course you already have your very own gold mine. Clearly the potential rewards for any large scale find(s) would be reflected favourably in our SP. Personally I'm content with where the SP will be heading in H2 2022, but sign me up for 20p as well if Robbie can inspire the BoD to lead us there.
ATB to SP dreamers
Can I show my ignorance and ask a question that has been touched upon on this BB but never conclusively resolved? When the NSX listing takes place am I correcting in thinking that the new listing requires a number shares to be dedicated to be traded there - I think 15% has been suggested? Obviously these shares have to come from somewhere, so are they bought back and reallocated from LSE or will we see a new tranche created specifically for NSX - which obviously suggests raising new equity?
Now assuming I'm not being comletely stupid, does it not look like Caracal will tie the launch on the NSX with the planned spend in Tanzania. So a fully costed spend which adds more shares, does not cause actual dilution, because of the clear value added by opening a second, and possibly third mine, or is my thinking way too simplistic on this issue?
Well said Trek, there should be something in the short term for all types of investors. Certainly I would look to sell a few on a double, if the timing works out, but only so I can buy something else that likes over ripe for a raise, because if I had the spare cash I would certainly hang on to all my Caracal shares.
I think you are completely correct though in saying that it will all be about the BoD, particularly as they navigate through the Tanzania minefield (no pun intended) to start pulling the gold we know about, out of the ground there. Thankfully Caracal has managed to attract a wealth of very talented individuals onboard, that I now believe have all the skills required to succeed. It's a weird analogy, but at the moment Caracal seem like a non-league club, that's fielding a premier league team.
Just one final point, did anyone else hear Robbie say that there was two years of drilling to be completed at Kilimapesa alone?
@Beyondthesea
For what it's worth, may I also take this opportunity to bid you welcome Beyondthesea.
I'm sure that you have done considerable research before taking your position here, so I sincerely hope that you won't have to wait too much longer before starting to reap the benefits.
GL and ATB
@Barravelli
Yes good luck with all your future investments Barravelli, excellent timing to use up you capital gains allowance - well played and hopefully see you return in the not too distant future.