Proposed Directors of Tirupati Graphite explain why they have requisitioned an GM. Watch the video here.
Onvestorman33 posted the following on ADVFN, which I found very useful:
Ryan's video interview - great talk to explain what's going on, worth a listen.
Highlights :
- Inexpensive magnetic ground survey on Red Star is one of next steps, may well be as early as December weather permitting
- geophysics/geochemical (including magnetic ground survey helps target next drilling campaign, probably starting drilling when snow melts
- Repeated very high grades of metals at Red Star (eg 1100g/tonne silver).
All good solid news/progress. Its clear that a bigger resource will be built up at Red Star with a view to putting Red Star into production.
(NB Background news Red Star will follow on from Empire being put into production, but looking well placed to develop a mine. Phoenix has cash in the bank to fund the magnetic survey and quite possibly next drilling campaign)
Next News expectation at Phoenix :
- RNS on Metallurgical test work in next couple of weeks
- RNS on PEA for Empire in next few weeks.
BTW worth explaining that the PEA (Preliminary Economic Assessment) includes a preliminary feasibility study (ie documenting all the steps required to build and operate the Empire mine) plus a full economic model including costs to build the mine and a model of the first 10 years production showing revenues and operating costs etc. So after PEA, investors will know that funding Phoenix to put Empire into production will give good returns at relatively low risk. So a HUGE step forward.
And once PEA is out the value per share will be far more obvious.
De-rampers and short sellers beware - PEA will kill you financially !
And isn't great news for traders - best for longer term holders !
Hi MT, this will be a step change to the business. Up till now the work has been more based in exploration. That phase is over, with no more need to invest in drilling for the Empire open pit, and any money raised now (and they will need some) will go towards the design, engineering, and construction of our mine. In the PEA they will bring together the data on the Resources focussing on the high grades for the faster return (so do not expect all the resources to be mined), with a 10 year plan. They will then integrate the gold and copper recoveries, based on the data from the metallurgical laboratory (and do not neglect the copper which will be recovered essentially for free), and calculate the economics from how much metals are recovered. They will give estimates for capital and operating costs, and produce a document good enough to go out and raise finance.
The key financial number for evaluation will be the NPV, which for those not aware of this accounting terms is the difference between the present value of cash inflows and the present value of cash outflows over a period of time. NPV is used in capital budgeting and investment planning to analyse the profitability of a projected investment or project, since it should show us the cash being thrown off by our project above and beyond the costs we incur. Another key number to look out for is the After Tax Pay-back, and anything under a couple of years would be good, and under 1 year would be fantastic.
Is this what you were after?
With Ryan’s interview I feel enough has been said on Red Star, so now onto Empire, and a conversation from yesterday. The metallurgical effort is reaching a point where they will shortly be able to draw conclusions. They hope to present the conclusions for the PEA soon. They can say that the ore from the Empire open pit is amenable to treatment with Ammonium Thiosulphate (ATS), and that the results to date look very encouraging. This is of course an established process, being used by some of the largest mines in the world, including the largest open pit mine in the world. This fits exactly into the developing remit of Phoenix to be one of the leading environmentally clean mining operations in the world. The use of ATS matches this exactly, and will be described shortly by Phoenix with the results from the metallurgical laboratories.
All in all, things looks very encouraging and positive for Phoenix.
Now let’s look at the financial implication, and this is my input. Remember that back in May Hardman came up with a value for company, based on the price of silver. At today’s silver price and based on the earlier mapping of Red Star, the company should have a share price of over 68p, before today’s news (emphasising that the Empire open pit gold mine should be much larger than this). With possibly much increased resources today from Red Star, this is looking better and better. The Red Star deposit does need further exploration to define the resources, and so magnetic surveys will be performed when the weather allows. This will be soon if possible, but most likely in early spring, since these are steep mountainsides with lots of snow, and which has already fallen.
Away from Red Star, I was reminded that Empire is now known, and with the success with the Ammonium Thiosulphate recovery on gold, and the present prices of precious metals, the Empire Open Pit is a no brainer to get it developed quickly. They are still hoping to have it in production before end 2021, with the PEA due to be produced in the near future.
Whilst in conversation, I learned that COVID has caused serious issues to the laboratories, with presently up to half the employees off sick.
I have now spoken with a director to clarify the RNS. And it was very interesting indeed. These are my notes, with some of my own interpretation.
First, remember that the silver in Red Star is carried in a (rich) vein, with a defined width. The Red Star area is covered in vegetation, trees, grass and rock, and with no visual guides to the vein, it made following the vein difficult. Indeed, the Red Star deposit has never been mined, and was found only in 2018 by accident.
Now with the knowledge that the silver is contained within the magnetite, this will become much easier to explore, and is perfect to do with the magnetic survey. They also found extensions to the veins, which need to be targeted in future exploration work.
But perhaps the most important information from Dr Rogers is that the mineralisation is quite possibly the same between Red Star, Bluebird, Horseshoe and White Knob, and he suggests in his report that the vein may be continuous, and worthy of investigation. If this is confirmed, we have more than 1.2 kms of continuous vein, not forgetting the possibility of multiple veins. But the geology also suggests that the vein may even have continuous strike from Empire through Red Star and up beyond Horseshoe and up to Windy Devil, which makes a total of 5.4kms continuous vein. These are all near surface finds. With today’s information, the Red Star silver deposit may be potentially many times larger than first anticipated.
The discussion then moved to geology, and can perhaps be best understood by looking at a map, and there is a good one in the June 2020 presentation, page 13, where you can see the line going up from Empire through Red Star, White Knob, Horseshoe and into Windy Devil. Then look at the bottom of that page, and you will see the vertical mapping of the straight black line (line A to A1), and the large copper resource being at depth, and under everything else. That shows the expected copper deposit lying under the whole extent of this area, so much wealth below. So mine for silver, and you get a copper mine below thrown in.
This is another technical RNS, and whilst they are obliged to report in this way, I feel it needs some interpreting.
The reason for the interruption in the drilling of the Red Star drilling programme this summer was that they found the vein system to be quite “complex”. We now learn that the vein is almost completely covered (“lack of discernible outcrop”), which does make following any veins rather complicated, I would agree. They addressed the problem to a Consultant Geologist, Dr Rodgers, but I have not looked at his report yet to understand why it is complex. His main conclusions in the RNS are:
1. The silver is embedded with magnetite, and knowing this, the vein can be followed using ground magnetic survey equipment, since magnetite is highly magnetic. This is now an easy win.
2. The vein has strong similarities to the historically mined Horseshoe and White Knob claim blocks, which are more than 1kms further north. Joining them up makes a very large deposit
3. The definition for where this silver/lead vein is found (between granite and limestone) provides another marker for the drilling programme
4. The grades of the metals in the deposit are exceptionally high
With the above known, it becomes much easier to follow the vein, plus they now believe that the vein system continues over 1 km north, maybe multiplying the resource 4 times, maybe a lot more if there are multiple veins. That’s more money in the bank. Putting all the data together shows that PXC have an extremely valuable resource, one potentially much larger than they first identified. There are a couple of points I did not fully understand so I will be calling into the company this morning and will post any information learned.
raxfactor, after the previous war in the early 1990's, the Azerbaijanis were "encouraged" to leave, so there were no Azeris in the villages to welcome the liberators, whilst the Armenians have simply fled. That is why the villages were empty.
Now onto what we can expect from the report, and note that I have no advance information. I am just trying to map out what we should be looking for.
Ryan (CEO) wrote in the RNS about this having complex geology. This may be that the vein meanders, breaks or disappears. A clearer definition of “complex” could either make or break this potential mine, and note that just because a vein is “complex”, that does not mean it is hard to mine. The known vein was determined to be 320 metres long. How long does this seam run for? Any addition above 320m is money in the bank. Just one vein was determined previously. Any additional vein found is money in the bank. The existing resource was for 103,500 tons of ore. So long as grades are maintained, any addition to that is money in the bank.
We know that they stopped the drilling programme to better understand the structure. We have to focus in the report on whether they remain optimistic that this is a mine which they can fast track into operation, or if it moves to the back burner.
A positive report should add great value to the overall business, since this was always viewed as an easy and low cost mine to bring to production, and indeed up till the beginning of 2020, the company was being valued almost solely based on getting Red Star into production.
I am so looking forward to seeing this report, and good news could be a real game changer, one of those steps like the announcement of the vaccine, perhaps?
With the Red Star update imminent, I thought I would offer a refresher, and a pointer for what we should be looking out for.
First, let’s look backwards. The outcrop is located 330m north east of the Empire gold-copper open pit, and in technical terms this is a silver-lead mineralised vein in an outcrop hosted in magnetite garnet endoskarn. The discovery of Red Star is relatively recent, and the maiden inferred resource estimate for Red Star in May 2019 was based on the results of three drill holes. It amounted to 103,500 tonnes of ore and more than 0.5m oz of contained silver. In their May 2020 Research, WH Ireland wrote “the geology looks prospective and from our understanding of similar deposits we expect a continuation of the mineralisation – a continuation that Phoenix can currently demonstrate on surface. The current drilling should provide significant colour on the inputs to any cash flow”. Also in May 2020, Harman wrote in their research “Further exploration work at Red Star has shown that the primary vein, which extends from the south west to the north east, is now measured at 320m and is open at both ends. The mineable width is estimated at 5m-7m”. Hardman continued “We have valued PXC using a DCF model, incorporating a very cautious discount rate of 15% (which we will reduce subject to exploration success), mine production to 2031 and a long-term silver price of $19.00/oz. Based on the assumptions, our fair value for the company is 31p/share, vs. the current price of 18.70p.”…. “Performing a sensitivity analysis on our financial model, we estimate that each $1.00/oz change in the LOM silver price affects our valuation of PXC by 6.2p-6.3p per share.” Note this clearly. Hardman valued the company in May 2020 based solely on Red Star, at 31p/share. If we apply the correction for today’s price of silver ($24/oz), Red Star alone should command a PXC share price of 62p!!! Note this well, for this price excludes all the other resources, and in particular the Empire gold.
Now let’s examine the present programme, the report from which we are expecting any day now. In the August 25th RNS Ryan wrote (note I’ve cut out some words without changing the message) "The results from the first six Red Star core holes confirm the orientation and continuation of the high-grade silver and lead system … which was first discovered in our 2018 exploratory programme. … numerous silver intercepts in excess of 115 g/t (3.70 oz/tonne) were received. Our team is currently evaluating these latest analytical results. The Red Star area is geologically complex and we have determined that the most successful exploration is best achieved through short drilling programmes, followed by evaluation of new data prior to additional targeted drilling. In May 2019, Hard Rock Consulting estimated a maiden inferred resource at Red Star of 103,000 tonnes grading 173.4 g/t silver, 0.85 g/t gold, and 3.85% lead, with minor copper and zinc.”
Earlier today you wrote "Maybe PXC will get an offer for the company or maybe a dual listing in the USA.".
You are obviously not aware that we are already listed in USA on the ODX exchange, however trade has been disappointing to date. I hope that this will pick up as we get to be recognised.
You also mentioned that maybe we'll get an offer for the company. I know from chatting with the directors that they are not prepared to sell their shares at the present time which would most likely severely undervalue the company. I find them a group of exceptionally honest guys, driven by the sole goal of making a success of this company, which they anticipate will deliver their pensions. I would guess that most of us small shareholders here would also follow that line. So, hang on, for this is a share to put in the bottom drawer, and then come back to for your own pensions!
And here’s the resource we have been promised. But what is important now is the conversion of this data into financial numbers. I made a quick calculation, comparing the value of the Measured & Indicated resource supplied in the RNS on 4th May, with that issued today. Using the numbers given (87,543 tonnes copper, 43,871 tonnes zinc, 7,595,198 ozs silver and 238,406 ozs gold), I come up with a resource value today for Empire alone of $1,351,000,000, compared with a value of $956,000,000 from May. That’s a whopping 41.3% increase in resource, in financial terms. And for curiosity I calculated that Measured & Indicated plus Inferred had increased by 33%. That the M&I plus Inferred increased by less shows how they have focussed closely on the gold recoveries, going after the higher grades to make the project more attractive.
So, what will be happening now? These figures now give the best ammunition to launch into the PEA, and to develop the optimised project. The technical team from Hardrock will be poring over these numbers, balancing grades against cost of recovery, to come up with the optimum investment cost vs return. I so look forward to seeing the PEA, and judging by recent ebullient talk from directors, I am going to guess that the economic conclusions from the PEA will be fantastic. Once we have the PEA, we will be gliding in to financing this part of the project. The summer drilling programme has really delivered on their goals, and we can now press ahead towards building that mine.
And do not forget, we should shortly see the promised report from Red Star, the results from Navarre Creek Carlin style gold play, the additional surface results from Empire, and we’ll then go into the Empire PEA. Exciting times!!
News, aside the first gold, has been quiet for a few days, so let me offer a reminder of what this opportunity is about.
It's a new company, mining for copper, gold, silver, lead etc, in Idaho, the most mining friendly location in the world.
The company started out looking for copper, as its name implies, and previous drilling programmes had this aim, with the Researches from May also having this focus. However, with the price of gold moving up, the company switched the focus to a fast track gold project in the Empire mine, whilst still keeping the silver opportunity in Red Star in sight. Their summer drilling programme in Empire on this higher grade gold has now delivered the first gold to be produced in 80 years. The result is a much more attractive project, eminently financeable, and very fast to put into production, according to the company.
They are fully funded through the current drilling programme (plans to complete Red Star and perhaps start a few holes in the Carlin style gold strike at Navarre Creek), and continue to state their intention to minimise shareholder dilution for the construction financing, particularly as the board are all significant shareholders.
With their consultant geologist saying that perhaps only 1% of the mineralistions have been discovered to date, they plan use the cash generated from the Red Star and Empire Mine, to fund the deep mines where the real bounty is expected to be found.
I like the board and have trust in them. Where the share price stands today is unrepresentative of the value this company could give. The core risk issue, in my opinion, is whether the board can take this company into production, and specifically finance the business. I myself have confidence they can do it, and their continuing updates lend credence to that.
There’s been a pause in news the last weeks, but that does not change the fundamentals about this business. In the coming weeks we are expecting announcements about the final assays from the summer drilling programme (Empire open pit rock samples, plus Navarre Creek channel samples), the Red Star technical report, the results from the metallurgical test work, the PEA, and perhaps new researches. Watch this space!
Note that aside Empire and Red Star, we have the potential gold and silver in Navarre Creek plus the White Knob Mining Group, and the Cobalt in Bighorn and Redcastle.
This is not advice, and please do your own research.
Good evening Mr Intelligent, for you have invested in Phoenix, who WILL achieve greatness, and you WILL get a large return on your investment. Now that is INTELLIGENT.
Let us be clear though, that none of us have ever promised that there will be NO dilution. As an example, if the company raise the money through some form of project finance, they will surely have to put up some of their (our) own money, and the easiest way too achieve that would be to have a small equity raise. But this would move the company from development into production, and so the share price should soar at that moment, as would raising finance from any other mean. The company have always promised to MINIMISE dilution, and not to exclude it. In my opinion, if we went from the present 73 million shares (fully diluted - note that term please) to say 100 million, but managed to boost our share price to 150p, I would be delighted, and so I guess would you, for it is the share price which puts money in your pocket.
But Mr Hughes is not cashing of because of possible dilution. He has already made about 300% from his investment. He most likely had a need for some cash for elsewhere, but he knows that the real money is to be gained from staying the course, which is why his withdrawal has been limited, and he is still there as our single largest shareholder. He would know the present plans, and if he was unsure, he would be cashing out. His remaining holding is a vote of confidence.
Whilst us posters have been extolling the value of the in-situ metal, what really matters is the free cash this project will generate. With this understanding, it is now clear that the most important document this autumn will be the PEA, and this should be the focus for investors (and as a result I will no longer be publishing the weekly Resource update). What was apparent from the conversation is that the Phoenix team are very excited by the return the project should generate.
To summarise, the company are getting very serious on project optimisation, and encourage investors to look at the economics of the Empire project, including the cash return, rather than focus solely on the resources. The BoD appear very confident that the project economics will demonstrate a most attractive return, which should see the company market value increase considerably.
Whilst the above concerns Empire, we should not forget that Phoenix also includes the Carlin style Navarre Creek gold zone, the silver in Red Star, the outlying Empire zones of Horseshoe, White Knob and Blue Bird Mines, plus the Cobalt zones of Redcastle and Bighorn.
I had a conversation with the Board Member today, and very interesting it was too, and the following essentially follows the flow of conversation. I found it immensely useful to receive a rather detailed explanation for how the BoD see the development of the business.
First we started on the outstanding news. The assay laboratory have said the results for both the Navarre Creek channel samples plus the Empire Open Pit Mine surface samples are imminent. These will be published in RNS’s without delay. Meanwhile the metallurgical work is going very well, and they promised to post pictures on Twitter of the first gold poured under laboratory conditions as soon as available. They are also nearing the end of the technical examination of the Red Star results, and should be in a position to post news shortly.
Now onto the more detailed discussion, and we started with a debate over the usefulness of the Resource Information in the context of the development of Phoenix. Phoenix as a new business has necessarily to develop its investment driven by the economics, and not by resources, important though they are, since it is a statement of the obvious that the 43-103 Resource statement does not tell the economics of mining such resources. As an example, you could own the world’s largest gold resource, but which may never be developed if the economics do not make sense. So, resources need to be put into context, and it is the PEA which will do that.
Project economics in mining operations are always a trade-off between grades and tonnage. On the one side we have the capital cost of building the production facilities, and the larger the facility, the higher the cost. But the grades (ie quality of the ore as defined by metal content) vary throughout the pit, and the higher the metals content, the lower the production costs. This summer, Phoenix drilled 32 holes into the gold zone to further enhance their knowledge, identifying the zones with the higher gold grades (noting that previous work was focussed on copper), which are now being used to work up a 10 year project economics. The intent from this approach is to throw off the cash to make a very attractive project, generating a large cash return to investors, whilst also allowing a large return to the business to go after the larger, deeper reserves. That does mean some of the resources will not be recovered in this 10 year period, but these may be recovered later, as the metals will still be there.
Silver $23.9/oz; Gold $1894.7/oz.; Copper $6,409/tonne; Zinc $2,302/tonne
Red Star silver PROJECT: today’s fair value share price should be 61.4p (last Monday 53.9p). Actual sp 43.0p.
Empire Open mine RESOURCES: Today’s Measured, Indicated and Inferred value: $1,825,000,000 (last Monday $1,819,000,000)
All metals prices updated 7am this morning.
Comments:
All metal prices except silver decreased slightly the last week, but the increase in silver price was sufficient to boost the Resources, which continue to look exceptional.
We are expecting a MAJOR positive reassessment of the Resources in the coming weeks, when the new assays and focus on gold in Empire have been input to the economic model and recalculated.
Red Star project valued from Hardman Research: hTTps://static1.squarespace.com/static/5914577386e6c0cd77e15c74/t/5ebe429f5807503aff2c88c7/1589527215301/Hardman-Research-Phoenix-Copper-May-2020.pdf
Empire NI 43-101 Compliant Resource valued from: hTTps://polaris.brighterir.com/public/phoenix_global_mining/news/rns/story/rml988x
Note the Hardman research excludes the value of gold, copper and other metals in Empire (confirmed resources) plus Navarre plus the White Knob Mining Group, and the Cobalt in Bighorn and Redcastle.
Silver $23.9/oz; Gold $1894.7/oz.; Copper $6,409/tonne; Zinc $2,302/tonne
Red Star silver PROJECT: today’s fair value share price should be 61.4p (last Monday 53.9p). Actual sp 43.0p.
Empire Open mine RESOURCES: Today’s Measured, Indicated and Inferred value: $1,825,000,000 (last Monday $1,819,000,000)
All metals prices updated 7am this morning.
Comments:
All metal prices except silver decreased slightly the last week, but the increase in silver price was sufficient to boost the Resources, which continue to look exceptional.
We are expecting a MAJOR positive reassessment of the Resources in the coming weeks, when the new assays and focus on gold in Empire have been input to the economic model and recalculated.
Red Star project valued from Hardman Research: hTTps://static1.squarespace.com/static/5914577386e6c0cd77e15c74/t/5ebe429f5807503aff2c88c7/1589527215301/Hardman-Research-Phoenix-Copper-May-2020.pdf
Empire NI 43-101 Compliant Resource valued from: hTTps://polaris.brighterir.com/public/phoenix_global_mining/news/rns/story/rml988x
Note the Hardman research excludes the value of gold, copper and other metals in Empire (confirmed resources) plus Navarre plus the White Knob Mining Group, and the Cobalt in Bighorn and Redcastle.
That detail is not really relevant to us, as we will be producing gold and silver doré bars, I would presume, which do not have the required purity for bullion. I suggest we just want now for the PEA, which should give a detailed analysis, including the destination for our metals.
Hi 999.9, I am not sure exactly what you mean when you seek the assessment based on the physical value. The Empire mine valuation I give is based on the latest Measured, Indicated and Inferred Resource defined by the company, earlier this year. It is an asset value of the physical metals in the ground. Note that this will be changing very shortly with the new data from the summer drilling programme, and should increase considerably. This will be followed shortly after by the PEA, which should bring together the new Resources together with the data from the metallurgical test work, and show predicted recoveries of the metals, as well as estimated capital costs. It should include a new valuation of the Red Star project. Since these are not too far away, I suggest we hold back on further guesses, and as Ryan the CEO says, let the data do the talking.
I hope this helps calm your impatience, but I feel the waiting will be worth it!
Silver $22.7/oz; Gold $1857/oz.; Copper $6,529/tonne; Zinc $2,365/tonne
Red Star silver PROJECT: today’s fair value share price should be 53.9p (last Monday 79.4p). Actual sp 41.5p.
Empire Open mine RESOURCES: Today’s Measured, Indicated and Inferred value: $1,819,000,000 (last Monday $1,938,000,000)
All metals prices updated 7am this morning.
Comments:
All metal prices decreased the last week, but the resources still look exceptional.
We are expecting a MAJOR positive reassessment of the Resources in the coming weeks, when the new assays and focus on gold in Empire have been input to the economic model and recalculated.
Red Star project valued from Hardman Research: hTTps://static1.squarespace.com/static/5914577386e6c0cd77e15c74/t/5ebe429f5807503aff2c88c7/1589527215301/Hardman-Research-Phoenix-Copper-May-2020.pdf
Empire NI 43-101 Compliant Resource valued from: hTTps://polaris.brighterir.com/public/phoenix_global_mining/news/rns/story/rml988x
Note the Hardman research excludes the value of gold, copper and other metals in Empire (confirmed resources) plus Navarre plus the White Knob Mining Group, and the Cobalt in Bighorn and Redcastle.