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Stanley, well done for remembering the source, and it was DP. If I remember correctly, what he wrote (not sure if it was published here or on ADVFN) was that with the present supply chain difficulties, and particularly the shortage of steel in the light of the Ukrainian war, it was almost impossible to obtain prices for the key equipment with validity over a week or so, which would mean that a BFS is practically out of date by the time it is issued. But the lenders understand that, so the banks will support us, despite not meeting the strict terms of a BFS. So, it will be delivered, but as a FS, but still acceptable for moving forward. I am sure that PXC are clever enough to be working things out so that this meets the criteria required from the ExGen contract. My further understanding is that the total debt will be $60 million, and I presume from that, they are not expecting any contribution from ExGen.
unvrkw, why take oil from Russia when Kazakhstan has a massive surplus and is an exporter?
No issue there bankrupty. I was going to post it later on, so you've saved me the bother! Yes, I remain superbly positive that this company is going to bring us in large rewards. The opportunity (metals in the ground) is fantastic, in a safe secure environment, with low taxes and which encourages investment, and with a really good BoD steering us along. One day soon, and very soon I believe, the finance will drop on the table, and at that point we'll know the project is secure, and the majority of the risk behind. We'll then never see the current sp again.
It's really like watching the kettle come to the boil. Every increased moment of attention just appears to slow down the process. We know that the BoD are slow to publish information, and are poor communicators. Maybe we just sit back and let the kettle boil.
I had a very good meeting yesterday with UK management. There was much discussed, and all extremely positive. Knowing pretty much everyone’s interests, I highlight the 3 main points:
# Our USA representatives met in Washington with one Idaho Senator (James Risch), whilst the other senator (Mike Crapo) was called away at the last moment on business, so they met with his senior team. The meeting was positive and supportive. A meeting at this high level is unusual, and sends a very positive sign of the recognition of the support available in Idaho for mining projects and this sector in general.
# No significant issues have been identified with permitting to date.
# The project remains on course to be financed by corporate notes, as promised. I understood that the coupon is likely to be based directly on the copper price rather than revenue, which should make these very attractive instruments for both parties (the higher the price of copper, the more we earn).
Here's a really positive interview with Ryan
hTTps://news.financial/interviews/interview-phoenix-copper-copper-with-certain-advantages
It was interesting talking to Ryan immediately after the AGM had completed, as he explained the detail of the issue. This is a confluence of many issues, but is broadly lack of the qualified staff, rather than the physical rig itself. He explained that metals prices had been depressed for a number of years, so there was a surplus of drillers, and many left the profession, then fewer went through the training. Then COVID hit, and many just left the industry, either to retire, or to accept the government handouts. With COVID and the aftermath, today drillers earn more working in Starbucks than on a drill rig, and so it is difficult to drag them back, even with incentives. So, it is the shortage of qualified drill riggers which is hurting.
• Konnex have established a community advisory group, with local citizens and businesses involved, and information being fed back to the community. It is working well.
• The Loan Note concept has been very favourably received. The company feels they can put this together fast, but are in no hurry, since “we don’t want to complete on loans too early and to start paying interest on a loan we don’t yet need”.
• The benefit of the Loan Note is that they don’t have to pay back any capital till the note expires (10 years suggested), so they will free up money to go into other projects. This will be non-dilutive value adding capital, and will accelerate the company.
• I also talked with Harry Kenyon-Slater, who believes that this is a real once in a lifetime opportunity. He agrees with the potential from the “elephant” below and likes the way that the financial plan is being developed.
• I talked my way round to several other directors, and was generally very impressed by their confidence and their approachability. This is really a special company.
I attended the PXC AGM yesterday and made the following notes. Please do note that these were not completely verbatim, and I may have missed some points. I invite other attendees present to correct or add to my notes.
The formal part of the resolutions passed very quickly with all motions being carried. It was then announced that Paul de Gruchy was joining the company as Director UK IR. This was followed by 3 PXC employees standing up and offering their own reports, being Ryan (CEO), Cathy Evans (NED) and Lenie Wilkie (ESG Programme Lead), followed by questions and answers. Here follow my notes:
• The Feasibility Study is advancing smoothly as is Permitting. “There have been no hiccups with either process”. The delivery of the Permit is entirely in the hands of the authorities, and we have a team fully engaged with advancing this process.
• Drilling rigs are in exceptionally short supply today in USA. Nevertheless Konnex has located and contracted a core rig which will start drilling on 1st June. Initially on Empire, then Red Star and then the deep sulphides. Navarre Creek requires a reverse circulation drill, which are in even tighter supply, and Konnex have contracted one for 2023. Ryan believes that this programme represents a good result in the present situation, and will allow increased focus on getting Empire into Production.
• Ryan commented that he has seen that Electra Battery Metals (formerly First Cobalt Corporation) are seeking permitting to drill towards the Redcastle (ie PXC) side of their property. We can expect news here.
• Nearly all Konnex staff and their families, have moved to Mackay. This demonstrates confidence that the project will take place.
• Konnex have opened a small office in Boise, which will focus on PR. Important since it is closer to the state capital and politicians.
• For ESG: Huge work done. In Idaho mining laws are some of the strictest in the world. We are happy with that, and as a result we are getting massive support from the local community.
Through my wife I have family in Kazakhstan. They are completely split over this war, like we were on Brexit, including within families. Broadly, the older generation, particularly amongst the Russian families, see Russia as the hero, and buy into the propaganda. The younger generation who are more tech savvy, are on Ukraine's side. This is leading to major arguments, of course (don't we know it). The result will be, I am fairly confident, that Kazakhstan will not enter the war. There may even be some advantages, for Rouble owners looking for safe havens. Plus, Kazakhstan is desperate for investment, and entering the war they lose that opportunity. That's my outlook.
For the wider readership, for those that don't know, several of our directors, and particularly our CFO Richard Wilkins were involved with OXS, and learned their lesson over jurisdiction, for the assets of OXS were taken from under their noses by the Uzbek state. I know Richard lost his pension, and is determined to make it up here.
Red Star is an easy one to describe, but I believe is becoming a little more complex to move into production, as time moves forwards, but for positive reasons. It was found I understand almost by accident in just 2018, and was planned initially as a a low cost underground high grade silver/lead mine, and might have even have beaten Empire into production. However, they did some additional drilling, and found that whilst the seam was a lot more twisted and deformed than expected, it also went on for much longer, so they decided to spend more resources to determine the exact shape, and these are the EM results reported recently. The conclusion was that the potential appeared to be significantly greater than that of the discovery outcrop, which generated the maiden resource, which is of course magnificent news. They also talked about waiting for the survey results from Horseshoe-White Knob area to the north, which may make the deposit even much bigger. Now here's the issue. If you are going to build a mine, it would be silly to design the facilities for a small mine, when it is quite possibly going to be quite large. So, I am sure that they are waiting for the full results from the EM surveys, at which point they'll do a drilling programme for next summer, and only after which will they start to plan Red Star. That's my guess, for I have not talked with the company about this. As you can guess, a much larger mine means more revenue, and therefore becomes more interesting to investors, whilst I am still content that it can be fast tracked at the right time.
On the question of whether they do a standalone project, like they are contemplating at Navarre Creek, I doubt it, since most of Red Star sits on their own patented land, and is close to the processing facilities which will be used for Empire open pit ore. Whilst most of the processing will be different (sulphides vs oxides), there are sufficient similarities to make good cost savings from running them together.
Finally, I agree with you that a £10 target is reasonable. Hope you have a great weekend!
That's kind of you bankrupty, but the thanks should really go to the company. The directors are standing true to their words, and are working hard to advance this company for everyone's benefit. We are not producing yet, so news comes out in spurts, but that production is not faraway. I speak with the directors regularly, and know that they remain committed, really committed, to bringing this company into production without the issue of any more shares. Once producing, we know that they will be throwing off cash, and so they will target the other resources in the portfolio beyond the Empire Open Pit, such as Red Star, or Navarre Creek or or the deep sulphides. which for the last 2 could each be much larger than the open pit mine. I am impressed by the way they are running the company, although I personally feel that they could do with simplifying some of their technical speak, and have told them that. I remain strongly tied to my belief that this company will make the early investors rich , and will allow many of us to take a significant boost to our pensions, and within a reasonably short time frame. Buy the shares now whilst they are at a bargain price, and put them away. Forget the short term volatility, and wait for the reward. Key leaps in the short term could come from advancement of the permit, from the sourcing of finance, and from other exceptional drilling results. Watch this space for any of those.
Stanley, nice dream.... However to make the sort of offer you mention, they would have to do a thorough due diligence, or the person making the decision would be crucified if things went wrong. And at the moment, whilst we have the Resource determined for the Empire Open Pit mine, we do not have anything of substance for the rest. In consequence, they could not make an offer for PXC based on that. Or it they did, it would be so low to be laughed at. The big boys make their money from running large operations efficiently. In due course we may come onto their radar, but not just yet.
Let me give some specifics concerning Martin Hughes, and the RNS from Thursday. He is an astute Fund Manager, and is nicknamed, according to The Times, the “Rottweiler”. The Toscafund he manages has assets of £4 billion.
Now concerning his participation in Phoenix. In February 2020 he bought 7,900,000 Ordinary Shares at a price of 15 pence per share when the actual share price was 10p. Yes, he paid a premium of 50% over market price. He was our hero then (and remains today). That money was used to fund the summer 2020 drilling programme, which was indispensable for us. Subsequent to that fund raise, the share price dropped to 5.5p, so his holding was worth about a third of its original value, but still he held on.
He was awarded some warrants at that fund raise, and this week he has converted his warrants into shares, investing more money into Phoenix, and held on. That shows confidence.
That he continues to hold sends out a very strong signal. I wish Martin Hughes well and thank him for his initial investment, for without him we may not have been able to have funded that drilling campaign.
Navarre Creek continues to look remarkable, genuinely remarkable. The key feature about a Carlin Trend gold deposit is that the gold is found in low grades, but in large quantities. Remembering the RNS from one year ago, they were expecting gold in the ppb, but found it in ppm. The results on the samples appeared at worst equal, and maybe even better than the initial samples found on the Carlin Trend in Nevada, which is a giant deposit.
Carlin deposits are named after the little settlement of Carlin in Northeastern Nevada, and Carlin deposits can be very big gold strikes indeed. The Barrick gold mine on the Carlin Trend which started this off is the world’s 8th largest gold mine, which is a relatively short hop and a jump away.
Now look at what has been written in this RNS. The directors are mining experts, and with that, we have to understand that they write in highly technical language. I can now sort of understand the delays in producing this report, since the geology is so complex. But you can sense the excitement coming through, and following on from the previous work which identified that gold is present, they are now determining the size of the host rock which carries the gold. They have confirmed all their previous work, and whilst Ryan does not generally get excited, I sensed a frisson of delight when he wrote “We believe the Navarre Creek area to be quite remarkable”. Now we understand why they went out and staked additional territory!
Whilst the geology of Carlin Trend deposits is quite complex, the shallow ore in Carlin Trend type deposits is usually oxidised, which is relatively simple and cheap to extract since it can often be mined by open pit which costs a fraction of underground mining. This work confirms that the Navarre Creek deposit probably has IMMENSE value.
Note that the Empire Open Pit Mine does not include any economic assessment of the deeper Empire Sulphides, the Red Star silver mine, the continuation of the Empire pit north (Horseshoe, White Knob and Blue Bird Mines), this Navarre Creek Carlin type gold play, the Idaho Cobalt belt properties (Redcastle and Bighorn), or other projects within the Phoenix portfolio. These are all given for free, in a company where the directors are firmly entrenched on not having to issue additional and dilutive equity, and plan to finance all further work through debt and revenues. In other words, if you buy in to the share now, you receive all this additional value for free.
I’m skipping and dancing this morning on the news in this RNS!
It looks to me from first glance, that Martin Hughes held warrants, and which were due to run out on 31st Jan. He appears to have held on to the lot, and paid up, hence his shareholding increasing and the RNS bei.ng required, so it wasn't him selling the last weeks. He has been called "The Rottweiler" from previous ventures, so that he is holding, is fantastic news for confidence in PXC. He would not hesitate to drop if he was at all unsure.
Don't worry Sparky, I've not been hiding at all. Just busy. But let me spell this out again, and I know that this is exactly what the company would say if they are asked. They have plenty of cash in hand, and certainly sufficient to take them through till well into 2023. This will allow them to carry on with the current drilling programmes, and the other development activities. They have zero, I repeat, ZERO, intent to raise construction and project funds in any way other than through debt. The result will be no dilution. This is not speculation, but words coming from a competent board, who are on the side of the shareholder, and who have demonstrated that time after time.
Hi Sparkey, I have spoken many times with the Board, including in recent weeks, and I can assure you that there is not a hint of a placing in view. None. Let me assure you. According to my conversations, the finance will be raised through some form of debt and not through equity raise.
I'm not sure what you mean with your question furey? If you mean how long before it really takes off, I would suggest next spring, when the finance is put in place for the Empire Open Pit project. Then we will know that the project is really going to happen. The finances for that are crazy, with an extremely fast return. The company are intent on investing the return back into more exploration and into production for other metals within the territory. So, this could be a share which multiplies many times in the coming years. However, although I said next spring, this company have been full of surprises up till now, and we could see other assays and results which surprise the market at any moment. The results this week have been misunderstood, and I plan to post on that during the weekend. No hurry now, it's Friday...