Member Info for scrwal

Contrary

I didn't mean the strict interpretation of ring fenced but "effectively" as the funds would be received by EST but they shouldn't be spent as the company would have a large financial commitment to their funding of the mine relating to the discovery which could only be paid from the milestone payments - hence they shouldn't really spend the money until any mine cost/working capital requirements have been met. Yes they would have a load of cash initially but it should be earmarked for the mine only.

I have been a holder since May 2022 making regular purchases including some at 4p but have got my average down to under 3p.

Alex is doing a good job with the positive news flow and presumably the assays are going to be good. However the current events aren't going to cause a re-rating or major price increases as they don't change the financial standing of the company only expectations which seem to be heavily discounted by the market.

I wouldn't say I am pessimistic but cautious. Since the dilution last year until recently Alex hadn't delivered on anything nor had the company kept to its own timetable especially with the drilling of Verkhuba. Also there was nothing being posted on X this year showing how any drilling was getting on unlike previous years.

EST is now very resource rich but suffers with cash poverty. As I have recently posted the JV doesn't alleviate the situation apart from receiving a refund of costs on Snowy if it is included in the JV. Any milestone payments will need to be spent on the cost of the mine to which they relate and not on EST operations. The cash only really comes in when the mine is in production but even then working capital needs to be provided. The milestone payments would be effectively ring fenced until everything was up and running and only then can the unspent amount be released for EST operations.

Yes the share is undervalued but it is in the doghouse as far as the market is concerned because of what didn't happen last year, the snap placing this year, the delay in drilling Verkhuba and the continuing wait for assays. Also Alex still hasn't been able to monetise Verkhuba so until he does the market is completely ignoring other discoveries because there is no expectation that the company can monetise them either.

We have not been given any details of any of the outstanding assays for Rulikha , Talovskoye and Verkhuba.

The MSA report makes no reference to 2025 drilling at Rulikha.

Verkhuba was to be drilled when winter ended but here we are still waiting for the assays.

We have another potential big resource but don't have the funds to advance it. Verkhuba really needs to be sold, especially now given the potential of Rulikha, so that we have major levels of funding which would cover all costs of developing current and future finds as well as contributing to any mine capital costs that hopefully arise from the Endeavour JV.

Contrary

The agreement is a standard one really for exploration. The sums involved are not committed but subject to what is found. Essentially it is Endeavour saying this is what we will spend on further exploration of two large regions from scratch - data may well suggest possible zones of interest. It's effectively an exploration budget which is more formalised and in the public domain that just held internally.

The cost of acquiring, digitising and analysing data especially if it is archived Russian reports isn't cheap.

Drilling costs $100 per metre so with the depths they may need to drill costs per hole will be high - see page 5 of the presentation for the deposit styles and depths.

It may well be possible that Snowy was the prime target with the other exploration an add on for Endeavour if it wanted to expand in the region.

The amounts over the 5 year period are peanuts as far as Endeavour are concerned - even any milestone payments to them are small. Their cash from operations in their most recent quarter was $309m and cash used in investing activities was $143m.

Alex has stated in the past it cost EST $90 per metre drilled so I have just rounded that up to $100 above.

Endeavour are just taking a flyer on the JV because the amounts involved to them are inconsequential. For EST it is the polar opposite.

This is a good deal for EST because if the optimism about Snowy is accurate then we don't pay for the drilling and hopefully the milestone payments cover our contribution towards the mine.

There is no need for the market to reflect the value of this deal as it is primarily all about potential of regions that there is limited data on, but EST may/may not have done initial research. The deal is a good one for a small explorer like EST but it does not provide any upfront cash in the immediate or short term.

EST will have a lot of its ongoing Kazakh costs covered by the JV which will reduce its cash burn which will help but EST will still have to fund all its VMS projects itself and will need funds to do that sometime during the latter part of next year.

Snowy becomes interesting with downside as Endeavour have first refusal which hopefully they exercise because if they don't what would that mean for Snowy - is it a non starter/not viable which would be bad news. If they do exercise then Snowy falls under the JV with EST being paid for all costs incurred to date - Alex did mention multiples of cost..

What does a successful discovery mean for EST - Well Alex did mention we get a minimum of $2 per oz but this should be higher with the various escalator clauses so potentially a lot of money. But there is the 20% working interest we have to fund which is why Alex gave a very simple example of a mine costing as follows - The mine costs $100m to build of which 70% $70m is on finance with the balance being equity of which EST would pay 20% of the remaining 30% ie $6m. This is just an illustration but it highlights that EST would receive a lot of cash based on the milestones but it needs significant funds for its 20% interest. Effectively EST becomes cash generative, give or take, only when a mine is operating which may be 5/6 years down the line.

In the meantime we still have to advance the VMS projects preferably by selling Verkhuba which would produce funding to finance all projects to a JORC and commercial feasibility plans plus funding for the new mine/s so this is the most significant price catalyst not the JV.

I fully expect Snowy to be part of JVCO - otherwise why would Endeavour have any involvement. Snowy may well be a Tier 1 prospect and is the only one EST has so it is obvious this is the asset the JV is aimed at and EST has no funds to progress it so they have done the deal to retain a 20% working interest after the earn-in period. EST also receives milestone payments as things progress.

Mikey279 - if you are referring to me then you are barking up the completely wrong tree.

I am just annoyed with the lack of action, delays in drilling and what appears to be a disconnect in company/third party expectations.

As Dibs61 indicated Alex will and has already said no to unfavourable offers but we don't really know how realistic his stance is/will be. Any lth doesn't want to be faced with unending small raises but selling Verkhuba even if it is lower than expectations will realise significant funds which would cover any future exploration costs and progressing finds to a JORC etc.

CAML may be interested but nothing happened last year and they may want a project that is much further advanced like the one they were outbid on.

The market is not missing a trick - the problem is the failures in 2024.

Verkhuba had a maiden JORC and a data room was opened to facilitate a sale which never happened. The company then pivoted to a JV which never happened. There was obviously a disconnect between company expectations and those of the third parties which resulted in the further drilling of the disconnected lenses which was supposed to be finished shortly after the winter break and wasn't and we are now in November waiting for assays. This has turned the market against the company with the prevailing sentiment being prove it or you'll be ignored because you had all that optimism last year but failed to monetise anything.

The company is asset rich but very cash poor and basically needs to sell Verkhuba - any JV will be heavily weighted in the third partys favour with EST not getting much in a lump sum.

The warrant extension is unusual and does open a can of worms for those involved. We are expecting good news with some expecting a deal but therein lies the problem as if that was the case then insider dealing rules could rear its ugly head - same for the assay results if known by the board.

Per rns 16 Sept assays expected from end of Q3 and into Q4 so a widish time frame.

Seems that the market and the trolls were expecting a blockbuster update.

The presentation is a summary of the current position and future plans in reasonable detail.

Morocco is in limbo until MOU-6 is drilled and 3D done. Of course the company will exit the country when it sells the assets which is what we all want as the company will never have the funds to fully develop the finds - a JV would be suitable for the much longer term but don't think that suits PG.

Trinidad production looks good and will continue to increase over the years and may well be the cornerstone of corporate activities in the longer term.

PRD will divest itself of the Moroccan assets and could well be bought out for the remaining Trinidad assets with holders being well rewarded on both occasions.

I think it has to be something to do with Verkhuba and is likely to be a sale rather than a jv but I could be wrong.

I doubt it is Rulikha or Talovskoye as those are single holes which could prove the concept but won't necessarily be proof of the total resource but will be "it is looking good". The company is asset rich but cash poor and currently couldn't prove up anything without a raise.

Dibs

Agree that we don't know what the expectations are but I reckon management are very hopeful but the market is probably just non committal (we'll believe it when we see it) . Yes if either Rulikha or Talovskoye is good then there should be an uplift but currently the company has shown it is unable to monetise an asset.

I didn't mention Verkhuba since the drilling is to prove if the lenses link up which will give a resource increase but I don't think it will be significant as all they are doing is showing that the shed load of dirt that needs digging to create the open pit actually has some copper in it so it's a bonus rather than just being waste. I'm surprised that nothing has been said about the anomaly at Verkhuba which was causing valuation complications last year and to me they should be doing work to clarify the position but they haven't.

Surprised they are stating that an IP survey is likely to be next when in April it was stated once the IP surveys were done at Rulikha/Talov the team would move to Snowy and complete 4x 1.6km IP lines at 200m spacing .

The assays to come from each hole at Rulikha and Talovskoye need to be good not ok. This is because they have been drilled at the optimal location by EST based on the data available so any results that are marginally below expectations would significantly reduce potential yields for either site and cast doubt on viability and future drilling. It could still be possible that any further holes could provide better results but that in itself casts doubt on appraisal methodology used.

Hopefully the assays will be good but the company by picking a singular hole which they consider it to be optimal creates jeopardy - perhaps they should have done a couple more holes.

There may well be a special dividend but I expect it will be Jan/Feb next year.

The major unknown is how the arrears will be recovered - this would give rise to another special but the bulk should be spent on new drilling.

What if the shares aren't part of a fund raise per se but are issued as part of a JV which enables better terms for PRD.

Not sure we can take AW at his word. After all we were told that the Verkhuba drilling would restart after winter and it didn't plus we were fully funded for the 2025 drilling campaign - AWs words - but we still had a placing. It's these comments that have partly turned the market against EST.

Do people not understand how long it can take for the assay results to arrive let alone the unknown drilling time. They didn't start at Rulikha until mid June.

Re Snowy - rns 28 April stated "Once the IP programme in the East Region is completed, the contractors will relocate to the Snowy epithermal gold anomaly to complete 4 x 1.6km IP lines at 200m spacing over the main pyrophyllite alteration and gold and silver anomaly to test for chargeability and resistivity anomalies resembling an epithermal sulphide gold target or porphyry system."

We have not received anything stating that the contractors have relocated and therefore have no idea if any work is being done at Snowy - until it is done and appraised there will be no drilling at Snowy.

Verkhuba drilling still needs to be finished as well.

EST received a grant of $500k from the BHP Xplor initiative. This provided funding and expertise in 2024 to advance the copper porphyry exploration strategy only. This money has been spent.

EST does not have any BHP backing in place - there may well be a tacit agreement that BHP may have first refusal on a porphyry find but that is as far as it goes. Alex has stated as much in the interviews last year even saying there is no further funding commitment from BHP.

Any results from the drilling will only provide proof of concept regarding the possibilities for Rulikha and Talovskoye. A much larger drilling campaign would still be required to provide any initial resource size let alone a JORC.

We have been told absolutely nothing about what is happening with the drilling. What results are people expecting to see released?

The drilling didn't start until around the 17 June so how long would it take to drill Rulikha and then get the assays done? It takes around 3 months to get the assays done so that's mid Sept plus the drilling time which pushes us into October and that's only for Rulikha.

The drill rig would then be moved to Talovskoye , pad may or not be prepared and then drilling so those results will be October plus the drilling time which will mean late Nov onwards.