Member Info for southwesterner

The circa 20% fall is very clearly tied to the results from the United Downs drilling programme, and the realisation (by some) that the lode intersected there is a minor structure and any resource is going to be on the small side, certainly a tiny fraction of the assumptions in the H&P reports. They used 2Mt @ 3.9% copper, 0.9% tin in their financial model, for the record (which incidentally makes up around 1/2 the value of CUSN in their NPV calculations). I think we'll be lucky to see 20% of that tonnage now, at lower average grades once diluted, based on my understanding of the new UD lode they have found. Clearly their attempt to make and release such a detailed financial model for UD when it was such an early stage exploration prospect (one intersection) is deeply flawed and frankly, based on normal industry practise, hard to justify.

The fact is that the massive and well delineated tin resource at South Crofty now underpins the vast majority of value in the share, and that is growing in value every day as market gradually accepts that tin prices will remain high for the foreseeable future. There's a long way to go, to prove that reopening South Crofty is technically and economically feasible, but if demand for tin remains strong, the project can be progressed.

And arguably there isn't much recognition in the SP of the possibility of finding more substantial resources in the ongoing drilling at United Downs, at Mt Wellington or to the South of Carn Brea. Cornish Metals has several £m to throw at exploration drilling if it wants. I'm not a geologist, and I much prefer to deal in the certain, not the conjectural - but frankly, I think they have to roll the dice with most of that money, not spend it on C&M at Crofty or let it wither away in G&A costs. Drill, drill, drill.

And yes I am still invested in AYM, have accumulated a decent holding at 3-4p over the past few months which I'm currently happy with, although I will be expecting developments in the not too distant future, and do not buy into your NDA hypothesis. If a roadmap forwards for Parys Mountain is concluded, and specific tangible goals to bringing the project to a feasibility study set out, including obtaining the appropriate financing (through either the sale of the LIM stake, equity raise, or a strategic partnership) then a discounted (pre-feasibility stage) project value is easily justifiable at £20-30 million. Whilst I do not ascribe as much value to the iron ore projects, even so there is a possibility that another £5-10 million could be raised from their sale. Based on all that, despite the £4 million of debt, and inevitable dilution to bring in financing, there is clearly good value here at a £9m market cap.

Tommymech; "Try reading what I actually said and not what you'd like me to have said. Your entire post is simply a 'straw man' and a further example of your projected negativity towards AYM. Are you even invested in AYM anymore?"

Actually, your post is the straw man - I was simply addressing your specific point that demand for iron ore will rise significantly due to iron-air batteries, and this will be good news for AYM. You then chose to go reel off the usual spiel about our brave new world, and how all commodity prices are going to be sky high in the future - yeah, we've all heard it all before. I'm sorry bit I deal in facts, not conjecture. The facts are iron-air batteries will have a negligible effect on overall iron ore demand, regardless of whether they are successful or not, and indeed in the event they are, they will take years to materialise in commercial quantities (which still won't have a significant effect on iron ore pricing), so ascribing any additional value now to AYM based on the emergence of this technology is beyond ludicrous.

Do you know how much iron ore is mined globally?
About 2,500 million tonnes per year.

Nickel perhaps?
2.5 million tonnes. Thats a factor of 1000x less than iron. And less than 10% of that will be used in batteries (2023f).

Do you know how much lithium carbonate is mined globally?
0.4 million tonnes.

Iron-Air batteries are simply never going to be a major driver of demand for iron ore, compared to the quantities of iron used in steelmaking for construction and engineering. Thus they will not affect iron ore prices significantly, regardless of whether this technology ever materialises - and I disagree that its going to appear on a large scale globally in the next couple of years. The fact you cannot see these basic facts, and continue to talk about how close I am to the rock face as if that is a remotely relevant riposte, is simply an indictment of the paucity of knowledge in your analysis.

"If this catches on (I can't see how it won't - see linked article and do a bit of Googling) then the demand for iron ore is only going to increase significantly and, for obvious reasons, that's even more good news for AYM."

The quantities of iron needed for batteries will be absolutely negligible compared to the total market size for iron ore, even if it was multiples of the size of the entire battery industry globally, it would still be using a tiny fraction of global iron production.

No one in their right mind is going to invest in iron ore stocks based on an unproven technology that is years away from commercialisation, and even if it does achieve that, won't ever have a significant effect on the overall iron ore market. Maybe the "large part of my professional life negotiating large commercial transactions" hasn't equipped you very well to understand the basics of commodity markets!

"Ok. My question is you both seem to have put a full stop here with these results yet the headline from all media states Cornish Metals " pleased " with drill results ?"
"Could you suggest why the company are pleased with these results ?"

I've never in the history of mining seen a company say they are disappointed with drill results, even if they hit absolutely nothing, they'd put a positive slant on it. Thats the nature of the business. You've got to take it with a pinch of salt, even if its copper.

Haha sorry FK. Its good to see someone born locally taking an interest. It's just difficult to separate out the mindless ramping that often goes on here. I'd really like to see this succeed, and in fact I believe it will, but one has to be realistic, especially if considering investing.

"As for the technicals, what are considered an attractive % mineralisation for Cu, Sn and g/t for Ag?"

It really depends on all these modifying factors that I was talking about earlier; width, depth, dip, ground conditions, metallurgical recovery factors, etc. There is no one set of numbers that you can boil it down to. But, basically the best way to go about this is to convert the % Sn, Cu or Ag (g/t) into a value per tonne of ore. So 1% Sn is... about $300/tonne. Take 65% recovery/net smelter factor etc, and you have say $200/tonne. On a 3-10m wide vein, you could estimate total costs at under $100/tonne, on a 1-3m vein, maybe up to $150/tonne, depending totally on scale. So you can see, in order to make a decent margin, on a small individual deposit typical of the area, you need either an (unusual) 3-10m wide vein of 0.8-1% Sn, or a normal 1-2m lode of 1.2-1.5% Sn lets say. Also remember, if you want to access a deep deposit and pump a massive old mine out, then your going to need a very large margin & a lot of reserves, to pay off the capital. Rule of thumb, copper is worth 1/3 of tin, so 3x as much required. All very rough!

The upshot of it all is, you need quite a large critical mass in terms of resources and reserves to make a project like this work. It might be possible to accumulate several different deposits, accessed from either South Crofty or the Wheal Maid decline, and together they will provide enough optionality and critical mass to be economically viable. There is already a large resource base at Crofty of high grade material, but its deep and high capex. All they need is a small high grade, easily accessible deposit, to start them off for a couple of years. Easier said than done of course, but they have the money to go drilling, they are going to have a crack at this on a scale no one else has tried for a long, long time.

"What would be considered a sufficient width?"

Width and grade, the size of the deposit, and various other factors such as depth and dip, all go hand in hand. One cannot look at any one aspect in isolation to assess the economic viability. For this setting and type of lode, a grade of 5% copper throughout and a 2m width would have been fantastic. Unfortunately other than the first 2 intersections, the rest have all been sub 3% copper, and the true width (adjusted for angle of intersection) may only be about 1-1.5m.

Based on the info available so far, its not looking good. But it may still be possible and worthwhile to mine this lode, if other mineralisation is found and accessible from the same operation (eg. the Wheal Maid decline).

"No expert here, but the name change from Lithium Lode implies they have moved away from thinking it contains worthwhile levels of lithium. The increased tin concentration is good news and the surprise that it is orientated in a way differing from previously thought gives reason to consider there may be more, unexplored deposits out there if in the past people have been looking in the wrong places based on received wisdom which looks like being disproven. Interesting, hopeful and positive in my mind. Good results."

I'm sorry but you clearly don't know what your talking about, the lode never contained any lithium. No lode-type mineralisation would ever contain lithium in this setting. It was only named that because it was accidentally discovered by Cornish Lithium, who were looking at brines at depth. They obviously decided to rename it to avoid this kind of confusion. They must be absolutely fed up of investors talking about lithium, when they are trying to find copper-tin deposits. The tin values are patchy and there's little evidence of continuity.

This lode is probably worthless I'm afraid, in isolation anyway. There is clearly some continuity as expected, but because its dipping south, the widths were originally hugely exaggerated as it was intersected tangentially. South dipping lodes in this district have been seen before historically, but would tend to be weaker offshoots, rather than primary structures, so weren't much mined. The true width looks to be very narrow, it may die out at 200m depth, and wasn't intersected in hole 7, so we're probably looking at 200kt of ore realistically, when it really needed 5 times that to be viable. None of the new zones look particularly encouraging in terms of continuity, grade or width.

I can see why they waited so long to put this out. A harsh lesson in not getting hopes up too soon. They shouldn't give up too soon either though, drill out the area, just in case there's anything else, particularly in terms of tin stockwork extensions around Whiteworks. It'll probably never be looked at ever again if they dont find something now.

Still, this is what mining exploration is all about! There's always Mt Wellington and the Great Flat lode prospects... and of course, South Crofty - at least we know what is there!

South Crofty now underpins the value of the company, any value attributed to United Downs will be written off over the coming days and weeks, we will see what that does to the share price, maybe not that much given tin is still looking strong.

I thought they intersected it in drilling in the 70s in a few holes, and it was a thick quartz leader, but either barren or very low grade. But maybe I dreamt that up or got confused with something else!

"Lord Grimstone visited South Crofty a few weeks ago............................. The UK needs to organise smelting next......... A site in Plymouth might be our best bet."

Haha! The govt couldn't organise a p*ss up in a brewery, they certainly aren't going to help build a smelter. It would probably never get past the Environment Agency anyway. Lots of talk about foreign direct investment - green technology future, woah! But talk is cheap. Lets see what actually happens. I wouldn't hold your breath!

"The elevation of the target site is considerably higher than the portal of the Tuckingmill decline, with a target depth 200m below surface, meaning the target us above the south crofty water level. As a result its possible to drive a tunnel to it and drain it into the Crofty water treatment plant, enabling disposal of the water. The majority ofvtge tunnel would be in the granite mass, providing good tunneling conditions, with it taking about 18 months to bring the area to a production ready state."

Yeah this all sounds sensible and viable. I guess the miners of old would have done this to drain this area, if they had the kit we do now. A modern drill rig can make light work of this, and the granite should provide decent geotech conditions. In the 18th/19th century, it'd probably have taken a few decades to get through the Carn Brea granite mass, would have had to follow the great crosscourse, but they just pumped out the mines instead.

I think the idea is that the copper miners found the Great Flat Lode where it junctions at depth with the near vertical copper lodes in the area? And then they followed it up towards the surface to the north, in a few locations, but perhaps missed some payshoots? I doubt we'll be looking at millions of tonnes, but it could be something worth having, 1Mt @ 1-2% tin that is easily accessible could do wonders for the economics. Will need a good width to make it mineable at a shallow angle though with techniques available now.

"The great flat lode is a massive structure (hence the name), which persists for around 3km strike, it has been speculated for many years that there is a parallel structure between crofty and the the GFL, if tgat proved to be the case you could be talking tens of millions of tonnes of additional resource."

I notice all the holes bar one are pretty shallow. But then there is one, 900m deep and almost vertical... is this targeting TWF?

Would be good to have some actual information in these monthly updates. All we know is process plant ran at 90% of throughput for last 10 days of July, ore looks good, made a shipment of 25t concentrate - of an unknown grade - at some point. But no real numbers. What were the recovery rates?

There are really 4 things worth knowing:
1) Tonnes mined
2) Tonnes milled
3) Grade of ore
4) Recovery rate

We don't really know any of them except tonnes milled was 90%+ of target (so 90+ tpd) for the last 10 days of the month.

Either Scotgold don't actually know, in which case, they are in all sorts of trouble. Or they don't want to tell anyone, in which case, why? Reminds me of Wolf Minerals.

But I mean really this mine should be printing money, its a very high grade resource. Albeit low production rates, even so they'd have to be doing something terribly wrong not to make this profitable ultimately at £1300/oz gold.

New CEO is great news, his CV looks strong, and fits the main requirements for this project - specialised in financing.

The main asset, Parys Mountain, is of great quality, and substially proven - there is little risk in the resource not being economically viable. There is no question in my mind whatsoever that it is viable at current prices, and it can be optimised further to be robust across an even greater range of prices, with some relatively simple adjustments. There is enough information out there now to be very confident of that. The risk was that the Board simply weren't doing anything, and that I would suggest should substantially diminish with this appointment.

Going forwards, the expectation has to be clear - the project has to be progressed to a feasibility study. No more talk of yellow mobile plant turning up next week, it won't happen. This is a serious capital investment to bring to production. So its absolutely essential that proper feasibility studies occur - and I would suggest if it is done properly, it will involve substantial drilling, met testwork, environmental studies, etc - and cost around £4-6m.

There is simply no way of "skipping" this step, just because its difficult and involves putting more capital at risk. Yes, a lot of money has been spent on Parys Mountain over the past 30 years, but it needs a bit more to realise its potential. Ultimately, if you don't believe in the potential of the project, then get out. The investment now to create real value is a small fraction of that put into the original project - the majority of spending has been incurred already. But that doesn't mean the rest can be done for nothing.

To prove this as a modern mining project, update all the relevant information and allow it to reach its potential, AYM will have to raise money and that may involve significant dilution - particularly as the asset is currently massively undervalued against NPV. Ideally you'd increase the company value before undertaking a raise, but if there is no pathway forwards, then it'll be hard for the market to recognise the value. But it should be possible to market this project a bit better, maybe re-run the PEA, and prove its value is well in excess of current estimates.

Ultimately, for the project to be taken seriously, you have to set about doing things properly. I have no doubt the new CEO will recognise this and ensure appropriate investments are made in taking the project forwards. Bringing in a JV partner or cornerstone investor in the form of an established mining company would be a shrewd move to prove this projects potential to the market. This project is most attractive to such a partner now, at low share prices - they could get a substantial stake for peanuts.

When that occurs, expect significant returns. Based on doubling the shares on issue to pay for PFS, then a 10p target price. If it can be done with less dilution, eg. by selling the iron ore assets - value is anywhere up to 20p.

I can't tell you about short term price movements, or who is or isn't "holding this down" after the bell. All I can really observe is that the price has consolidated well over the past couple of months in this 15p (+/-2p) range. It may push higher based on the strong tin price performance recently, but there are two major news flows that will determine the next move, and that could be positive or negative.

The first is whether CUSN can get the finance for pumping Crofty. No specific time pressure on this, and the market probably views it as both a negative and positive, depending on the detail - mainly, what the raising price is, and whether its all dilution, or can something be done with offtake finance. It'd be a bit unusual to get offtake finance for a project only at a PEA level, but Crofty has provenance that most projects don't, and the tin concentrate market is very tight, apparently. I'd view it as a positive even if there was significant dilution in the short term. Because if they could gain access to this finance it shows the market views South Crofty as viable and worth putting money into. If they can't progress it forwards at $36k/tonne tin, then when can they? - is the flipside on the negative. Obviously they will want to get finance on reasonable terms, but we will see whether it happens or not, no guarantees, this is more money than they have ever raised before.

The second is the next batch of drill assays at United Downs, which we are due this week based on what the CEO has stated in recent presentations. Obviously that could be a big deal to the share price. The last drill assay had a fairly neutral reception, hopefully now there is has been some recalibration in expectations, and an appreciation in the market that this is narrow vein (1-2m wide) mineralisation, but potentially high grade, and if they can prove 200m+ lateral continuity of 4%+ copper, then this begins to move in the direction of something that has real value. Moreover it shows if they left that lode behind, what else is there out there in this area?

Tommy; "Have you paid for a search of Juno LTD (Bermuda) structure, board members and shareholders? If not how can you make this statement? It's complete speculation which is what you accuse me of and therefore kettle calling the pot black. On the other hand, if you have looked into the structure of Juno LTD (Bermuda), are you prepared to disclose who are the shareholders in said Juno LTD (Bermuda)?"

It'd be a notifiable disclosure of interest if any other board members were shareholders or directors of Juno Limited. Because it isn't noted in any of their statements, they aren't.

Tommy; "Where do you get the interest rate of 10% on the £3.7m of loans to AYM? Genuine question. This seems ludicrously high given the low interest rates of the last decade++."

In the Annual Report. Its only payable on the principal, so its not too bad.

Tommy; " errm, no. That's a very naive view of the world. No development stage mining companies are going to broadcast an interest and see the SP rise. Just think about it."

That isn't what I said, and I'm certainly not naive on normal practise in the industry. What I said was that ongoing discussions do not stop the Board communicating with shareholders (on other matters of progress). Presumably something else should be going on other than discussions with a potential partner for selling the asset. They raised £600k in January to "to continue the development of the group’s Parys Mountain property as outlined in the recent positive Preliminary Economic Assessment for that project". How is that going? We have no idea.

I follow dozens of junior mining companies, and this is one of the weakest out there for shareholder communication, and it always has been. They just conducted a raising, and should be progressing this promising project forwards - but they are acting like they are in a perpetual state of dormancy. Most development stage mining companies provide regular updates on progress throughout the year, not just in Annual and Interim Reports. If they did this, it would improve shareholder and market confidence in the company.

I mean you have to bear in mind, last time tin prices were at this kind of price, the GBP:USD ratio was 15% less favourable. This matters cause of course the tin is priced in USD, but most operating costs and some capital costs will be in GBP. Of course there's been a bit of inflation since 2011, but overall, basically - its never been a better situation for the tin price, since the early 1980s.

Whatever your own views on the commodity market and metal pricing situation going forwards, and I imagine you have some, and I know there are some very bullish people on tin (and copper) out there - and they may well be right - but the reality is that the financiers are still not certain, and there is still this narrative that its a "covid supply side" induced shortage rather than a fundamental long term supply-demand shift that is driving these prices to spike. Whatever the truth, the reality is that (total) funding for a project with a fairly high price required to achieve suitable economic returns, with only a PEA level study - will not be forthcoming. That is basically an absolute certainty, before people get carried away.

However, right now, they dont need total funding. The next step is to start dewatering, and conduct further drilling of the inferred resources to bring them into the indicated category. For that, to run the dewatering and drilling operation over a two year period, they need to raise US$25m roughly (see the recommendations part of the new resource statement). Thats still a lot of money, its about 1/2 of their current market capital, its going to be tough to raise that all in equity even with the current momentum. So what they really need is for Osisko to stump up some serious cash, or for a new "cornerstone" partner to join them. Or some kind of miraculous government grant for the dewatering. But yeah, this next step is crucial. If they can take it, I think it adds value to the project, the dilution is significant in the short term, but the share price rises because the probability of production (and thus, value) being ultimately realised greatly increases. So they should take this next step, if they can, but thats a big if. Nonetheless, even if they can't take it, there is still the possibility of United Downs coming good, and using that as a stepping stone (starter mine) to lower Capex etc. So yeah the next few weeks/months are certainly crucial on both fronts.

Starting to drift towards a pointless argument now. To bring it back round to the original point (hopefully...) - looking through various stock exchange filings over the years only Danesh Varma has been referenced as associated with Juno Limited as "a Director" and "a significant shareholder".

I don't think there is any evidence any other members of the Board are associated with Juno Limited, so the idea that other members of the Board don't need to hold shares in AYM because of that seems to be fairly baseless. Only Bill Hooley has any shares in AYM directly, and then only about £7k, so one could certainly argue performance is not adequately incentivised presently. Certainly though Mr Varma's exposure to AYM through the Juno Limited, is significant.

As discussed before Juno Limited don't just own 26% of AYM, they also hold £3.7m of loans to AYM. Presumably, Mr Varma, or his beneficiaries, would like to get that money back one day. But for now, its just racking up interest of 10% (on the principal) per annum.

I've reaccumulated a decent quantity here recently at these lower prices, primarily because of the underlying quality of the asset of Parys Mountain and the low market valuation of AYM overall now at £7m. I get that there's a risk the BoD are actually doing nothing, and that only time will tell whether they are in advanced discussions with potential partners, or indeed just asleep. I can see why people are frustrated though, there hasn't been enough dialogue with the market, and discussion with potential partners does not stop other development stage mining companies interacting with shareholders. I also think this was way overhyped a few months back and that expectations were not in calibration with reality. But nonetheless, Parys Mountain with this updated resource and some further optimisation, in the current market, is a really decent VMS deposit, and I think its now becoming an inevitability that its time will come.

Appreciate your candour and honesty, and I certainly don't want to put you off posting. It's good to hear sentiment driven views, because there's no doubt on AIM sentiment is an important factor, certainly in the short term. But when you are just ramping based on misrepresenting an RNS that is about filing a technical report, as being "great news" on pumping and permitting - and about graphs of "rare minerals"... I'm not sure thats really adding much of value. Just confusing people.

Like, my view is that the lithium aspect is mainly hype, and the vast majority of long term value in this company likely lies predominantly in the copper/tin assets. But that is a legitimate point of discussion, and others are entitled to their views on lithium brine "DLE" projects. Obviously the immense valuation on Vulcan Energy Resources (ASX: VUL) now (A$1bn) would tend to suggest the market is more confident of this technology now, but I'd suggest its still hugely risky and unproven. Most other DLE projects appear to be in aquifers, whereas this is just direct into the granite and there is no evidence that I have seen so far of the ability to sustain lithium brine concentrations at production level flow rates, but I'm not saying that its not possible. Just that no evidence has been presented thus far, so those that ascribe value there are taking a leap of faith. It could be a huge commercial success, or maybe the accidental copper discovery at United Downs could turn out to be its main legacy. We will see.

So again, fairly speculatively, but starting to become more tangible, there are now 2 drillholes showing a high grade copper-tin lode to the north of the old United Mines. The evidence of lateral and depth continuity in the surrounding mines historically is significant and suggests there is a decent chance with this lode too. In the next 2 weeks with the next set of results, we should see more from the drilling assays. This could very easily shape out to be a great little starter mine. Equally it could peter out before it builds up critical mass. A small mine today, would be equivalent to a very very large mine in the 19th century.

And then we are left with South Crofty. Now there is really nothing intangible about this. This is one of the greatest tin mines in Cornwall's long mining history, and it clearly has plenty to give. But getting it up and running is a fairly long, capital intensive and technically complex process. There is no doubt that there is a substantial tin deposit down there, but getting to it is not the easiest task in the world. But at current tin prices, its certainly worth the risks and challenges, and the market will surely come around to that view in time if tin prices remain high, or rise further.

This must be one of the few stocks with development assets in metals, whose price is essentially no higher now than at the height of the covid market crisis in March 2020.

Copper prices have more than doubled since then, and the value of LCCM on an NPV basis has hugely increased. Tin likewise has more than doubled. SML often claims to have substantial tin resources - they don't, and claiming things which arent true I don't think helps market credibility. Redmoor has a very small tin resource, it is primarily a tungsten resource. But even tungsten has appreciated recently. And magnetite prices should be positive too, so Cobre keeps ticking over and creating a bit of revenue - perhaps enough to pay the Directors generous compensation packages.

Anyway, to have not created any value over this period is quite astoundingly poor, and speaks to the level of confidence the market have in SML's ability to execute what they say. How well has this headline from over 2 years ago aged for instance; https://www.proactiveinvestors.co.uk/companies/news/312510/strategic-minerals-makes-significant-step-towards-full-scale-leigh-creek-production-12510.html - there are many more like that unfortunately in relation to SML's past.

I'd say LCCM is the current millstone around SML's neck, and there are real questions over the substance of the "feasibility level" study that was released to the market last November. This was the Study where the project funding requirement was reduced from $1.75m to $2.2m (an increase to most people). And now we know its really more like A$10m once you include the environmental deposit. And this "feasibility level" report is all by the company who are selling them the equipment, its hardly an a comprehensive or independent study.

They were getting debt, then a JV partner, then listing on the ASX, now debt again but more, and maybe listing on the ASX next year. It's all become a bit of a saga. Is anyone really going to stump up 100% debt for this project? Maybe at current copper prices, anything is possible, but it's certainly risky. This is more complex than loading a stockpile onto trucks.

So yeah, dismal performance since March 2020. And if we look further back it doesn't get much better. However has that now created a value opportunity? Market cap is £7m. It wouldn't take much to go right to justify that.

Cobre just about pays the bills, gives them some credibility, but probably wont ever do much more.

I think the chances of selling Redmoor for more than they paid is low. They talk a lot about tin, but they need to drill for it if they want to have it. Redmoor - as is, only has any value to Tungsten West - no one else can monetise it realistically. So a sale, or JV with them once they IPO is an absolute must if they want to create value from Redmoor.

So it all comes down to Leigh Creek. They have to do what they say - secure the permits and funding. Its that simple. SP is a bet on them delivering on this.