Ryan Mee, CEO of Fulcrum Metals, reviews FY23 and progress on the Gold Tailings Hub in Canada. Watch the video here.
It’s almost comical that two guys having a bit of a moan on Telegram over the weekend has infected so many people, and suddenly it’s the end of the world.
Nothing has changed with the project other than a few slips in the timeline (ok, a year or so isn’t small, but we have had a pandemic to navigate through). We’ve got a number of funding options, and now undertaking research to double profits.
I honestly don’t see where all the drama has come from.
I agree ITD999.
Despite the slipping timescale all events do appear to fall into place at the right time.
The inflationary pressures, plus covid, may have delayed the project, but has allowed the team to look at the best ways to run the project to maximize returns in the long term.
The slippage in time will better align to the predicted demand in copper and this increase in price.
The timeline trade off could be far better economics in the long run.
And with the copper price now bouncing it could be the best time to announce bond news in order to re-rate the share price.
Ok, this is a glass half full view, but lets hope it all falls into place.
On the bond I hear that the delay is a result of one of the big subscribers requiring to create new investment vehicles as they are “out of region”. We’ll get there soon enough, and I think this is days rather than months.
We should also hopefully get started on Red Star imminently. Intel from Mackey is that drilling begins next week.
Lots to come, hang in there guys.
Yes, join the telegram group! It’s by far the best run group I’ve seen, with knowledgeable posters, and very little spam.
But I think Mr Hasten’s points were fair, and there are many exciting prospects that PXC are sat on.
Which, by the way, includes Red Star. I believe we are due to start the (delayed) drilling campaign there next week, weather all being well, lasting throughout all November. The results from that should be exciting too.
Remember the second large anomaly….
Hi EnglishPatient,
It's fair to say that the delays have been frustrating. We would all have liked the finance to be completed by now, and the share price to be higher than it is today, but I am 100% confident we are not being strung along.
The company is being very methodical in the approach, and a "slower today, faster tomorrow" approach is actually very prudent, as they are ensuring that every duck is lined up correctly, from finance, to ESG, mine design, extraction process etc.
They could go for expensive finance, sub-optimal plan, and quick flow of revenue, but I would much prefer that they do all they can to maximise the returns on our investment, even if that takes longer than most of us hoped for.
The ATS testing is the next major milestone, as that will determine mine plan and permit amendment submission, and that will be Q2-23. Finance is actually less important right now, but I am fully convinced we will have news very soon.
Methodical yes, strung along? - Not in my opinion.
I'm sure SLP is also a good investment though, so good luck with that.
Stan.
From what I'm hearing, news is "imminent".
I would say within the next 10 days (+/-). From there everything then starts to fall into place.
I don't tend to do rumour posts, but the info seems legit. No more to be said.
My guess, from various research and putting 2 and 2 together (and getting 12) is that it will be ADIA taking up the majority of the bond ($40m+). Can't say how or why I arrived at this point though.
But until the bond agreement is signed, as Donald said earlier, there is no certainty of closure.
But to Sparky's point, I have zero objection to offering shares to the bondholder to ensure it gets processed. Class it as a placing, a bribe, a sweetener, a warrant, an option, whatever. If the bond is in place then a small share issue will have no impact on our fortunes at all.
They have been adamant there will be no further shares issued, but sensibilities should come into it, and if it's beneficial to us all then I support it.
Stan.
That’s a good point, Bankrupty.
Our timelines as investors (or short term traders) are not always aligned with the Board.
We are eager for rapid gains in share price, and paired with the global economic struggles, panic sets in when things don’t happen overnight.
The Board have lived this project for many years, and want to ensure everything is done properly. Ryan is doing everything according to the book, and nothing to risk the permit process.
I have no doubt that getting finance has become significantly more difficult recently, but still think that we are on the right path, and are dealing with the right people.
We have a choice to either trust their judgement, or move on. I’m staying firmly in the former of those camps.
I’m looking forward to getting an update this week.
Its been hinted at for a while, going as far back as early August. If it was a general update there’s nothing to have prevented it coming out weeks ago.
It’s pure guesswork, but I believe they have been waiting for something to get signed off. Maybe one of the potential bond holders to return to office and officially subscribe, or some other milestone event.
Waiting for September also optimised the impact, as news often gets lost in August, and now is the chance to get the message out via the media.
I’m possibly looking for the positives, but lets hope the RNS is less fluffy and more substantive.
Again guessing, but I’m going with: $25-30m secured through bond subscription, and tranche 2 to be launched in January. Alternative finance offers on table, so the company is jot concerned regarding raising all the money.
Project continuing, and x has been achieved do far (truck routes, basic infrastructure).
Resubmission of POO about to go into BLM, with the aerial rope way being the chosen solution, enhancing ESG credentials.
Empire drilling continuing, and here’s the results so far. Red Star drilling to begin soon, ahead of the winter setting in at Mackay.
Permit for drilling approved for Navarre, and initial drilling campaign to begin once a rig can be secured (maybe next year).
These may come out in a couple of RNS’s, but this is what I believe we will see in September.
If this is right, 22p is just daft.
Bankrupty, it does seem a strange thought process, but at least you are honest with your position and actions.
So I gather that you used to hold around 500k shares, and have sold around 300k recently?
I mention this to show that often people don't sell just because "they are in the know" (at least, 'm presuming you don't have insider info!). Often people have different risk appetites, some are just over-leveraged, or forced sellers, and see reasons to sell when others see reasons to buy.
I believe the price drop recently has been a cascade of "they sold, so I will do the same", and seeing regular sells of 10k, 25k, 50k (which I am sure Bankrupty may have also been doing, too), creates a storm of fear. Maybe rational, maybe not. But it's not evidence of an impending doomsday for the Company.
While the macro-economy is being flushed down the toilet, there is still reason to believe in Phoenix, and I hope that the next few weeks will help shore up the share price, and maybe even create a reverse trend. It would be great to have you increase that position back up, mate!
The bonds don’t have a completion date of July 23.
We have until then to get them finalised, so it could be completed next week. So yes, it could be a long wait to do so, or it might not.
It’s prudent to have the option of completing in tranches, particularly with the short-term drop in copper.
There should be an update on progress by next Friday, according to info posted on Telegram (Paul stated “within a week or so”, a few days ago).
It’s painful to be holding most mining stocks right now, the drop is not exclusive to us, but let’s hope it’s short term. Securing finance should see us retrate considerably.
Be patient, guys. It is hard right now, but we need to trust that the Board know what they are doing. They aren’t new to building a mine, and know the right steps to take. I’d prefer this than random RNS’s to prop up the short term share price.
GST, like you, my holding is large. 500k+. It’s ugly to look at currently, but let’s hope in 12 months we’ll be feeling happy we held through these drops.
I know it's a throw-away line, but the lack of news is because there's nothing yet to update on.
I would rather the company get their heads down and bring the project together professionally rather than try to passify an impatient group of shareholders (but for the record, I also find the wait is frustrating).
Infrastructure is being worked on right now, with the creation of trucking routes, as well as drilling to optimise the targets. These are not really RNS-worthy, but I do agree that they should offer more than just a few phtos in tweets.
We are limited in other construction as the facilities (crusher, processing etc) are on the BLM land, but the team are doing what they can on the patented ground.
On the finance front, I can imagine that getting the bond away has been more of a struggle than anticipated just a few months ago, but the repeated posting of "copper-future" articles does solidify the case for Empire, and indicates that the future price is up not down, and therefore providing a solid return to potential bondholders.
It should not be unexpected though that the delay is due to bond terms being negotiated, and the headline numbers could be higher than initially advised. But even at a few percentage points higher, Empire is still hugely profitable.
They could also be having to work on secondary funding if the bond has not been fully subscribed, but it has been advised that there is 12 months in which to get the Bond away (in which time copper should bounce, making for a more favourable investing environment), but there is also bank finance as an alternative or complementary source of funds.
I would also imagine there have been delays due to reworking the costs for the (B)FS, maybe factoring in replacing combustion-engine trucks for electric, sourcing the vehciles in times of chip shortages, getting certainty for the tramway etc.
The last few months have created many more moving parts to this project. This will then have a knock-on effect to the permitting, as the Plan of Operation needs the above items solidifying.
It is now a case trusting the reasons you invested in the first place. Empire is the primary target here, and the other drilling is just a bonus. We know all we need to know now about the Oxides, and we should allow the Board the time to arrange the right finance detail to progress us forward, and in turn reward us for our patience.
I don't expect the permit until next year. But finance should hopefully be in place well before then.
JIMO, anyway.
I don’t think funding will be delayed by the plan amendments, as the bond book build is underway. I’m hoping we get an update on the progress this week. Let’s hope it’s progressing well with a decent take up.
As for permitting, this is still a fluid situation. The Plan Of Operation should be updated shortly and submitted for approval (as a revision to the original plan).
Timelines for this are unclear and it depends on how much change or update there is ti the original submission. But the permitting process got a significant boost tonight with the US Senate passing the Inflation Reduction Bill. This has a number of provisions, including addressing the permitting process for energy infrastructure and mining projects, and restricting the litigation that can be taken out against the NEPA act. This could have significant benefit to us to help speed up the timeline to approval.
Just some of the benefits can be read here: https://www.politico.com/f/?id=00000182-5b22-de24-abe3-5b2210300000
Permit will happen when it happens. The original POO was detailed, so hopefully it’s just a minor revision to this once resubmitted. And if we do decide to process the gold in year one then all the better.
50p is a pretty pessimistic view, Sparky, considering where we have fallen from.
If we get finance in place the share price should be multiples of where we are now, as we are then only one hurdle away from unlocking Empire.
But the markets are unpredictable. By year end I’m hoping the recession risks will have calmed down and copper moving back upwards, and this should then, in sensible times, have seen us pushing £1. But whether it’s 50p or somewhere much further north, the real returns will be in the years ahead, not the months.
This isn’t just a Phoenix drop. Look across the whole industry, and even companies like Freeport McMoran, Antofagasta, BHP, and Southern Copper are all down 20-40%.
Admittedly our pressures are slightly different to theirs and the associated risk is higher, but time will be a healer for all.
Copper will reverse direction at some point, and until then we just need to ride it out. PXC has $9m in the bank, and while there is an increased burn right now as we continue work on infrastructure at Empire (truck routes, drill-testing etc), there is sufficient cash to see us through the next 18 months.
The Bonds don’t have to be completed right now, either. We can return to market at any point in the next year with a second tranche. Even taking $30m from the first round will provide us with a large safety net, and still allow the project to remain on (the loose) schedule.
Yes, there’s risk. We might not get any interest in the bonds right now at all. But we have time, and then it comes down to faith that the copper price will return to the $4 range. To me, 28p is bargain of the century.
Hi Bilko. I don't think there's any concern about operating during the current downturn.
The Company has plenty of cash in the bank, and if needed could ride out the storm until normal service resumes.
But I don't think they will need to. The Bond terms were looked at favourably by those that the company had discussions with prior to inception, and despite the market conditions changing somewhat, this is a long term investment in an in-demand product.
We don't need all the cash up front, and so can return to market with a further raise / Bond-2 next year. Just getting half the Bond away will enable us to keep the plans on schedule (permit notwithstanding).
PXC is not immune to inflation / redession, but we are well-placed to get through it. While some of us were dismayed at the extra shares issued at the last placing, the extra cash it brought in now seems like strategic genius.
Sit tight or buy more. That's the only choice I'm tussling with.
Thanks, Trek.
The timing of the bond issue hasn’t been ideal. 6 months ago we would have sailed through it, and 6 months further into the future would likely see inflation reduce and the rest of recession abate.
While short term it isn’t pretty, the HNWI and institutions that the company would have been speaking to hopefully take a longer term view than just next week.
This is a 10 year bond that could realistically pay 15% once operations begin. I can’t see there being no interest in that.
The permit is likely to come in early 2023, so we’ve got plenty of time to sort the finance. It would be good to get much of the infrastructure underway, even if we can’t start the facilities side on the patented land. But I believe we are in a bit of a Catch-22 situation right now. We need the finance in place to finalise the Plan of Operations, need the POO to complete the revision of the permit application (with final plan details), but need the permit to convince the market that this will happen, and therefore optimise the finance raise.
It’s not a unique problem to Phoenix, but the timing of the bond wasn’t optimal.
I’m still confident, and trust that the Board did their legwork and selling ahead of the bond terms being put in place. It’s a novel agreement, and one that would likely have been done through negotiation with the purchasing party, which could be why the base rate of 7.5% was increased to 8.5% (learned from the interview with MEJ). Either that, or he misspoke!
I’m sure we will get more clarity in the next few weeks.
Trek, what do you think is the likelihood of getting a full book build for the bonds?
For the upward copper-price believers there’s serious returns to be made on this bond. But has the recent downturn created a risk-off environment, and the PXC story is not yet real enough to buy into?
Would the bonds still complete if we only managed to raise $45-50m?
I’d respect your opinion on this one.
Cheers,
Stan.
There was a post on Telegram saying the company did have discussion with potential investors ahead of the bond structuring, so you’d like to think that the vast majority of it will be subscribed to. It wouldn’t surprise me if Martin Hughes directly, or Tosca Fund subscribe (although we’re unlikely to ever know).
A minimum return of 7.5% isn’t insignificant, and almost all of us here agree the copper price will see sensible levels again soon. The upside to the copper price / bond% is tasty if you believe in where it’s going.
We’re looking for a range of $60-80m. I’d be disappointed if we come away with less than $40-50m from the book build.
Todays drop was harsh and overdone. It might not be the bottom, but wherever it starts to bounce it should bounce big.