Member Info for StarBright

Deserves its own thread.

https://www.londonstockexchange.com/news-article/GCAT/exploration-update/15165965

Caracal Gold plc, the gold producer with operations in East Africa, is pleased to announce an update on its ongoing exploration activities at its producing Kilimapesa Gold Mining and Processing Operations in Kenya, where it is advancing an initial shallow trenching programme on high priority targets on the newly targeted Southern Mineralized Zone ahead of the commencement of its planned RC and diamond drilling programmes later in the year.

HIGHLIGHTS

§ Peak trench sample result of 40m at 4.85g/t gold including 7m at 7.6g/t from trench CART 0003

§ Individual samples of 1m at 15.08g/t; 1m at 14.09g/t and 1m at 12.89g/t in trench CART 0003

§ Individual samples of 1m at 5.1g/t gold and 1m at 7.93g/t gold in trench CART 0001

§ Individual sample of 1m at 8.24g/t gold in trench CART 0002

§ Initial trench lengths have been extended as intersections of gold mineralisation exceeded expectations and remains open in all directions

§ Trenching work is continuing and is now planned to expose the southern contact of mineralisation in the six trenches across an initial strike length of 125m out of an approximate 7km of potential strike length

§ Bulk sampling from the first trenches will now also be excavated and used for further testwork and analysis

Robbie McCrae, CEO of Caracal, said, "Our focus at Caracal is on rapidly delivering on our strategy of becoming a +50,000oz p.a. producer and building a JORC compliant resource base of +3Moz within the next 12-18 months. Whilst we will continue to increase production at our Kilimapesa Gold Mining and Processing Operations, in parallel with this we will be focused on our aggressive acquisition strategy and on our exploration activities on our mining and prospecting licenses at Kilimapesa where the potential to increase our resource base is significant.

"Whilst early days, these shallow and high grade trenching results, particularly the 40m running at almost 5g/t of gold, provide us with very good indication that, what we potentially have at the newly targeted Southern Mineralized Zone, is a very wide and extensive gold mineralised zone that extends for several kilometres on our prospecting license and is open at depth. It is very encouraging that this Southern Mineralized Zone is in addition to, and south of the mineralisation and JORC compliant resource of over 671,400ozs that we have already defined and is being mined at Kilimapesa.

"We now look forward to completing this initial trenching work and the follow up bulk sampling programme and to include this Southern Mineralized Zone in our surface RC and diamond drilling programmes which will commence as soon as the recently acquired drill rigs arrive on site later this quarter."

....

https://www.rns-pdf.londonstockexchange.com/rns/4307O_1-2021-10-7.pdf

Cora Gold Limited, the West African focused gold company, is pleased to announce the twelfth set of drill results from its
largest ever +40,000m drill campaign at its Sanankoro Gold Project (‘Sanankoro’ or ‘the Project’) in Southern Mali. The
Company focussed the drill campaign on both resource growth as well as infill drilling to convert existing Inferred
resources to Indicated. The drill results have continued to be extremely encouraging throughout the campaign with highgrade results in generally shallow oxide ore.
HIGHLIGHTS
Zone B1
• 73m @ 2.24 g/t Au from 83m in hole SC0555
• 22m @ 3.73 g/t Au from 117m in SC0556
• 2m @ 17.9 g/t Au from 39m in SC0553 and
• 23m @ 1.62 g/t Au from 60m in SC0553
Zone A
• 34m @ 3.06 g/t Au from 61m in hole SC0521
• 59m @ 1.28 g/t Au from 60m in hole SC0523
• 2m @ 34.85 g/t Au from 81m in hole SC0519
• 36m @ 1.65 g/t Au from 66m in hole SC0543
• 30m @ 1.85 g/t Au from 96m in hole SC0544
• Results show both good infill continuity and extensions along strike and at depth beyond existing pit shells
Bert Monro, CEO of Cora, commented, “To have two more holes of over 100 gramme metres, taking the total number of
+100 gramme metre holes to 13 in this drill campaign, is extremely exciting and also very encouraging as we approach an
updated mineral resource estimate (‘MRE’). The results continue to show good consistency of widths and grades in oxide
ore which offers us further encouragement as we look towards the DFS which is already underway.
“The RC drill campaign is now complete and we will expect the final assay results over the coming weeks in advance of an
updated MRE. We look forward to updating shareholders in the near future with further news.”

Thanks for sharing. I really enjoy long-term investing success stories like yours.

Try reading it aloud over this http://bitly.ws/h6Ye

Can I pose a question to our resident GGP & mining experts?

I am interested to get a feel for the potential future importance of Havieron to Newcrest.

The large numbers for NCM come from Lihir, Cadia & Telfer.
*Using $1800 for POG, Production and AISC's from NCM FY22 guidance at mid-points:
Lihir resources are shown as approx 40moz, with annual production at 750koz, AISC at $1,000/oz = $600m pa gross
Cadia, 35moz with annual production 575koz, AISC at -$35/oz = $1,050m pa gross
Telfer, 3moz with annual production 415koz, AISC at $640/oz = $480m pa gross
Total (as an OoM check vs 2021FY) is 1,740koz & $2,130m vs 2,093koz & who-knows, but EBITDA $2,443m. Close enough.

For Havieron, estimates here suggest that 20-30moz is possible in terms of reserves.

But what about annual production? Do we have estimates for that?
In simple "order of magnitude" terms, is it too simplistic to assume a 25 year mine life, so roughly 1000koz annually..?
If not, what would be a better ball-park annual production estimate and why?
How about AISC?

Would anyone like to take a WAG at completing the expression below replacing XXX, YYY and ZZZ with potential figures?

Havieron, 25moz(?) with annual production XXXkoz, AISC at $YYY/oz = $ZZZ gross

JFF obviously...!

The two 1.1m trades could equally be:

"NCM stake-building...!" or
"II's positioning ahead of the PFS..!" or
"US traders piling in ahead of the NYSE open..!" or
"Hedge-fund algos desperately trying to catch up..!" or
"GDXJ adding again..!"

or any of the other edge-case hypotheticals routinely asserted here as facts, without a shred of supporting evidence.

Perhaps these two trades are shorts closing. Absent some evidence though we know only that two trades of 1.1m each at 18.2p were reported at 13:49 today. Anything beyond that is supposition and guesswork.

Do you have some evidence EnricoPallazzo...?

How do you know these are shorts closing?

Good to see some positive price action after a difficult stretch. Like watching a good batsman score fluently again after an out-of-form spell including a couple of ducks.

But some of the ramping/rhetoric here is bordering on ridiculous. At just under 18p we're back to where we were in the middle of last month. We'll see if there are any LIS trades later, but £4.8m traded across 900+ trades thus far is just £5k average size. No-one is "burning" or "desperate", no-one has "lost control" and the market looks perfectly orderly to me. The spread has narrowed and RSP's are doing good two-way business. I don't see anything in the trading today that isn't fully explainable by PI's buying into anticipated positive new flow.

We can all enjoy the rise, but investors always benefit from retaining a sense of perspective. And taking some of the posts here today with a pinch of salt...

I think it is good comms management. It's an important announcement, and they have given everyone just the right amount of notice. V thoughtful and professional in my view.

Thanks. I think the Telfer angle is key. It's very hard for companies to "let go" of operations that have built and sustained the careers of many senior execs over the years. All of whom are likely to have continuing emotional and personal relationships with such projects. Decision making is often biased through this, even if that is never overtly discussed. The point on phasing of production commencement is good too.

Three Pre-Feasibility Studies at the same point in time. If all three are positive, do NCM have the resources (capital, management, risk appetite, ambition etc) to take all three forward? Or will they have to make a prioritisation decision of some shape? Have NCM said anything about this publicly?

The big parcels (10.75m, 6.25m etc) going through around 1.6p in the last week or so are likely to have been sales by these guys and other early investors, not "Orca piling in" as per the promoted narrative. This ahem.. liquidity... has been mopped up by many small buys from "retail". Question now is whether escape velocity has been attained such that the retail buying continues and the SP rises in the absence of the downward drag of the sells. Looks finely balanced to me, although rocket fuel might be supplied through further company announcements - particularly if production targets etc are met or better still exceeded. We will see.

I am interested to understand the operational role of Orca in this. I don't see anything to suggest that they are strategic investors with sticky hands and long time horizons. More likely they have played a particular role in the creation of the ahem... liquidity... and will depart stage left soon. I would be very happy to be wrong on this, we'll know soon enough.

Big sellers? I must have missed you mentioning that before...

In terms of primary evidence, here's the most recent mention I have found.

Sandeep Biswas said (on Sep 15th):

“Newcrest is in the enviable position of having a current reserve life of around 25 years. This is based on an estimated 49m oz of ore reserves as of 31 December 2020 and, key, it’s before any ore reserves from Red Chris or Havieron. We’ll have more to say on that when we release the outcomes of the pre-feasibility studies later this month, and there is a high likelihood that ore reserves will grow further over time with more drilling.”

The definitional shades of grey between "Pre-Feasibility-Study", "Feasibility-Study", "Final-Feasibility-Study" and "Bankable-Feasibility-Study" can be subtle. My former colleague (a mining specialist PM not a generalist like me) says that the critical difference is whether a study is bankable or not. His definition of a bankable study would comprise a settled mining plan with definitive details supported by costings based on actual bids not estimates etc.

I notice that some frequent posters here refer to the imminently anticipated (2H21) study as bankable, but some say pre-feasibility.

Which is it?

I think we have as much clarity as we ever will.

To go back to the original premise - my reason for engaging in this extended discussion! - my conclusion is that it is correct to use 30% (not 25%) when contemplating GGP's economic interest in Havieron. GGP will either own 30% (if NCM do not exercise their option) or 25% PLUS the market value of the optioned 5%. The timing/sequencing questions will be wrinkles only.

If you want to discuss valuation (based on either the 4.2m oz stated by the company or the 20m+ oz predicted here, or any other number..!) then it is appropriate to model GGP's interest at 30%.

Thank you TT.

The summary on the website page you linked is blank by "Timeframe". My reading is that NMC's option on the additional 5% is open-ended, the 12m exercisable period detailed originally looks to have been dropped. Interesting! An open-ended option is significantly more valuable than one with a limited duration.

I agree on your sequencing point also.

The later (30 Nov) RNS appears not to comment on timing/sequencing, saying only that: “Newcrest retains its option to acquire an additional 5% interest at fair market value (cumulative interests 75% Newcrest; 25% Greatland).”

No details (as far as I can see) on when the NCM option is granted, on any conditions precedent, or if/when it expires. These points might have been covered in the agreement itself of course, but it would be odd to leave them out of the updated RNS as they were detailed in the original.

Is it possible that these terms were dropped entirely, so NCM already hold the option and there is no time limit upon its exercise?

Thank you notrader. I will take a look and revise my post/view if necessary.

My take on timings.

From the March '19 RNS:
"(Stage 4 Farm-in) if Newcrest (and/or its related bodies corporate) completes and delivers, or incurs no less than US$20 million by way of Expenditure toward the carrying out of, a Feasibility Study for a project on the Tenement Blocks (the Stage 4 Commitment) within a period of 24 months from the date following satisfaction of the Stage 3 Commitment (the Stage 4 Period), Newcrest will have the right, but not the obligation, for it or its related body corporate nominee to acquire an additional 10% Farm-in Interest (the Stage 4 Interest) for no additional consideration; and

(Additional Farm-in) within a period of 12 months from the date following satisfaction of the Stage 4 Commitment (Additional Period), Newcrest shall have an option exercisable by written notice to the Company for it or its related body corporate nominee to acquire an additional 5% Farm-in Interest at fair market value."

Completion of stage 4 requires the delivery of the Pre-Feasibility Study *OR* $20m of expenditure on the study. Once stage 4 is complete, NCM have 12 months to exercise their option over the additional 5%.

If NCM have spent the $20m on the study then this 12-month period may have already started, regardless of the delivery (let alone publication...) of the Pre-Feasibility Study.

If work on the Pre-Feasibility Study has cost less than $20m, then the 12-month period will start when the study is delivered.

Yes, lebugue-addick. There is a difference between knowing instinctively whether an assertion like “..Blackrock just bought 10% of Newcrest…” is credible, and having to look it up to check as you did. Many people refer to this as expertise.