Member Info for Steve4077

>> Steve - Surely the cut-off in the conceptual open pit study is Cu Eq even if it does say Cu? For example, if there was 0.9% Cu but 0.25% Cu Eq, they wouldn't classify it as waste dirt to be dumped.

Copper equivalent seems to be used in three ways.

1) For the total tonnage, such as the new 1.1mt CuEq JORC, which has 922k tons copper and the other 180k tons in gold value converted to copper value.

2) For a combined grade. Same as above - the 0.22% is CuEq grade, which includes 0.18% copper with the other 0.04% coming from gold converted to copper.

3) For the cut-off. The 0.1% CuEq cut-off is for ore that contains a 'combined grade' of at least 0.1%. Only part of that, I estimate roughly 0.08%, is copper and the rest of gold converted to copper grade.

If we take the conceptual study as an example, that used 0.15% Cu cut-off - ore that contained at least 0.15% copper, plus some gold on top - so the CuEq cut-off for that model was higher.

So a 0.15% CuEq cut-off will include some ore that would not be included in a 0.15% Cu cut-off. I'm not saying that one is right and the other is wrong - just that they are not directly comparable.

@theiceberg. Thanks for the blog. Two quick comments.

1) The JORC comparison you posted was from the doc. However, yesterday I noticed the new JORC RNS used 0.15% CuEq cut-off, whereas the old one used 0.15% Cu, so my comparison was flawed. Given that the gold/silver accounts for almost twenty percent of the 'equivalent grade', a fairer comparison would be to the new 0.20% CuEq Cut-off, which is about 0.16% copper. That changes the comparison from 50% extra copper (as noted in your blog) to less than 15%.

2) You quoted a capex number for another mine at $800m and thought BR was somewhere between $500m and $1500m . I just wanted to point out the study was in AUD, not USD

Ben, you will probably see me very rarely after this week, although I have an emotional connection to XTR having been here so long and I will keep an eye on it. The last couple of days posting was more about defending against attacks on the numbers then any desire to spam the board. My goal here was to provide data to help people make informed decisions, but I am seemed to have got sucked into a more acrimonious debate.

However, I'm definitely not going to keep returning as some bitter de-ramper like Pops1980. In fact, I hope everyone does really well in XTR. If Ascot or Manica is better than I expect, I could even be back in, although the behaviour of people connected to the company has somewhat soured that possibility.

I plan to invest the money I removed from XTR and I believe in Colin's vision of copper being huge in the next few years, so I am looking for copper-related investments and other 'green' commodities. I've learned a hard lesson about promises vs reality, which will make do a lot more analysis before I go in, rather than as a reason to exit.

I'll probably post a little in the next day or two, just in response to questions, and after that I will be an occasional visitor only. Good luck with your future investments.

Yes, plainly its my fault the company is in such a state. The share price was 3.45p when the RNS was released, down from 7p in April, already a 50% drop. The share price was already down to 2.5p (a 25%+ drop since the RNS) before I posted my comments on Monday morning. It hovered around 2.15p last night. Then it went down again today to about 2p after Colin's interview in which he said a third party was needed to determine if BR is economic.

Perhaps the person highlighting the situation isn't the one to blame for it.

OK, I think we need to agree to disagree about your identify then, as you use the same language and phrasing, similar attacks, etc. and even third parties realised straightaway who you were. By all means continue posting, but you are now green boxed.

Kevin, maybe when you create new accounts to attack me and try to distort the message, perhaps use different language than you use in your threatening PMs and on the forums. Only you have talked about "trashing the share price" and "escalation".

Perhaps you could try using data or reasonable arguments, rather than attempts at intimidation or threats of legal action on Telegram, and now attempts to muddy the water here with spurious unrelated numbers.

In fact, I really hope you are trolling and those were not serious comments about the calculations.

Is that you, Kevin? :)

Yes, I did post that on 8th November. Note the line about "Once news drops and sparks wider interest (assuming it is generally in line with expectations),"

The 23rd November RNS provided new data that was plainly NOT in line with expectations. I'm an analyst. If the expected data changes, then my conclusions change too.

OK, I am giving up on this for now - I don't think the recent posters and I have a common frame of reference :)

Lets see what theiceberg comes up with, as he us a neutral party. I think we can agree, regardless of current beliefs, that we are all eager to see the new updated model.

I am sorry, but what are you talking about? In which line of my post do I:
" Multiply the 922 by 0.08% (cut-off/minimum grade) = 922*0.0008"

Given your posting history from yesterday, I suspect this is actually an attempt to confuse the issue, rather than an an inability to read or do maths.

Hi Steve - I want to split it out to allow a fair comparison with the original JORC, which has been my main focus in the last couple of days. I think the modelling debate has distracted a lot from that point. If my JORC calcs are correct and there is only 10-15% extra copper compared to the original JORC, then any model is not going to be far off the XTR conceptual model for last year, especially as the additional copper is lower grade. Maybe I should take the XTR numbers from July 2021 and convert the original JORC into CuEq - that might be a clearer approach.

Agree on the football and beer :)

>> Steve, I think your calculation is wrong because you multiply the copper by the minimum grade cut-off (the 0.1%) and then after that you ALSO multiply the copper again by the maximum amount (0.22% from RNS or 0.18% in your calc).

I was trying to avoid posting again today, but this doesn't seem to want to die.

I am not multiplying by 0.1% anywhere - I'll put the calcs in several lines so you can tell me which one is wrong

Firstly, here is the RNS
https://www.lse.co.uk/rns/XTR/racecourse-prospect-updated-mineral-resource-k5dfrxajgs0ls13.html

1) Here are the numbers in the RNS for the 0.1 CuEq line
Cut-off: 0.10 CuEQ
Copper Grade: 0.18% Cu
Gold Grade: 0.05 g/t
Silver Grade: 0.72 g/t
Copper Equivalent Grade: 0.22%
Tonnage 512mt
Contained CuEq 1.1mt

Just in case you are not aware, all the cut-off means is that ore below that grade is ignored - it is not part of the calculation in any other way

2) 512mt x 0.18% Copper Grade = 922k tons of copper

3) 512mt x 0.05 g/t = 25.6m g = 903k oz of gold.

4) 512mt x 0.72 g/t = 369m g = 13m oz of silver.

The RNS states that copper is $8800, Gold is $1800 and Silver is $24.

5) Therefore 903k ounces of gold is worth 184k tons of copper and 13m oz of silver is worth 1477 tons of copper, which gives us total value equal to 1.1m tons of copper, also known as 'copper equivalent metal'

Taking two numbers provided by the company and multiplying or dividing them is not inventing new numbers - its called maths. If the company says it has 512mt at 0.18% copper, then it is saying there is 922k tons of copper. Which part of that is invented?

"922k tons at 0.08% Cu" ?? 922k tons at 0.08% Cu is less than 74k tons of Cu. Where in the XTR RNS did you see those numbers?

The RNS had a table that breaks down the resource by cut-off and grade. The 1.1m tons is for 512mt at a cut-off of 0.1% CuEq and includes both copper and gold. The copper grade is 0.18% so 512mt x 0.18% = 922k tons of copper. The gold grade is 0.05 g/t. Converting that into 'copper equivalent tonnage' accounts for the other 178k tons. The 0.01% CuEq cut-off is a combination of copper and gold grades, so with gold accounting for 18%, the copper grade cut-off is approximately 0.082%. Hence, 922k tons of copper at a 0.08% cut-off.

@theiceberg If you are looking at the numbers, please check the JORC calculations too. I think that is a lot more important at this stage than the NPV models. Bear in mind that the new JORC uses CuEq cut-off and the old one is using Cu cut-off. The best comparison is from the 0.15% cut-off version of the original JORC in the conceptual study RNS from July 26th 2021.

I'll make this one short post in response. I'm going to restrict myself to replying to questions from now on as I have made my case and don't want to spam the board.

There was not even a single attempt to answer any of the specific points raised in my doc with actual numbers. Instead: "We don't know - its all in independent hands to tell us if we actually have anything". Very different than previous statements. I think that is an pretty strong acknowledgement that previous positive statements were not based on knowledge - because they are waiting for an independent source to tell them its economic.

No acceptance that JORCs should be compared like for like to inform investors about added tonnage, or even acknowledgement of that main point. Twice said there was 1.1m tons of copper, when there is actually 922k tons at 0.08% Cu according to the XTR RNS.

Colin only talked about independent modelling, which is irrelevant if they only have about 10%-15% more copper than the original JORC at the same cut-off. Also I don't need access to any modelling data to state the JORC is completely misrepresented. Its all in the published RNS and that is the massive underlying problem that he completely ignored - ask yourself why?

I though the 'knock on the door' comment was unprofessional. Also, my comments on telegram have now been been deleted and Kevin Hornsby is saying "This will probably be escalated by XTR". Can't debate the facts, so just try to bully the messenger. That escalation should be interesting though, especially if they have to refute the data or we start analyzing everything Colin has said publicly.

>> I ran his numbers (the basic ones on old and new JORC) and found the numbers check out on the 0.135 Cu%. I don't really understand how that could be included since the scenario had cut-off of 0.15%.

Yes, that had me stumped for a while. The answer is that the new JORC uses a CuEq cut-off, not Cu. Given the Gold is about 18% of the CuEq, that means the actual cut-off was about 0.123%, which explains why the addition was below 0.15% Cu. A fairer comparison is the new 0.2% CuEq cut-off, which is about a 0.162% Cu cut-off and compare that to the original 0.15% Cu cut-off. However, that makes things considerably worse than my original post.

>> I'm not well disposed to debating with you but I'll just point out that you're wrong. The original 71Mt JORC'd resource was a net (after recoveries) 410kt of copper plus 229k ozs of gold - read Scenario 10 in the July 2021 RNS.

Yes, that is the scenario I referenced in my doc. Except it wasn't based on the 71mt at 0.3% cu cut-off. It was based on 162mt at 0.15% cut-off. Just read the RNS.
https://www.lse.co.uk/rns/XTR/bushranger-conceptual-open-pit-mining-study-c05hq78ws9qagfq.html

The recent RNS referenced 191mt, an increase of less than 30mt and only 45k tons more copper, with 0.20 CuEQ (not Cu). The Cu cut-off for that resource is about 0.162% once you remove the gold equivalent. It's effectively the same resource from the conceptual study last year with about 10% more copper. It was just presented in a way that disguised that.

Plenty of attacking the messenger today, rather than just checking the numbers. Every single criticism is about open pit modelling, or something similar. As I have said here and on Telegram, that is just a side-issue. The real problem is that the drilling didn't add much in the way of extra tonnage. It doesn't matter how good the modeling is if we don't have enough extra ore to change the conclusions of the XTR conceptual study. No one has pointed out any flaws in the JORC comparison, which the real underlying problem.

In fact, I am going to point out a flaw I found earlier while answering a question on Telegram. The new JORC is based on a 'copper equivalent grade' cut-off, not a copper grade cut-off like the original JORC. As about 18% of the 'copper equivalent grade' is provided by the gold, that makes the new JORC considerably worse than even I thought. For example, the 1.1m tons of 'copper equivalent metal' at a 'copper equivalent grade' of 0.22% with a 0.1% 'copper equivalent cut-off' is actually about a 0.082% copper cut-off supported by 0.05 g/t gold.

The comparison I did with the old and new JORC at 0.15% Cu was therefore flawed, because the new JORC is actually using not much more than 0.12% Cu cut-off and hoping no one will notice the Eq. In fact, the 0.2% CuEq cut-off in the new JORC (about 0.162% Cu) is the closest comparison to the 0.15% original JORC.

Original JORC was 470k tons of copper graded 0.29% from 162mt at 0.15% cu cut-off. Its now 515k tons of copper at 0.27% from 191mt at 0.162% cu cut-off. If they look similar, its because they are. From these numbers it looks like the entire drilling campaign added only a small amount to the deposit.

If this all sounds like fantasy, then consider how it has been presented.
A) 0.30% copper cut-off using contained copper tonnage, with copper and gold grades listed separately
B) 0.1% copper equivalent cut-off (really 0.08% cu), using contained 'copper equivalent' tonnage and using 'copper equivalent' grade.

Its pretty much the same deposit with only minor additions presented in two completely different ways.

Now you can attack the messenger, or you can prove me wrong by explaining the flaws in those numbers (which are straight out of the RNS - no mining skills needed, just basic math), or maybe the best option would be to ask XTR to provide a side-by-side comparison of the new vs original JORC using the same parameters in both cases. That would end the debate immediately and should be easy to provide.

>> Steve - In your calculation you make the assumption that "operational expenditure (opex) is pro-rata for the ore tonnage mined". But you can't assume that. For starters, all the new ore that has been discovered within that boundaries of that first conceptual open pit, is going to be recovered without any increase in the cost of digging the hole isn't it?

When you say "All that new ore" - most of it was in the original conceptual study, which was 470,000 tons at 0.29%, using a 0.15% cut-off. At the same cut-off, the new JORC has only added an extra 235,000 tons at 0.135%. The original study did not include any scenarios below 0.15% except at 0% cut-off, so we don't know how much of the 'new' ore between 0.15% and 0.1% cut-off was already in the original JORC and therefore the original model.

The new JORC also covers a much larger area than the old one (see link) and we also know that for 0.15% cut-off comparison, the amount of ore to be processed will be double (336mt vs 162mt).
https://www.rns-pdf.londonstockexchange.com/rns/2677H_1-2022-11-22.pdf

I'm not pretending to be an expert on open pit design. I have presented all my numbers and my assumptions. The key for me is the JORC comparison and that is just reading the RNS with no expertise needed beyond basic maths. If you want to go into the detail of the high level model and believe my opex assumptions are substantially incorrect, or maybe it will take less than a year to build the mine and reach full production, then plug your own numbers into the model and see what works. The alternative is to trust what is being said in interviews.

As you say though, we won't know for certain until we see the official model.