Member Info for Steve4077

>> LTHs have seen this type of drop before without any external reasons - and we know why it happened.

Yes, but last time it happened was there the same level of massive economic disruption? Was copper down 30%, was the whole index down 30%, were all the other small-cap miners crashing? Was there inflation, high energy prices, etc.?

Yes, you can't be *100%* certain that the world situation is responsible, but the alterative explanation seems considerably less likely. What you are saying in effect is that while the world economy is crashing down all around us and everyone else is suffering huge share price falls, we would have been fine if only CB had better communication skills.

>> Steve... do you know what the current strategy is ?

Yes, I think I have a fairly reasonable idea based on the information on the many RNS and the recent annual report. I don't think it is spelled out very clearly, as the comms are not great, but its not too difficult to make inferences. Check my posting history. What is happening now seems to be fairly in line with what I predicted would happen based on the information available. Have patience, delay the deal, do some more drilling using the income from Manica, prove up more resource, wait for market conditions to improve, get a good deal. If I am wrong, we should find out at the AGM.

What do you think the strategy should be?

BTW I am not debating that CB has mismanaged expectations - I think it is fair to say he has. However, you have to be careful of the classic trap of correlation rather than causation. Just because Event B happens after Event A, it doesn't mean that Event B is caused by Event A.

For example, there is a strong correlation between ice cream sales and swimming pool deaths (seriously) but it doesn't mean that eating ice cream makes you more likely to drown. It's because hot weather is the cause of both.

In this case, it seems a lot more likely that world events is the cause of a general fall in small cap equities and has significantly disrupted XTR plans. I agree that we need a lot more information on how the latter has changed and we have the ideal opportunity in less than three weeks.

I think the evidence that world events is playing a significant part is pretty overwhelming. Just look at other small-cap mining stocks. Many of them are down similar amounts during the same period. The entire stock market in which XTR is traded is down 30%. The Copper price is down 30%. The world is in recession. Energy prices are sky high. A major war in Europe. Highest inflation in the West since the 1980s

Do you really believe that all of the above is NOT having a massive impact on XTR? Or that CB should NOT adjust his strategy in light of those events?

I know people are getting angry, frustrated or worried, due to the share price or bad comms/ expectation management or world events that impact market conditions and XTR's room for manoeuvre.

I'm comfortable with my investment despite that. As Andy said, there is no issue with the quality of assets. Obviously I wish I had bought lower, but I made decisions based on what I knew at the time. I also wish I had money available now to take advantage of the share price, but I can't control that either.

Perhaps I could offer some extremely hard-earned advice from my professional poker-playing days. The only thing to focus on is making good decisions. Forget about outcomes, because they are outside your control. It sounds simple but it takes a long time to really get into that mindset. In poker, you can't control the cards, so there is no point getting upset if you lose. Your decision was correct - you were just unlucky.

I've lost a £5000 pot as an 800-1 favourite when the money went in. I've lost a £3000 pot when my opponent misread his hand, called by mistake and then got the perfect two cards he needed to win. I've taken multiple terrible beats in succession and lost £10k on the night, despite being ahead every time the money went in. I have been unlucky thousands of times, but I still finished ahead in the long term. Sometimes I was lucky too, but mainly its because if you keep making good decisions, then the money usually ends up with you.

I learned from experience to congratulate my opponent and move to the next hand. If I got upset (what poker players call 'going on tilt') about things I couldn't control, then I made decisions based on emotion rather than logic, which made the situation worse. I would cause tension at the table, which is bad for me because happy casual players stay longer and play more carelessly. If the table gets fractious, they leave. In summary, getting upset about being unlucky or looking back with 20/20 hindsight, or taking my frustrations out on others were not only a waste of energy, but actively damaged my chances of winning in the future.

This experience has helped a huge amount with investing. I am happy with my purchase decisions based on the information I had at the time. I didn't know there would be a major European war, or that China would go back into lockdown, or there would be a huge spike in energy prices, or global inflation, etc. so there is zero benefit to regetting choices I made before any of that happened. I didn't forsee the stock dropping 50% from the recent highs on low volumes, but then so have many other mining stocks. AIM as a whole is down over 30% in the same period. There is nothing I can about that except make good decisions based on the situation right now. Worrying about the past or ranting about the present is pointless. It doesn't help me.

I'll finish with a favourite quote from Macbeth.

"Things without all remedy should be without regard: what's done, is done"

Firstly, its possible that AA could simply make an offer at any time, without XTR triggering it. There would be no pre-agreed process in that case, such as Valmin, and the parties would work out something suitable between them, with either able to walk away.

If there is a phase 3 drilling program (note the phrasing "the company intend to plan a Phase Three drilling programme" - not "the company will undertake a Phase Three drilling programme"), then I imagine that will require several months and I couldn't see a sale happening until Q1/Q2 2023, by which time the economic situation and the copper price may have recovered, plus we should have steady income from Manica.

Given the wording, I suppose its possible that talking of 'phase 3' is a device to put pressure on AA to make an early offer outside of the buyback terms, because Colin may want to generate a deal without going through Valmin for some reason, but I think that is a lot less likely then an actual phase 3, because for reasons already stated many times, it makes a lot of sense to do more drilling at the moment.

(repost from Telegram)

Seems to be a lot of unhappy shareholders, but not sure why, Seems to be more impatience than anything else. Since CB made his prediction on model release time, etc, we have had the largest European war in 75 years, a global recession, high inflation, a global food crisis, crashing commodity prices, etc. The whole AIM index is down 40%+.

I can't understand why shareholders want Colin to just ignore all that and press on as if nothing had happened. Reading CB's comments on BZT, he plainly thinks this is a terrible market and good news is wasted.

We have income, which puts us in a great position because we can choose to be patient and wait for the market to improve before declaring a resource. We have a lot more drilling results, including positive results to the south of Ascot. Finally, if we decide to wait, we can spend that income on building up the resource while we wait.

What do people think Colin should do instead? Declare a resource now and go to AA in the middle of a recession with low copper prices?

On the BZT telegram group this morning, a summary of a call with Colin was posted. A couple of quotes relevant for us:

"In short, the market as we know is in bad shape and any good news wouldn’t move the sp notably. Finance that was on offer previously is now difficult to secure. Because the sp is low it’s difficult to raise."

"Rns worthy news to come but in honesty it’s not going to budge the sp until the market recovers"

That tells us a couple of things. Firstly how fortunate we are to have an income at the moment, which puts us in a far better position than most explorers. Second, Colin knows that 'good news' isn't really helping the share price and won't until the market recovers.

You need some assumptions to see how that affects XTR, but given our income and lack of pressure on finances, it means we can choose to be patient and wait for the market to recover before we issue the 'good news', whether that is FB or BR. As I mentioned a few times, while we are delaying/waiting, we might as well drill and improve the eventual payout.

OK, I am going to cease debating at this point. I have spent a lot of time on large-scale (multi-billion) M&As and I cannot believe AA's legal team will have created a situation in which the future negotiation advantage lies with the micro-cap partner (or if they did, they should be fired), but if the majority of the forum wants to believe that I am not going to waste any more energy on the topic. Lets see if we can get some more clarity at the AGM and resume the discussion after that.

I think I am in the minority, but I believe as soon as XTR announce they have 2mt (which would have to RNS as it will plainly have a 'material effect' on the share price), then AA have the option to activate the buy-back clause.

Firstly, on the video Colin stated "If Anglo write to us and say they want to exercise their option" - that sounds like Anglo have the decision on whether to activate the buy-back.

Secondly, I cannot see any scenario where the legal team at Anglo create a contract with a buy-back clause with a clear trigger without also giving Anglo the option to react to that trigger. Otherwise, Anglo would create a situation where they can only watch while XTR makes it more and more expensive for them. If that was the case, there would be no point stating an amount in the first place.

'Ultimately' in this context seems to be used in the sense of 'at some point in the future', rather than 'the last time the resource is updated' (because how can anyone know the latter). Its just badly written.

On the video from the 'Evening with Colin Bird', Colin states: "If Anglo write to us and say they want to exercise their option and this is the value they estimate, we've got five days to accept that. If we don't accept it, we have to go to expert opinion. The expert has 60 days to say what he thinks the value is using the Valmin method, which includes a DCF model, and Enterprise Value and looks at similar sales in the last five years."

Also "If we make a decision to mine, Anglo have 10 days to make a decision on whether to trigger the same process"

I'm paraphrasing a little to remove repetition and extraneous content, but I've left the key parts verbatim. Even so, given the level of confusion and uncertainty, I agree this is a key question for the AGM

BTW - we should definitely seek clarification on the exact conditions and process for the AA buyback at this year's AGM.

Colin made it very clear at the 'Evening with Colin Bird' last year that as soon as we declare 2mt, Anglo have only only a few days to decide whether to activate the buyback or forgo the option. This is on video.

Here is the text from the relevant RNS:

Under the terms the Bushranger Acquisition agreement, if a deposit of greater than 2 million tons of contained Cu equivalent (e.g. 450Mt @ 0.45% Cu equivalent) is ultimately identified, Anglo may buy-back 80% of the Racecourse deposit at fair market value as determined by an Independent Expert in accordance with the JORC and Valmin Code. Anglo and ProspectOre would then provide funding pro-rata to their interests, save that ProspectOre may decide not to provide its share of funding and be diluted, ultimately retaining a 0.75% net smelter royalty (NSR). If a "Decision to Mine" is taken by ProspectOre prior to the identification of 2 million tons of contained Cu equivalent, Anglo also have an opportunity to exercise the buy-back. Anglo have a once-only opportunity to exercise the 80% buy-back whether the opportunity comes through the discovery of 2 million tons of contained Cu equivalent or a decision to mine.
https://www.lse.co.uk/rns/XTR/bushranger-copper-gold-project-australia-o7u71uhdwbdy9b9.html

Note the phrase "Anglo have a once-only opportunity to exercise the 80% buy-back"

I would rather rely on an RNS supported by Colin's public statement on video, rather than a theory which doesn't seem to be supported by any evidence beyond a recollection of something Colin said a year ago.

I agree that copper will go up in the long run, but there is a huge correlation between current prices and copper futures - currently less than 1% difference between now and December 2025
https://www.lme.com/en/metals/non-ferrous/lme-copper#Trading+day+summary

There is no way that Anglo would accept (for example), a copper price higher than both the current price and the projected December 2025 price. However, as I have said before on here, if someone wants to prove me wrong, just point me to a mine sale that assumed a higher copper price than both current and future projected prices.

The connection between NPV and copper price isn't linear. A 20-25% increase in price could double NPV, so I would rather wait until the copper price is recovered and we are in a better negotiating position. I don't see a downside to doing that, as a relatively short wait could mean a far higher sale price.

If we do have 2m+, I really hope Colin doesn't announce that and trigger the buyback in the middle of a recession with low copper prices. That would not be a good idea.

Although 1.9m tons would be fine, along with a plan for further drilling - or maybe 1.5m+ so it doesn't look too obvious :)

The detail of the agreement is probably a good question for the AGM.

>> There is without a doubt huge value to be added from Ascot and would be absolutely irresponsible, even negligent of the BOD not to proceed with further exploratory work if it can take the project continually further up the value curve, particularly with the implications the gold will have on the financial model. Especially now with meaningful income to fully fund any necessary work.

Yes, agree with this conclusion. Also we probably need to wait for the market to improve, or at least the mining sector, before beginning the sales process, so we might as well drill rather than sit on our hands. The income means we can progress a lot further than other similar cap exploration companies, who will be reluctant to raise in the current market.

Not just BZT, but AFP and Kendrick. 9.30am, 11am and 1pm on 23rd August.

Looks like Biden is going to get his climate bill passed. Good for copper!

"The bill aims to tackle global warming by using billions of dollars in tax incentives to ramp up wind, solar, geothermal, battery and other clean energy industries over the next decade. "
https://www.nytimes.com/2022/07/28/climate/climate-change-deal-manchin.html

>> can’t understand the market sentiment.

99%+ of investors will not have researched XTR, so won't know about the gold. Its not just about having a good story - you need people to find out about it.

I discovered XTR because I check the LSE RNS list most days for the mining sector and read any that sound interesting. You need investors to not only do that, but then have enough interest to do the research necessary to understand what we have - or have a forum that will pique their interest if they start reading. If I see intelligent debate on a stock forum, I am interested because it means smart people are invested in the stock. A forum with a high noise-to-signal ratio would probably deflect interest from more casual potential investors.

The company can also do PR - interviews or presentations and try to them noticed, but there are so many companies doing that, you need to stand out in some way to even get someone to read or listen. Twitter can help too, if people with a lot of followers become interested, they will spread the word.

Its one reason I am not too bothered at the current share price meanderings. At some point, the story will be big enough to spread by itself as investors become excited. In the meantime, I just need to have faith in my own research plus patience in very difficult market conditions.