Member Info for Steve4077

In terms of the sale, it may make sense to spin off the non-BR assets into a new company with an appropriate market cap. XTR shareholders would then receive a combination of AA shares, a special dividend and spin-off shares. That way you avoid a lot of post-sale price volatility in XTR.

As to the process, one thing that I haven't figured out is how the 'having 2m' works in practice. It might seem obvious that a JORC would be the trigger but, given the implications of the buyout, if XTR knows they have 2mt, which they will know long before a JORC is published, then that is market sensitive information they would have to publish. They may not have an option to hold that information back,

The other question is the amount of time that AA can wait. CB mentioned this was only a few days in the 'Evening with Colin Bird', but that has never appeared in an RNS or an interview.

Maybe the best approach is CB talking to AA now about what happens when 2mt is hit, or the strategy in more general terms - perhaps an agreed amount plus future Ascot, so that a deal can be announced without ever triggering the 'buyout' process. That would give more flexibility to both sides, rather than forcing them down a pre-determined route.

Grade in absolute terms is irrelevant. Its the different between the value of the copper and the cost to extract it. There are plenty of higher grade deposits in South America, halfway up a mountain in the middle of the Atacama desert, but the cost of infrastructure and extraction is so high that the deposits are uneconomic and the political risks make it even worse.

For Bushranger, you can just dig a large hole in an easily accessible area with existing infrastructure in a great jurisdiction, within 150km of Sydney. Because the capital and extraction costs are so low, you can have a much lower grade and it will still be more valuable.

>> How deep can your understanding be though? The price reflects the entire markets knowledge and so abstractly reflects all.

If the price reflected the entire market's knowledge, then you wouldn't see the spikes that happen when the market wakes up to the potential. The whole point of investing in small-cap stocks is identify those that the market has undervalued. or overlooked. I suspect the number of people who have invested sufficient time to understand all the projects at BZT is a tiny, tiny percentage of the 'entire market'.

>> I would be cautious NOT using tech analysis.. the alternative is just guessing

The alternative is understanding the company in which you are investing and its likely future value vs current value. On news-driven, small-cap stocks, technical analysis can be very misleading.

@3cardbrag

Yes, I think it is fair to say that wages would be lower, but you still need to provide accommodation, food, water, power, etc. for those workers who will be working at an altitude where they will need to acclimatize. Symptoms of altitude sickness start at 2500m and this project is much higher. At Racecourse, they can easily commute from nearby towns so its a completely different ball game in terms of staff-related operational costs.
https://en.wikipedia.org/wiki/Altitude_sickness

I suggest reading the Josemaria PFS - its publicly available - especially all the fairly scary risks that are highlighted. I've provided advice on several multi-billion M&As, with a focus on forward projections and risks, and I wouldn't take the Josemaria project on for free. I guess it shows how desperate the need is for new copper projects.

I agree that it will be based on NPV and (based on RNS and recent interviews) it sounds like XTR are preparing a very detailed document on that basis. The % of in-ground value is a proxy for NPV we don't have enough information to calculate it and the wide range of values discussed shows that it is a broad proxy.

If the valuation is done on the Valmin method, as per the buyback agreement, then an important additional factor is recent deals. Have a look at the Josemaria sale in December 2021. This was for similar grades to BR, but a larger in-ground amount than what is probable for BR. However, it is at 4000m altitude in the High Andes, in a seismically active area, seven hours from the nearest town with very limited infrastructure. Its also in Argentina, which isn't the best jurisdiction.

Compare that to Bushranger, 150 km from Sydney in an existing mining area with excellent infrastructure nearby and a very safe jurisdiction. I suspect the huge capital risk involved in Josemaria will more than offset the extra tonnage in-ground. It sold for $483m.

>> How do I join the XTR telegram group? Thanks.

You will need a link to join. I tried posting one here and my account was temporarily suspended. There will probably be a link on Twitter somewhere.

Telegram is a messaging app in which you can post text, images, documents, video, etc. There are versions for all common platforms (PC, Mac, iOS, Android, etc.). There are two different XTR groups on Telegram.

https://telegram.org/

>> Yeah if I recall it was pretty much along the lines of my questioning the huge confidence that there was 2mt in the ground at Racecourse, the great unknown, and you didn't seem to like that.

I checked my posting history and it looks like that was Jan 4th. You had a lack of confidence in XTR and concern about people selling. My response was (paraphrasing) "Read all the RNS and watch the interviews - if that doesn't convince you, then nothing will".

I am not sure why my suggestion that you do your own research to increase your own confidence indicates either condescension or unhappiness on my part. Probably best to filter me in case I cause inadvertent offence :)

I don't care about being positive or negative as long as it is factual. If I offended you, that is probably why.

On Telegram I seem to spend a lot of time trying to rein in excessive ramping :)

Based on the June 1st 2020 RNS, a discovery of 2mt or decision to mine will trigger the buyback. Therefore Colin cannot state categorically that we have 2mt, as that would require an RNS as that is the very definition of 'material' information.

While he plainly doesn't want to state anything definitive until they have finished their desired amount of drilling, he is dropping as many hints as he possibly can within that restriction.

Regardless of whether Ascot connects to Racecourse, the buyout is based on the licence, not only Racecourse.

Also, I completely agree with ButlerMan

>> Nothing stops them declaring a new JORC and then carrying on drilling to calculate the full size of Racecourse before beginning negotiations with AA.

As soon as XTR declare a JORC of 2mt, AA have only a few days to decide whether to activate the buyback (as per the evening with Colin). So they can't declare 2mt and then drill further before beginning negotiations. This seems to be why CB is delaying the JORC. They want as much as possible before they declare.

"My evidence is spelt out clearly in the 1st June 2020 RNS, where the duty of identification is not specified at all, and therefore open to all parties."

LOL - absence of evidence is not evidence of absence. I assume that means Santa Claus must exist because Colin has not specifically stated that he doesn't

Colin has repeatedly stated that XTR will trigger the clause when XTR either announce 2mt tons or a decision to mine. Not once, in all the hundreds of RNS or dozens of interviews, has Colin stated that AA can trigger this by themselves. Please continue to entertain yourself with this bizarre theory and by all means have the last word, as I am bowing out of this one.

@RealtimeRob

In a choice between your speculations with a complete lack of any supporting evidence, or what CB has repeatedly said in interviews, I think I will rely on the latter :)

BTW I seriously doubt that Anglo can decide for themselves that XTR have found 2mt tons of copper, but I am happy to be corrected if you can point out an example of a 3rd party company creating a legally-binding estimate of a company's likely JORC.

Note that Colin is very careful in interviews not to state that 2mt will be found, other than being very positive. He keeps the total tonnage vague and the likely grade vague, because he cannot say anything 'material' in an interview without putting that in an RNS first.

The 'other licences' issue is no longer relevant. The 50% clause relates to a December 2017 agreement between ProspectOre and AA. When XTR bought ProspectOre, they inherited the agreement. It wasn't extended because ProspectOre had a new owner.

https://www.lse.co.uk/rns/XTR/bushranger-copper-gold-project-australia-o7u71uhdwbdy9b9.html
"ProspectOre acquired the Bushranger Copper-Gold Project from Anglo American Exploration (Australia) Pty Ltd ("Anglo") in December 2017 ("Bushranger Acquisition Agreement"). Under this agreement, Anglo has a "buy-back" option, as described further below. ProspectOre also entered into an Exploration Farm-in and Joint Venture Agreement ("JV") with Anglo at the same time to farm-in to the surrounding exploration tenure covering 3 additional exploration licences: EL8305, EL8306 and EL8585 ("Anglo Exploration Tenements"). Subsequently, ProspectOre has agreed with Anglo ("Anglo Acquisition Agreement") to acquire outright the Anglo Exploration Tenements, which supersedes the JV agreement, for a cash consideration of A$50,000."

"In the event that within three years of completion of the acquisition of the Anglo Exploration Tenements, ProspectOre sells the Anglo Tenements, ProspectOre must notify Anglo of the sale and if the sale value is more than A$100,000, an additional payment is due to Anglo equal to 50% of the sale value in excess of A$100,000. If the sale value is less than or equal to A$100,000 no further payment is due to Anglo."

Down 4% now on just 350k shares traded, at least half of which are buys. There wasn't even a trade until 8.15.

It looks like the MMs are taking advantage of the situation in Ukraine to engineer a price drop and gather shares without any real substance behind it.

The news is not really what we wanted, given events in Ukraine. It's going to be a rocky day on the markets.

It will be interesting to see how this affects XTR though as we have minimal exposure (beyond general uncertainty), Russia is the 7th largest copper producer (about the same as Australia) and gold looks like it is going up.