Member Info for Steve4077

>> Wouldn't want HMRC getting their hands on my hard earned cash.

Move to the Isle of Man :)

No capital gains tax, no inheritance tax, no stamp duty, 20% top rate of income tax and if you are married and your wife doesn't work, you can have all her tax allowances as well as yours (and vice versa). Finally, you never have to pay more than 200k tax per year regardless of earnings/income. I wish the last one was applicable to me :)

Yesterday's RNS stated "The Phase 2 Racecourse drilling programme is ongoing and to date 15 diamond drill holes have been completed for over 10,000 metres drilled. "

15 holes is 7 through 21, so it sounds like they are already completed. We just haven't had the details yet.

@schlemiel

That report was from a year ago, before even the phase 1 drilling at Bushranger and before the very promising results at Eureka and Kalengwa.

>> Who decides what is a troll anyway compared with an honestly negative poster?

Up to individuals, but I generally consider trolls to be people who are consistently negative, use the same points repeatedly, don't support their negativity with any analysis, using qualitative rather than quantitive statements and ignore any counter-arguments. I would also say rampers are the same except exchange 'positive' for 'negative' above :)

>> does the value go up faster or slower than the resource in the ground?

If we assume that there is a fixed capital cost for the setup of the mine and that the extra resource costs the same operational cost to extract, then the value goes up faster than the total resource.

Assume $500m setup for example and that each ton of copper is worth $10000 and costs $5000 to mine. 100k tons of copper is therefore worth 100k x $5000 (after extraction) = 500m. However, that is breakeven due to the setup cost. The next 100k tons has no setup cost so the mine value is now $500m. The third 100k tons is also worth $500m so the mine value is now $1b

So profit on the first 100k is zero per ton. 200k is worth $2500 per ton and 300k is worth 3333k per ton, etc.

Because Bushranger will be open pit, the cost to extract each ton is much lower than an underground mine so the grade you need to be profitable is much lower. Also, a huge volume makes the initial capital cost much lower as a fractional of overall cost and also increases profitability per ton.

>> This is not supposed to be a model to predict the future sp here just an illustration of the fantastic potential here and the increase in MC and over what timescale when big discoveries are found by juniors.

It is a very interesting comparison. I think we have a fairly sensible group of posters here that try to make reasonable estimates of future company value and then base the potential share price on that calculation. What we don't account for is the potential for a runaway share price that is based on sentiment than value, which I think we have all seen on AIM. If that happens, then common sense is out of the window :)

>> Your in-ground figures should all be in US$, so as of today GGP - 4.2M OZ gold equivalent X $1800 = $7.560B and XTR - 2M tons contained copper X $9600 = $19,200B.

As we are talking about companies listed on a GBP exchange, I converted all USD values for commodities into GBP using the current market rate to allow easy comparison to market caps. The values remain the same.

Lets assume for a moment that ART123 is genuine in his belief that 2m tons will be the high point and any more is pointless. That view seems to be based on the idea that GGP hit 35p+ and then fell 50% even after more resource was discovered, so (he assumes) the resource must not be connected to the share price beyond a certain point.

GGP has a current resource estimate of 4.2m oz (equiavlent) of gold. That gives an in-ground value of 7.35 billion (assuming $1750 for gold). However, GGP only have a 30% share of that resource now the PFS has been issued, so their in-ground value is actually $2.2b (£1.6b). Their market cap reached £1.3b at its height, or about 80% of the in-ground value.

Lets look at XTR in comparison and assume we reach 2m tons of contained copper. That is £14b in-ground value (assuming $9500/£7000 for copper).If we assume XTR is also worth 80% of in-ground value then we would have a market cap of 11.2 billion and our share price would be £14.00 (or 280x current).

Of course, that is plainly insane. The flaw in the above calculation is the equally insane market cap of GPP. Even if they increase their current in-ground resource by 10x, they would still be overvalued even at their current £800m market cap.

So in summary, the reason that the GPP share price is falling is the gravitational effect of reality, rather than any lack of causal link between accessible resources and market cap.

I was intrigued about the 'GGP faster than XTR' claim, so I checked. GGP acquired the Havieron licence on 25th July 2017. XTR acquired Bushranger on 27th October 2020.

The respective announcement of the first drilling campaign was 50 days later for XTR (6000m) and 267 days later for GGP (2400m). First assay results were 143 days for XTR and 335 days for GGP.

The second drilling campaign was announced after 258 days for XTR (20,000m) and after 419 days for GGP (6,000m).

So the idea that GGP were drilling sooner and faster doesn't really hold water once you check reality. In fact, at the equivalent point in GGP history (compared to current XTR) they were still months away from even starting their second drilling campaign and even that was only planned for 6000m. As theiceberg pointed out, it was Newcrest that eventually speeded things up. In comparison, XTR are already halfway through a second drilling campaign that is well ahead of (in elapsed time) and more than 3x the size of the equivalent GGP campaign.

We are really are moving quickly and very effectively. Kudos to CB and his team.

Check the posting history and draw your own conclusions. A rare filter from me on this one. Lets not clog up the board with replies that are ignored anyway.

>> No Cygnus7, I just want a share price that shows some life.

If you want to make the trolling more effective, maybe do a little research. The share price is up 13% since the start of the month and up 35% since the start of the previous month. How much life were you expecting?

>> a troll made some comment about us all be mad if we thought this would soon be going to 8p (I paraphrase) and nobody responded which I thought was great

Yes, I noticed that too :)

It's probably because the majority of the people on this board are well-researched and treated the comment with the disdain it deserved. There is none of the insecurity that usually results in people engaging trolls. I also agree that the best option is to ignore them. Eventually, they get bored and leave.

We only completed the acquisition of Bushranger on October 27th 2020, so to get to this point so fast and with so much more potential than expected, is pretty remarkable.

@Screenlearner

Colin is 78 (I think) so I am guessing he won't want to go down the route of a mine that will still be producing when he is 100+, but anything is possible. The 2m tons question is interesting though. Does he create a JORC as soon as they believe they have 2mt, or does he hold off triggering the buyout option until they have 3m, 4m, etc.?

The information in the June 2020 RNS about the buy-back option doesn't contain enough information to determine the best strategy (see below). Maybe a question for tomorrow might be asking about the exact situation re the AA option.

"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.


If Anglo does not exercise the buy-back and ProspectOre ultimately develops a mine, ProspectOre would hold a 100% project interest, less 3.5% in NSR royalties and a A$7.5 million development payment to historic holders (which includes Anglo)."

>> It almost, but not clearly, sounds like Colin is considering xtr mining the pit rather than selling it.

Whether he wants to sell or wants to mine, he has to display a strong intention to mine to get the best deal. If you want to sell a car and get the best price, then don't tell the potential purchaser that you don't plan to drive it anyway.

>> I agree with your comments about doing research, but the fact that the market often reacts in a way that doesn't seem logically shows that not everyone does their research.

I think its actually only a small minority of private investors that do any significant research. I suspect most base their investment decisions on 'tips' or forum posts or the current movements of the herd. It can be very frustrating when it seems the market is ignoring what is 'obvious' to us, but on the other hand over the long-term the 'researchers' have a huge advantage.

In this case though, I do think the wider market is starting to wake up a little, plus we should have a steady flow of news over several months at the right time of year.

>> The drilling extension is great news but will this need another round of fund raising via a dilution ?

No. The company had 8m cash at the end of June and stated in an RNS two weeks ago:

"Upon reviewing those cash flow projections for the forthcoming twelve months, the Directors would not expect for funds to be raised through equity raisings, or require additional financial resources in the twelve-month period from the date of authorising the consolidated information to enable the Company to fund its current operations and to meet any future commitments in the event that the Company decides to continue with further exploration work including drilling campaigns in Australia and Zambia."

>> there seems to be a disconnect between RNS and market reaction IMO.

You understand the RNS in the context of the overall project and consider all the relevant factors; the probable volume of resource, cost of extraction vs grade (open pit so very good), great jurisdiction, existing local infrastructure, nearby ports, AA buyout clause, etc.. However, to do that you need to invest time to research the company and the average AIM investor probably looks at an isolated RNS and thinks that 0.5% isn't very good or 'what does does all the red mean?'

>> Horrifies me to think we we be still be drilling holes and trying to prove up the region in 2024.

If we are still drilling in 2024 (which means we are continuing to find new resources), then I suspect the share price will be considerably higher by then.

I am sure the people who oversee major capital investments will revise their view of NPV now that schlemiel has revealed its actually tosh :)

Maybe an easier way to look at NPV is to consider opportunity cost. You have a billion dollars to invest so you look at multiple opportunities. When you consider those investments you need to look at potential profit but also the risk involved and any fixed time commitment.

Lets assume one option is to make the money available for a loan. With such a large sum, you could probably get a 5% return with very little risk involved, or perhaps spread around multiple smaller 8-10% returns with some risk involved. Another option is a stock-market tracker, or a mixture of investment funds. Maybe 6-8% with limited risk over 10 years.

So if you want to invest the money in building a mine for GGP instead, the benefit of doing that is the amount by which the return on the GGP investment will exceed the other opportunities, taking account of any risks in the process - especially potential cost overruns.

When you take that into consideration, then using only 4% makes very little sense.