Market Cap vs 2m JORC19 May 2021 18:11
After today, the market cap for XTR is about £40m
The RNS for the completion of phase 1 drilling (6th April) stated: "The MIMDAS IP survey is continuing, and information from this deep survey, along with assay results from the Phase One drilling, will be developed into a 3-D model to guide the planned Phase Two drilling programme aimed at defining a 2Mt copper-equivalent mineral resource."
The RNS for 19th April (placing) sounded a little more optimistic, by stating that for phase 2 drilling: "The objective is to delineate the necessary 2 million tonnes of contained copper which is the trigger point for the Anglo American buy back option."
After the completion of the IP survey, the tone became even more optimistic in the RNS of May 17th, stating the "objective of drilling out an Inferred Mineral Resource in excess of 2 million tonnes of contained copper equivalent"
Lets assume (because its fun to do so), that we do actually prove up the 2m ton copper resource target (ignoring any excess beyond that). Bear in mind Bushranger is in a great jurisdiction in an easily accessible location with nearby infrastructure, about a hundred miles from Sydney (which is a major port) and can be accessed via open pit.
The market price for two millions of copper at $10k ton is twenty billion US dollars. Obviously, that is still in the ground so we would only get a small fraction of that if Bushranger was sold. John Cornford used 3% as an average. In reality, we might see more than that because of the low extraction costs and aforementioned benefits of the location, but lets stick with 3%.
3% x $20b = 600m USD = 430m GBP.
We have 840m shares in issue, but lets assume with warrants, etc. we get up to a billion shares. If the sale price (set by a neutral third party) is in line with the above estimated value, that gives a share price of 43p.
If you want to be more optimistic, you could assume a higher JORC than 2m tons, a higher in-ground value than 3% and a higher copper price than $10k.
If we assume 20% more on each (2.4m tons, 3.6% and $12.5k), the value per share would be 77p :)
Current share price is 4.85p. GLA!
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