Member Info for stevemocal

Steve - Jeremy and Quinton are not experts in pit design and mine economics, which is why the data has been passed on to those that are, in order to independently 'determine the economics' using state of the art technology. Even with access to all the data, being qualified geologists, successful exploration professionals with decades of experience, they still need to bring in specialists with the right tools to do the job. For someone complaining about personally attacks, you don't seem to have a great deal of respect for other professions or the integrity of the Xtract Team in Australia!

And it has not all been personal attacks either. I have twice asked you about the opex cost you used in your economic assessment. You doubled the cost (identified in the economic modelling commissioned by Xtract) based on there being twice as much ore to process. That is a very big assumption and is simple wrong - processing the ore is only a small part of the overall opex associated with mining. The opex is a key figure for making an economic assessment and you made it up. Surely, as a professional analyst, you know this is a fatal flaw in your assessment?

It is also worth remembering that the Racecourse modelling we are waiting on is simple a stepping stone to the negotiation table and will never actually be used by any new owner - whoever takes this on will want to sink another 200-300 drill holes before decided where to start and finalising the pit/site design (I still think Ascot will prove to be the daddy in this system). We just need to prove a profitable project with massive upside in order to declare a 'decision to mine' and take this to AA as the first step in the selling process.

One last point. We know the first economical model showed that Racecourse would pretty much breakeven based on the the inherited JORC ore resource. Since then, XTR drilling data have converted what was previously classified as waste dirt (within the boundaries of the first pit design and coming out anyway), into significantly more pay dirt. So, keeping things really simple (given we don't have the data, knowledge, experience or technology to make anything resembling a proper economic assessment), do we think this is likely to have improved or worsened the economics?

The 'flag' Steve is raising is nothing we don't already know i.e. don't rely on numbers unless they appear in an RNS.

We know CB is stretched across too many companies and he clearly goes into interviews without preparation, notes or a game plan. You can tell he is trying to remember numbers on the fly and he often makes mistakes.

Bottom line remains the same though. This is a junior miner that will very short have enough income to avoid future raises... providing they don't do anything stupid like buy another expensive project before getting Bushranger over the line.

It isn't bribery. He is simply saying to rich nations (who have all become rich utilising fossil fuels) to give them what their natural gas is worth and they'll leave it where it is. He is calling their bluff knowing full well that they won't swap virtue signalling for hard cash.

All recent interviews were followed by significant SP drops. Communicating through song until the real RNS worthy news is ready, suits me!

Steve - Whether it is new or old rock is something of a moot point. What matters is whether it is economical to dig up. To that end, we need to first understand the value of the Cu Eq that can be extracted, and I would agree that you've been able to make a reasonable estimate of this using data reported by XTR. However, we then need to know the capex and the opex and this is where you calculations have to rely on on some rather unsophisticated assumptions.

My main issue is with your opex estimate. You assume there is a correlation between opex and the amount of ore i.e. a pro-rata doubling of opex due to there being twice as much ore. Why? Firstly, as you point out, nearly all the new ore is 'the same rock', which means it was waste rock that had to come out of the pit anyway and the cost of getting it out is therefore already accounted for. Secondly, the cost of processing ore (as opposed to dumping waste) is only a small part of the total opex - see link below to a presentation I found that gives some insight into opex costs. Personally, I think you have significantly overstated the opex and I don't see how you could have any statistical confidence in the numbers you have used and therefore the conclusion you have reached.

https://dxi97tvbmhbca.cloudfront.net/upload/user/image/GPoxleitner_OperatingCostEstimationForMiners_201620191128185443446.pdf

I would also question your interpretation of any hidden message in CB's song selection!

To be fair... that was the most confidence boosting message I've heard from Colin in the last year! Expecting a positive market reaction tomorrow. ;)

Did she mean to say "fiends' in the last paragraph or is it a typo?

IWTO - It is also worth reminding people that the study was done based on the 2018 JORC, which had 470kt of contained Cu Eq (the resource increased by lowering the cut-off as Steve pointed out in his analysis). We now have 1.1mt of contained Cu Eq and the vast majority of it - as far as I can tell by comparing the phase 2 drill hole map with the map/pit presented in the webinar - will sit within the walls of the conceptual open pit used in the study. So that's 350mt of waste dirt (that was coming out anyway) converted to pay dirt, which will yield an extra 630kt of contained Cu Eq. And the resource is likely to increase with further refining and the inclusion of Ascot (which is open in all directions).

Personally, I find it hard to see how a 134% increase in Cu Eq within what will be an almost identical pit, would do anything but significantly improve the economics. But everyone should do their own research and make their own decisions.

GLA who are holding until we reach the finish line! Are we nearly there yet Dad?!?

Docit - I think this is so over-sold now that not only do we have zero value attributed to Bushranger but not enough value to the African assets. If people haven't sold already, there seems little point doing it now!

AIMHO. DYOR

Steve - They are consistently inconsistent.

One other clue to it being an inaccuracy is that the phase 1 and 2 drilling went into a lot of virgin ground and extended the footprint of the original ore body. I simply cannot see how those extensions only added 15% more copper.

Steve - I still think it is just another inaccuracy.

If you have a cut-off for copper alone, then you will end up classifying good ore (that has low amounts of copper but high amounts of gold, silver etc) as waste. And there is no other cut-off grade mentioned for other metals.

Should read... 0.09% Cu but 0.25% Cu Eq

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.

It has been said many times, CB is stretched too thin over many companies and it shows. No communication strategy, just winging it. Every time there is an RNS or interview, the SP takes a hit!

Hopefully the resource in the ground will have the final word.

How do you conclude that? Steve said he didn't think the mine would be economical and iceberg said it probably is?!?

Steve's maths was all good but the data that feed into it was based on a lot of assumptions. And we all know what assumptions are the mother of!

For me, the most obvious assumption error was doubling the opex because the volume of ore had doubled. Digging up and processing the ore is just one cost. If you go back to the conceptual open pit study, that showed a strip ratio of 4.37 which means for every tonne of ore you take out of the pit for processing, there are 4.37 tonnes of waste dirt to dump. The cost of that is significant and ignored. Plus, the new JORC will have improved the strip ratio by turning what was previously considered waste dirt within the pit into pay dirt (ore), with the cost of extraction already accounted for.

As iceberg said... too many variables to make a solid call on whether a mine will be viable. But there is certainly enough ore for Bushranger to command a good price if mine viability is proven.

I'm seriously underwater with this now and I can't see it losing much more even if the mine isn't viable. I'll be hanging in here until the final whistle is blown on the Bushranger game.

I don't see anything wrong with anyone's maths... you're just calculating different things.

Steve - Perhaps it would help if you could explain why you think it is important to separate the Cu Eq figure in the new JORC, into the separate copper and gold components? Is it just to allow comparison to the earlier JORC (2018) or are you implying there is something more sinister behind it e.g. Xtract trying to hide something?

It is worth noting that the buy-back clause refers to contained Cu Eq, even though AA's own JORC (2018) had the copper and gold quantified separate. If anything, it was surely AA that prompted the use of Cu Eq as the measure?

Anyway, enough of this for today. There is beer to be drunk and football to be watched. Evening All.

The curse of the CB interview strikes again.

Freck - It is not CB deliberately being misleading. He interchanges Cu Eq with Cu a bit like he does Bushranger and Racecourse, which are different things too. At the last interview, he also referred to the resource in ounces instead of tons. I find the inaccuracies somewhat niggling but I don't think it is going to change any time soon and I don't think we should read too much into it.

Cela - I don't think it would help for CB to state that in his opinion, this is absolutely economic... although you might argue he did with "the decision to mine is taken!" comment in the previous interview.

He has previously told shareholders (although carefully not in an RNS) that he expected 2mt of cu eq at Racecourse... without Ascot. Given the recent JORC, that brings into question his judgement/honesty. Reassurances from CB are sadly not enough at this stage.