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Details of buy back
That was my only question and the answer appears to be 'the whole of EL5574'.
4. Details of buyback agreement eg whole of 5574 or RC only. If whole of licence then how will value be attributed to Ascot and Footrot.
Whole of EL5574.
In this case it should be only a matter of course to get the full 2 MT of contained copper out of RC and Ascot and at a far better grade than if the buy back was for Racecourse only.
Cheers
Also once XTR announce 'decision to mine', AA have 30 days to make a decision on triggering the buyback.
Was any clarity given on whether declaring a 2mt JORC would automatically trigger the buy-back offer or whether Xtract can effectively put it on hold until they have finished their exploration work and have their 'final' resource tally?
I asked quite a few questions on the strategy. In principle it seems to be:
1) Announce RC decision to mine based on 500mt (ish) using a model with a copper price in the region of $8500. Total contained not specified but we can probably assume around 1.5mt. The intention seems to be to get the AA decision out of the way early. Colin expects copper price to reach 15,000, so (reading between the lines) it seems to me they want to announce this model while we are below 2mt and the copper price is low in order to get a 'no' from Anglo. I asked if getting Anglo out of the way could backfire as it removes the shield of that agreement and allows a lowball bid for the company. Colin stated that junior miners don't suffer hostile takeover attempts. The only example he could think of was SOLG and that was due to conflict within the company.
2) Phase 3 will follow the above (which is interesting as they assume there will be a phase 3) and will cover more definition on RC higher grade area to improve the IRR, further drilling at Ascot and NW of RC, which they now seem to think is actually open again. This will happen sequentially, not all at once.
3) Start talking to various majors who are more likely interested because they already have a presence in the area (Newcrest?). Again reading between the lines, it sounds like informal contacts may have already happened. Colin made it clear that when a deal happens, it can happen quickly.
Based on the above, the 2mt seems to be a moot point because it will become irrelevant once AA reject (or accept) the decision to mine trigger. This seems to be a coherent strategy with defined steps. It could be a relatively quick deal if Anglo trigger the buyback on the decision to mine, or maybe 6-12 months for a different buyer. Colin made it clear there would be no JV. Whether people will be happy with that strategy will depend on their time horizon and prior expectations, but given the current market cap I will probably add as funds become available.
Thanks Steve (and everyone else) for sharing your notes.
Thank you Steve and Ben too for your time and efforts.
That’s good to now have a better understanding of wether the agreement being in place is a potential deterrent. With the resource total for both RC and Ascot now in excess of 2mt (would hope) you could say it has played some part up until now, but then again it was inherited without the option for it to be not in place. But, It’s made it much more clear cut in terms of only needing to concentrate on the asset and not worrying about the share price without that perceived threat of any corporate actions going forward once we are free from its constraints if AA pass on their options.
The share price will take care of itself once modelling , income etc is released
Thanks for all the feed back from those that attended the meeting. Appreciated.
In the big picture, the news about Eureka is not that significant as most are here for Bushranger. But yet again it shows the CB is more than just “overly optimistic” with his comments. He said twice over the last 18 months that ore is just about to be put on the lorries and is being taken to be processed. That clearly was not the case and now we have gone from repeated talk of a potential IOCG to hopefully. maybe, getting some income out of this.
2 years ago he predicted $200K a month from Jan 2021 from Eureka
Will Eureka end up going the same way as Moz Gold and Kalengwa (spelling)? If it does, I guess it doesn’t really matter in the overall scheme of things.
Thank God for Fairbride. His one major income success. Which he doesn’t seem to want to promote or celebrate :)
If CB does announce yet another “great accusation project” and not keep focusing on completion of Bushranger sale, then I doubt the market will see that as a positive. Well not before Bushranger sale is completed.
If CB is talking about the model being completed in circa October, then I guess that means Jan next year is more likely? CB does seem to keep insisting the RC model is not as late as it is. He originally gave a timescale of May (June latest) and now its October. First he said it wasn’t late in an interview, now he says it will be only 2 months late! CB needs a new calendar :)
I still believe that there will be a sale of Bushranger and at a much higher price than current SP. But I am not as confident it will be anything like CB’s previous implications and it may not happen until mid 2023 now?
I hope he proves me wrong.
Thanks again to everyone who gave feeback and notes.
Great feedback from everyone that attended.
My only contribution would be......just because he said it to your face, doesn't mean his timescales will be correct this time.
Pleased with the 25@20! that's 1.65mt at .33
Add on ascot and we could have 2/2.5/3mt.
Could be more ar RC if the grade is higher but I doubt it.
Looking forward to the model though, whenever it may arrive.
Agreed, thanks for the feedback.
Oct it is then..
F100
Hi Andrew just one point worth a mention >>He said twice over the last 18 months that ore is just about to be put on the lorries and is being taken to be processed. <
They were test mining for some time running ore to plant when I believe (without checking) that some further met test work and drilling was done. With the last release mentioning operations will resume soon!
Sorry don’t have time to check facts at moment, I do agree with all your other points.
Hi lucky let me please have one more crack at why RC grades will be potentially a lot higher than .33%Cu. from your post
>> Pleased with the 25@20! that's 1.65mt at .33 ?Add on ascot and we could have 2/2.5/3mt. ?Could be more ar RC if the grade is higher but I doubt it.?
Here’s a fact, The average grade of porphyry copper ore is about 0.4%Cu, with the ‘larger proportion’ of ore minerals being less than 2 percent of the total volume of the ore rock with progressively more ore the lower the grade.
You are still trying to determine the amount of in ground copper by guessing the average grade% When in fact it is the amount of economic recoverable copper within a defined resource that determines the average grade%. Not the other way round. As I have said before, there is substantially more copper in ground the lower the grades are reduced. This is why the low economic cut off of 0.15%Cu is key to this extra copper volume. And the grade factor (.44) is not a assay drill average but the percentage of recoverable copper within the resource.
Jeremy Reid clearly states in the Ascot discovery webinar right at the very end that they estimate 2mtCuEq will come from RC with a resource of about 450mt @ 0.44%Cu hopefully confirmed now with CB’s revaluation of a mine potential of 500mt (25yrs x20mtpa).
Have another listen from about 23mins to end with Colin stating 2mt and shortly after Jeremy Reid confirms the point by also saying once all the assays are put into the model it determines the amount of copper. Which of course then, the copper % within the resource is then calculated.
https://youtu.be/QJ8b--rhvRI
Howezap, I think your argument is flawed. Firstly, it is only the original 71Mt resource (@0.3% cut-off) that has been measured at 0.44%. That gives about 0.3Mt of Cu. Then we already know that dropping from a 0.3% cut-off to 0.15% for that same resource adds an extra 0.1Mt of Cu, to give 0.41Mt. That’s from the published open-pit modelling July 2021. (That resource then averages about 0.295% btw).
Since then, hardly any assays have been around the 0.4% mark. Any significant runs of mineralization have been lower - 0.2%, 0.3%, etc. So it’s simply not possible to get to 0.44% overall for the whole of RC. In fact I’d be very surprised if we weren’t at 0.2-0.25%, allowing for the “averaging down” effect of the lowest grade ore (0.15% etc).
I also wouldn’t be surprised to see the 20Mt x 25 year statement from CB turn out to be 25Mt x 25 - because it’s financially beneficial to crunch through rock at a faster rate. I think it’s quite possible that 625Mt is down there, given the 0.15% cut-off. You are quite right, of course, to say overall tonnage of Cu is the most important thing, provided the low grades don’t make it economically unviable.
Hi iWTO thank you for your reasoning. The 3D resource modelling has a greater impact as it follows the mineralisation trends throughout the resource so will make a big difference to the overall numbers. Otherwise if your were just going by the average grade for each hole you would just need a calculator. I’m not saying it will all be at .44 I never have btw. But I do think the final amount of contained copper may surprise a few. Or I certainly hope at least from my understanding.
Yes sorry the grade factor comment I made was not quite how I meant it lol. Read twice post once
Just one small point, reducing the cut off has no bearing or influence on the resource estimate (500mt) But hey, that’s huge amount of ore, and with the later holes into Ascot that saw an extra 100m plunge added and a final hole to the southern extent that could both potentially add heaps to the already identified resource. Could we be close to an estimated 1billion tonne combined?
Hi Howezap, the cut-off certainly does affect the resource estimate. With a 0.3% cut- off, anything below 0.3% is “waste”, anything above is ore. When the cut-off is reduced to 0.15%, the material between 0.15% and 0.3% is now treated as ore, with the amount of waste (and strip ratio) correspondingly reducing.
Going back to the July 2021 model, we originally had 71Mt at 0.44% yielding 0.31Mt of Cu. When the cut-off is reduced to 0.15%, with no other changes, the amount of ore increases from 71Mt to 162Mt, now yielding 0.41Mt of Cu. It’s all there in the RNS. That’s why I think we probably have more than 500Mt of ore - we have one third of that already from the JORC’d resource, with P1 and P2 drilling in addition. Cheers.
Hi IWTO thank you for correcting me on that one was sure it didnt effect the resource estimate! It’s obviously the recoverable ore and not the total mass of rock.
Sometimes the obvious can be right in front of you but just don’t click. Cheers
I’m still hopeful of decent copper from the bulk of the lower grades. My theory is based on some research that suggests the disposition of the lower grades that ore in the higher grade crown are not proportional to its disposition within the lower graded parts of the resource. That is, the higher graded parts of the resource has more concentrate of higher grades than lower, particularly within the crown.
I’m hoping from the new modelling it shows a greater percentage increase over the conceptual study figures. Wether or not it will actually have a material effect on the amount of contained copper is to be seen, but in theory it should.
I have been doing some research on it for what seems like months and tbh I’ve lost the will to live! Every porphyry is different.
Cheers
Guy
Coppers rising nicely today. Inventories will be dwindling soon. New all time high in the next 6 months is my bet.
As soon as you said that, Copper started falling and is now back at the opening price :)
Yes I see that, prices go up at well as down. I stand by the all time high in 6 months.
It probably went down because two or three people posted negative comments on a bulletin board lol. Isn't that Wright?
My prediction of the jorc in September 2023 is still looking good.
Right*.... oh the irony haha