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Howezap.... What did that £10m cash raise achieve at BR that applying a 0.1% cutoff to the original JORC resource couldn't achieve ? What is the extra value that has been added ?
LW you don’t just simply decide to lower the cut off grade to increase the resource size! A many number of factors go toward impacting the cost of mining and toward the lowest economic recoverable grade. The drilling programmes increased the overall resource by x8 and with a copper inventory of 1.3Mt. No not 2mt but was not likely to be, much of the drilling at racecourse was to convert all or most of the original resource that AA identified that didn’t make it into the original 71mt JORC but was in their resource model and that was included in xtracts conceptual study on the 71mt resource, also drilling was to further identify extensions to the mineralised body and infilling to upgrade part of resource to indicated.
No roast for two weeks now, have kev and Phil done a bunk on a jolly to Margate with all the money they’ve earned from cB and gang
Howezap... The original resource was 0.3mT. How is 1.3mT x8 the original ?
OK let me ask another way... The original resource was 0.3mT at 0.3 cutoff. What size would that have been increased to if 0.1 cutoff was applied. The original data was and is available. If no further drilling was done (at a cost of £10m) the original resource would not be far short of the current 1.1mT (0.2mT is from Ascot). I suspect we spent £10m on drilling looking for something that was not found and further suspect that the cut off to obtained the new JORC was published to cover the failure of finding whatever it was that Prospect ore convinced Colin was there.
Howezap... what I'm saying is I believe Colin "precisely lowered the cutoff to increase the resource size" !
>>No roast for two weeks now.
I'd not be surprised if they were being investigated for insider trading. At least from an XTR perspective, they magically seemed to know an RNS was being released before the Market did!
Gixxer - According to their last podcast they are taking their summer holidays.
The lower cut off is mostly due to increased copper price granted, but drilling has achieved a lot.
The increase and conversion to inferred of the known but unreported low grade 0.1-0.2 peripheral grade ore that didn’t make it into the original and was on the outside of the 71mt JORC would not have been economical at that time to warrant converting. With the increase in the price of, and further projected future price those peripheral grades that now have JORC classification as they have been infilled will now be economic to mine once an initial early Cap pay back phase can be shown to be viable from the high grade central part of the resource.
From the ‘21 conceptual study
>>Optimal believe that the economic recovery and processing of ore with low grades between 0.1 - 0.2% Cu is pivotal for the economic viability of the Racecourse project”
Referring to the known but unreported ore in the resource model that didn’t make it into the JORC at that time.
There was never going to be 2mt at racecourse as xtract would have known from AA’s resource model the expected grades.
Originally 2mt could have been a possibility from RC as one 3+km long open pit ‘before’ it was split down the middle when Ascot was identified and weaker mineralisation separated the two. But didn’t turn out like that once it was drilled.
>>There was never going to be 2mt
Are you saying you believe Bird deliberately mislead the market HZ?
No not at all, cB has been very clever in using the 2mt as a carrot, for all we know there could have been 2mt from the JORC, the non JORC ore and from making assumptions of potential ore from the known correlation between iP signatures and actual grades found at RC to make those assumptions on the lower anomoly that became Ascot. It would have given cb enough confidence to make that statement that we have 2mt. It didn’t suggest they had proved up and JORC’d 2mt
My 2mt from rc was more aimed at what it became defined as once Ascot was identified.
Sorry to confuse.
HZ - can't sleep so apologies if l have got this wrong. But basically you are saying that the XTR drill programme proved up what AA had already concluded, ie this is a very low grade resource that is uneconomic to produce at current copper prices. Hence the market is valuing at zero.
We have no way of knowing how much of the resource model there was that AA had ‘identified’ or ever will. This was ‘probably’ uneconomic at the time, I didn’t say it was uneconomic now.
There could have been any number of reasons why AA didn’t carry on. Xtract geologists had learned to understand that the IP and drone mounted EM surveying signatures could be overlayed in a new technique that was suitable with BR mineralogy that helped more accurately target where to drill due to the very subtle differences and being able to compare those differences with the known mineralisation of the original JORC. If AA geos had known years before of this technique things may have been different for them.
Also read theiceberg last blog entry
http://icebergshares.blogspot.com/?m=1
Somethings cooking
All in all a well executed and measured exploration programme that increased what they set out to increase and identified further potential to be unlocked by an acquirer.
Why would xtract or ‘any’ junior embark on one single £12m+ costing project without a good degree of certainty of a successful outcome.
The importance of doing that 71mt conceptual study cannot be underestimated, it gave the direction that Xtract were recommended to follow.
Proof of the pudding will be how the updated figures stack up of course, however, there is further scope for optimisation to improve further overall value and IRR. It’s not as though they have run out of options. Far from it!
Consider too why AA have kept an interest in BR with the agreement attached when they passed over the baton to xtract to de risk it further.