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Issuers will often make statements about a mineral project that does not have mineral reserves which suggest that an economic analysis of some nature has been conducted. If the project does not have a mineral reserve estimate and there is disclosure of economics of any sort, the regulator strict view is that this is a PEA and a technical report may be triggered. These statements could include anticipated production rates, capital or operating costs, mine life or projected cash flows of a project. A PEA need not be a formal study.
Examples of disclosure that could be seen to be a PEA and trigger a technical report include:
“We will likely produce 200,000 oz. silver/month in 2014”
“Capital costs will be in the range of $50 – $100 million”
“Mine life will be 10 – 11 years”
“We expect to generate $20 million in revenue”
“IRR of approximately 30%”
Therefore, it is important that issuers monitor their public disclosure of the economics of their projects in press releases, investor presentations, social media, websites or other continuous disclosure documents so as to not inadvertently trigger a technical report by making such statements if there is no technical report to back up such statements.
This is because the completion of a PFS is the minimum prerequisite for the conversion of mineral resources to mineral reserves. This also means that the economic analysis in the PFS cannot include inferred mineral resources.
So I've been reading you can't use inferred in a PFS financial study.
Didn't iceberg say it is discounted 50%?
Maybe australia is different?
>>Didn't iceberg say it is discounted 50%?
Yes, a buyer will only pay for what is in the JORC and inferred is discounted.
On recollection CB also said that a PFS is not a prerequisite for a sale. But a straight sale is not the immediate objective. The hurdle is to trigger the buy back to get a decision from AA first and foremost.
A PEA or similar assessment could well be then an adequate supporting study that simply means “ we are heading toward financing” and not a genuine attempt to secure it.
The ‘decision to mine’ term in the agreement is ridiculously vague and has clearly had CB in the past uncertain of what it actually means!
I would like a clear and definitive path from Colin at the AGM, no BS this time. What's the plan Colin?
Thanks Howezap,sorry for late reply, I've not been at home for the last 24 hrs
What financer would even look at the project with the AA buy back clause still in play? It is like putting out an invitation to tender, whilst disclosing that bids will only be considered after a preferred supplier has given first refusal. Errr... do one!
I am not an expert in any of this but I cannot imagine a team of professional miners/explorers, and their legal advisors, signing up to a clause that couldn't be trigger as soon as the first of the engineering studies (the PEA) is complete and the project is ready to move towards a PFS and more detailed mine planning. But what do I know.
I do share that same rationale steve, just picking apart CB’s comments. welcome back btw.
We, or some, or I’m maybe getting tied in knots with what’s actually required to trigger the DtM. As was part the case with the 2mt option in the agreement. I think CB has inadvertently maybe given us a bum steer in some of his podcast comments in how they have been interpreted.
End of day you can only evaluate what’s put in front of you to guide your research in trying to get a grip on what’s in needed to be done going forward.
That’s a good plan lucky for AGM please report back any clarity on the dtm, Stevem does make sense.
Hi howezap - CB has not been consistent with his messaging re the buy back clause and we are all confused and have had many a debate on the matter as a result!
Yes, as Lucky has suggested, pressing CB at the AGM for some next steps (even if they can't give timelines) would he appreciated.
We trust the board to make the correct informed decision regarding the decision to mine. Some observers have confused themselves by trying to formulate a plan without having all the facts to hand. Colin and the board know what needs to be done.
Going to the AGM then are you steve ?
Old school that's great, but we shareholder need to know too! It's not colins private company.
>> Colin and the board know what needs to be done.
No 5hit Sherlock
Re post 1601hrs
Let me be nice about this…….Can this old chap really do it with old ways. Or. Is it time to call in for help? sorry mean assistant!
" trust the board" that's it in a nut shell old skool , you either do or you don't ! I do . I don't need every single detail of every deal just an understanding of probability !.
Billy, go and get a mining licence and show us all how it's done ! lmao .
Billy, i assume you meant ASSISTANCE , oh the irony . ;)
NG - I'm just looking at train tickets. £92 return from Sheffield... Maybe. You going? Fancy a pint?
Every deal gordi lmao 🤣 every deal so far has collapsed, so I understand why you don't bother to understand! Because you trust the board to provide shareholder value next time!
Well start a JV with billy and let us all know when your doing an ipo ! ;)
Repost 1649hrs
NG sorry typo Pre text was on.
Might as well apply for new mining licence. Might put the sh!$t$ up CB. I sure I’ve read somewhere you can dig for surface gold/minerals regardless who owns license to mine underground.
Now must go and watch Aussie Gold Hunters !!!!!
I wish!! Taking the money from people trying to make their lives more comfortable. Praying on their hopes and dreams. Sitting back giving fantastic benefits while you travel the world on treasure hunts using thier money hoping to strike it lucky! Without ever actually delivering anything back to them.
Unfortunately I'm not that type of person and
I hope you, I and everyone else gets what they need out of xtract.
I’m afraid that I disagree with OldSchoolView. Colin Bird confused observers by presenting them with a plan rather then the facts. His forward guidance has turned out to be somewhat misleading so personally, I don’t trust the Board. But I’m optimistic for the price of copper
Many small PI's heard what they wanted to hear and got carried away. Why is it the fault of the board that they didn't understand the steps needed to monetise a resource ? The large shareholders who understand what the board is trying to achieve are quietly waiting for the board's hard work to deliver a successful outcome, something some smaller investors seem incapable of doing. Patience is needed but not all seem capable of that.