Afferro Min Share Discussion Threads

[che7win] 17/4/2015 23:13

Not if we don't agree...they could offer us an option to extend I suppose but there are a lot more AFF former shareholders to deal with.

[scorpione] 17/4/2015 14:14

A payment deferral and / or reduction of interest could be on the cards for us; look at latest IMIC announcement concerning other bonds due to mature.

[horneblower] 17/4/2015 10:36

You could try asking IG but I doubt they will quote you.

[livic1971] 17/4/2015 10:13

Has anyone found a way to short IMIC? I too cannot see the bonds being paid back so we will likely get issued IMIC shares, which will of course fall through the floor. It makes sense to short them now IMHO but they are so illiquid.

[horneblower] 16/4/2015 08:26

It does seem odd. You'd think it would be illegal since it prefers one set of shareholders over another which certainly breeches LSE rules for listed companies.
That's AIM for you.

[allstar_07] 15/4/2015 22:46

I too am wondering what will happen. Saying that I had written the notes off pretty much.I think when the bod insist on a cash payout and we get interest paid at the end of the term it tells you they really didn't expect them to pay out! I still question how the board getting cash was allowed...

[blah blah] 15/4/2015 21:54

You would think so che7win, assuming the takeover deal gave us the proper protection, but if they are worthless then what is the value of that?

[deltrotter] 15/4/2015 21:52

Usually true che7win - lets see what happens here.

[che7win] 15/4/2015 21:42

No, but the point is we should be ahead of shareholders in the pecking order, correct me if I'm wrong.

[deltrotter] 15/4/2015 20:38

Not sure che7win - but if they are worthless (and the Cameroon govt may take them back if the owner does not spend money on them) is it a good thing to have them?

[che7win] 15/4/2015 19:21

If they default on the loan, we have rights to the assets ahead of shareholders, is that not usually the case?

[blah blah] 15/4/2015 19:11

Thanks Del. I think the prudent thing is to mentally write off the remaining payment and count it as a bonus if anything is received. It will be interesting to see how it plays out.

[deltrotter] 15/4/2015 19:04

I know that some of the AFF BOD were extremely pessimistic about the future Blah blah. They had touted their assets to all parties and the best they could extract was the IMIC bid. No other party came in with a higher offer - which is very telling.

As it turns out, the BOD called it correctly.

My big mistake was not realising that a world class asset could be worth a fortune one year and then be valueless the next. Indeed it could be worse than that and actually be a millstone around a company's neck.

Maybe there will be a turnaround - I just can't see it happening for some years. And AFF bond holders need the turnaround in the next six months!

[blah blah] 15/4/2015 17:27

I agree that's what it looks like del, you would think they would have a plan though or they might as well just pack up. I'd be interested to know what it is, even just so I can mentally prepare myself to write off what's due. As you point out, as it turns out we get a cracking deal from IMIC, even though that's not what it looked like at the time.

[deltrotter] 15/4/2015 17:17

I am not sure how they can raise the cash to pay loan note holders. The assets they hold (having bought them from Afferro) are in effect worthless.

[blah blah] 15/4/2015 17:07

I'm interested in what we might expect to happen late this year when the loan notes are due. IMIC doesn't have the cash to pay, so are we going to be getting their shares - which will dilute their holders hugely? Or will they just not make the payment and we get the asset back if we sue them? Or do we think they will try to raise the money to pay us?

[deltrotter] 15/4/2015 16:57

LOL - the AFF BOD shafting Severstal and IMIC. Wonder how much they would get for Putu now?

[j1nxed] 24/2/2015 10:38

@myst1

i agree with you on zinc, the most interesting zinc project imo is the kipushi mine

hxxp://www.ivanhoemines.com/s/kipushi.asp

the latest assay results were

KPU051 drilled on section line 7: 188.5 metres grading 49.7% zinc, 0.3% copper, 15 grams per tonne (g/t) silver and 58 g/t germanium.

KPU055 drilled on section line 7: 162.9 metres grading 51.1% zinc, 0.4% copper, 11 g/t silver and 59 g/t germanium.

KPU057 drilled on section line 5: 175.7 metres grading 50.3% zinc, 0.3% copper, 11 g/t silver and 27 g/t germanium.

KPU058 drilled on section line 11: 41.4 metres grading 42.1% zinc, 3.8% copper, 54 g/t silver and 71 g/t germanium, including a copper-rich intercept of 6.0 metres grading 6.0% zinc, 22.6% copper, 203 g/t silver and 177 g/t germanium.

KPU061 drilled on section line 5: 75.6 metres grading 46.2% zinc, 0.3% copper, 20 g/t silver and 89 g/t germanium, plus a second intercept of 64.9 metres grading 44.7% zinc, 1.1% copper, 14 g/t silver and 128 g/t germanium.



sadly ivanhoe seems to the focusing on their platinum project instead which i am uninterested in. If they sold their platinum project and used the money to advance their copper project and the kipushi mine i would be interested in investing there

[myst1] 24/2/2015 04:55

 
Thanks j1nxed,

What I like about NRRP is the short payback period and the exposure to zinc. Since the DFS the exploration at Namib has increased Resource and the very positive drill results have shown the potential to significantly extend the initial 3.5 year mine life.

I take your point about the price assumption, but I think they are in the right metal in zinc.

[j1nxed] 22/2/2015 23:23

here are a few clips

Subscriber Summit October 9, 2014 Vancouver Excecutive Chairman, Mark Morabito


Excelsior Mining Hydrology Video 2013


Excelsior Comments on Permitting


Chairman's Comments

[j1nxed] 22/2/2015 21:51

@myst1

sorry about that! in any case, it seems like an ok project, but the scale is extremely small with an NPV of 13,7m (snowden report). I wouldn't expect a drastic ramp up here with added resources, i would expect a longer mine life instead. Their other projects seems to be even smaller so i am not sure how they will grow with their resource claims.

The biggest issue is their price assumption (around 20% higher than todays prices) coupled with their short mine life. They did intercept some good widths with very good zinc gradesso i would assume extending the life wouldn't be much of an issue, but the cash flow might not be as good as projected in the DFS

I have just skimmed through stuff here

[myst1] 22/2/2015 03:33

Hi J1nxed,

Interesting, will take a look at excelsior.

It was me that mentioned Greenstone Resources who also invested at a premium in NRRP. They seem to know a good investment when they see one.

Would be interested in your thoughts on NRRP if you get time to look at them.

[j1nxed] 22/2/2015 01:13

Gunnison Copper Project

so the project is located in the middle of nowhere in arizona but has superior access to infrastructure which is what usually kills a project on the spot (african iron ore anyone ;) )

hxxp://www.gunnisoncopper.com/images/about/Gunnison-Map.jpg

the economics are quite staggering (market cap of $28m CAD)

After tax in US$
$2.75 Cu price, 7.5% discount rate
• NPV: ~$820 million
• IRR: ~45%
• Payback period: 2.4 years
• Initial capital: $285 million
• Production rate: 110 million lb/year
• Average for the first 14 years, then
declining over a 20 year total mine life
• LOM production: 1,682 million pounds (based on current recovery rates, might go up)
• Direct operating cash costs (C1): $0.69/lb
• Indirect/other operating costs: $0.13/lb
• Sustaining capital: $599 million
• “All-in” costs of $1.37/lb (this includes sustaining, indirect/other AND initial capex)

hxxp://www.excelsiormining.com/images/Presentations/min_ppt.pdf

What matters these days is low CAPEX, low OPEX and good infrastructure and you are usually limited to one if you are a junior. A lot of the juniors sit on massive remote deposits that face a lot of environmental opposition (look at pebble mine in alaska) or a really bad IRR/NPV. The gunnison project is still very high risk (metallurgy needs to be tested more, water assays needs to be run, groundwater flow models needs to be developed more in depth etc etc) but the good news is that most of the testing work for the FS should be done by q2!

hxxp://www.excelsiormining.com/index.php/news/news-2015/459-excelsior-provides-feasibility-study-work-program-update


They should be close to fully funded for the FS since Greenstone resources (same company you highlight zangdook) bought in a few months ago at a premium (how often does that happen?). I suggest people start with the presentation and their Q&A hxxp://www.excelsiormining.com/index.php/investors/q-a

[j1nxed] 22/2/2015 00:40

Risks With in-situ

It is not a method without its set of risks

1:You inject acid (albeit a very weak one, around the same acidity as vinegar) into the ground which that people near the well are going to have a hard time accepting this. This is exactly what happened to the Florence project (owned by Taseko) and i will go into that project in a bit

2:You need to use a lot of acid (although all copper mining requires acid) which is your main opex driver. The bedrock/ore consumes a lot of acid in the process which means that the acid consumption can vary quite much.

3:you need to do a lot metallurgical testing in order to map fracture intensity (the ore needs to be fractured for the method to work) which means that you can have places where the fracture intensity is low which means that you cant mine in that block or that it will yield very little copper

4:You need to drill several monitor wells in order to monitor the cone of depression (this just means that you pump out more water than you pump in in order to prevent injection your solution into the ground water) and other things which increases the sustaining capital

5:sustaining capital is quite high because you need to drill more wells in order to move to a different mining block when the old ones get depleted. What is say to this is that all those opex numbers you see are cash cost only (c1) and hardly anyone includes sustaining capital in their opex, so the opex is actually higher for everyone if you factor in sustaining capital for the traditional mining


all of these issues can be dealt with (except maybe sustaining capital), but lets talk some about the florence copper project and why you can't compare it to the gunnison project.

1)The florence project was discoverd a long time ago and BHP even ran a testing facility there that produced copper, the problem is that this was BEFORE the town of florence was built in close proximity. The gunnison copper project is located practically in the middle of nowhere

hxxp://www.gunnisoncopper.com/images/about/Gunnison-Map.jpg

dragoon is the closest "town" (it has about 200 people living there)

2)The florence project is located on land that is zoned for residential usage which means that the people who wants to build houses on this lot is in extremely strong oposition. The gunnison project is again located in nowhere with no "zoned" land on the deposit that i know of

3)The large acid consumption and proximity to the town for the florence project means that they will have to truck the sulphuric acid there which is one of the concerns that the residents have. the gunnison project is located on the middle of nowhere BUT with godly infrastructure access (a highway that runs through the northern tip of the deposit, rail access just a few miles away and a power plant around 10 miles away). So they can get all the sulphuric acid there by rail which reduces the costs as well as increases the safety

4)the florence project requires sulphuric acid (as does gunnison) but they will most likely never get a permit to build a sulphuric acid plant there. The gunnison project has assumed they can build a sulphuric acid plant that their location should not prevent them from getting this permit either

5)There are agriculture farms near the town of florence (hxxp://www.florencecopper.com/i/pdf/FC_P1PTF_Dec2014.pdf) which means opposition from the owners. The gunnison copper has no agriculture located downstream from the deposit



"“People are often surprised to hear me say this, but it’s generally easier to permit these in-situ projects when compared to more traditional mines,” Twyerould says. “We don’t generate a lot of the disturbances typically associated with mining — like dust or the use of explosives, for example — so there are actually fewer required permits. Thankfully for us there is nobody using any water near or downstream from our site. We’re so remote that we don’t have agriculture, or anything else involved."

Here are a few tidbits from what i have found so far

"For mines with no nearby residential populations and those far from any proposed development, little stands in the way of their approvals. But an ISL mine near residential or commercial development is likely to stir much controversy. "

hxxp://www.jhc-law.com/AZ-Water-ISL-Mining.pdf


And here is a massive document (i have read through a bit of it) of a public hearing i believe which shows the question from a citizen and the answer from Arizona Department of Environmental Quality (ADEQ)

hxxp://www.azdeq.gov/environ/water/permits/download/curis_summ.pdf

sadly i can't copy and past from this document and it is absolutely massive, but it shows what kind of opposition there is in florence and they STILL got a temporary permit for a testing facility