Xtract Resources Share Discussion Threads

[the diddymen] 24/10/2021 21:57

Quite right - if it sells the company.

[lurker5] 24/10/2021 21:43

I know enough to know that Solgold says it will have to pay a gains tax if it sells the company holding Cascabel.

[the diddymen] 24/10/2021 20:21

The bottom line is that if ProspectOre transfers itself to XTR shareholders at cost then there is no CGT due from the company whatever tax domain you are in. The CGT is then between the shareholder and the relevant tax domain.

It is a great problem to have and I am sure that proper tax planning was considered at the outset of the acquisition.

[onething] 24/10/2021 19:47

'I'm no tax expert' seems to be the go to qualification of anyone on this BB that feels they should comment on the tax position.

Maybe someone could ask someone that knows what they are talking about at the AGM tomorrow.

My view is the very fact anyone is worrying about paying tax is a great problem to have. It means profit is expected. Let's hope, probably assume, that capable tax advisors are in the loop to guide on this one.

[lurker5] 24/10/2021 18:39

Im talking the tax for XTR itself which will probabably be a big factor in any decision (See Solgold which has a similar issue re Cascabel). If it sells Prospect, it might attract a (Aussie) tax on the gain. If Prospect sells Bushranger only it might not and/or might be able to offest exploraton costs (I'm no tax expert). As for potential buyers, the % 'in-ground' will be less important than the NPV and capex which, if Prospect hasn't done it already, they will try to calculate, and will pay whatever price that shows to be worth their while paying (which will be a lot less than NPV).
All in all things coud get quite complicated, imcluding that a jv might be XTR's only option in face of its own small size, and as is being shown (and will continue o be shown) by GGP vs NCM, a junior jv partner can get a raw deal if it doesn't look out. Maybe an answer would include floating Prospect on ASX.

[the diddymen] 24/10/2021 17:04

If it is as large as CB reckons, XTR are just too small to take on the development.

Providing UK shareholders hold via an ISA then there will be no tax implications.

[lurker5] 24/10/2021 15:02

On the other hand, if XTR develops Bushranger itself (getting a better return for shareholders even though taking longer) it would avoid any gains taxes.

[the diddymen] 24/10/2021 12:14

There has been a bit of discussion about the potential impact of taxation on the LSE boards (underlying assumption that there is a gain to be taxed).

The concerns are quite varied, but seem to go along the lines that the sale of ProspectOre would trigger a capital gain charge on XTR in either Australia or the UK. The subsequent distribution would then be taxed as a dividend in the UK where XTR is registered, ie a double taxation.

First up the health warning that I am not a tax expert.

ProspectOre is a wholly owned subsidiary of the UK quoted XTR. I would have thought that within the share capital of ProspectOre it could create a one for one relationship with the shareholding of XTR. The ProspectOre shares would then be subject to an in specie transfer to XTR shareholders, and at the same time AA or another would pay a cash consideration to the new shareholder. Essentially that would result in one taxable capital gains tax event in the name of the XTR/ProspectOre shareholder.

I am certain this will have been taken into account in the tax planning.

If XTR were to undertake a partial sale of the assets of ProspectOre, then it presumably would create a new Australian company and transfer the assets at cost to the new company which would be 100% owned by XTR, and the same could happen again (subject to laws on the transfer of title of mineral exploration rights).

If the capital gains are as high as some are speculating on LSE I suspect that HMRC will be asking for details of the beneficial owners of the ProspectOre shares from the institutions!

[jeanesy] 24/10/2021 10:21

It is the AGM on monday afternoon. Perhaps we will get some more news to coincide with that ?

[goforgold1] 23/10/2021 19:11

If we get hood volume again Monday say about 15 million we gap up to 7p next week

[papillon] 23/10/2021 11:27

TD. 👍 Very good post.

[papillon] 23/10/2021 11:23

jwafc. 👍

[the diddymen] 23/10/2021 10:27

It is worth noting the change in language between the July open pit presentation and 14th October.

In July CB had dropped the 2MT prediction and during the presentation Jeremy Read was talking about 3 or 4 times the open pit resource including the South East anomaly. The open pit estimate was 0.4MT of copper, indicating an outcome of 1.2 to 1.6MT.

The language of 14th October was of a world class resource and 1BT of ore; at 0.41% (my assumption) 4.1MT ignoring the recovery%.

The change in language, which approximately triples the contained copper, cannot be accounted for by the development of the open pit, excluding the SE anomaly. It must include the SE anomaly.

To my mind it would be injudicious to base a significant increase in prediction (however loose) solely on an IP and resistivity overlay of the SE anomaly.

In my view XTR should and would have drilled the SE anomaly as soon as they were permitted. I am sure that we will find out very shortly that the unspoken hole 23 sits in the anomaly. Also in my view CB would have had the first visual reports of a possibly incomplete hole 23 prior to the 14th Oct presentation.

With the formal shareholder meeting on Monday afternoon I would expect further updates imminently.

[jwafc] 23/10/2021 10:17

Great post papillon. XTR also have income from alluvial mining at Manica coming on stream. Exciting times.

[denjon] 23/10/2021 08:35

Just on 12.5 million trades yesterday. A significant increase. Investors beginning to appreciate the enormous potential. About time too.

[goforgold1] 23/10/2021 00:39

12 million shares traded highest in a while .

[papillon] 22/10/2021 23:52

Well "andplus" there was a placing to raise £5.5m (before expenses) announced, around 6 months ago, on the 19th April.



Before that, around 10 months ago, they raised £5m (before expenses) on the 21st January



So XTR have raised £10.5m (before expenses) so far in 2021

At the 30th June they still had £8.08m of cash.



That half year report issued, less than a month ago, on the 29th September states the following;

"The Directors have assessed the working capital requirements for the forthcoming twelve months and have undertaken the following assessment.

Upon reviewing those cash flow projections for the forthcoming twelve months, the Directors would not expect for funds to be raised through equity raisings, or require additional financial resources in the twelve-month period from the date of authorising the consolidated information to enable the Company to fund its current operations and to meet any future commitments in the event that the Company decides to continue with further exploration work including drilling campaigns in Australia and Zambia."

So it looks like your hopes (?) for a 3rd placing this year (or anytime soon), "andplus", could prove to be unfounded.

PS read the RNS's "andplus"; I've found it helpful.

[all in eol] 22/10/2021 21:45

Borrowed time....

[andplus] 22/10/2021 21:28

Has the next placing been announced? Is there a date on sight?

[goforgold1] 22/10/2021 17:32

Trades look good today some hood size buys starting to come through . Looks like someone is building a stake now . About time as well .

[papillon] 22/10/2021 17:04

Just to set the record straight. I have no experience of mining. I'm currently just a small time punter of speculative mining shares. I previously punted on speculative O&G shares, but I gave that up as a bad job, hence my current interest in speculative mining shares, especially those exploring for copper because of the coming "green revolution". XTR is by far my largest investment, though it is probably small beer compared to many on here.
So don't expect any knowledgeable posts from me! 🤔
I do look at the charts of shares, but I'm not Nostradamus, or Mystic Meg, so don't claim my chart based predictions will turn out to be successful.

PS I did recently have a measure of success gambling on gas shares, KIST & SQZ. I still hold some KIST.

PPS A successful investment in GPM last year got me interested in mining shares. GCL has been similarly successful for me, so far, this year.

[lurker5] 22/10/2021 16:19

Reassuring that despite slight retrace last hour or so, biggest trades today have been buys - some chunky. There ! supporting the bulls (for the moment)

[goforgold1] 22/10/2021 16:14

Nice volume today get volume and news next week over 6p

[backtothesoil] 22/10/2021 16:12

I wonder if he takes on private clients.

[jeanesy] 22/10/2021 16:09

Takes all the fun out of dyor though doesn't it backtothesoil !