Ann: Nifty Copper Project Update, page-122

Rewatched Monday’s webinar for the second time.

I shouldn’t laugh, I know, but couldn’t help myself. Some of the Bazzisms like:
“If I hold my breath waiting, I’ll be asphyxiated”;
“8 months” (5 times in a row, 6 in total);
“We build stuff. We don’t just talk about it”;
“Welcome to mining 2021 - where timelines are dictated by consultants and government”.
It honestly looked like he was gunna blow a head gasket at times.

I empathise with LT shareholders in here. I have been in your position before. I once had a significant chunk of capital (well into the 6 figures) stranded in a speccy explorer/zombie for 6 years. Although I managed to finally extricate myself from that investment slightly above breakeven, it was the lost opportunity cost that hurt the most over those 6 years. Getting out was the right move in that case, as the SP is still araldited to lows all these years later. On the other hand, I once booked a 60% loss in another junior speccy only to see it 10 bag a month or so later after a significant mineral discovery. I won’t lie - I sooked it up hardcore at the time. All part of the learning curve. And a big reason I shifted my focus away from exploration specs and concentrated more on development plays with a real chance of transitioning into producers. It has proven a successful strategic change & one I hope to replicate once again here with Cyprium. I know it is a tired adage, however, I truly believe patience will be rewarded with this one.

I agree with observations made in these threads that Baz can’t escape the blowtorch for his aggressive timelines. It is better to underpromise and overdeliver than vice versa. He wouldn’t be the first mining executive guilty of that charge. Delays and excuses are par for the course in mining. I bombarded the MD of another company I am invested in with texts following a 12-month delay in raising finance. In that particular case, they simply updated their project timeline chart each quarter and pushed out the finance timeline an extra 3 months with no additional commentary. He then denied that they had pushed back the finance timeline, so I screenshotted 4 charts from quarterlies to show him. It didn’t matter in the end, as they successfully raised US$335m in financing over a month period (100m debt + 235m equity) - which was equivalent to 100% of their MC at the time. An extraordinary achievement, even if it took them 12 months longer than they had previously promised. Similarly, I don’t doubt that Barry will get there in the end, but am under no illusions as to the time it will take. As I am a new investor here (bought in back in October after watching for 8 months), I am not at the point of second-guessing my investment here. Sure, having capital tied up longer than one had anticipated increases the risk of exposure to the vagaries of the market. And so many questions start to loom up such as:

What opportunity costs am I missing out on?
Will global macro hold up? Will the Cu price stay high?
Can I afford to have my capital tied up here for longer than I had originally anticipated?

The risk is being reflected in the current SP. Have the fundamentals changed, though? No.

My takeaways from the webinar (apart from the timeline delays):

1. “Leaching is not an issue”. They have successfully recovered 85% in a short time. They are running multiple columns at different parameters. They are trying to minimise the time of leaching. This feeds into 2.

2. They are working hard to maximise capital intensity. Investors would do their lollies down the track if opex blew out due to avoidable factors. Have a chat with any mining engineer and all they will bang on about is capital intensity. Baz is no different. He spoke about minimising reagent consumption because it adds to profitability. Reagents are expensive because sea freight costs have tripled. He sounded confident that they could get their reagent use down even further. This is the great detail an investor wants to hear. Do the hard yards now, so that they will run a successful operating business once in production. I have seen many companies cut corners and it has come back to hurt them in the end.

Clearly, Barry shares our frustrations, however, they are beholden to consultant & government approval delays. Effin red tape. Yes, they shouldn’t overpromise, but I remain confident in their strategy. Market impatience has presented greater accumulation opps and I will end up with a larger position at a lower average buy in price than I had originally anticipated. Risk hurdles remain, however, I am backing Bazza in to produce copper sometime in 2023 (a 6-12 months delay isn’t a deal breaker for me, even if I am not getting any younger).