UK 09:21 Sunday, 25 October 2026
Breaking news and expert analysis on fast-moving AIM and LSE listed shares
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
As a new boy to this site I feel I should apologise. A couple of people commented on the fact that my article on Sunday on Xtract Resources (XTR) was only focussed on one relatively small part of the future value of this business, namely Chepica, and that it would have been more balanced if I had mentioned other parts of the business.
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Comments
Peter
Now that is something shareholders should be asking, good piece, looks like a mates deal to me with maybe MTI and Jan in bed together, something is not right here.
alcira16247
CB
Nice work! Great reading!
You raise some very interesting points that need to be answered, to clarify what seems a series of confusing contradictory and potentially misleading statements. The companies actions regarding this project seem to defy any sensible business logic.
Although, to be fair, in my opinion, based on past form, this company appears to regard misleading investors as acceptable behaviour.
More red flags here than a May Day parade!
wildrides
Not a holder here but have to say this does indeed look like the shareholders have been turned over good and proper . It reeks of corruption on the face of it . I think I would be bailing if I was in . There has to be a connection between the parties otherwise non of it makes sense and if there is then its misuse of shareholder funds anyway . BB morons ………what can you do with them .
Peter
so in fact the alluvians JV are being paid for by XTR shareholders, you just couldn’t make this up
TROYSKA
good stuff! been in and out of this one a few times but stayed out because of exactly the waffle you have hilighted. be delighted to see what the excuses are!
Drunken Sailor
Spotted a typo:
“I imagine that most investors took great comfort from the following statement signe of by CEO Jan Nelson”
Spell checker should have picked that up.
More importantly “in-house” estimated NPVs are bollocks. The only NPV to put any faith in is one from an independently verified report where you can see the assumptions used and the sensitivity analysis on them, even then they can be misleading. Any idiot can throw numbers into a spreadsheet and if they don’t like the NPV figure they get adjust the assumptions until they do like the figure. What price did he use for the copper? What capital costs did he assume? What recovery rates did he assume? – they make a massive difference to operating costs and what operating costs did he assume as a result? What life of mine did he assume? What production ramp up did he assume? What discount factor did he use? – makes a big difference if there is a big capital outlay and quite a long time to breakeven.
The money that has been put in just buys the stake in the project, where is the financing coming from to develop the project? When are they going to have a JORC compliant resource? When is the PFS going to be complete? – what is a “technical assessment and feasibility report”? what water does it hold with lenders and off takers? When is the DFS / BFS going to be done? – that is what any serious financier needs to see. He does not seem to be project managing these projects in any conventional way as far as I can see from what you have written. Looks like classic ramp to me. No wonder the believers are getting upset with you.
Looking forward to future articles.
D_Stone
I’m not involved in this share but your analysis is an eye opener for a novice such as myself.
Keep it coming.
Cynical Bear
@Alcira – thanks for the feedback
@Drunken – thanks for the proof-read. All I will say is that it wasn’t in the copy I sent ;). In my first ever job, I had a boss that would pay clients £10 for any typo found in the documentation so I’m usually pretty good at that
Drunken Sailor
CB perhaps you should negotiate a £10 bonus for every typo your boss inserts for you.
Seriously though if you are the sort of person who is incensed by in house NPVs or even slack use of them where they get quoted without the discount factor because the discount factor used is pitiful, maybe you could do an article that explains all the tricks, you would not necessarily need to pick on XTR as you example as quite a lot of shite companies fool investors with them.
Cynical Bear
Ha – good idea.
One for down the track maybe. Not sure I’m sufficiently expert at all the tricks right now. Interestingly enough when XTR first announced the $50m NPV for Manica, I spent a bit of time trying to back-calculate it and then do some sensitivity analysis using different gold prices, discount rates and costs etc but it was more time-consuming than I originally thought. Maybe I’ll try again if I get some time
Drunken Sailor
The basic point on NPVs is if a company craps on about them, but they have not been independently derived and the full report posted on the company website so you can see all the assumptions and the sensitivity analysis, they are bullshit. Even then you need to look at why the report was produced, if it is effectively for PR purposes they are still mostly bullshit as the independent company is trying to please the client. If they have been produced to support serious financing, then they will be more reliable as the independent company needs to maintain credibility with the big financial institutions more than it needs to please the client.
I have seen some great in house NPVs. One managed to value an oil project, which had not been drilled and had a COS of just 2%, at several $Bns. Another company valued another start up company it was invested in at over $10m on a 3 year 20% discounted NPV basis – wow! talk about a cash cow that was just about to spunk cash from every single orifice, even though it did not actually have the lease on the land where it was going to build this cash printing plant! After 2 years of doing this and the investee company still burning cash and needing yet more investment and taking on even more debt and only just getting a different bit of land to build on, they came up with the same valuation, but this time on a 5 year NPV with 20% discount factor, even though various factors had completely changed the proposed business model – I have a complaint running with ICAEW against the auditor that signed off on all that bollocks (that was not the only issue the $700k valuation of another investee company that had been asset stripped and is awaiting compulsory strike off and another $300k as a current asset which was a loan due for repayment from a company with zero cash and zero assets, funnily enough run by the same directors as the investment company, plus a few other minor issues like they were trading whilst insolvent when the annual report was finally signed off nearly 6 months late also come into it, plus the fact that exactly the same auditor has audited every other train wreck driven by the CEO over the past 10 years and I had sent him several e-mails on behalf of a lot of small shareholders asking him to look at all those issues several months before he eventually signed off on the complete bollocks produced).
Bob the brush
Good follow up. best way to deal with the trolls is simply answer their insane questions. it leaves them nothing to say as has been proven here! where have they all gone I wonder. you have even converted one of your previous critics it seems! Good article and great Debut. looking forward to more straight analysis like this. simple, factual, not emotional or personal etc.
Cynical Bear
Thanks Bob
Drunken Sailor
There is a lot more cynicism about XTR. The apparently good news about the mine restarting and the processing plant coming back by 20th Jan has been met with a number of comments about the previous restart date of “about 12th Jan” not being met and suspicion that the accident and the delay in restart being used as an excuse for another placing. People are starting to ask all the right questions for themselves.