# AZX - Ausex Resources



## lbaz9 (9 May 2006)

I bought this stock last October on the float at $0.50.  It has since run to $1.35 and has pretty much stayed around this amount since the start of the year.  Its a pretty tightly held stock and trades on small volumes with a market cap of around $15m.  The company has only done some drilling with positive results.  The main metals are tin and molybdenum with some bismuth, tungsten, silver and gold.  

Does anyone else hold this stock and if so, what do they think of it?


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## CalifDreaming (30 December 2006)

Just having a look for their Kingsgate Moly property.

Looks like they hope to mine about 1.5MM lbs Moly per year for 5 years.  Assuming $US25 lb, that's US$37.5MM (A$47MM) in revs.  Assuming A$5 lb costs, they should cash flow about A$40MM annualized.

Current market cap (as best I can determine) is A$28MM (21.8MM shares x $1.30).

They need to raise about A$15MM to put it into production.  So assuming an equity offering at ~$1.50, that's another ~10MM shares needed.

With $40MM cash flow and about 32MM shares os post financing, that's about $1.25 per share.  Assuming about a 5x cf multiple, that indicates Ausex may be worth about $7.50 when in production.

I'm going to do a bit more DD.


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## J.B.Nimble (18 June 2008)

A very long time since anyone has posted… Wondering whether anyone else has been following developments with this off-the-radar stock...

A lot of interesting prospects but two key projects are going to define this company.

*Kingsgate Moly/Bismuth*
Scoping study out last year indicated 250,000t/yr operation. 
Capex 		$ 39.7mill
Revenue		$158.20/T 
Operating costs	$  60.33/T

Things have evolved since then. It all points to a very conservative picture in the scoping study.

Revenue was with long term prices at 30% discount to spot price. Outlook for Mo and Bi looks good.

Study was conservative on head grade at 0.23% Mo, and 0.23% Bi. Actual grades appear closer to the 0.3% they were hoping for.

Metallurgical work indicates recoveries significantly better than scoping study assumptions 94% vs 85%, and more recently talk of producing ammonium molybdate rather than molybedenite for premium pricing.

Resource drilling was to firm up an initial five year mine life. Drilling results have been indicating up to 3x the tonnages assumed in the scoping study with only 10 percent of the project area drilled.

And then comes the real surprise. Still scratching my head on this one… They have delayed the feasibility study report to check the potential for high grade SiO2 as a co-product. Price per T dependent on purity but if suitable for refining to electronics grade Si, then there could be 100,000 to 150,000 T/yr @ up to 400USD/T. I’ve been looking at the number for weeks and I’m still stunned that SiO2 could fetch these prices… Any Si/SiO2 experts out there to shed some light on this???

Looking forward to the feasibility study results (due in Sept). If the SiO2 proves saleable then the project moves from being pretty respectable to being a real winner.

*Khartoum Tin *
Very early days but this has big written all over it… even if they have had to amend their announcements to “conceptual”…
Not too many holes in the deposit yet but the holes are showing good correlation with the channel samples. The indicated size is 80 to 120 million T at 0.2 to 0.3% Tin. At $23,000/T that is an in ground value of  3.7 to 8.2 billion… A long way to go before it is JORC’d but the signs are very promising. 

All in all not bad for a 25 to 30mill mc junior… Very thinly traded which might put some off but the price has held up nicely through this years volatility. 

I’m in to this but interested to know what ASF’ers think of these prospects…


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## Sean K (18 June 2008)

I do like how the company name has been changed from Auzex to Ausex for ASF ers. lol

Looks pretty cheap on those figures JBN. Interesting.

You're right about tin. Amazing price increases that are there to be taken advantage of. Not very sexy though is it?

Khatoum looks pretty prospective. What's 104m at 0.21% tin from 12m in au equiv I wonder. Might put it in better perspective. 

Lots of other projects to have a look at.

Cheers.


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## doogie_goes_off (18 June 2008)

Turned this one off my watchlist some time ago because it was too expensive, now I am beginning to wonder - Kennas - If you redefine the tin to gold equivalent question i can spit you out a figure but it's a bit unclear what you are asking.


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## J.B.Nimble (19 June 2008)

kennas said:


> I do like how the company name has been changed from Auzex to Ausex for ASF ers. lol
> 
> Looks pretty cheap on those figures JBN. Interesting.
> 
> ...




I agree that tin is not very sexy, but it is very much in demand - particularly in electronics as tin solders substitute for lead. China and Indonesia control something like 70% of world output and, between them they are totally screwing up the supply side. China is doing what China seems to like doing these days... and Indonesia has imposed quotas to protect the environment on Bangka and Belitung islands - I've visited Belitung, nice part of the world, worth protecting what is left... 

As to grade equivalence, I feel like an alchemist turning tin in to gold but here goes... With gold at around 880 USD/oz ($28.3/g) and tin at around 21,500 USD/T that would suggest 0.21% tin as equivalent to 1.6 g/T... How does 120m from 12m at 1.6 g/T Au(equiv) feel?


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## morton_mains (19 June 2008)

JBN
Yes I was pretty stunned - patsted in my watchlist notebook that they could turn what was "waste" from the production of Mo/Bi, into something generating $40M p.a.

$us400/t about same as phopshate!


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## J.B.Nimble (20 June 2008)

morton_mains said:


> JBN
> Yes I was pretty stunned - patsted in my watchlist notebook that they could turn what was "waste" from the production of Mo/Bi, into something generating $40M p.a.
> 
> $us400/t about same as phopshate!




I'm still struggling to get my head around it. The impurity levels suggested for saleable 5-5-3 and 4-4-1 SiO2 product seem pretty unremarkable, so why aren't others making millions from this strategy? 

At first I thought it was a bit of red herring with the consultant spinning it out for more fees but that would be a bit silly in the current environment - no shortage of work for consultants and why ruin credibility in this way. And then we see the note in the March quarterly that they have started dialogue with Japanese buyers...! 

I can only assume that the impurity levels they mention in the Si market background notes are for common metallurgical Si production and they are looking at achieving something much more pure for electronics grade.

As you say, extraordinary that they could make so much money out of selling their waste stream. It will start to look like the Kingsgate SiO2 project with Mo, Bi, and Ag credits... If it comes off, it will be one hell of a starter project before tackling the biggie at Khartoum


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## markymark187 (25 September 2011)

Saw this article on Sky news and thought it would be worth sharing. 

"Joint venture partners Auzex Resources and GGG Resources now insist they are getting along and that their new gold company, Bullabulling Gold can proceed."

"Production could start in 2013, with the brownfields mine producing 150,000 to 300,000 ounces of gold a year."

I see the current price has dropped to around 0.38... Are there many holders of AZX here? Is some movement expected over the upcoming 18-24 months?

I have attached the article for reference. 

http://www.skynews.com.au/finance/article.aspx?id=665749&vId=


Bullabulling Gold an uneasy alliance

Despite months of bickering, joint venture partners Auzex Resources and GGG Resources now insist they are getting along and that their new gold company, Bullabulling Gold can proceed.

In what has been an uneasy alliance between Britons and Aussies, the partners fell out this year over how to develop the Bullabulling gold project, west of Kalgoorlie in Western Australia.

During an investor roadshow this week, the hostilities were blamed on everything from the tyranny of distance to how men are out of touch with their emotions.

Britain's GGG Resources launched a failed hostile $95 million takeover bid for Auzex in March and the companies traded barbs in public.

Hostilities were spiced up by the fact that two geologists and former colleagues were fighting for control of Bullabulling.

GGG is chaired by Dr Peter Ruxton, who is a former employee of Auzex managing director John Lawton.

With the price of gold soaring and angry shareholders watching share prices plunge, the two boards had to find a solution.

Three weeks ago, the companies revealed they had patched up their differences and would create a single corporate entity called Bullabulling Gold through an all-share merger of equals.

Production could start in 2013, with the brownfields mine producing 150,000 to 300,000 ounces of gold a year.

One thing the companies agreed on was that they had to sort out their differences, rather than delay Bullabulling any longer.

The price of gold has been trading at record prices of about $US1,800 an ounce at attractive production costs of about $US1,000 an ounce.

But Auzex stocks have plunged by more than 47 per cent since April and were at 39 cents on Friday.

Mr Lawton will sit on the board of Bullabulling, but Peter Ruxton, who previously told AAP he regretted the falling out with his former boss, will not. He will pursue 'other interests', according to GGG.

Auzex corporate adviser Stephen Stroud blamed a lack of communication for the problems.

'We both speak English, but we're in two different time zones ... you have joint venture meetings where one party is living and breathing it more than the other,' he said.

'One party was not recognising that maybe the other party didn't feel involved as it could have been, then it escalates. As blokes, we're probably not great with our emotions.'

Mr Lawton said this week he regretted the public spat.

In April, he accused GGG of not having the expertise to run a mine after Auzex became a takeover target, while GGG countered that Auzex was taking too long to bring the mine to production and said it would manage it better.

'It was quite an odd situation. It was played out in public and that's never nice, which is usually a space for celebrity weddings, not usually in resources,' he said this week.

Mr Lawton claimed - while in the presence of GGG director Nigel Clark this week - that GGG had started the takeover hostilities.

'They didn't discuss it with us and they didn't discuss it with their major shareholders before it happened,' he said.

'But we're still comfortable with the outcome, GGG is as well ... it was very much an agreed outcome that satisfies all our shareholders.'

The latest resource estimate for Bullabulling is 78.84 million tonnes at 1.03 grams a tonne or 2.6 million ounces of contained gold.

Mr Lawton says Auzex's share price has been trading at a discount to its competitors, due to the joint venture.

There has been consolidation in the sector this year, including Barrick Gold acquiring Equinox Minerals, Focus Minerals' friendly bid for Crescent Gold and the pending merger of Catalpa Resources and Conquest.

Mr Clark said he had developed a good working relationship with Auzex chairman Chris Baker in June, that common sense had prevailed and that the two parties had ultimately been 'able to meet in the middle'.

Bullabulling will list on the Australian Securities Exchange (ASX) and London's Alternative Investment Market (AIM), giving it more access to the greater liquidity and capital markets of the UK.

Auzex has a market value of about $39 million and dual-listed GGG's market value is about $59.7 million.

Each ordinary share, warrant and option in GGG is to be exchanged for an equal number of shares, warrants and options in Bullabulling Gold.


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## J.B.Nimble (25 September 2011)

I'm a disappointed ex-holder. Pre-GFC, they had some great projects; a sense of where they were going; and how they were going to get there. They had a mistimed options issue in 2008 when they should have had a straight forward cap raise. When the crucnh came they found themselves strapped for cash and absolutley moribund. A few changes in management later and they had resurrected themselves with a new directions as a brownfields gold exploration company - meanwhile Kingsgate and Khartoum sit with no further interest or development. Kingsgate I understand. Khartoum is unforgiveable given tin prices over the last two years. It sounds like these assets may be spun out - maybe it will get interesting again...


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