AAM - A1 Minerals

jman2007 said:

5.) It sounds like you're wanting me to flash you a detectives badge for id and give you my life story. If I was a geo working in the Au sector would that satisfy you?

7.) So explain to me their findings Nick. What depth of mineralisation? What is the strip ratio? Is the ore refractory? What is the host rock? Is it open along strike? Is the mineralisation structurally controlled? A grade of 2.4g/t tells me very little.


jman

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See above - several posts ago.

Who needs to grow up and show respect? I think even you will have to admit how you put things was childish. Not sure what response you expect from someone after that.

Golden rule - do unto others as you expect them to do unto you.

Peace. Agree with Gar. Lets be constructive and help each other with info (good example is exgeo's post). We all have specialties and can pool this knowledge to let us as individuals make good decisions.

POG looking very stong. Seems like a consistent uptrend has been going for some time now (with minor corrections along the way).

Seems like interest has been renewed in AAM. Volume has been steadily increasing and buy support seems to have come back online, perhaps its about to turn? I wonder if any chartists can give us some analysis?

Fundamentals aside, I bought in purely on the technicals and that is the build up of stopping volume at 17c.

With thinly traded stocks like this one, once the sellers have been absorbed, the price can run up very quickly. The intraday chart has tested 19-20c in the last few days and it looks like there are a few sellers still looking to get out for a sllightly smaller loss. But the higher volume on the upwards movement vs the downward movement shows that there are buyers to take the stock off the sellers. We will find out soon if this is a reversal.

AAM fundamentals have only improved. The poor performance of the share price lately was simply because someone ( RMB Resources I think ) was trying to sell 1-1.5 mil shares in a tightly held stock. They sold lots of shares in a short time, where an average WEEKLY volume used to be close to 300K. It should not surprise that the sp has suffered. 10000m drilling program currently underway at Laverton to increase and upgrade gold resources so lots of news to come in the near future. Gold on the rise sharply today as well. RSI is moving up today as well plus the moving average line is moving up too, so chart wise looking good

Gar said:

Differences of opinions aside, I'm glad to hear any information you guys have got to share but keep your heads on guys, its not about being right or wrong its about identifying opportunities.


It's been good to see some positive volume action over the last couple of days (especially today!), the bargain hunters are starting to give us some nice buoyancy at 160 - 170

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Hi Gar,

More than happy to provide you with a bit more info. I've had a look through this thread and I haven't seen anyone seriously analyze the Brightstar project, question its feasibility or is even aware of its somewhat "chequered" history, to say the least.

These deposits have been known about for donkeys years Gar, and have been worked over before, and and far as I'm concerned the Brightstar project is an absolute dog, pure and simple. A company called Deep Yellow had a mine called Mikado at what is now known as Brightstar Beta during 2003-2004. They did mange to toll-treat some of the ore at Sons of Gwalia's Barnicoat Mill, but in the process managed to completly mis-interpret the ore body, and before they new what had happened they had gone bust, citing "poor continuity and highly variable gold distribution". These deposits are infamous for their highly variable grades and spotty ditribution of the ore.

In the bottom of the Beta pit, there is a big evil-looking stope, so obviously Deep Yellow or someone before them has stoped the qtz vein and tried to chase it to depth. No-one I've talked to has gone anywhere near it because it is so unstable, but how deep, whether it is flooded at the bottom and most importantly, "how much grade has been taken out?" are all pertinent questions here.

As far as I know, it's pretty much just Williams and a couple of his mates trying to flog this off to the market as a viable project. Tony Ryall is apparently good value, a real "old-school" type Geo and is definitely on the level, but I have very little confidence in the rest of them. For their contract drilling, they mostly just use contract Geo's, so potentially attracting and retaining key technical personnel could also be an issue.

The capex to bring these projects to fruition will be very substansial Gar, remember that Brightstar is spread over a number of satellite pits, which are very spread out. If Williams wants to get serious here, he'll basically have to dig the ore out in one go rather than try to toll-treat in local facilities bit-by-bit. Which raises the following question?....does he have the financial back-up to do this, well I don't think he does. Trust me on this one, no mill in the area is going to go into shut-down mode so they can treat A1 minerals ore for 2 days out of every 7, especially if he is trying to drive a hard bargain to go with it, it just wouldn't be economic.

If you aren't sure what toll-treating is, well it can be a good way for companies with limited capacity to get their ore treated. Generally both parties would come to an agreement re the head grade of the ore going through the mill, and there is usually a lot of assaying and spot-checking which goes on as well to confirm the parameters. Obviously the mill owner will take into account costs per ton to treat the ore and so on, and an acceptable financial arrangement would be made.

That's pretty much my assessment of where their at with this Gar, no-doubt it'll enrage a few people and cause a bit of jumping up and down, but I'm not particularly concerned about that. if people think they can trade the daily "blips" in this and make a bit of pocket money then great, good luck to them, but I personally wouldn't go near this.

Good luck
jman

PS, have a look at their presentation for the 2008 RIU Explorers Conference, it has a couple of their pits with about 25,000L of water sitting in them.

Thank you very much jman for your geological appreciations.

I’m distressed with Williams & Co either. They made a poor job in communication and explaining the shareholders their strategy. A lot of promises – and none was fulfilled so far.

But you shouldn’t forget (and I guess that is Nicks point of view):

AAM currently isn’t valued as a possible producer in 2008 or 2009 without any further marketcap dilution.

With an enterprise value of about 10 m AUD is valued as a pure exploration play that has to dig some years, dillute a lot and maybe possibly will produce in > 5 years.

So the chance/risk ratio at 0,16 per share is quite o.k.

And maybe a deposit that in 2003/2004 with a POG of 350 USD was not economical is mineable in these days with a POG of 1000 USD….

Cheers
Maigret

Maigret said:

Thank you very much jman for your geological appreciations.

I’m distressed with Williams & Co either. They made a poor job in communication and explaining the shareholders their strategy. A lot of promises – and none was fulfilled so far.

But you shouldn’t forget (and I guess that is Nicks point of view):

AAM currently isn’t valued as a possible producer in 2008 or 2009 without any further marketcap dilution.

With an enterprise value of about 10 m AUD is valued as a pure exploration play that has to dig some years, dillute a lot and maybe possibly will produce in > 5 years.

So the chance/risk ratio at 0,16 per share is quite o.k.

And maybe a deposit that in 2003/2004 with a POG of 350 USD was not economical is mineable in these days with a POG of 1000 USD….

Cheers
Maigret

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No worries Maigret,

Yes, the big question here is whether Williams can back up his promises with deliverables. I thoroughly suggest investors research this carefully before buying into this however.

Good luck to those who believe in the AAM vision.

jman

Cheers Jman,

It's good to hear from someone with some local knowledge, I must admit I was unaware of some of the issues raised in your post.

I'm still holding at the moment though as the company has a lot of projects on the cooker, lots of exploration planned before the end of the month and it looks to be setting up quite nicely for a possible reversal technically.

best of luck all

Hi Gar,

Remember that I'm only discussing the Brightstar project area here, I know they have a lot of ground around Narnoo prospective for Ni and are reviewing data around the Duketon area as well, so potentially plenty of exploration upside here.

I quite enjoy posting commentary's for Resource comapnies on ASF even if I don't hold them or have any intention to buy, you'll see a few in and amongst the gold comapanies especially.

I would still be a little concerned over the feasibility of Beta considering the Mikado history.

Hope you can reach an informed decision Gar, can't argue with you over the possibility of a turnaround, not much of a t/a myself mate

jman

Nicks said:

POG looking very stong. Seems like a consistent uptrend has been going for some time now (with minor corrections along the way).

Seems like interest has been renewed in AAM. Volume has been steadily increasing and buy support seems to have come back online, perhaps its about to turn? I wonder if any chartists can give us some analysis?

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Nicks; Looking over this as I do with others peridically as it is one I have marked with potential.

I'm not a true t/a but a trend follower and a look at the weekly chart is all bad at the moment. As things pick up in the mini gold sector it will be one to keep in mind.

Big resource upgrade last week - extra 725Koz

Anyone still holding this?...comments on the release, data quality etc?

jman

Latest quarterly makes for interesting reading - sort of?? Anyone care to comment - highlights:

Production scheduled for December (~30koz pa @A$600/oz cash cost)
Would mean at A$1100/oz a net cash of $500/oz or $15m pa.


Good resource base 1.7Moz
Sounds like some potential at Zeta with surface grades at 20g/t although small intersections

Worth a pitch at approx valuation of $8.50/oz of resource with production nearing?

I guess potential downside may be ala VRE (once mining starts, will predicted grades play out? although 170koz reserve has been outlined).

ANyone??

• AAM is a junior gold explorer moving to producer
• # of shares 160m
• Close price Friday – 24c
• Current market cap around $38.4m
• Brightstar Gold Project – JORC Resource 1.7m ounces (150k reserves)
• Resource spot value approximately - $1,946,500,000 (NEARLY $2 BILLION DOLLARS) – Calculated with Gold at AUD$1145
• Resource valued at only $22p/oz

***According to my Gold Nerds spreadsheet this puts AAM in the top 30 cheapest gold stocks measured by Market Cap/Resource, only 3 of those 30 are producing. AAM is one of the most undervalued gold companies on the ASX.***

• Managing Director with the company since 2002 (when formed)
• Managing Director has over 20 years experience as a geologist in Australia/overseas
• Managing Director has 11% stake (major shareholder)
• Top 20 Shareholders hold 43% of shares
• Minimal debt confined to specific equipment financing
• Hedge free, fully leveraged to increases in gold price (which you’re probably expecting if looking into gold companies)
• 100% owned gold plant (300Ktpa) nearly complete
• Production commencing December 2009
• Expected annual output of 30,000oz pa once producing
• Growth - Production output and resource increase likely
• Expected cash cost of $600p/oz (TCO - $633, courtesy Gold Nerds)
• Deposits/Projects located in Australia, so is low risk
• Recent sale of non core tenement & additional placement of 10.4m shares @ 19c to fund A1 until production commences


IN SHORT: EXPERIENCED management, HUGE resource, severely UNDERVALUED, flying UNDER THE RADAR and soon to start PRODUCTION.

Also appears to have broken out of a technical cup and handle pattern as per my post here.

I have it forth lowest on my Kennas Nerd List attached at just $17 an ounce to EV.

Maybe my figures aren't updated.

Why do you think it's so undervalued as a general comparion?

Aiming to produce 30k a year doesn't sound that exciting perhaps.

kennas said:

I have it forth lowest on my Kennas Nerd List attached at just $17 an ounce to EV.

Maybe my figures aren't updated.

Why do you think it's so undervalued as a general comparion?

Aiming to produce 30k a year doesn't sound that exciting perhaps.

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Yeah I think they are physically limted by the throughput of the plant. A 300ktpa plant doesn't sound all that interesting for an open pit low grade operation.

Sorry missed your posts on this one. Yes 300ktpa may not be exciting, but it's a start to a profitable operation, have to start somewhere and once they've been producing profitably for awhile I think there would definitely be scope to upgrade the plant to increase output.

Still only priced at around $22 per ounce. I expect this to double in the short term (1-3 months -> $.50c per share).

http://www.proactiveinvestors.co.uk...ents-at-mining-2009-santa-is-coming-9616.html

Thursday, October 29, 2009
A1 Minerals presents at Mining 2009 - Santa is coming

Mining 2009 revved up a notch today as delegates heard a pitch from Perth based near term gold producer A1 Minerals (ASX: AAM).

John Williams managing director of A1 enthralled investors with, "all things going well, we should be pulling gold by Christmas".

The company is fully funded to production, a rarity indeed.

With the Brightstar Gold Project, seven deposits in the Laverton district of Western Australia, A1 has a current JORC resource of 1.7 million ounces of gold at 2.5 g/t gold, with 150,000 ounces in the reserve category at 4.2 g/t gold, and 350,000 ounces in the probable category.

There is potential to go deeper. As well as get stuck into exploration in other nearby deposits.

Anglogold has the nearby Sunrise Dam and Barrick, the Granny Smith gold operations.

Establishing a 100% owned gravity/CIP treatment plant next door to the resource at the Beta plant site enabled A1 to keep the project costs down. In fact, to date the company has only spent $20 million, with $4 million left in the bank. Not bad for a company that will be in production in a few months.

Previous owners of the Beta plant site got into financial difficulties, providing an opportunity for A1.

The gold treatment plant is rated at 300,000 tonnes per annum, with potential John Williams said, to expand this to 700,000 tonnes per annum in due course.

The Beta orebody is high grade, near surface material with overburden removed.

Williams estimates the plant can produce a handy 30,000 ounces of gold per annum over a four year mine life. With cash operating costs at A$600/ounce, that's a nice margin for A1. That production level is likely to be increased, to around 50,000 ounces per annum in time, once cash generation commences and the market cottons on to the transformation of the company to producer - with resource upside.

Delegates heard there is significant exploration upside at the company's other prospects, with upside in the resource base, and likely production increases to follow.

On a comparison basis, A1 seems to stack up well and appears lightly valued, relative to its listed gold peers on a resource basis and on a comparative value per ounce.

A1 Minerals has ticked all boxes it said it would to investors, developing a multi-million ounce gold resource and into gold production on time, with exploration and production upside.

In fact, there aren't that many gold producers that will get into gold production within the next few months.

You'd expect a person in his shoes to be bullish and Williams backed the presentation up with, "There's going to be a massive re-rating - has to be, when we get into production".

With a market capitalisation of $35 million, share price of 20 cents, cash of $4 million, fully funded into production, there appears good reason for his exhortation.

As he said, "Santa is coming...we will be producing gold by Christmas." Yes John, there may very well be a Santa Claus - afterall.

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kennas said:

I have it forth lowest on my Kennas Nerd List attached at just $17 an ounce to EV.

Maybe my figures aren't updated.

Why do you think it's so undervalued as a general comparion?

Aiming to produce 30k a year doesn't sound that exciting perhaps.

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Kennas, this attached Gold Producer Comparison list doesn't have newmont? New mont is one of the leading gold producers in the world.

Some reasonably good news from A1 today with the release of their preliminary drilling results for the Beta site at their Brightstar project.

There was an encouraging intercept of 6m @ 62g/t at a depth of just 6m however I don't understand the large jump in SP after finishing up almost 16%

Any ideas?

Evan better update yesterday with significant find close to surface 2m with up to 63g/t , 262g/t & 111 g/t only 100m to 400m from there plant...

Plus on target and schedule for first gold pour this month.....

Looking rediculously good value to me....

Disc - may or may not own this stock at various times.

A bit of a retrace happening now. I have a feeling we might be seeing the formation of another Cup & Handle pattern.