AAR - Astral Resources

[ideaforlife]

Thanks for the warning Hangseng. I guess there is no need to worry considering the much lower volume on prive drop compared with when it's hiking up. On the other hand, perhaps it just creates some chances to re-enter at a cheaper price.

 

[YOUNG_TRADER]

At first I was surprised at yesterdays weakness,

But then I realised, lots of people and traders do the BUY the rumour, SELL the fact,

So with yesterdays Ann what we saw was sell the fact, however I don't think the news has filtered out properly, I am yet to see mining news article or any article for that matter, talking about the fact that after 21yrs AAR has finally made a profit.

Watching and waiting

 

[Mazrox]

I agree. Jittery people are probably selling the fact, and people who were looking to take new positions (like me) set themselves up yesterday. (I have been watching for a re-entry after making a small trading profit a few months ago. Looking to hold longer term this time.)

Being able to self fund future exploration is a big plus in my mind in the current uncertain climate. Makes them less vulnerable to the vagaries of the credit markets and/or investor confidence.

It's one of the things I have been looking at as I review my portfolio of juniors.

A question someone might be able to answer...

Quote from yesterday's ann: Approximately 50,000 tonnes of additional ore have been mined and are currently stockpiled at a custom mill where the ore will be processed during December quarter 2007.

Is this likely to be their own mill? One of the things I liked about RMS was that they bought their own processing plant to process their ore. Would think that gives them more control over the process, and therefore the cashflow.

(I'm VERY new to this, so be kind to me if I've asked a stupid question! )

Maz

 

[tech/a]

Below is a 240 min chart.

I see this currently as pretty normal price action.
The 5th bar in shows quite an amount of supply----selling.
Note how it finishes off its highs and is a high volume bar.
The next bar does the same but with lower volume this indicates
a slowing or absobtion of supply.
The next and highest bar manages to hold at 10.5 and volume
while above average indicates more buying that selling.
Yesterdays and todays volume indicate supply is low sellers are not
pushing lower with wide range bars looking for buyers.
Low volume down bars Followed by Higher priced higher volume up
bars are definately a sign of strength.
.92c is a critical support level.

For me its wait and see.
I'm looking for technical weakness and or strength.
Weakness I'm out.Strength I'll remain.
Time will tell.

 

[YOUNG_TRADER]

Well I had another look at AAR fellas and I like what I see,

Past
"Western Australian mineral explorer and gold miner Anglo Australian Resources N L (“Anglo”) today announced a Net Profit after Tax for the year ended 30 June 2007 was $5,582,690, its first profit since incorporation 21 years ago."

"The profit was achieved from revenue of $10.2 million, principally derived from the sale of 12,434 ounces of gold, and after allowing for $0.23 million in exploration expenditure, $0.32 million in depreciation and amortization and $nil tax."

So 12,434oz generated $10.2m rev = $5.6m profit


Current
"Approximately 50,000 tonnes of additional ore have been mined and are currently stockpiled at a custom mill where the ore will be processed during December quarter 2007. Substantial profit will be derived from processing this stockpiled ore, which is estimated to contain more than 12,000 ounces of gold."

So this 12,000oz should generate $10m+ rev = $5m-$7m profit for this year

Future
At East Mandilla a new model has been developed following examination of diamond drill core and re-evaluation of cross sections and long sections. Allowing for weathering a case can be made for a number of very shallow south dipping lodes, which are flat lying in cross section. The width of these lodes is approximately 50m and appears to have a thickness of 3-6m within the centre of the lode. The average grade of these lodes is 5g/t Au. They appear to be located in a corridor bearing approximately 338 degrees and possibly thicker on the eastern side and tapering off to the west. Based
on existing intersections there is 24,000 ounces in sight (to 60m below surface).

So there's another 24,000oz's to be mined = $20m+ Rev = $10m-$14m profit next year

Summary
AAR is well funded and has at least another $30m of revenue to make at Mandilla which should result in $10m-$20m in future Net Profits,

This should easily enable it to fund the BFS for Koongie, as well as Intial development,

In addition to this AAR is arguably poised to make more discoveries at Mandilla

 

[jtb]

I am yet to see mining news article or any article for that matter, talking about the fact that after 21yrs AAR has finally made a profit.

Watching and waiting

YT,

You'll be glad to know Anglo' copped a mention in the business section of todays 'WEST AUSTRALIAN'

 

[BUY&SELL]

YT,

You'll be glad to know Anglo' copped a mention in the business section of todays 'WEST AUSTRALIAN'

And the Financial Review, page 22 "Anglo Aust turns profit"


qwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnm

 

[hangseng]

Special point of interest is they are not processing the remaining gold until the end of 2007. They are taking full advantage of higher gold prices. This is a clever move.

The game at play at present is all psychological. I for one have no desire to take part, I will not be selling to satisfy the game master.

The only disappointment of the report is you need to search for new information and to know what to look for. It is there though, and it is all positive. Why John Jones is keeping AAR low profile is beyond me at the moment. However it has become clear the direction is forward and they are progressing in a deliberate direction of developing Koongie Park, active exploration at Victoria Plains and further development of Mandilla to provide ongoing cashflow.

I remain strongly positive, despite the trading shenanigans going on. I have a medium to long term outlook of AAR. Of course traders will as usual have their fun along the way, all a part of the game.

 

[SGB]

Below is a 240 min chart.


For me its wait and see.
I'm looking for technical weakness and or strength.
Weakness I'm out.Strength I'll remain.
Time will tell.

Agree tech/a

Very important support at .09c.
However, there is one fundamental point that keeps my eyes open to this stock.
There are not too many companys under .10c who are actually making a profit. Yes.... it,s taken 21 years but they have now found the formula, the people are starting to make a difference.
Good long term value IMO.

SGB

 

[YOUNG_TRADER]

Below is a 240 min chart.

I see this currently as pretty normal price action.
The 5th bar in shows quite an amount of supply----selling.
Note how it finishes off its highs and is a high volume bar.
The next bar does the same but with lower volume this indicates
a slowing or absobtion of supply.
The next and highest bar manages to hold at 10.5 and volume
while above average indicates more buying that selling.
Yesterdays and todays volume indicate supply is low sellers are not
pushing lower with wide range bars looking for buyers.
Low volume down bars Followed by Higher priced higher volume up
bars are definately a sign of strength.
.92c is a critical support level.

For me its wait and see.
I'm looking for technical weakness and or strength.
Weakness I'm out.Strength I'll remain.
Time will tell.

Hey Tech, curious what the techie picture is telling you?

Looks to have consolidated quite well, will need an article or broker report to pop I think, I read somewhere that Fat Prophets is covering AAR now, can anyone confirm this? (As I read it off another forum and don't believe it)

Thanks in advance

 

[spottygoose]

I think it is true. They have it as a watch and the assumption is they will update it soon. A poster name Francoo just posted this elsewhere complete with issue number:

Here's the whole post if anyones still intersted. I think they are going to put out a buy rec. in the next 2 weeks....

Anglo Australian Resources

Await buying opportunity Fat Mining 65, 21 Feb, 2007


We met recently with the two executives of Anglo Australian Resources in our Sydney
office, Angus Pilmer and Peter Komyshan. What impresses us about the company is the
very achievable growth path that AAR has in place and the fact the company is very
modestly valued. We believe the upside is enormous and it should certainly be on the
radar screen of those Members wanting base metal exposure.

"AAR has what we consider to be a well thought out growth path."

This is our first report on AAR.

Buoyant investor support saw AAR nearly quadruple in price between June and
September last year. This followed more than six years of relatively subdued trading
at historic lows. Following such rapid price gains, the upward trend of any stock
would be at risk of pausing for consolidation. AAR is no exception.

In the near term, we anticipate further consolidation. While volatility threatens
initial support at 6 cents, we believe that the revival of longer term upward
momentum will serve to limit downside risks.

Given the clear and sustained break above the six year base formation, the long term
outlook for AAR is positive. Accordingly, Fat Prophets will monitor AAR for a suitable buying opportunity.

Given our bullish stance on base metals, we are constantly on the lookout for new,
undervalued opportunities for our Members. We believe that Anglo Australian
Resources represents one such opportunity. We believe upside is enormous and it
should certainly be on the radar screen of Members, particularly those wanting
additional base metal exposure.

Effectively, two signature projects have propelled Anglo Australian Resources beyond
the junior exploration stage to a point where it could realise its sizeable production ambitions.
The first project is the Mandilla Gold Project, situated near Higginsville south of
Kalgoorlie, in Western Australia. Although not a company-maker in its own right,
Mandilla is set to play a crucial role in AAR's development.

Mandilla is a small, profitable gold mine that will produce a significant cash flow
surplus during 2007.

In fact, the first gold production from Mandilla has exceeded all expectations, with
the first batch of ore producing 4,755 ounces of gold from the treatment of 8,451
tonnes at an average grade of 17.68g/t Au. This was 51% above forecast.
The key is the very high gold grade, which boosted production above the reserve
model forecast of 10,656 tonnes @ 9.17g/t Au.

The company now has 24,400 tonnes of ore available for treatment, with the next
campaign commencing in early February.

The West Mandilla palaeochannel deposit is estimated to contain a Probable Ore
Reserve of 70,100 tonnes @ 7.52g/t Au for 16,960 ounces of gold within 20 metres of
surface.

From our meeting with AAR management, they expect the Mandilla Project togenerate
$8 - $10 million in net cash after all costs this year. AAR management intends to
spend these funds wisely.

AAR will apply its earnings towards appraisal work on its second project, its
flagship Koongie Park base metal project in Western Australia. While the project has
been around a long time, we believe its prospects for development are now better
than ever.

When one has a look at the mammoth share price performances of our previously
recommended emerging base metals opportunities like Fox Resources, Terramin
Australia and Copper Strike, we believe AAR has a lot of potential upside, with no
significant downside.

AAR owns 100% of the Koongie Park Project, which comprises an advanced
lead-copper-zinc deposit at Halls Creek in the Kimberley region of WA. Having owned
the project since 1989, AAR has completed extensive work worth around $7
million on the project and we await the release of results any day now from a
Pre-feasibility Study recently undertaken by AAR.

The project consists of two deposits, Sandiego and Onedin, with both containing a
zinc zone, a copper zone and a mixed zone. The surge in base metal prices over
recent years has undoubtedly boosted the development economics of the project.
The Sandiego deposit is a steeply plunging tabular mineralised deposit that has been
intensively drilled on 40 metre spaced sections over a strike length of 120 metres
and to a depth of 500 metres. Importantly, it remains open at depth.

The Onedin deposit meanwhile comprises a mostly rod-shaped mineralised zone, with a
high-grade component.

Total Resources at present comprise: Zinc Zone: 2.25 million tonnes @ 7.0% Zn;
Copper Zone: 1.8 million tonnes @ 2.6% Cu; and Mixed Zone: 0.6 million tonnes @ 7.7%
Zn and 1.6% Cu.

The current Total Resource comprises 4.65 million tonnes @ 5.2% Zn, 1.2% Cu, 0.8% Pb
and 29.6g/t Ag.

Our discussion with management revolved around only the project's history and
resource potential. We will however know more about Koongie Park's potential to host
a robust base metals development once the Pre-feasibility Study is released.

Our back of the envelope calculations however suggest a possible production scenario
could generate 30,000 tonnes of zinc metal annually at a cash operating cost of
A$0.80 per pound. This would generate a very healthy operating margin indeed,
compared to a current spot zinc price around A$1.90 a pound.

Accordingly, we keenly await the release of the Pre-feasibility Study.
Anglo Australian Resources held cash reserves of $2.3 million as at December 31 2006.
The key points for Members in our view are that AAR could receive a substantial
re-rating on the back of the development potential of its Koongie Park Project.
Furthermore, the cost of a Bankable Feasibility Study to fully assess development
would be fully funded from earnings from its Mandilla Gold Project, so shareholders
would not suffer any dilution.

We also understand that management has had discussions with a number of Asian metal
refiners interested in off take agreements and potentially assisting with project
funding. Given the scarcity of zinc concentrates in the world market, we believe
there would be a whole host of potential project partners for AAR.

Accordingly, Fat Prophets will monitor Anglo Australian Resources for a clear buying
signal.

 

[tech/a]

Y/T I'm a bit tied up at the mo but will update the technical picture later.
Its looking fairly typical to me at this time.

 

[tech/a]

Y/T.
Technically a little ho hum.I'm not seeing

(1) Absorbsion of supply.

(2) OR un impeded price rise through 11c.

Chart comments paint the technical picture.Until we see one or the other price will range.

 

[YOUNG_TRADER]

Thanks Tech,

Call me crazy but I see another CUL/RMI push towards 16c-18c

I'm not talking fundamentals here, I'm talking trading and I just remember how hard the traders pushed RMI and CUL,

So on the back of that I bought another 1.5M today at 10c and am looking to buy another 1M,

Fundamentally I see very little risk in buying at these levels, but I could be wrong

 

[SGB]

Thanks Tech,

Call me crazy but I see another CUL/RMI push towards 16c-18c

I'm not talking fundamentals here, I'm talking trading and I just remember how hard the traders pushed RMI and CUL,

So on the back of that I bought another 1.5M today at 10c and am looking to buy another 1M,

Fundamentally I see very little risk in buying at these levels, but I could be wrong

Yer.. I'm with you YT

I'm snapping up on weekness. Theres a feel about this one. Bullish gold prices gives me more confidence.

 

[tech/a]

Here in lies a difference in trading styles from fundamental to at least this techie.

I have a great deal of respect for some who spend a great deal of time evaluating companies going forward.Like all who take their style of analysis seriously I know the effort involved.
Placing ourselves in the position to take advantage of opportunity is both of our goals.

Ive sold out of AAR at a small profit,I see lack of demand and a great deal of supply blocking the path. This can change very quickly with an announcement.

My style is to find stock which is moving and take advantage of that move in my direction for as long as I can and with as much as I can muster (increasing position sizing).
Unlike some fundies I'm not prepared to wait and am happy to miss some of the move to have my funds working harder for me in trades which are showing opportunity.
This results in short trades and small losses.When one does fly and I'm on board,the shuffle for position is well rewarded as is those who take positions fundamentally and simply wait.

Neither in my view are more correct than the other,just different in application.
I may well be back in the frey but in the meantime I have AAR on the alert watchlist at 10.5c or sub 9c

 

[It's Snake Pliskin]

Here in lies a difference in trading styles from fundamental to at least this techie.

I have a great deal of respect for some who spend a great deal of time evaluating companies going forward.Like all who take their style of analysis seriously I know the effort involved.
Placing ourselves in the position to take advantage of opportunity is both of our goals.

Ive sold out of AAR at a small profit,I see lack of demand and a great deal of supply blocking the path. This can change very quickly with an announcement.

My style is to find stock which is moving and take advantage of that move in my direction for as long as I can and with as much as I can muster (increasing position sizing).
Unlike some fundies I'm not prepared to wait and am happy to miss some of the move to have my funds working harder for me in trades which are showing opportunity.
This results in short trades and small losses.When one does fly and I'm on board the shuffle for position is well rewarded as is those who take positions fundamentally and simply wait.

Neither in my view are more correct than the other,just different in application.
I may well be back in the frey but in the meantime I have AAR on the alert watchlist at 10.5c or sub 9c

I agree with the supply there tech,

I was watching it yesterday and the buyers were being eaten up with no increase. Not ready yet for me.

 

[hitmanlam]

I think i agree with BOTH tech/a & YT here. Neither way is correct. Just as long as you make good profit thats all that matters.

Commenting on post #553 this is my analysis on the current situation.

A lot of supply between the 10.5 - 13c mark and clear resistance is at 13c. Sellers winning at this level. Below the 10c mark, theres alot of buyers coming in and willing to push the price back up to 10c. Buyers winning at this level. Currently there's alot of buyers willing to accumulating at < 10c and sellers willing to distribute at 10.5. Buyers are probably absorbing the sellers for now and we're going to see abit of consolidation at this point (tight range of 9.5-10.5c for next couple of days) before the next leg up.

I think this stock will give great returns in a months time but i think patience is needed though. As i said before, the price was pushed back twice at the 13c level but I think there's a better chance this 3rd time it breaking through the 13c mark. Could be right, could be wrong. But i think the difference this time is:

a) Strong POG and market conditions supporting that price
b) Announcement of maiden profit. I don't think ppl realise the significance of this. Being able of fund/increase exploration resulting in less dilution of shares etc etc.

Im not going to increase my holdings at this stage as im am satisfied with my current position. (All i can say is its a whole less than YT position. lol).

Def fundatamentals are there and its a definite hold for me. Just give it a month.

 

[YOUNG_TRADER]

Well AAR really fell over today,

I'm surprised as were back to the levels we were pre the announcement of the profit, ie 8c-9c

I would have thought the fact that the company should be netting $30m of revenue from Mandilla which should result in $10m-$20m in future Net Profits, to fund the BFS of Konngie would have attracted more support, seems I was wrong

Well I'm still here, but it seems I am alone

Tech/a no doubt the chart doesn't look too healthy?

 

[countryboy]

can't support you just now ..need to do some homework on this stock. I sat on some cash for the last month and am trawling the market for purchases now that things appear to have settled.