AAR - Astral Resources

[hangseng]

Seems I need new batteries (calculator and brain ).

Please disregard my previous Co calculation.

2887.65 Tonnes Co @ USD$36,000 = USD$103,955,400.00

At 10% IGV = USD$10,395,540.00

Value p/s = .021

Still value but not as high as I indicated. A bit pedantic but need to be correct. Despite this we are still looking at the very high probability of a near term significant re-rating of AAR.

 

[YOUNG_TRADER]

Seems I need new batteries (calculator and brain ).

Please disregard my previous Co calculation.

2887.65 Tonnes Co @ USD$36,000 = USD$103,955,400.00

At 10% IGV = USD$10,395,540.00

Value p/s = .021

Still value but not as high as I indicated. A bit pedantic but need to be correct. Despite this we are still looking at the very high probability of a near term significant re-rating of AAR.

Hey Hang Seng, am I going blind,

Where does this Colbat come from?

If tis a seperate project I will have to re-do my valuation as this adds another 2c per share

Could you also post up the link where I can find it for myself

Thanks in advance

 

[hangseng]

Hey Hang Seng, am I going blind,

Where does this Colbat come from?

If tis a seperate project I will have to re-do my valuation as this adds another 2c per share

Could you also post up the link where I can find it for myself

Thanks in advance

2007 Annual Report Page2
http://www.anglo.com.au/_content/documents/551.pdf

There is more but this is the one that sticks out.

"6.2m @ 2.14% Cu, 462g/t Ag
41.6m @ 10.89% Zn
29m @ 0.6% Cu, 621g/t Co
All three drill holes intersected substantial copper mineralisation with unusually high values of cobalt. As cobalt is a high priced commodity (about US$36,000/tonne), potential exists for cobalt to be a valuable co-product to copper if metallurgical testing indicates cobalt is recoverable."

 

[Purd2]

You two never cease to amze me...lol. To see you both together is great. I have copied the specific paragraph for others to see...hope it copies ok! P

Metallurgical test hole SRCD24 was drilled grid east at -52 ° on section 1080N to a depth of 332.5. The hole was designed to intersect partially oxidised sulphide (transition zone) mineralisation. A 100m down hole interval of semi-massive to massive sulphide containing pyrite, magnetite, sphalerite and chalcopyrite was intersected. Principal mineralised intervals are:
6.2m @ 2.14% Cu, 462g/t Ag
41.6m @ 10.89% Zn
29m @ 0.6% 621g/t Co
All three drill holes intersected substantial copper mineralisation with unusually high values of cobalt. As cobalt is a high priced commodity (about US$36,000/tonne), potential exists for cobalt to be a valuable co-product to copper if metallurgical testing indicates cobalt is recoverable.
Exploration hole SRCD23 was drilled grid east at -60 ° on section 1200N to a depth of 294m. This hole was designed to test the projected northern strike extensions of the Sandiego mineralisation within fresh rock. The hole intersected a five metre interval (204-209m down hole) of moderately mineralised chlorite-talc altered etc etc ............................

 

[cuttlefish]

Are the koongie resource figures based on the combined oxide, transition and primary ore? and have they not stated that the transition and oxide ore aren't in any of their current mining plans? Does this not reduce significantly the size and in-ground value of the recoverable resource? (isn't the primary only 50% of the sandiego resource and only 30% of the onedin resource - so over 50% of the total ore isn't being included in their initial mining plans - the same plans and pre-feasability study they've been talking about completing for a year now).

In relation to gold - as fqz88 said earlier in this thread - the most recent info from the AGM indicates that they only recovered 8koz from the remaining 50ktonnes of ore, not the 12koz they expected. Also gold mining and processing at mandilla now appears to be complete for the time being - stockpile processing is finished and they've not stated they are going to mine the low grade (3.5g/t) bedrock resource.

 

[hangseng]

Are the koongie resource figures based on the combined oxide, transition and primary ore? and have they not stated that the transition and oxide ore aren't in any of their current mining plans? Does this not reduce significantly the size and in-ground value of the recoverable resource? (isn't the primary only 50% of the sandiego resource and only 30% of the onedin resource - so over 50% of the total ore isn't being included in their initial mining plans - the same plans and pre-feasability study they've been talking about completing for a year now).

In relation to gold - as fqz88 said earlier in this thread - the most recent info from the AGM indicates that they only recovered 8koz from the remaining 50ktonnes of ore, not the 12koz they expected. Also gold mining and processing at mandilla now appears to be complete for the time being - stockpile processing is finished and they've not stated they are going to mine the low grade (3.5g/t) bedrock resource.

As I have consistently stated the complete picture won' be known until the completion of the metallurgical testwork. For now the estimates are based on the total IGV as now confirmed by JJ himself at the AGM.

AAR has indicated the metallurgical testwork results are expected to be completed in the 3rd-4th qtr of 2007. This estimate would have come from Kwan himself. Kwan is also quite expensive, so I am sure AAR will be wanting a conclusive decision and won't let this go on indefinately.

It is also already acknowledged that high grade recoveries have come from the intial testwork results. All available in AAR reports throughout 2007 and now on the new website.

Nothing conclusive as yet as you indicate, however intial progress results are undeniably positive.

 

[Scuba]

From the chairman's address- A.G.M. 28th November 2007;
http://www.anglo.com.au/_content/documents/554.pdf

"...and I am pleased to confirm that a total of 20,130 ozs were recovered from 78,000 tonnes of ore as against a budgeted 17,000 ozs from 70,000 tonnes.

Further and urgent work is being considered at East Mandilla where an additional but as yet unmined Resource has been identified."

 

[YOUNG_TRADER]

Ok well I have modified my research to include the potential of Cobalt, however due to the uncertaintiy of the quantity contained I can't really factor any value into pricing, and before anyone says it, conservative, yes yes yes I know.

AAR​

Mkt Structure

Shares = 500m




Mkt Cap @9.5c = $47.5m Current



Cash
$9.5m + I think more from upcoming treatment of some remaning stockpilled Ore


Projects


Mandilla Gold, 100%, W.A.

What Mandilla West has done is given AAR its first ever profit of $5.6m last year,

Now with this batch treatment, I'm betting they will be able to announce another profit this year of around $5m, more if they treat Mandilla East

Now they have announced a JORC at Mandilla Est of 356Kt's@3g/t Au = 35Koz's Au, should Net $5m

However Mandilla East has the potential to host much higher grade gold as evidenced by previous drilling


"High grade bedrock intersections achieved at East Mandilla including
1m @ 14.58g/t Au
1m @ 9.23g/t Au
1m @ 13.98g/t Au[/B]"



As I mention earlier on, Mandilla is actually 2-5kms East of RMS's Wattle Dam gold operation, a quick histroy lesson on RMS, shows that it too was developing its Wattle Dam gold mine as a simple cash cow project, ie it was never meant to be a company maker, however some deep holes below the base of the open pit operation intersected some amazing hits of gold

So given the proximity of Manidilla to Wattle Dam (ie 2-5kms) and given the fact that in the past AAR has had the following drill intersections at Mandillia

a spectacular result of 3m @ 250.07g/t Au (inc. 1m @ 739.76g/t Au).
This exceptional intersection is accompanied by other significant intersections
such as 1m @ 13.2g/t Au, 1m @ 11.2g/t Au, 1m @ 10.17g/t Au and 1m @
6.7g/t Au at depths of only 16 to 19 metres below surface. 3m @ 71.82g/t Au (inc. 1m @191.75g/t Au),
2m @ 38.95g/t Au, 2m @ 9.15g/t Au and 1m @ 11.8g/t Au



And these were all shallow holes, I firmly believe the potential exists for deep drilling at Mandilla to uncover a possible high grade gold section that would transform Madilla into the Jewel of AAR's projects, as it did with Wattle Dam to RMS.

In any event, the cashflows generated for this project should ensure that for the foreseable exploration future no fund raisings (ie Dilution) will be required.



Koongie VMS style Base Metals, 100%, W.A.

JORC 4.7Mt's@ 5.2%Zn + 1.2%Cu + 0.8%Pb + 30g/tAg

This project is made up of 2 parts, 1 appears to be shallow enough to be open pittable, the other which appears to be the bulk would best be accessed via underground mining.

The company has been undertaking metallurgical testing as well as Pre-Feasibilty Studies on the project.

To highlight the value of these VMS style deposits, the company has put a comparison of Koongie to other deposits and I believe the deposit is easily comparable to TZN's Angas or PDZ's Prairie Downs

Also the company has now announced an In-Situ value of $1.2Billion for Koongie, now the usual rule of thumb is to give a company a 10% EV (Enterprise Value) of the total IGV (In Ground Value) or In-Situ value of the deposit,

@ 10% = $120m however I do acknowledge there are some metallurgical/processing risks with Koongie and will thus discount this by 50%

This still gives an EV of $60m = 12c



The deposit also has a very exciting Colbalt potential as evidenced by the following drill hits

6.2m @ 2.14% Cu, 462g/t Ag
41.6m @ 10.89% Zn
29m @ 0.6% Cu 621g/t Co
42m @ 0.7% Cu, 1.76%Pb, 15.68%Zn, 146ppm Co, 109g/t Ag (125 - 169m)
13m @ 1.93% Cu, 1.81%Pb, 13.46%Zn 143ppm Co, 146g/t Ag (178 – 191m)
9m @ 0.56% Cu, 5.3%Pb, 7.65%Zn, 126ppm Co, 104g/t Ag (206-215m)40.1m @ 1.31%1.31%Pb, 4.89%Zn, 154ppm Co, 85g/t Ag (245.9 – 286m)
18m @ 0.41%Cu, 1.66%Pb, 5.59%Zn, 20 ppm 65g/t (293-311m)




Victoria Downs Zinc/Lead Base Metals, 100%, W.A.
The company continues to announce an exploration target of 50Mt's-100Mt's@10% Zinc

Now I don't know about you, but I don't think the guys running this company are rampers, if anything they're too quiet and say too little, so for them to have this target says to me there is a good chance they may have something big at Victoria Downs,

Now 50Mt's-100Mt's@10% Zinc would be worth $12B- $24B Insitu at current prices, however it is just that a target

I think $5m-$10m exploration upside is fair to price into AAR's share price


Feysville Gold/Nickel, 100%, W.A.
The Feysville Project consists of all mineral rights attached to two mining leases located 16km SSE of Kalgoorlie. The project is situated in the geological / structural corridor, bounded by the Boulder Lefroy Fault that hosts the world class deposits of Kalgoorlie and St Ives as well as other substantial deposits in the New Celebration, Kambalda and Hannans
South areas. The project also contains an extensive strike length of an ultramafic unit which may correlate with the ultramafic horizon that hosts nickel sulphide deposits at Kambalda 30km to the south.



Pinnacles Gold, 40%, W.A.
The wholly owned exploration licence of 4 sub-blocks is located immediately east of the Pinnacle workings 20km east of Cue. The area is interpreted to contain portion of the felsic unit that hosts most of the mineralisation at the Tuckabianna mine. Alloy Resources Limited may earn a 60% interest by expenditure of $150,000 over a three year period.


Valuation

Cash = $9.5m = 2c (approx)
Mandilla East JORC = $5m = 1c
Mandilla bonaza exploration upside = $5m =1c
Konngie @ 5% EV (ie discounted by 50% of Mkt Norm) = 12c
Victoria Downs potential $5m - $10m = 1c-2c

Total = 17c - 18c

Now I am not a financial advisor and this is not a formal valuation or anything, its just my opinion, but at under 10c AAR seems cheap, if they bring Koongie in it could be worth many multiples of the current share price, gold is strong and this ensures profitability for Mandilla East (albeit less than Mandilla West)

The exploration potential of Mandilla and Victoria Downs is large, especially Victoria Downs

Most important for me, the company has succefully mined Mandilla and generated strong cash flows, as a result they have not had to dilute the capital of AAR with SPPs or placements

 

[hangseng]

"Recent drilling programs at East Mandilla have also shown that there may be potential for palaeochannel mineralisation as several intersections (such as MDRC26 1m @ 28.27g/t Au and MDRC45 3m @ 20.60g/t Au) relate to quartz gravel at the interface of weathered bedrock and transported overburden. Closer spaced drilling is required to test the potential fully."

AAR has also recorded much higher grades (+300g/t) however they have allowed for a top cut of 25g/t.

Also take note how they highlight the location of the old Nicholsons Find plant right next door to Koongie Park , which is still there and can be upgraded for Koongie Park. This is no accidental mention in my view (and they have eluded to same in past information).

 

[Old monkey]

I think many of us would like to be optimistic for this share to go North. If anything it will be a comfort to hold on to it. Many would like to have an idea the range of the SPs in the months to come. We hear TZN being mentioned. TZN was at one time around 70 cts. But it is now in the $3 range. AAR has taken 20 years to get to 9 cts. It only take TZN 2 years to get to $3 range. What is driving TZN's SP?? SMM shares was at in the 30cts range but within 10 years it has gone up to $6. I am sure that there are many goodies with AAR, what with Mandilla, Koongie, Victoria Down etc. But why is it taking AAR 20 years to get to where it is now??? It is time to sit back and see where AAR will go. I am sure JJ and his team are man of goodwill and would like to have its projects firing at all cylinders. Optimistically how far will they go given their history??? $6 to $10 at least maybe.........???? Can Hang Seng or YT comes up with some sort of summary so that all of us have something to look forward to or cheer AAR on?

 

[YOUNG_TRADER]

Can Hang Seng or YT comes up with some sort of summary so that all of us have something to look forward to or cheer AAR on?

Ummm exactly what would you consider to be a summary?

Have you looked at my research contained in the post immediately preceding yours?

If thats not a summary I give up

 

[prawn_86]

Monkey,

YT has put his summary and it seems to be "fair".

Asking for someone to say a stock will go to $6 or $10 when it is only 9c is just ridiculous.

 

[Sean K]

Ummm exactly what would you consider to be a summary?

Have you looked at my research contained in the post immediately preceding yours?

If thats not a summary I give up

Maybe your summary didn't come up with the $6-10 target set.

Need to work on your creative accounting. Maybe just add a few 000s here and there?

 

[YOUNG_TRADER]

Maybe your summary didn't come up with the $6-10 target set.

Need to work on your creative accounting. Maybe just add a few 000s here and there?

lol, yep agree, I'll take a course with Arthur Anderson ENRON Audit team, they are said to be good with number manipulation and trickery

AAR is worth One Hundred Billion Gagillion Dollars!


On a serious note I have shown that conservatively AAR is arguably worth 18c

Koongie only on Industry norm valuations (ie 10% I.G.V.) should add $120m to AAR = 24c

My guess is that as usually it will take the company announcement of the AGM Presentation (containing all the Koongie comparison table and I.G.V.) to kick start things

Why it hasn't come out yet is a mystery, I mean the AGM was wednesday

 

[hangseng]

lol, yep agree, I'll take a course with Arthur Anderson ENRON Audit team, they are said to be good with number manipulation and trickery

AAR is worth One Hundred Billion Gagillion Dollars!


On a serious note I have shown that conservatively AAR is arguably worth 18c

Koongie only on Industry norm valuations (ie 10% I.G.V.) should add $120m to AAR = 24c

My guess is that as usually it will take the company announcement of the AGM Presentation (containing all the Koongie comparison table and I.G.V.) to kick start things

Why it hasn't come out yet is a mystery, I mean the AGM was wednesday

YT AAR did state the IGV at the AGM and it in the announcements. USD$1.2b

I have given so many summaries on AAR it is quite amasing to have a request for a summary.

 

[YOUNG_TRADER]

YT AAR did state the IGV at the AGM and it in the announcements. USD$1.2b

No HangSeng, I meant why hasn't the presentation been released as an announcement yet, I only was aware of it because of Spottys post,

My guess is once its out mkt will be all "check it out, last page of presentation, company reckons Koongie is worth $1.2b" etc

 

[hangseng]

No HangSeng, I meant why hasn't the presentation been released as an announcement yet, I only was aware of it because of Spottys post,

My guess is once its out mkt will be all "check it out, last page of presentation, company reckons Koongie is worth $1.2b" etc

No problem YT.

I agree the presentation should be released as an announcement. Once seeing it publicly like that, it would be enough to make some salivate at the prospect of the wealth potential. AAR has the potential of many multiples of return, as it has already done for some.

 

[aaronphetamine]

While I'm not into the depth of knowledge that many posters on this thread are, Id just like to make it known that I still follow this stock closely and have since first finding out about AAR through this forum site and checking it out myself.

It seems from around march to july were the "glory days" for this stock, and many ppl walked away very happy, there was talk of this stock buying holiday homes on the coast etc... then the august correction happened and the stock plummeted dramatically, after attempting to reach and breach the 13.5c barrier three times and failing each time, investors moved on to better shores.

Now with all this positive news floating around, im sure these investors will be watching on and waiting.

I have always had faith in this stock, but since august, been too scared to buy in... Now however, could be different. I will be putting in a buy order in the low 9s and we'll see what I can pick up... if anything.

Volume really needs to increase for this stock... and then that will get the ball rolling.

 

[Scuba]

What do you think of Gerard Burg's (of NAB melbourne- minerals and energy) Zinc to drop 11% in 2008: Study story quoted here at Buisness standard dot com do any of you think it a major concern in relation to AAR's potential KP project and outlined plans in general?

 

[hangseng]

What do you think of Gerard Burg's (of NAB melbourne- minerals and energy) Zinc to drop 11% in 2008: Study story quoted here at Buisness standard dot com do any of you think it a major concern in relation to AAR's potential KP project and outlined plans in general?

"The price will average $2,925 a tonne" in 2008

Have a look at the estimates by AAR, YT and myself. This will make absolutely no difference at all. Also this has been forecast for some time so the NAB analysts are providing nothing new (in fact they display how far behind they are).

There is also a little aspect as displayed by many analysts termed the "Zinc Gap" which will occur about the same time AAR would be coming online as a producer. Interestingly Fat Prophets referred to this same chart in Perth this year.
http://www.kitcometals.com/images/commmentary/Furse/feb102006_2.gif