AZM - Azumah Resources

[Sean K]

Interesting move by the EC to purchace a couple of more shares. Obviously has some confidence in his company. Hopefully the market starts to have some more confidence and rerate it.

Executive Chairman Acquires a Further 3 Million Azumah Shares

Azumah Resources Limited (ASX: AZM) is pleased to announce that the Company’s Executive Chairman, Mr Stephen Stone, has acquired an additional 3 million Azumah shares making him one of the Company’s major shareholders with a substantial holding of over 5.7%.

Mr Stone said the share transaction reflected his underlying confidence in the potential of the emerging West African explorer’s flagship Wa-Lawra Gold Project in north-west Ghana, which has a current JORC-compliant resource of over 516,000 ounces of gold at the Kunche prospect.

“With a current market capitalisation of less than A$12 per resource ounce, Azumah is extremely cheap on a fundamental and peer comparison basis,” Mr Stone continued. “That does not include the discovery just made at Bepkong and the other 100km of largely under-explored greenstone belt where we have a growing pipeline of soil anomalies to test.”

“We are confident that we will achieve our next objective of delineating a 1,000,000 ounce gold resource, which will enable us to look seriously at the possibility of a stand-alone, open-cut mining operation,” Mr Stone continued. “We have had some excellent near-surface gold intersections lately but the stock market correction followed by the Opes Prime collapse have taken their toll on the share price.”

Recent drilling at the Wa-Lawra Project has provided significant exploration success, with best drill results including 16m @ 4.9g/t gold from 50m and 32m at 3.62g/t gold from surface (from the Bepkong prospect); 6m @ 7.33g/t gold from 5m and 7m @ 3.95g/t gold from 10m (immediately east of Kunche); and 8m @ 9.35g/t gold from surface, including 2m @ 34.0g/t gold from 6m (from the Kunche East prospect);

RC and RAB drilling programmes will recommence at Wa-Lawra in a few weeks with the aim of delineating an initial JORC compliant resource at Bepkong and testing for possible northern and southern extensions, following-up mineralisation recently identified at Basabli and investigating new targets.

 

[Sean K]

Interesting move by the EC to purchace a couple of more shares. Obviously has some confidence in his company. Hopefully the market starts to have some more confidence and rerate it.

Up 30% after this news. On small volume, but they only have a few on issue.

Nice to see them get a bit of airplay.

Azumah Resources Limited (AZM) shares jumped 30% after it said executive chairman, Stephen Stone, had acquired an additional 3 million Azumah shares making him one of the company’s major shareholders with a substantial holding of over 5.7%. Mr Stone said the share transaction reflected his underlying confidence in the potential of the emerging West African explorer’s flagship Wa-Lawra Gold Project in north-west Ghana, which has a current JORC-compliant resource of over 516,000 ounces of gold at the Kunche prospect.

Too early to say if the downward trend has stopped but looks promising. They still have about 5% held in the Opes fiasco I think, so there may be some more downward pressure while the shares are moved and until they start the next drilling campaign.

 

[copper_hot]

Looks like a great stock.. I wanted to get onto it but been waiting for ANZ to sell off first.. any idea how much they still holding? I dont think they've sold anything after their first round selling.

 

[Sean K]

Looks like a great stock.. I wanted to get onto it but been waiting for ANZ to sell off first.. any idea how much they still holding? I dont think they've sold anything after their first round selling.

Might depend on what that big volume was a few days ago. Perhaps it was a transfer. I wasn`t watching the depth then. Even if they got rid of 3m then they still hold quite a few. Maybe 3-4%. I think they should just hold them, still at the lower end of the au to mc chart, only beaten by RER I think.

Nice day yeasterday, but still stuck in this sideways zone. I still think there ´s a floor at 9, breaking 15 should set it free.

 

[Sean K]

All that volume was obviouly the transfer of shares due to the Opes debacle.

Ann out this am regarding drilling out of the prospect to the north of the JORC deposit, but is obviously connected in some way, if only minimally.

Drilling Underway to Upgrade Wa-Lawra Gold Resource
Sale of Opes Prime and Croesus Overhang Stock Completed

Azumah Resources Limited (ASX: AZM) is pleased to announce that a 5,000m diamond and RC (reverse circulation) drill programme at the Company’s 100%-owned flagship Wa-Lawra Gold Project in north-west Ghana has commenced with the primary aim of delineating an inaugural JORC compliant resource at the recently discovered Bepkong prospect, 2km north of the Company’s 516,000 ounce Kunche inferred and indicated resource.

I'm interested in this for 3 reasons:

1. Undervalued on JORC to MC.
2. Highly prospective ground, only to accentuate the above factor.
3. If they achieve 1m oz au + then they will be a takeover target.

So, fundamentals and spec. Not a multi multibagger IMO, (no indication of that yet) but just a seemingly well managed, undervalued gold explorer. I'm in ave about 10 cents, so if it finds it's way to 15 plus, I'm happy.

“With an enterprise value of just A$14 per resource ounce based solely on its JORC-compliant resource of over 516,000 ounces of gold at the Kunche prospect, Azumah is fundamentally and comparatively undervalued against its West African peers - especially given the new discovery at Bepkong has not yet been factored in,” Mr Stephen Stone said.
“Shareholders can expect a steady news flow over the next few months as the Company commences two more drilling campaigns ahead of a planned resource update in July and the completion of metallurgical test work.”

 

[AussiePaul72]

I totally agree Kennas!

I researched AZM and watched on the sidelines for a while before getting on board last week at 12c. IMO it is undervalued when comparing known resources to a market cap of around $10M. Lots of potential for resource upgrade in the near future.

Market depth has been steadily growing stronger and stronger recently and if the broader market remains at least on par we may see a rally in SP this coming week. I say this as there are 32 buyers lined up for a total of over 2.1M shares and only 7 sellers for just over 300T shares at present. Interesting weeks ahead!

 

[vegemite]

I'm going to an Azumah presentation on Fri at the Gold Coast Resources showcase. So if I pick up anything of interest I'll post it.

StockAnalysis likes it. In his most recent comment (28 may) he makes the following points:

• Buy below 20 cents.
• Valuation of 32 cents (assuming $40/oz and 900,000 commercial ounces)
• Opes overhang cleared
• Lowly rated at the moment ($14/0z) due to 0.5 million ounces not being commercial at its location and $2 million in the bank
• Resources are in a relatively remote area of Ghana - away from other gold mining areas but still with good access to power and transport infrastructure
• Upgrade of resources expected in July. At the same time probably a capital raising (maybe 5 million) to fund feasibility)
• A matter of attaining critical mass (approx 1 million ounces) to attain rerating

You would imagine that with 560,000 ounces already and an upgrade in July that getting to around the million ounces mark is not to big an ask

Cheers V

 

[Sean K]

You would imagine that with 560,000 ounces already and an upgrade in July that getting to around the million ounces mark is not to big an ask

Cheers V

I don't think there is any doubt that they will eventually get the 1m oz over the entire tennament package, but it needs to be concentrated in a square area IMO. That is the risk right now. They need the area surrounding the current JORC to produce the required ounces at good grades close to surface, or it will go like a lot of other multi deposit explorers. No where. I'm sticking with the punt for now, and in on the right side of exploration. Once they get the 1m oz, they will be rerated and the big gains may have been missed. (or, you will have saved some pennies )

 

[jman2007]

I don't think there is any doubt that they will eventually get the 1m oz over the entire tennament package, but it needs to be concentrated in a square area IMO. That is the risk right now. They need the area surrounding the current JORC to produce the required ounces at good grades close to surface, or it will go like a lot of other multi deposit explorers. No where. I'm sticking with the punt for now, and in on the right side of exploration. Once they get the 1m oz, they will be rerated and the big gains may have been missed. (or, you will have saved some pennies )

I think a hypothetical price target of 15c would represent a very nice result, if your average buy-in price is 10c kennas. Long-term prospects and development potential still well off the page atm, but needless to say a 1Moz target still looks achievable over time. Exploration potential still looks to be slightly hamstrung by the modest budget, but it's hard to argue with a MC to oz ratio of $14.

Given the plethora of Australian and Candian companies now active in Ghana, it appears as though it's quite hard to make your voice heard above the clamour from everyone else. Investors on the ASX also seem to attribute a significiant "risk discount" to a lot of Australian outfits operating offshore, and would appear to undervalue many goldies compared to their Canadian compatriots on the TSX.

jman

 

[Sean K]

I think a hypothetical price target of 15c would represent a very nice result, if your average buy-in price is 10c kennas. Long-term prospects and development potential still well off the page atm, but needless to say a 1Moz target still looks achievable over time. Exploration potential still looks to be slightly hamstrung by the modest budget, but it's hard to argue with a MC to oz ratio of $14.

Given the plethora of Australian and Candian companies now active in Ghana, it appears as though it's quite hard to make your voice heard above the clamour from everyone else. Investors on the ASX also seem to attribute a significiant "risk discount" to a lot of Australian outfits operating offshore, and would appear to undervalue many goldies compared to their Canadian compatriots on the TSX.

jman

Yep, I agree jmann, and perhaps I'm selling it short at 15 cents. $30 an ounce seems to be the average for spec explorers in the region, so 20c is more about where it should be. The current drilling program should add in further ounces so it will be even cheaper on todays sp. And if they crack the targetted 1m oz, then it should be around about 40c all things being equal.

Too early to say if the downward trend has stopped but looks promising. They still have about 5% held in the Opes fiasco I think, so there may be some more downward pressure while the shares are moved and until they start the next drilling campaign.

Looks like that was a bottom, at this stage. Been moving up ok developing a bit of an ascending triangle. Need to break this 13c wall!!

 

[Sean K]

Looks like that was a bottom, at this stage. Been moving up ok developing a bit of an ascending triangle. Need to break this 13c wall!!

Too early to say, but holding above 13 with a tiny bit of buy depth building (some of it's me). However, will only take one keen seller to knock the buy side out as it's so thinly traded. More POG weakness could certainly cause that, or just a punter needing to pay off the margin call on BNB. eeeek!!

Here's a longer term perspective that shows a clear bottom confirmed by the indicators and a steady rise since high 9s. Longer term the next major resistance is shown, with some patchy stuff in between.

Need the initial JORC from Bepkong to be OK and general drilling to confirm the continuity of the overall gold strike in the tenaments for it to keep going I feel. Along with POG not imploading of course. And no black swan landing in the market pond.

 

[jman2007]

Too early to say, but holding above 13 with a tiny bit of buy depth building (some of it's me). However, will only take one keen seller to knock the buy side out as it's so thinly traded. More POG weakness could certainly cause that, or just a punter needing to pay off the margin call on BNB. eeeek!!

Wow,

This has really started to move since the low 9's, up another 7.5% yesterday, I wonder where these buyers are materialising from? I've currently got 30 buyers for over 2M units vs 8 sellers for 0.4M atm....seems like some nice depth is starting to build.

If Bepkong eventually turns out to be anything like Kunche, as in 250k oz or more, then this could get very interesting.

jman

 

[Sean K]

Wow,

This has really started to move since the low 9's, up another 7.5% yesterday, I wonder where these buyers are materialising from? I've currently got 30 buyers for over 2M units vs 8 sellers for 0.4M atm....seems like some nice depth is starting to build.

If Bepkong eventually turns out to be anything like Kunche, as in 250k oz or more, then this could get very interesting.

jman

Another nice day, reaching my intial take profits target, but I'm holding on for the minute. Looks like it's being chased with the sell side disappearing as buyers accumulate. Unfortunately I was not agressive enough in the chase and have sat back waiting for a natural correction. Up over 50% since the lows. Oh well, still doing ok out of them on paper. Not getting too excited yet but don't see this getting overvalued on oz to au JORC until it's well over 20c, which is around about industry average on current known resources. I don't like to use the word no brainer, so I won't.

 

[jman2007]

Another nice day, reaching my intial take profits target, but I'm holding on for the minute. Looks like it's being chased with the sell side disappearing as buyers accumulate. Unfortunately I was not agressive enough in the chase and have sat back waiting for a natural correction. Up over 50% since the lows. Oh well, still doing ok out of them on paper. Not getting too excited yet but don't see this getting overvalued on oz to au JORC until it's well over 20c, which is around about industry average on current known resources. I don't like to use the word no brainer, so I won't.

A great example of picking an undervalued company that appears to have been grossly overlooked by the market. I would be very, very happy with those gains kennas in what can only be described as an absolutely horrific past few weeks for the aussie-based gold plays!

jman

 

[Sean K]

Trading halt for the release of interim drill results of the current campaign. Must be very good, or very bad, but considering the stock has run from 11 to 16 cents in the past few days I would suggest some people have been talking to friends, and they will be good. Fingers crossed.

 

[jman2007]

Trading halt for the release of interim drill results of the current campaign. Must be very good, or very bad, but considering the stock has run from 11 to 16 cents in the past few days I would suggest some people have been talking to friends, and they will be good. Fingers crossed.

Yeah I saw the trading halt announced with interest. I tend to think they would be fairly significant in this case, usually poor results are buffed up a bit with "further assays pending" blah blah. I think we saw with CGX how the stock started to run hard before the near-mine exploration results came out. Not saying this is an identical situation, but surely more going on than meets the eye here?

jman

 

[vegemite]

When I saw their presentation last Friday, I didn't pick up any vibes that anything big was in the offing. My partner however had a sense that he was quite excited underneath it all. Would be happy for her to be on the money in this case.

My contribution is that I learnt that azumah means both warrior and friday - I'm sure that will help everyone hugely,

Cheers V

 

[Sean K]

Damn it! POG could have been kinder and the DOW could have gone up 2% for us instead of tanking for this prospectively good ann. Now, if it's crappo, there could be some pain. Damn stock market!!! LOL

At least if it's good, we won't feel too much pain, but the potential boost has been thwarted by bad timing. Arrrghhhhh!

 

[Sean K]

Not bad:

Wide High-Grade Gold Hits Significantly Enhance Bepkong Gold Discovery

Results Include 26m at 6.90g/t Au including 8m at 15.35g/t Au

West African gold explorer Azumah Resources Limited (ASX: AZM) is pleased to advise that it has received outstanding results from the current drilling campaign at the Bepkong Prospect, located 2km north of the main 516,000oz Kunche resource at its 100%-owned Wa-Lawra Gold Project in Ghana.

The results from Reverse Circulation (RC) drilling have extended and confirmed a zone of coherent high-grade gold mineralisation at Bepkong that will form the basis for an initial JORC Code compliant resource estimate scheduled for August 2008.

Intersections based on 4m composited samples include:

26m at 6.90g/t gold from 28m - incl. 8m at 15.35g/t gold from 28m
40m at 3.45g/t gold from 4m - incl. 20m at 5.45g/t gold from 4m
48m at 2.39g/t gold from 64m - incl. 32m at 3.25g/t gold from 76m
28m at 3.31g/t gold from surface - incl. 8m at 9.47g/t gold from 12m
24m at 2.04g/t gold from 56m; and
60m at 1.42g/t gold from 16m.

Another open pittable deposit here by the looks. They may have their 1m oz in just Kunche and Bepkong...

“The mineralisation is clearly still open at 80m depth but our focus is on defining by year-end a one million ounce near-surface resource to underpin a stand-alone open-pit mining operation – an objective which we are increasingly confident of achieving,” Mr Stone said

Looking forward to East Kunche which should be imminent also.

Such a shame the DOW tanked...

 

[Sean K]

One of a few green one's today. Damn DOW! And POG could be going balistic instead of trending down too!!!! Oh well.

Just readjusting some figures on if they achieve 1m oz au and on a current MC to potential oz au they come in at $13.5. Still half that of the general explorer market at $30.

Chart wise, coming up against a hurdle at 18 and then a rough patch to 23. Not sure what it will do around these levels.

Needs some more consolidation at some point anyway.