AZM - Azumah Resources

[Sean K]

Yeah, holiday was great mate. Thanks for asking!

Hi kennas, I see you've changed your tiger. I prefer this one to the last. Nice beast!

Been a bit quiet on the AZM front, what are they up to? Maybe they're all on holiday putting the recent placement to use?

Perhaps they're finalising some drilling results from May?

Future Work

Activities planned during the June 2009 Quarter include:

• commencing a more extensive drilling programme at the Wa-Lawra Gold Project in mid-May that will focus at Bepkong on extending near-surface resources along strike and high-grade zones to greater depth;
• drilling other quality targets in the Kunche-Bepkong mineralised camp area;
• extending maiden resources at the Yagha and Atikpi prospects; and
• testing a series of new soil geochemistry defined targets.

Additional drilling and rock chip sampling is also planned.

June quarter ends at the end of June doesn't it? Like next week?

Fingers crossed they pull up some of the yellow metal because the buy/sell spread looks disasterous at the present.

Good luck!!

 

[Sean K]

Hi kennas, I see you've changed your tiger. I prefer this one to the last. Nice beast!

Hi Old Mate, cheers. Like the new one. Thanks!

Ann out on some results that look ok but haven't delved into it enough yet. Looks like they will get to the 1m oz au mark soon, but this was supposed to happen last year!!!


HIGH-GRADE GOLD INTERSECTIONS AT COLLETTE AND JULIE

• Shallow, high-grade gold intersections at Collette prospect
o Includes 3m at 45.90g/t gold
• Wide mineralised zones confirm continuity at Julie prospect
• Drilling to target extensions to Collette and Julie prospects
• Maiden mineral resource at new Wa Project targeted for end-2009

Better intercepts include:
• 12m at 13.13g/t gold from 24m - ACORC004 - Collette
incl 3m at 45.90g/t gold from 24m
• 1m at 16.20g/t gold from 60m – ACORC002 - Collette
• 13m at 2.78g/t gold from 10m – AJRC027 - Julie
• 2m at 8.96g/t gold from 21m - AJRC028 - Julie
• 3m at 5.03g/t gold from 52m – AJRC032 – Julie

“These results, combined with the discovery of new mineralised quartz veins at Collette, reinforce our view as to the excellent prospectivity of the recently acquired Wa Project where we are targeting the delineation of a maiden mineral resource by the end of 2009” Azumah Executive Chairman, Mr Stephen Stone commented.

 

[shag]

at least it wasnt leaked, as the only trade before this was a pidly partorder of mine and it wasnt going far friday.

 

[Sean K]

at least it wasnt leaked, as the only trade before this was a pidly partorder of mine and it wasnt going far friday.

I'm sitting back waiting for a market pullback before committing any more at the moment. Having said that, a significant run in POG and this breaking through 15c will make me re-evaluate.

Just going through their presentation they put out with the above mentioned announcement and they have pointed out their position in the W African market, but I have some doubts on the figures because I know PRU have more shares on issue and more gold. Like, 2m oz au more!

Waiting for CDT and AZM to merge. Or, perhaps they like being on each others boards to collect more fees?

On the Julia prospect they state: 'Immediate opportunity to delineate maiden resource at Julie' which is underlined and bolded, so very serious stuff!! They have over 1000m of strike with intersections generally 2-5m at 1-2g/t but some higher ones like 10-15m at 5-8 g/t so they could firm up a couple of hundred thousand grams maybe, at a pluck. Expect a maiden resource I suppose...

Collette is very very interesting. A couple of outstanding hits there, and it could turn into quite a few ounces also. Needs some follow up to see the extent of the widths and depth. Have circled the announced intersections. 3m @ 45g/t!! They also had 1m @ 70g/t which wasn't announced for some reason.

Seems pretty positive for them to reach that 1m oz mark. And with their success in drilling, fingers crossed they continue to find decent deposits close to Kunche where any mill will probably be established.

Their stated program looks like we'll see a few drill results filter through in July.

Hey, PRU! Hey LGL!! Look over here! Look at all this undeveloped gold sitting at the surface!!

Cripes, I was about to say surprised it didn't attract some attention yesterday but didn't realise the spike up to 17c. eeeeek. Has done alright since the 'bottom'.

Good luck kennas!! Cheers.

 

[jman2007]

These guys seem to travelling along quite nicely

Yeah I also noticed the 'slightly' out-of-date figures they were using for their peer comparison in the presentation. : The other unusual aspect of the drilling results release was the description of their tenure as being "geologically fertile", I know what they mean, but it's an odd way to put it!

I really hope they manage to tie something together at Julie, and a couple of those Collette hits are damn impressive too. I'd like to see some more cross sections tbh, as it is difficult to draw too many conclusions from a plan view although Julie "East" looks to be shaping up as the more prospective/advanced project at this stage.

We have a very significant shear zone running through some of our tenure in the Goldfields too. We have found that very large sections of the shear along its length (strike length) are indeed mineralised with gold, but in sub-economic quantities. Generally, things like cross cutting faults or dilational jogs and bends in these types of shear structures will help in focussing the mineralising fluids and result in the gold being precipitated, hopefully giving you a nice little gold deposit.

Lets hope that the Julie shear doesn't turn into another "also ran", but it looks quite encouraging at this stage!

Don't hold this one, yet

 

[Sean K]

Yeah, Julie 'East' looks the most promising. Some outstanding historical drilling from Crew in that area with quite a few of 10m @ 10g/t plus. One of 10m @ 40 g/t, another at 32 g/t. Fingers crossed AZM can pull up a few like that.

 

[Sean K]

Have to laugh at the broker/bot trading that goes on during these times.

First trade today 84 shares @ 11c for $9.24 consideration, (less brokerage) to push the price down 4%.

Poor punters out there will be crapping themselves. Sell, sell, sell. LOL

 

[Miner]

Have to laugh at the broker/bot trading that goes on during these times.

First trade today 84 shares @ 11c for $9.24 consideration, (less brokerage) to push the price down 4%.

Poor punters out there will be crapping themselves. Sell, sell, sell. LOL

thanks Kennas for giving this inside on AZM.
I am wondering if Commsec has a minimum sell or purchase criterion of $500 how could another broker makes a transaction of $9.24 ? Should not ASX has some sort of lower value for transaction ? Of course Commsec sells any value plus brokerage if that is the last parcel with the seller. In a way Commsec will accept a sell order for one share @1 cents if that is the left over in portfolio.

I was frustrated to see it dived down at 11 cents until reading your post. Thanks a lot.

I however noticed there were two transactions today (presumably one was done after you posted) so far .

One was with 11 cents for $9.24 (no of shares 84) and the second one was for 12 cents (no of shares 9917)

02:02:02 PM 0.120 9,833 1,179.96
10:05:12 AM 0.110 84 9.24

12 0.5 4.55% 11.5 12 11 12 11 $1,189 9,917

 

[Sean K]

Nice to be noticed in the news. Just need some investors to actually buy some shares in this puppy..


Gold rush: Ghana in spotlight
THE DIRT: Robin Bromby | July 07, 2009
Article from: The Australian

IT'S not quite Bendigo in the 1850s or the Klondike in 1897, but Ghana seems the nearest we've got these days to a red blooded gold rush.

The fact that separates Ghana today from the gold rushes of the past is that, of course, the West African country is already an established producer of the yellow metal. But there is enormous exploration remaining -- like in much of West Africa.

The pace is really picking up there -- and, fortunately, Australian companies are in the vanguard of the charge.

The leader of the Australian pack in Ghana is Perseus Mining with more than 5m ounces of gold and plenty of money in the bank.

We have just seen Azumah Resources report some spectacular drilling results from its Wa project in Ghana, including an intersection of 12m at 13.13 grams/tonne, with 3m of that assaying at 45.9g/t, or 1.50z a tonne.

Blackswan Equities’ latest note on AZM is headed: “Azumah -- Potential to punch above its weight?” It puts a price target at between 17c and 28.5c a share.

Azumah’s project lies in the northwestern corner of Ghana running up to the border with Burkina Faso. South of its Wa project lies another gold play -- also, confusingly, called Wa -- owned by Perth-based Castle Minerals, a company that has 8000sq km and which, so far, has discovered a virgin high grade vein called Julie West with 400,000 tonnes at 4.5g/t in the 50m immediately below surface. Further details will be available in CDT’s quarterly later this month.

 

[Sean K]

AZM looking like a turkey on the long term chart. A turkey. IPOd at 20c and went to 40, before a constant run down to 4c, and now hovering about 10. I wonder what it is that punters don't like? Maybe because it's outside the SW Ghana sweet spot where all the majors are playing. Maybe there's lack of infrastructure and any capex is going to be a killer. There's no producing mines nearby that I know of where excess mil capacity could be used so that's going to be one hell of a committment and dilution eventually. Even if they get to development. Maybe it's the ex Croesus players, who seem to be managing to keep CDTs market cap under lock and key as well. They've convinced Macquarie to invest so they must be able to deliver a good powerpoint presentation. I'm troubled by the lack of support. Gotta be a reason. Half the mc as GRY with the practically the same resource base, and prospects.

 

[Miner]

AZM looking like a turkey on the long term chart. A turkey. IPOd at 20c and went to 40, before a constant run down to 4c, and now hovering about 10. I wonder what it is that punters don't like? Maybe because it's outside the SW Ghana sweet spot where all the majors are playing. Maybe there's lack of infrastructure and any capex is going to be a killer. There's no producing mines nearby that I know of where excess mil capacity could be used so that's going to be one hell of a committment and dilution eventually. Even if they get to development. Maybe it's the ex Croesus players, who seem to be managing to keep CDTs market cap under lock and key as well. They've convinced Macquarie to invest so they must be able to deliver a good powerpoint presentation. I'm troubled by the lack of support. Gotta be a reason. Half the mc as GRY with the practically the same resource base, and prospects.

Me confused too. I put a buy at 10.5 cents thinking it will never come and market was so upbeat. I was shocked to see my buy order was executed. Today price dropped on a good day what happens to AZM tomorrow

 

[jman2007]

This Blackswan Equities broker report from their website has some useful information. It looks like the author of the report actually went and visted the majority of their prospects, and included several interesting photos in the report:

http://www.azumahresources.com.au/wp-content/uploads/2009/07/AZM_Blackswan_240609.pdf

The author of the report obviously knows a bit a about geology (probably a former Geo himself?), and it shouldn't be understated that Bepkong was a "blind" discovery -meaning that the mineralisation has no surface expression. But the point is, that Azumah's approach is obviously the right one for the area - so there is a fairly reasonable chance of future discoveries imo (their land holding is fairly significant right?).

The infrastructure, or lack of is an interesting point. The regional center of Wa has about 50,000 people, so it's not exactly just a few huts sitting on the side of the road. Maybe it's partly to do with Azumah not being in the "fashionable" part of the greenstone belt? If they find another 'hidden' 500Koz deposit though, that'll do wonders for their profile.

 

[Sean K]

This Blackswan Equities broker report from their website has some useful information.

Thanks jman, I hadn't noticed that one. Nice to see some photos of the place and more detailed info on the projects although not too much more to what we've seen.

As a valuation, the only thing we can do is a peer comparison, which Tony Lofthouse, the analyst here, has done. We've seen these sorts of comparisons elsewhere but it just confirms again in my mind that this should be revalued at some point, to be more in line with the market.

His comments regarding valuations by peer comparison in West Africa and the chart below:

Taken alone these data suggest that Azumah does not receive the same level of market recognition as many other companies active in West Africa.

Based on the range of valuations ascribed by the market to companies with exploration and/or production interests in West Africa, combined with Azumah’s extensive holding of prospective target lithologies and structural settings; our subjective assessment of the effectiveness of the technical programs the company has carried out to date and plans for the next six to twelve months, we consider it probable that, within that timeframe, Azumah will increase its resource base to between 1.0Moz and 1.5Moz.

Market capitalisations ranges between A$15 and A$160 per resource ounce for companies with up to 1,500,000 ounces of resource. A reasonably common figure appears to be in the order of A$40 per ounce once a company reaches the one million ounce level.

Assigning 90% probability that AZM will achieve 1,000,000 ounces and 50% probability of the extra 500,000 ounces; plus a 75% probability that the market would uplift its assessment to A$40/oz at 1.0Moz and 90% uplift probability if 1.5Moz is reached, gives a basis for a valuation range.

Assuming 158M shares after the Crew acquisition is finalised, and using the subjective probabilities outlined above, we estimate a share price target range as follows:

At announcement of resource upgrade to 1,000,000 ounces:
(1,000,000 * 90%) at (A$40/oz * 75%) = 900,000 * A$30 = A$27.0M
Price per share on 158M fpo = A$27 / 158 = A$0.170

At announcement of resource upgrade to 1,500,000 ounces:
(1,000,000 + (500,000 * 50%)) at (A$40/oz * 90%) = 1,250,000 * A$36 = A$45.0M

Price per share on 158M fpo = A$45 / 158 = A$0.285

If market values 1,500,000 ounces at A$40/oz, valuation rises to A$60M = A$0.38 ps.

This is pretty much how I've been plucking price targets - based on JORCs and MCs/EVs, so I'm happy with it.

Still confounding that it's half GRYs mc.

And this chart, once again, shows PRU to be undervalued compared to others at their stage. And the figure should look even better as they 7m oz au, not the 5 mentioned here.

 

[shag]

Me confused too. I put a buy at 10.5 cents thinking it will never come and market was so upbeat. I was shocked to see my buy order was executed. Today price dropped on a good day what happens to AZM tomorrow

i was in exactly the same boat, 10.5, top of list, and forgotten.
appologies for post yest, a bit pragmatic/callous.
someone was dumping/offloading stock.

 

[Miner]

i was in exactly the same boat, 10.5, top of list, and forgotten.
appologies for post yest, a bit pragmatic/callous.
someone was dumping/offloading stock.

Thanks Shag and no worry.

I think both Kennas and Jman are very bullish on AZM and they have the ears right on the ground.

So let us enjoy the 10.5 cents price for some times considering that will be the ground floor for the price.

 

[Sean K]

Thanks Shag and no worry.

I think both Kennas and Jman are very bullish on AZM and they have the ears right on the ground.

So let us enjoy the 10.5 cents price for some times considering that will be the ground floor for the price.

I'm more curious than bullish.

Been checking GRY in more detail today and perhaps there's a reason they have double the MC. Looks pretty good.

My interest here is that it's potentially undervalued, that's about it. No idea if they'll ever get to mine it. I'll be taking some money out when I think it's fairly valued.

Good luck!

 

[Sean K]

Todays ann was titled:

Further Drilling Success.

I suppose they have hit some gold, but not very inspiring for me.

I want 100m@10g/t from surface thanks!

I suppose they are finding that the gold zone trend line continues and they may add incremental ounces, but it's currently not looking like multi million ounce potential. Just a million or so. Need another big find to be put on the map I think.


DRILLING CONTINUES TO ENHANCE WA GOLD PROJECT, GHANA

Results reinforce scope to expand existing 754,000oz gold JORC Indicated and Inferred mineral resource

• 29m at 4.02g/t gold from 6m intersected in Kunche oxide zone
• 3m at 1.33g/t gold from 16m confirms mineralisation at new Bepkong North target
• Shallow, high-grade mineralisation up to 1m at 7.78g/t gold from 3m intersected at new Kunche West target
• Up to 4.63g/t gold returned by rock chips from recently identified quartz veins located south of Bepkong

 

[Sean K]

AZM struggling while the market runs.

Troubling.

170m fully diluted @.10c = $17m MC
Cash $6m = $11m EV.

750k ounces = $14 an ounce.

This is going to be upgraded this year with potential for 1m oz au.

I've read $30 an ounce is market average for explorers in W Africa, but the analyst above puts $40 an ounce on companies with over 1m oz au.

Check their numbers above for the rough valuation.

It's undervalued, or it's a turkey.

 

[Sean K]

Looks like all results in from the last drilling and we need to wait till the Sept drilling campaign is over to get some more results. They should be put together to establish the first JORC for the Julie prospect and add ounces at Bepkong and Kunche. So, a bit of a wait for any news to give them a catalyst for re-rating.

29 June ann:

A major, multi-rig drilling campaign is planned to commence at the Wa Project in late September 2009 after the cessation of seasonal rains. It will focus on the Julie and Collette prospects where there is a good opportunity to define near-surface mineral resources complimentary to the existing 754,000 ounce gold mineral resource defined at the Wa-Lawra Gold Project, 65km to the north-west.

Their overall aim is 1-2m oz to underpin a stand alone operation. The 1m looks a shoe-in but not sure about 2m. They'll need another discovery I think.

Qtly last week:

JUNE 2009 QUARTERLY OPERATIONS REPORT WA GOLD PROJECT

Intersected high-grade mineralisation at Collette and Julie
Identified new mineralised zones at Bepkong North, Bepkong South and
Kunche West
Commenced open pit optimisation and scoping studies
Planning resource extension, new resource delineation and high-priority
target drilling campaigns commencing in September Corporate
Raised $5.25 million
$6.3 million cash (as of date of this report)
Completed acquisition of 100% interest in Crew Gold Wa Project

The new resource estimate for later this year should include Julie (historic 300k non JORC) Kunche East, extension to Bepkong, and perhaps (depending on drilling success) Bepkong South and North. Pretty early stages there though. Out of left field might be the Collette prospect which returned the amzing grades that cause the spike a few weeks ago. Included 1m @ 70g/t as part of 3m @ 43 g/t. Hopefully that is extended...

SP back down to the 10c ish level, looks pretty ordinary.

EV of around $10m looks pretty ordinary.

Could end up an also-ran if they don't get this JORC upgraded to over 1m by the end of the year.

 

[Sean K]

Prelim Mining Study out. That's quick.

Initial cash costs look pretty high to me, and I am sure they will increase over time, as they always do. Under US$500 is OK I suppose.

Positive out of this is that it's on the previous resource and does not include any of the recent drilling or adding in what they come out with at Julie, which is good grade and shallow and will be able to be trucked to the Kunche/Bepkong Camp Mill.

No capital cost estimates for the 1m tn mill. That could come in at the operating surplus!

Need another decent discovery I feel, or they're looking marginal.


PRELIMINARY MINING STUDIES INDICATE ROBUST OPERATING MARGINS FOR WA GOLD PROJECT, GHANA

Mineral Resources Approaching Critical Mass for Development

Operating surplus of approximately A$138 million (US$112 million) generated from Kunche and Bepkong resources (1)
292,000oz of gold recoverable at cash cost of A$593/oz (US$483/oz)
Forecast production of 4.5 million tonnes at 2.24g/t gold
Low life-of-mine strip ratio of 4.2 : 1
Scoping Studies underway
Substantial drilling programme targeting additional gold resources to commence next month