AAM - A1 Minerals

[Sean K]

You could be right re cash.
And thinking about cash waht about AAM's cash

AAM's last announcement.

*Last Quarter report* (I may have rounded some figures slightly)
payments for production $1,230,000
administration 696,000 (approx 2.8m a year) and growing?
Cash at end of quarter $2,309,000

The above was cash at end March 2010. Cash must be down at least another $700,000 (end April unless they are sitting on bills). What are AAM's current liabilities?.... 60 people on site, building a gold room, cost of refining off site, and advertising for expensive additional staff, where's the money?

Didn't they just do a raising for 4m or so?

Need to add that in I think, but at this rate it lookslike it'll be going quick.

Need to get this gold production going well or they'll be cactus.

 

[AAM shareholder]

Didn't they just do a raising for 4m or so?

Need to add that in I think, but at this rate it looks like it'll be going quick.

Need to get this gold production going well or they'll be cactus.

Kennas, yes they did but read the ASX reports.

17/03/2010 Completion of Tranche1 raised $3,941,400
14/04/2010 cash at Bank $2.4million
So where did it go

Best I can analyse the situation
1 month after the announcement of completion of the Tranche 1

(Cash held on 17/03/2010 + $3.9m) - (current liabilities + expenditure)
= $2.4 million left in the Bank

I realise some of the Trance 1 money was received before the announcement of 17/03/2010 but that doesn't alter the calculation's effect.

What were the current liabilities? Did AAM trade whilst their insolvent?
Seems to me AAM needed this injection urgently to pay their suppliers, staff, and Hp etc.

Now we have
Gold room construction costs
Running the mill
60 staff

Now one month later what's in the bank?
My guess is that costs are over $1million per month and probably much more.
What liabilities are undisclosed? we can see the HP (they needed 5 more utes.
What is the "state" of "normal state" processing through the mill?

AAM can't get tranche 2 away so they'll try and do an issue at 16cents likely to shareholders who still believe.
A gold loan looks unlikely unless production is really fixed.
If production is fixed then all may be well.
WHERE IS THE PROMISED UPDATE?

Guess for yourself what staff costs are. Prior overheads ran over $2m per year, say $160,000 per month. PLUS additional staff who need to be paid weekly and at least monthly.

WATPAC billing approx $600,000+ per month
My guess Cash is < $1 mill + gold

There's a song I remember from when I was a kid "Tell me a Story"

So JW, "tell me a storeeey! tell me a storeeeey tell me a storeeey and then I'll go to bed, you promised me you said you would.........."

Out of here

 

[Sean K]

Out of here

It's looking very dubious isn't it. Maybe a nice out of the blue drilling result could turn the tables, but who relies on chance to make an investment decision? Interesting question regarding trading while insolvent. Where is that cash going?

 

[condog]

ive turned negative on this till we get an announcment. not enough capital, too many expenses, poor communication , but lots of gold in the ground.

 

[Buckfont]

AAM shareholder, this is the tune, that you remember probably shows your age

http://www.youtube.com/watch?v=hviV1JKo6oY

 

[jonojpsg]

Looking a bit like VRE to me Lost big time on that and have bailed on this after the quarterly It's a shame smaller companies like this can't get access to decent debt, as it seems highly likely that they would be able to turn a profit once production gets going? Still might I guess?

 

[AAM shareholder]

AAM shareholder, this is the tune, that you remember probably shows your age

http://www.youtube.com/watch?v=hviV1JKo6oY

Hi Backfont,

Thanks
Yup that's it and the tonal quality is great, actually reminds me of much of what has been being written on HotCopper by the JW cheer squad over the past 6 months.

Showing my age? YES (says he smiling).

Hi jonojpsg
VRE, seems to have been already de-listed!?!
I don't wish this but I'm starting to worry.

Condog I've been negative for some months. read my earlier comments.

Actually I'm angry.
I believe that JW treats this as his company.
His PR repeats verbatum the same "@stuff@ " that we read and the HCopper crew lap it up. Shikes we even have a copy of that email with the PR on this forum. It got rave reviews on hot copper..... say no more.

Since issuing 6.6m shares to himself at 8cents he has not announced the full extent of the production and staff problems until well after they have had an impact. Now many hold on with too many shares to dump and no buyers...least ways no buyers for volume.

JW sold on market in Dec 09 and Jan 2010 at prices above 35c.
How many employees converted options and sold shares?

Would you have sold if you knew that the promised production date of Dec could no be achieved? If you had known and understood the effect of these problems.

Why did they convert those options?
Some 7.3m options which did not have to be converted many for years.

They also paid for the accommodation and the mining contractor with shares some at a value of 37.5 cents.

Either they required $capital or they are taking more control to sell the company.

I believe that I have been mislead by the ASX releases and will be doing something about that regardless of if or when the mill is up and in full production.

please DYOR I am not clairvoyant.

Look at a 6 month daily chart with OHLC on them.
draw a line from the Dec high that touches the Jan high and continue it,
then a line from the Dec lows (both within days) touch the April and yesterdays low.

Makes a nice parallel trend channel.

looks like 5 waves down ...I think it needs a volume down day to complete.
ps I'm not a great chartist.
Did anyone checkout AZS one of the shares I mentioned several posts back?

Cia

 

[AAM shareholder]

AAM Announcement,

In production at rate of 30,000oz pa.
I suspect that the plant can do better than 30,000oz.
The release says Production

?????????????????? What grade is it ??????????????????
?????????????????? what's the recovery rate ??????????????????
?????????????????? Gold room status ??????????????????
?????????????????? COST per OZ ??????????????????
?????????? is $600 inclusive of all cost still accurate ???????????????

The prior estimate for upgrade to double capacity is based I suspect on fudged figures. I can't see these clowns managing a duckpond let alone a gold plant.

Unfortunately the profitability per share has now been halved by management's failure to either toll mill 2 years ago or to raise cash via loans

Short term they may process some high grade ore 8gm+ and issue a "surprise" : announcement".

 

[condog]

Its the announcment we have waited for

A1 Minerals - AAM - Gold plant at Brightstar begins operating at designed Capacity Reply |Matthew Connors to business
show details 2:06 PM (10 minutes ago)


Gold plant at Brightstar begins operating at designed Capacity
Highlights
Commissioning of CIL plant completed at A1’s Brightstar gold project, and plant has now achieved its rated capacity and design specifications.
Gold production has commenced with production scheduled at 30,000 ounces per annum from 300 K tpa throughput.
Final ‘commissioning’ gold pour of 10.6 kg Au brings total to 34.1 kg during commissioning stage.
A1 Minerals is pleased to announce that the gold plant at its Brightstar project has recently achieved its designed capacity of 300ktpa, to produce circa 30,000 oz Au per annum.
The CIL plant was commissioned last Friday and is expected to be operating reliably as per design.
Gold Pour
A1 Minerals had another gold pour last week which produced 10.6 kg (~ 339 oz) of unrefined gold. This is the last of the ‘commissioning’ pours which takes the total amount produced to 34.1 kg (~1,089 oz).
Page 2
Photo: A1 Minerals CFO (Albert Longo) holding a 10.6kg unrefined gold bar
Now that the plant is in production, A1 Minerals looks forward to taking advantage of recent strength in the gold price and generating strong cash flow from its high grade ore at Beta.
For further information, please email myself or Liam Wheaton from Investor Relations on LiamW@a1minerals.com.au or visit the website.
John Williams
Managing Director – A1 Minerals Limited
For full reports and information go to A1 Minerals website: www.a1minerals.com.au or ASX Code: AAM
The information in this report which relates to the Brightstar Gold Project is based on information compiled by Mr John Williams who is a member of the Australasian Institute of Mining and Metallurgy and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the mining method undertaken to qualify as a Competent Person as defined in the JORC Code (2004). Mr John Williams is a full time employee of A1 Minerals Ltd and consents to the inclusion in the report of the matters based on this information in the form and context in which it appears.
BACKGROUND INFORMATION ON A1 MINERALS LIMITED
A1 Minerals Limited (A1) is an emerging Australian gold miner with its 100% owned BrightStar Gold Project currently in development. The BrightStar is situated in the highly prospective Laverton district in the Eastern Goldfields of Western Australia, a region with a rich history of gold production that is demonstrating scope for significant new gold deposits. Mines developed in recent years include Barrick Gold's Wallaby/Granny Smith and AngloGold Ashanti's Sunrise Dam gold operations. Since listing on the ASX in December 2003, A1 Minerals (ASX: AAM) has grown its assets through prudent acquisition and successful exploration to a total ground holding of more than 2500 square kilometres; JORC Resources of more than 1.7Moz gold including JORC Reserves of more than 150,000oz gold; and its own gold treatment plant. The BrightStar Gold Project is expected to produce a minimum of 30,000oz gold per annum for at least 4 years.

 

[AAM shareholder]

Yer, yer, Condog,

No need to repeat the "stuff" they dish out on the ASX
Its the same "stuff" they have been feeding us for the last YEAR. :iamwithst

14th April 23.5kg
4th May, another 10.6kg
WOW grandma, what big gold eyes you have

Why don't I believe their announcements?
ps. READ THEIR ANNOUNCEMENTS CAREFULLY there is subtle word usage.

4th May, the "ANNOUNCEMENT" then small buyers jumped right back in.

The share price hardly moved, volume was up, there are more sellers lurking.
On a monthly chart this downturn still looks just like Dec 2007.

Gold price in AUD is still good. AAM is near it's 2004 low. I'm stoked

The re-tracement from 42cent is :-
1. greater than 50%, that would be 22cents
2. Its hit 61% (20cents)

Today's chart action shows "indecision" on a candlestick chart.
Exactly my feelings.

I don't have a brokers screen but when I look at the trades I think that the sell orders were larger than the buy orders.

Look at some other gold charts, NAV, RNG, SLR, OGC, etc

"The more I think, the less I know"

For what it's worth I think CBA topped today.

You've done a super job John Williams

 

[BandwagonJumper]

Were not out of the woods. Disclosure has been pathetic, we still have no idea how badly the enterprise is haemoraging. This could be a sucker pump before another capital raising I agree. The was 2.2 Million volume today...............where did the 2.2 Million sellers come from at this lousy price?

Im like you.......STUCK

I would have been 25% 0f todays volume.

Nothing of any material value was released to the market today. You know my history AAM Shareholder "Im a production guy". If this had broken through the storm clouds and was in the sunshine frankly there would be 200 People in Kalgoorlie talking to anyone who would listen about this stock. Instead its moribund.
I have one question is 10 Kgs a good return of a couple of weeks?

 

[condog]

If you consider they are tinkering with the circuit and putting through the bare minimum ore to avoid wastage, 10kg is fine for a few weeks. The will step that up now.

As the announcment said looking forward to strong cash flow.

You got tot remember guys this is already priced like a failed exdplorer so to have it producing up to 30,000 oz p.a possibly starting today is phenominal at this price. they have $1B bucks gold located, much of it extremely close to the circuit and extremely close to the surface.

If it was priced at $150M mcap id agree but its around $40M or less.

 

[BandwagonJumper]

My Thoughts:
You dont avoid wastage in a Gold mine.
I worked for:
-Resolute.
-Great Central Mines.
-Western Mining Corporation. Not as a contractor but as a salaried Full time Mineral Process Technician. I have Plant commisioning experience

There have been issues here with insufficient agitation in adsorption tanks
Secondary Ball Mill (Regrind)
Primary Jaw failure and massive vibration on the secondary conical crusher,thats my mail anyway whats yours?
None of these issues I would consider anything above a troubled commisioning but the 5 month time frame leaves me somewhat worried. Wheres the Gold?

The WatPac mining contract is coming in at around $750K per month (thats my mail). I would guessimate that there is less than a Mill in the piggy bank.

Mills are run flat out (Always) recovery rates never I repeat NEVER determine Mill throughput. I have been in a Mill where the head grade was 32 grams a tonne and it was simply blended back to 2.5.. I worked on a 160 tonne an hour Allis Chalmers Ball Mill that we run at 300TPH, recoveries dropped from about 95% to about 87% and no-one gave a rats because its a cash flow game. There are full time Mets measuring the GIC Gold in Circuit so none of this is a wing and a prayer, its measured often. The emphasis is always on the Golden Eagle laying the Golden eggs,no-one is ever worried about some Gold to tail mate.Quite simply we need the Revenue(Its a matter of survival)

Weve been told vaguely we are headed towards "full production" , its "imminent", a whole lot of qualifiers have been used, theres only one measure here and thats what Gold youre pouring.

What better way to tune up the ellution circuit, get the grind right etc than have the projected head grade at the mill throat?(4.5g/T). Its not as if weve got 400tph going through this to tail, its a winky dink toy mill is probably running at 35 Tonne an hour.

Im sorry, Im past coming up with excuses here after 20 weeks. WE now need to see the Gold and its very very likely in my view that more money is required to feed "The Hungry Beast". Whats the Placement going to be at?
Sure things could start going right and we could from this point forward start pouring sufficient Gold to meet present and future contingencies. Lifes taught me that thats probably just wishfull thinking on my part.

The Companys not saying much but if it
"Looks like a snake, slithers like a snake and bites you in the face..............Its a Snake" Weve been waiting a month for a 10Kg pour and the shares are at a giveaway price whats that tell you? If a stocks hot, Jubilee, Delta, Hill 50 there will already be 2000 shareholders living in Kalgoorlie who brought in based on a tip from an insider, thats not happening.

Lets not get carried away, they have a reserve of I think about 120000 ounces(thereabouts). Priced fairly ATM I think

 

[AAM shareholder]

Thanks BWJumper,

In Dec 2009 they announced 15000 tonnes high grade ore on the pad + low grade. If they processed only the high grade and assuming 4gm per tonne only we have.

15000*4gm= 60000gm=approx 2000oz(rounded) = approx 66kg
Say max 1000oz in the tanks = 33kg , 33kg for sale

Wow that's what they got

I know that this is simple analysis BUT why dig any more for the last 5 months and pay out $$ if you can't process what ya got.

look at RMS (5c capital return)
They took the toll mill option initially and then used their cash.

1. I'm wondering is AAM going to be anywhere near as profitable even with double capacity.
2. Has anyone analysed their ore bodies enough to be able to tell how costly the underground option will be.
eg is the nature of the ore such that it is high enough grades to cover costs and easy to convert to resources?
3. Where is the money coming from?

 

[condog]

BWJ i understand your frustrations, but if we continue to have emotional outbursts like this with unjustified attacks on the company i can tell you what placement price will be. But you wouldnt like that.

The announcment weve been waiting for arrived yesterday. I suggest patieince now to see the next pour result.

 

[AAM shareholder]

Price of gold starting to look like Nickel did at the top.
If I was managing a small gold stock I'd take a PUT option on the gold price in US$.

Short term the US$ should drop but medium term it may continue up for months to finish this retracement. As a risk mmt I'd take insurance. If I'm wrong and gold keeps shooting the company makes lots of $$$ and the PUT is a blip in the cost margin, If I'm right then the company has a good profit and can keep going whilst gold and the Aus$ DROP.

Have I missed AAM's production announcement??????

 

[BandwagonJumper]

Condog thanks or your input however you describe my input as emotional. Read the posts and consider the data, I'm not talking in ASX company releases and generalities.

Full throughput means nothing, Im concerned about the Production figures ie) GOLD PRODUCTION.
6-8 weeks on from the AGM that the directors mistakenly called youre still getting excuses. I have worked in this Industry, this is not a chemical or hydrocarbon process this is brutaly simple process. Whos ever taken 5 months to commision a 35tph ball mill? Im listening...who?

 

[Sean K]

You got tot remember guys this is already priced like a failed exdplorer

Nodpe, that would be in adminbistration. Tis companie is in sherious trubble. Looks like they cant deliver thew the promises.

 

[jonojpsg]

Nodpe, that would be in adminbistration. Tis companie is in sherious trubble. Looks like they cant deliver thew the promises.

Shownds like yure in sherius trubble kenna - had a few have we Although I agree, looks unfortunately like VRE although these guys don't have the excuse of a low POG

 

[condog]

announcment out today

if they actually achieve it this has huge potential

current mcap = 40M

targeted output = 2500 oz pmth at cost of $600 aud per oz

current gold price approx 1400 aud per oz

at net $600 per oz and say 1500 oz per mth = $10.8M net profit p.a

PE 10 = $100M

sp target for me 50c witning 6 months,

"if " all goes ok

best case say 2000 oz mth at 800net = 19.2M p.a PE 10 = 192 m

sp target $1.05

DTOR may contain erros, seek expert advice. I been wrong so dont rely on this.