AAR - Astral Resources

jtb · 21 September 2007

YT,

Any comment Re: The treatment issues on the transitional sections of KP?

Substantial portion of the resource

Base metals is not my really thing

"Initial metallurgical testwork has focused on the “Primary” sulphide mineralisation which
consists of unoxidised sulphides located at depth in both the Sandiego and Onedin deposits.
Rougher tests conducted to date on the primary mineralisation have produced excellent
recoveries for Cu and Zn for both deposits. The Company anticipates that saleable copper
and zinc concentrates can be achieved from the primary mineralisation and testwork on the
primary mineralisation continues with the aim of optimising recoveries and the grade of the
final concentrate(s). The primary mineralization currently, forms 60% of the resource tonnes
at Sandiego and 29% of the resource tonnes at Onedin, but both deposits are open at depth
and the Company is confident that primary resources can be increased at both deposits"

•"Initial testwork on transition zone mineralisation indicate its metallurgy is more
challenging, as expected. Testwork moves to use of more elaborate flotation methods."

YOUNG_TRADER · 21 September 2007

Hey mate,

Well as I said, the company has so far spent a considerable amount of time doing PFS and Metallurgical testwork on the deposit, the primary sulphide zones should be very easy to extract, the transitional and oxide zones were always going to be much more difficult to extract, however companies such as INL have shown that it is possible.

In any event Koongie is not being valued anywhere near its potential value, rather but a fraction of it and thus is being heavily discounted due to development/processing risk

But in the end I think that both Mandilla (especially after what happened to RMS) and Koongie (if brought into production ie like JML's Jaguar) offer large blue sky potential.

jtb said:
YT,

Any comment Re: The treatment issues on the transitional sections of KP?

Substantial portion of the resource

Base metals is not my really thing

"Initial metallurgical testwork has focused on the “Primary” sulphide mineralisation which
consists of unoxidised sulphides located at depth in both the Sandiego and Onedin deposits.
Rougher tests conducted to date on the primary mineralisation have produced excellent
recoveries for Cu and Zn for both deposits. The Company anticipates that saleable copper
and zinc concentrates can be achieved from the primary mineralisation and testwork on the
primary mineralisation continues with the aim of optimising recoveries and the grade of the
final concentrate(s). The primary mineralization currently, forms 60% of the resource tonnes
at Sandiego and 29% of the resource tonnes at Onedin, but both deposits are open at depth
and the Company is confident that primary resources can be increased at both deposits"

•"Initial testwork on transition zone mineralisation indicate its metallurgy is more
challenging, as expected. Testwork moves to use of more elaborate flotation methods."

jtb · 21 September 2007

Cheers mate,

You are the man.

I'm not in, so will cry quietly as it runs through 15c on the YT express

cuttlefish · 21 September 2007

jtb - The March quarterly implied that an underground mining operation of the primary ore was likely to be feasible on its own. If they can also sort out the metallurgy of the transition zone then its likely they'll be able to open pit that part which would be a big bonus to the economics I suspect.

Excerpt from March quarterly below - you can see that Holly recommended proceeding to feasability for the underground mining. (and according to the June quarterly the primary ore metallurgy was good).

Engineering Assessment

As part of the on-going PFS, Consultant mining engineers Holly Mining Pty Ltd (Holly) and
Brian Speechly prepared a study into mining the Sandiego and Onedin Deposits. The study
examined the feasibility of mining the deposits by open cut and/or underground methods and
examined various options for processing.

Two potential operations have been modelled:

1. An operation based on underground mining of only the Primary mineralisation at both
Sandiego and Onedin.

2. Additionally, an open pit operation based on the Oxide and Transition mineralisation at Onedin.

The study, and associated preliminary financial models, produced positive results indicating
potential for both operations, subject to confirmation of metallurgical recoveries. Plant design
requires the metallurgical testing to be finalised first. No major mining problems have been
identified. In particular, Holly recommended that a Feasibility Study should be undertaken to
fully define the underground project.

tech/a · 21 September 2007

jtb said:
Cheers mate,

You are the man.

I'm not in, so will cry quietly as it runs through 15c on the YT express

Strange with a potential of 50% increase why not take a position if you like it now?What dont you like about it?

hangseng · 22 September 2007

Rising volume
Clear break above 20/40/60 day MA
Positive divergence on MACD
On Balance Volume (OBV) rising convincingly
Shooting star reflects the late Friday selling that occurred, however the strong buying at .10 at close indicates further increases could be on the cards early next week. I am also expecting some further consolidation at this level for a short time.

So many positives about to occur with AAR that a rise in the sp is inevitable.

Yes Mandilla is about to provide significant cash to AAR (again) and will continue to do so but my focus now is on the mining DFS for Koongie Park and the metallurgical testwork PFS. Controlled Potential Sulphidisation (CPS) is clearly the focus of the PFS now and I am expecting imminent news about this aspect. Once they define how to apply this proven technology, Koongie Park success is all but guaranteed. Will they do it? According to my metallurgist contact nothing is ever guaranteed, even with CPS. However he stated AAR have engaged the best there is in this field and he believes this methodology will work with the indicated metallurgy of Koongie Park. To quote his statement to me recently "It seems you are on a winner". He is recognised as one of the best base metal mining metallurgists in WA and has first hand knowledge of the location, I greatly respect his objective view.

I am now getting just a little excited, I have waited so long for this. Still early days and I am not expecting finalisation of the PFS or DFS yet but we are very close to knowing what direction this is heading and the cash just keeps coming in.

Will AAR be the next KZL? I personally believe so in fact I am now banking on it, literally.

jtb · 22 September 2007

tech/a said:
Strange with a potential of 50% increase why not take a position if you like it now?What dont you like about it?

Hi Tech,

My play money is allocated atm unfortunately.

Have been building two other large stakes since April with 12 month view and not prepared to breach them.

Mrs just got a new car

greenfs · 22 September 2007

I am getting pretty excited about this one and have arranged on Friday for the sale of some of blue chip property trust stock to increase my exposure even a little further to my existing holding in this stock. Good luck to everyone that is on board.

You will see from the chart below that it looks simply irresistable.

jtb · 22 September 2007

cuttlefish said:
jtb - The March quarterly implied that an underground mining operation of the primary ore was likely to be feasible on its own. If they can also sort out the metallurgy of the transition zone then its likely they'll be able to open pit that part which would be a big bonus to the economics I suspect.

Excerpt from March quarterly below - you can see that Holly recommended proceeding to feasability for the underground mining. (and according to the June quarterly the primary ore metallurgy was good).

Engineering Assessment

As part of the on-going PFS, Consultant mining engineers Holly Mining Pty Ltd (Holly) and
Brian Speechly prepared a study into mining the Sandiego and Onedin Deposits. The study
examined the feasibility of mining the deposits by open cut and/or underground methods and
examined various options for processing.

Two potential operations have been modelled:

1. An operation based on underground mining of only the Primary mineralisation at both
Sandiego and Onedin.

2. Additionally, an open pit operation based on the Oxide and Transition mineralisation at Onedin.

The study, and associated preliminary financial models, produced positive results indicating
potential for both operations, subject to confirmation of metallurgical recoveries. Plant design
requires the metallurgical testing to be finalised first. No major mining problems have been
identified. In particular, Holly recommended that a Feasibility Study should be undertaken to
fully define the underground project.

Hey cuttlefish,

Yeah as you know I had a good look AAR 3 or 4 months ago and took a couple of good positions.
What concerned me from the last ann' was the possibility that only the primary would be feasible and as mentioned to YT - halve the resource.
This then brought them back to many others I was comparing them too.

Cash is a big plus though.

As is sentiment

jtb · 23 September 2007

tech/a said:
Strange with a potential of 50% increase why not take a position if you like it now?What dont you like about it?

As a qualifier to my previous reply, the 15c figure was simply a function of the YT SP equation-

YT + Stock code X + Fan club = >50% < T

T being time, commonly 14 days

or simply Woosh.

On a serious note- further to my KP downgrade point and in regard to the gold prospect, I'm personally biased against granites (for no good reason) and looking at the Mandilla lease after the last results I chose to sell on the absence of their exposure to the greenstone belt (and the obvious loss of support) located on the other side of the shear zone (RMS side).

Mafics (ultra) give me a horn and the lovely returns in RMS' sample pictured here-

https://www.aussiestockforums.com/forums/showpost.php?p=181573&postcount=466

Are in silicified mafics and thus a totally different host.

You can see below that AAR are looking at totally different structures and the mineralisation is likely transported material from the granitic dome and intrusive structures.

Wattle dam however is smack in the middle of the greenstone extension (the fault to the right of which is the fault you can see running past the left side of Mandilla.

I lowered myself to having a look at the AAR thread on HC last night to gauge the mood (wash my mouth out) and was amused to see the verbal masturbation carrying on regarding everything we were discussing on this thread up to last month as if it is was new info

They seem about to beat themselves into a frenzy regardless.

cuttlefish · 23 September 2007

Here's a bit about the local geology of Mandilla from the AAR web site:

The Mandilla project consists of 100% interest gold rights attached to two mining leases located 70km south of Kalgoorlie and 20km south east of Kambalda. The project is located on the contact of a sequence dominated by mafics and ultramafics with a sequence of felsic volcanoclastics and metasediments of the Mandilla Formation. The sedimentary sequence is intruded by the Emu Rocks Granite (a high level stock of porphyritic monzogranite). The western contact of the granite is faulted by an interpreted southern extension of a splay fault off the Zuleika Shear Zone, which hosts 1 million ounce deposits at Raleigh (Kundana) and Mt Marion (Ghost Crab).

In the RMS prospectus there is also quite a lot of information about the geology of the region. (http://www.rameliusresources.com.au).

On Mine Web there's an article about the RMS discovery that talks a bit about the geology of the area as well.

http://www.mineweb.net/mineweb/view/mineweb/en/page66?oid=25917&sn=Detail

Here's some of it:

Wattle Dam is in the Spargoville region made famous by the nearby Spargos Reward gold mine and other historic workings. It is 25 kilometres west of Kambalda and part of a large tenement holding that extends from the Widgiemooltha-Spargoville region north towards Mount Marion, which made up part of the satellite operations for the New Celebration mine, originally developed by Newcrest Mining Ltd.

"These are extraordinary gold grades," said Ramelius' Managing Director Joe Houldsworth. "There is little doubt they are amongst the highest ever recorded in Australia's rich and long gold exploration history."

Certainly some of the other bonanza grades came from big nuggets from this region including the Golden Eagle at Larkinville, and also from the brief but spectacular mining life at Londonderry, south of Coolgardie.

An influencing structure for this new find is the Zuleika Shear that extends from north of Coolgardie down through Spargoville and Houldsworth told Mineweb that there were about 20 priority targets. He likened the Wattle Dam find at this stage to the Red Lake area of Ontario that has produced bonanza grade orebodies.

While the area from Coolgardie down to Widgiemooltha is pockmarked with old workings, the Wattle Dam area was not seriously prodded since the regional work by Selection Trust that led to the Spargoville nickel deposits being found.

sting · 24 September 2007

Good news this morning.... Showing a net profit as well as a stock pile of 12,OOO ounces to be processed soon.

Things will start to move ahead in leaps and bounds.....

I forcast at least a sp of 20 cent at end of yr

SEMPER UBI SUB UBI

hangseng · 24 September 2007

sting said:
Good news this morning.... Showing a net profit as well as a stock pile of 12,OOO ounces to be processed soon.

Things will start to move ahead in leaps and bounds.....

I forcast at least a sp of 20 cent at end of yr

SEMPER UBI SUB UBI

Excellent announcements, absolutley excellent!

AAR has not had one negative announcement in over 12 months and just continues to march on toward Koongie Park. I am looking forward to gains far in excess of what you indicate sting. 2008 and beyond to a much higher return is my target and AAR is slowly but surely heading there. The positive comments in the profit report from John Jones regarding Mandilla are telling to state the least.

Nothing but more positive announcements out this year and I look forward to each and every one of them.

hangseng · 24 September 2007

hangseng said:
Excellent announcements, absolutley excellent!

AAR has not had one negative announcement in over 12 months and just continues to march on toward Koongie Park. I am looking forward to gains far in excess of what you indicate sting. 2008 and beyond to a much higher return is my target and AAR is slowly but surely heading there. The positive comments in the profit report from John Jones regarding Mandilla are telling to state the least.

Nothing but more positive announcements out this year and I look forward to each and every one of them.

And the last huge buy at 11c says it all, the sentiment toward AAR is rapidly shifting.

One more little point is that the CPS testwork was to be finalised in the last 2 quarters of 2007. This news is also imminent based on company reports.

YOUNG_TRADER · 24 September 2007

wow that profit report totally caught me off side,

I knew they were making good money but $5.6m, this is also a milestone for the company as it is the maiden profit for the company in over 21yrs listed life

"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."

Now as stated

"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."

Now we also know that 12,000 more ounces of gold are contained within stockpiles awaiting to be treated and since they only cost will be treatment and allowing for a lower grade, I'd say at least $10m will be generated in revenue, of which another $5m-$7m Profit can be expected for this year.

"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."

Now for some forward steps on Koongie to really get the ball rolling

hangseng · 24 September 2007

YOUNG_TRADER said:
wow that profit report totally caught me off side,

I knew they were making good money but $5.6m, this is also a milestone for the company as it is the maiden profit for the company in over 21yrs listed life

"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."

Now as stated

"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."

Now we also know that 12,000 more ounces of gold are contained within stockpiles awaiting to be treated and since they only cost will be treatment and allowing for a lower grade, I'd say at least $10m will be generated in revenue, of which another $5m-$7m Profit can be expected for this year.

"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."

Now for some forward steps on Koongie to really get the ball rolling

YT you should note the comments on the Atlantis Zn grades. That along with cash and future mandilla prospects and a report in October on Victoria Plains should (I believe will) create a lot of interest in AAR. Also the CPS is now focussing on individual separation methodolgies, which are already indicating good recoveries in early testwork.

Hold on YT your patience is going to be rewarded. As I indicated recently, consolidation is now occurring and I now expect the sp of AAR to shift sharply upwards on the next reports.

YOUNG_TRADER · 24 September 2007

So far there has been no media coverage of AAR's maiden net profit,

I find this somewhat strange given its mkt cap,

I would expect some media if not broker coverage given the fact that they are now generating cash to self fund explotation

Watching and waiting

j4mesa · 24 September 2007

I am not sure whether someone is capping this share or not...
but if we check the market depth, we can see the pressure from the seller compare to the strength of the buyer....

I can see that the seller is on power. Despite that I like the technical analysis of this share, MACD ,etc.....

aaronphetamine · 24 September 2007

What a weak finish for a strong start for this stock, there is alot of selling pressure, most probably becuase alot of people are still feeling from what happened in july when the price whent to 13.5c and then proceeded to fall to 6c, infact it has capped 13-13.5c twice in the past 5mnths and then proceeded to fall back between 6-8c range. some people see this as a double top ?

Id say if the market conditions stay towards bullish, obviously not a 90pt jump a day, but still bullish then this stock will reach the 13.5c spot. As for going over the 13.5c mark.. who knows.. all loyal AAR followeres will remember how positive the buy and sell depth was back in july for AAR to make a run to at least 17c, but it just sat there idle and started to fall.

Alot of people who brought in at the 6-8c range are probably behind alot of the selling, also people in for small day trade profits, becuase the 9c range jump to 10 and 10.5c jump is a good time to make some quick profits.

Im out at the moment, was going to buy in theis arvo but it was a weak close and so i left my funds elsewhere.

was it a right move ? well since YT has joined AAR, it prolly wasnt.. the stock will prolly run tomo.. haha. but we will see.

Hang Seng first got my interest in AAR and its good to see this young man still in it!

hangseng · 24 September 2007

aaronphetamine said:
Hang Seng first got my interest in AAR and its good to see this young man still in it!

I wish, long time since I could have been called that.

I actually liked the CSPA today, nice strong close at .10 and consolidating as I indicated I believed it would. Your anology on general sentiment may be right, in fact I agree with what you say in part. Having said that though the strong fundamentals of AAR will takeover in the end.

The selling today didn't surprise me one bit, as didn't the good single buys that came in. Once the impatient have left the building AAR will take it's correct place in the market as the little champion it is.

For now, as I was told here on ASF on the last great announcement when AAR had and proceeded to go down, "the market is always right". From memory AAR increased strongly shortly after that, as I believe it will again.

If trading you will need to be quite nimble this time around and not be faint of heart. AAR is going to be shaken and shaken and then just move on up.

I am just sitting, holding and enjoying the games.

AAR - Astral Resources

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