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AAR - Astral Resources

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I had 20 seconds to skim over it, in that 20 seconds I read a lot of crap that I had already read before and yes I happened to miss the 1 peice of information that was new. So easy up there.

I am not sure what your stance is on the AAR quarterlys, but in previous announcements they rarely have put anything new out - I wasn't expecting anything and read straight over it

Anyway - agree it is a good step forward for Anglo and happy to keep holding it long term.
 

Not having a go at you by the way, I didn't mean that to come across so harsh. One of the first lessons I learnt with any report, never skim. I have missed opportunities like that so I now read in detail, even the regurgitated information. I agree with your report view, they could do a lot better I think. The website is simply woeful. Thankfully they seem to be concentrating on the work in hand and doing it well it seems.

Bit of a slow train coming is AAR on Koongie. I hope I live long enough to see this happen. If I have to wait another 20 years I could miss it
 
Hey Hang Seng,

Looks like we both missed something in todays ann, and I hate to say it but the only reason I picked up on it was becuase of HotCopper (My research and observation is slipping )

Anyway although I always knew AAR had other projects in addition to Koongie and Mandilla to be honest I never paid much attention to them,

However AAR's report today suggests that the Victoria Downs project could be the biggest and most porfitable by far,

They have an "intial" target of 50-100Mt's @10%Zinc, are they Nuts??????????

50Mt's@10%Zinc using an EV of say 20c/lb Zn = $2.2Billion and thats just an EV

100Mt's@10% Zinc = $4.4Billion using an EV of 20c/lb Zn

The I.G.V of a 100Mt deposit at those grades would be $30Billion+ a current zinc prices


It should be stressed that this is only an exploration target, but what an initial target!

Also the other thing I don't get is that this company seems to be fairly conservative and restrained in their ann's, so this latest ann seems quite out of character


Thoughts?
 

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YT I didn't miss a thing and don't think I ever have with AAR.

I have been eluding to Victoria Downs for quite some time. Seemed I was the only one doing so though, so I just stopped posting about it. I have also stated for some time about the potential extension of Sandiego, now confirmed. The grades at Atlantis are even better than Victoria Plains, just not as big a resource. Still not there yet and a long way to go but I like the direction it is heading. Not being clever it is just that this has been my focus for some time now and will be for some time to come.
 
mickqld said:
As with their previous quaterly reports it wont be released till after trade between 5 and 6pm. More than likely nothing new in it.
Click to expand...


Holy cr*ap how wrong could I be with that statement.
Forget about how good Mandilla gold upgrade is and the potential from Koongie Park.
Target 50m - 100mt Zn at 10% for Victoria downs. At current spot thats 15 to 30 BILLION dollars. OMFG this thing could be HUGE. Where the hell did that estimate come from. That could target a share price of $30 to $60 a share!!!!!!!!!!!! INSANE.
 
micks just divided in ground value by issued capital ($15 billion/ 500 million shares = $30/share). This is way to simplistic as it doesn't count capex, opex or discounting for time.

It should be noted that at this stage all they have to go on are soil anomolies and geo surveys. There are numerous companies targeting elephants, finding one is another matter.

Koongie looking promising, still be good to see confirmation of the transition ore processing.

No great surprises at Mandilla but chugging along and likely to continue adding cash to the bottom line to fund other activities. Nice to see they did jorc the bedrock veins (34koz) and looks like they did the 50m spaced in-fill drilling which means they must be fairly optimistic about being able to mine it.
 
cuttlefish said:
micks just divided in ground value by issued capital ($15 billion/ 500 million shares = $30/share). This is way to simplistic as it doesn't count capex, opex or discounting for time..
Click to expand...

Very true Cuttlefish it is too simplistic to say that but if these resource estimates are anywhere near what eventuates then this company will have a market cap in the several billions and a SP in the multiple tens of dollars. With their gold projects pumping millions in, then there is no need for capital raising and subsequent SP dilution. Zn prices are only going to continue to rise as the zinc gap ever increases. Finally the disclosure of such an estimate can only be described as amazing because if they are misleading in any way over this then the directors know the consequences would be severe.
 
There's plenty of companies targeting deposits of this size - thats what greenfields exploration is all about - if you're going out into the wilds to drill holes where none have been drilled before you want the rewards to justify the risk.

Anglo's got two very good projects in advanced stages:

Mandilla gold in production (west paleo mining complete and halfway through processing the ore, east bedrock jorc identified, further exploration going on.) Only a small cash cow at this stage but not far down the road from RMS so potential of the area to surprise is obvious.

Koongie Park - known indicated jorc Zn/Cu/PB resource, making its way slowly through metallurgy and feasability with some challenges, but getting closer to some definitive outcomes being available.

I'd wouldn't at this early stage be factoring the victoria downs stuff into a realistic fundamental valuation of AAR but that won't necessarily stop the market from running with the headline target figure.
 

Hey Cuttlefish,

I.G.V.'s are unrealiable and hence I prefer to use EV's (Enterprise Values) which are based on the industry average, see below for my value based on this,

Also while I do agree completely this is just an exploration target, the company has always seemed very conservative to me, ie they come across as miners who look like they just want to get the job done, that being said, I am very very surpirsed that they have gone out on such a limb and put this exploration target in, surely if it causes a price spike the asx will query them and they will respond accordingly,

Either way there aren't too many juniors who stand to realistically bank $30m ish in gold sales, while progressing on the PFS for a JML/TZn type VMS deposit and also have a monster size zinc exploration project on their hands all for the baragain basement price of $50m


 

That still gives a potential share price of somewhere between $4.40 and $8.80 & not factoring in the gold projects or koongie Park. Not a bad return on a 10cent stock.
 
Mick its a long shot - at any given time there are any number of companies drilling for these sorts of deposits. Anglo hasn't even negotiated drilling access yet as far as I know.

ARE and Barrick/IGR are drilling a potential monster IOCG 's in SA
BSM and ZFX are drilling potential monster Zn or Ni 's in TAS
Plenty of potential nickel monsters being drill over in WA
Plenty of potential copper monsters being drilled in QLD (e.g. GLF).
And Uranium monsters being drilled the world over

A lot with market caps circa $10-20 million rather than $50 million

Thats what grass roots exploration is about.

But Anglo compared to a lot of specs has some sound fundamentals in that they have a prospective gold lease thats yielding small production deposits, and a bit of cash/gold backing, so they won't need to go to market in the medium term for more cash. This can also potentially throw up surprises.

If koongie goes ahead and Zn prices remain around current levels it would be a profitable project for Anglo. With current Zn prices a JV might be a safer option for a small cap, but if they can get this Onedin transition ore metallurgy sorted out they've potentially got an early cash flow from koongie with relatively low capex (open pit).
 
interesting standoff developing over the 11c mark, with sellers no wanting to drop down to 10.5c, and buyers happy to take anything available at 11c.

in the short term AAR will be driven by the gold price, being one of only a handfull of junior profitable gold miners.

with each dollar the gold price rises it is just adding more money to the bank account of AAR, also alot of people are yet to realise by the time they finish toll treating their ore they will be sitting on $30 million to help speed up exploration and development. That works out to be around 60% of the current market cap.

in effect the market is not going even close to assigning a realistic valuation to the rest of AAR projects, and you get the feeling once the markets starts to wake up to AAR prospects the share price will be much higher than these level.

i'm sure once YT gets a spare minute he will update his research and price target on AAR and it will be significantly ahead of the current shareprice.
 
Hey guys,

Its hard to put a price target on this one, as if Koongie goes ahead your talking several multiples of current level, but thats if I am confident that it will go ahead though as they have been thoroughly working on the project for awhile now and given that they have just appointed a PFS Mining Manager it sounds like their getting serious


Bottom line: @ 10c/11c I think all your paying for is Mandilla's current and future cash generation + the exploration upside ie more gold = more cash to come, as I have already put forth, current and future cash to be made from Mandilla should be $30m, which will ensure no dillution until we're ready to proceed with Koongie.

I think very little of Koongie is priced into the SP at these levels

And absolutely none of the upside of Victoria Downs Elephant exploration target.

Also for the record,

@11c AAR's mkt cap is $55m

BSM's mkt cap is $45m ( 90m shares fully dilluted @ 50c)
Its main cash cow project will only yield about $15m, however there is scope for additional ore to be found and it also has Elephant ground targets

ARE's mkt cap is over $100m (170m shares fully dilluted@65c ish)
It has no cash flows at the moment but it appears to have some very very good projects which may yield huge amounts of profit should they come into production

My point is I think AAR is the safest of the bunch at current levels as its mkt cap is underwritten by its cash cow project Mandilla and some of Koongie, these guys are miners, they are making money from Mandilla, I reckon they'll make Koongie work (onc ethey sort out Metalurgical etc)
 
I totally agree with you there YT the market is putting virtually no value on Koongie or Victoria Downs, not to mention the possible upside from further gold discoveries and production (remember they border RMS and surely there is plenty more high grade gold to be found)

with record gold prices, combined with high grade high margin operation, the Mandilla Gold Project is a real cash cow for AAR and infact may surprise to the upside, once exploration starts up again.

looks like AAR is having another go at holding the 11c level, since around 11am it has churned over many millions of shares at that level, once a significant buyer wall is placed at 11c, then we will see the upward trend continue.
 


The funny thing is that its taking so much volume to push up every little 0.5c because many people thing this is just another range move, but if it cracks 13c it will run so so hard because then it will be an "OUTSTANDING BREAKOUT"

I hope all the profit takers get caught out and it runs hard :
 
Hey Techies, got a favour to ask,

I know the fundamentals of AAR inside and out, I think fundamentally the stock is very undervalued, but I realise that traders are having a massive influence on the stock, so I'm curious what does the chart say is going to happen?

Thanks in advance techs
 

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Technically speaking, its still in an uptrend. Those old highs...a double top should provide some resistance. A few sellers around today.

Cheers YT.
 

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What a blood bath today

Hindsight is 20:20, I knew I should have taken some profits at 11.5c+ yesterday because I would have been able to buy them back at 10c today, its just so hard when you love the fundamentals and think something is really really undervalued, but the technicals say, that it will do something else,

Oh well I'm left holding the baby AGAIN!!!!!!! (and its a big freaking baby)
 
Never mind YT.

The baby will eventually grow up (hopefully) and this will be a distant memory...

Cheers
Maz

PS I'm holding a baby too .... albeit a smaller one!
 
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