AGY - Argosy Minerals

[sydneysider]

A completely ignored stock. Rags to riches may unfold. Situated in Burundi which has been racked by civil war, now peace has broken out. 99 million shares at 35 cents (up almost 130% to-day) and holds about 6% of the world's nickel (i am told) and AGY hold a 100% interest. Took a position earlier to-day. More to follow..later...good luck to all longs

 

[sydneysider]

A completely ignored stock. Rags to riches may unfold. Situated in Burundi which has been racked by civil war, now peace has broken out. 99 million shares at 35 cents (up almost 130% to-day) and holds about 6% of the world's nickel (i am told) and AGY hold a 100% interest. Took a position earlier to-day. More to follow..later...good luck to all longs

The current status is that meetings will be held with senior members of the Burundi Government in late April and that discussions are underway with major mining groups. AGY acquired the Musongati Nickel Project in 1999 and was forced to declare Force Majuere several times due to severe political instability in the country which has now been followed by peace since the last quarter of calender 2006. AGY will seek written assurances from the Government that it can proceed with development of the Musongati (as the original five year time line was totally disrupted by civil war on numerous occasions).

Musongati is a massive, world class nickel and PGM Project. It hosts three surface lateritic nickel deposits that overlay a very large ni sulphide and PGM system. The largest of the surface deposits was drilled in the 1980's with 237 dd holes to a depth of 60 meters and came up with a non-JORC resource (there was no current jorc definition at the time) at Buhindi for 185,000,000 tonnes at 1.31% nickel and .08% cobalt containing 2,423,000 tonnes of ni and 148,000 tonnes of co for a current "in situ" value of US$126 Billion. This does NOT include the other 2 surface laterite ni deposits or any value attached to deeper ni sulfides or PGM's (which are substantial).

AGY closed on Friday at 34 cents / market cap of A$32.6 million. IF we assume a value of 1% to AGY for its project then it is worth US$1.26 Billion / A$A$1.6 Billion / A$16.66 share. Any comments?

 

[sydneysider]

I am stunned that no-one else on this thread has picked up on the significance of what is happening at AGY. The Mosongati Project is about equivalent in size to Voisey Bay on the KNOWN and drilled non JORC resources at Buhindi which hosts 5.3 million pounds of lateritic nickel within an open pittable area about 50-60 meters deep. Compared with Voisey Bay at 6 million pounds of nickel.

At Musongati the above resource does NOT include the drilled resources on two additional drilled nickel laterite deposits NOR the hardrock ni and PGM potential. To get a sense of the PGM potential..read the 2002 Annual Report. AGY discusses two DDH drilled 8 kms apart on a 12 km long ultramafic zone. DDH 57 intersected 280 meters of PGM's with values ranging 1.5 g/t to 5.4 g/t down to 303 m and DDH 59 with 95 intersections down to 456 m ranging up to 10.2 g/t of PGM's. These values occur BOTH in the laterites and in the hardrock and there are a substantial number of other holes also drilled here.

A number of major miners have signed confidentiality agreements with AGY and various studies have been underway with them, various universities and folks such as Robertson Research.

I have never seen an ASX minnow sitting on something with this type of massive potential in my lifetime of following stocks. The fact that AGY is valued at 96 million shares at 34 cents for a market cap of A$34 million is simply outstanding. The development cost of the project may be around $500 million (via google search of internet news) for the open pittable nickel resource (with PGM's and ni sulfides to follow). At this stage the project will qualify for a NYSE listing and a valuation that would have made INCO proud. Inco was valued at $17 billion when it was bought out. So we are certainly looking at something that has multi-billion potential but with many twists and turns ahead. The first will be the meeting with Burundi Government next month and the second will be a JV deal or deals with some of the biggest mining houses on earth keen to get their hands on 6% of the worlds nickel supply.

I managed to pick some AGY's up at 33 & 34 on Friday. Good luck to all longs.

 

[Archie]

Hi Sydneysider, Frustrating isnt it but I can assure you that as a very long time share holder I am definitely aware of the significance of this latest development and agree with your anaylsis 100%.

Judging by the trading activity on Friday it would seem that others are also very much aware of the potential here and it looks like AGY is going to be very volatile in the next few weeks as a result of the latest developments.

Just one question though regarding your valuation of $16 a share, does that include the copper?

I have also compared AGY to the Murrin Murin project in WA that is jointly owned by Glencore 40% and Minara resources 60%.
They have 145 million tons & when at full capacity will eventually produce 40k tons of nickel & 2500 tons of cobalt per annum with a mine life of 40 years. AGY's potential appears to be better than that.

Minara is currently priced at around $6.00 per share so I guess one could assume a similar share price for AGY in the next few years if not sooner.
Bring it on.

 

[Sean K]

Hmmm, I'm not sure how this Ni is going to get to the market. Burundi, in central Africa, no trains to the coast. Fly it out?

Interested to know the logistics on this one...

I suppose with that much value they can build their own rail line.

Need a significant JV partner I'd expect. BHP size maybe?

Only up 112% on Friday, not sure what the fuss is about. LOL

Burundi is still a major issue I feel. Peace is only ever temporary in Burundi/Rwanda.

 

[the barry]

Having a resource is one thing getting the resource to production is another, this is reflected in the share price. Problems AGY face in Burundi are as follows;

Geographically isolated, facing population pressures and having sparse resources, Burundi is one of the poorest and most conflict-ridden countries in Africa and in the world. Its small size belies the magnitude of the problems it faces in reconciling the claims of the Tutsi minority with the Hutu majority.Logisitically it seems hard to get the product to market?

The country is landlocked with Rwanda to the North & the Democratic Republic of Congo to the West. The country has seen genocide & mass killings of more than 500,000 of it's citizens & has been incivil war for decades. In short it is an incredibly poor, unstable nation, with ethnic divide.
However taken from Wilipedia(not sure of when this was last updated) is this comment on the current situation between the Hutu & Tutsi in Burundi:

"The same civil war made other more people refugees outside Burundi and others displaced within Burundi. In general, in Burundi, Hutu have been vulnerable target of more mass killings and the Genocide organized by the former governments of Burundi. The current government makes a difference in such way that it is made up of both Hutu and Tutsi. And the Military is made up of both former Hutu rebels and former Tutsi government soldiers. Many people in Burundi have now expectations of living in a country without war any more."


That comment is encouraging, However the country is highly unstable & the cease fire called by the president is no certainty to hold.

If the meeting on the 23rd of April is successful & stability is sustained then AGY has a chance to go from exploration to producer(either off capital raising or a JV) then the share price has potential for exponential growth.

There is a lot of if's involved & you wouldn't want to put more in this one than you can afford to lose, having said that it is worth a punt on potential gain alone.

Will have a dabble on Monday, Thanks for bring it to the attention of the board Sydneysider

 

[Sean K]

:iagree:

I spent 6 months in Rwanda with the UN in 94/5 and I know the area relatively well I suppose. This region of the world is going to be at war for the foreseable future. The Tutsi and Hutu just don't get on unfortunately.....Anyway, that's medium term stuff. In the short term, might be a few $$ to be made out of this one. Good luck. Will be very interesting to see the open Monday.

 

[sydneysider]

:iagree:

I spent 6 months in Rwanda with the UN in 94/5 and I know the area relatively well I suppose. This region of the world is going to be at war for the foreseable future. The Tutsi and Hutu just don't get on unfortunately.....Anyway, that's medium term stuff. In the short term, might be a few $$ to be made out of this one. Good luck. Will be very interesting to see the open Monday.

The IMF Survey of October 30, 2006 is very interesting reading. 2006 GDP growth was estimated at 6%. Burundi started a full scale reform program several years ago. The value of the Burundi Franc has stabilized over the last two years at around 1,000 Francs to US$ (form a high of 1,300 several years prior at the height of the civil war). The last stage of the peace settlement with rebel forces was signed early in the last quarter of 2006 and democratic elections have been held. The nation appears to be on the path of full "western style" reform program with transparent government, privatization of the business sector, now fully underway in sectors such as coffeee production. Full cooperation with the IMF and World Bank and other donors are dispensing funds into the country (some as benchmarks are meet). The resources sector will be governed by international "best practice" in cooperation with recommendation from IMF and World Bank. A heavy emphasis over the last six months on attracting capital into this and other business sectors.

My sense is that the meeting with senior government officials in late April will be to announce a "go-ahead" on Musongati (otherwise there is no point in publizing the meeting as I am sure there are ongoing discussions with various public servants underway now / or completed to clear the way for coming meeting). AGY has already stated that officials are very positive about their relations with the company (why make this statement if the result will be negative?).

My search of various news wires indicates that there has been no fighting for a considerable period of time and all of the news seems to be focussed on health and poverty issues, good relations with neigbors and sports news.

Will be watching the market on Monday to see how much effect this will have on the capitalization of AGY. Should be a very interesting several weeks. IMHO AGY has a substantial upside potential. It is also interesting to note that AGY was going to pull its status as a registered public Canadian company (late last year due to compliance costs)) and they now seem to be maintaing their Canadian status althou the stock is untraded at this time. The North American markets love these "big picture" stocks and I assume that we will be trading publicly soon on the TSX Venture Exchange.

 

[robandcoll]

HC are all over it. Will be interesting first couple of hours

 

[the barry]

HC are all over it. Will be interesting first couple of hours

Buy the rumour, Sell the fact.

 

[Sean K]

HC are all over it. Will be interesting first couple of hours

Probably a pump and dump. Be careful ppl!

 

[the barry]

Probably a pump and dump. Be careful ppl!

Right on the money mate. Bought in at 40 and sold at 45. Only bought 20,000, but not bad for 30 seconds work.

 

[sydneysider]

Probably a pump and dump. Be careful ppl!

One of the AGY neigbors is AVM based in South Congo. Went from 10 cents to $17.00 (restructured) but i recall they had rebels fighting next to their copper production plant several years ago. That was one heck of a risky investment?

IMHO AGY is a re-run of a similar rags to riches story. To-day's trading seems to be holding up very well in the low 40's. Does not look like a pump and dump, the selling volume volume is way too low and their seems to be a lot more buy pressure around.

 

[Sean K]

One of the AGY neigbors is AVM based in South Congo. Went from 10 cents to $17.00 (restructured) but i recall they had rebels fighting next to their copper production plant several years ago. That was one heck of a risky investment?

IMHO AGY is a re-run of a similar rags to riches story. To-day's trading seems to be holding up very well in the low 40's. Does not look like a pump and dump, the selling volume volume is way too low and their seems to be a lot more buy pressure around.

Is holding up well. Day traders are obviously on it though. If it's mentioned on HC....So, will be interesting to see how it unfolds. If you're trading it, just don't get caught when the day traders jump ship I suppose. If you're in for the long haul, good luck.

 

[sydneysider]

Is holding up well. Day traders are obviously on it though. If it's mentioned on HC....So, will be interesting to see how it unfolds. If you're trading it, just don't get caught when the day traders jump ship I suppose. If you're in for the long haul, good luck.

Sometimes my long hauls last as long as the time it takes to smoke one (corona size) cigar. There are too many interesting things going on here. Several of the majors signed confidentiality agreements with AGY after they acquired their Burundi properties in 1999 and IMHO there is a lot of chatter going on between them all.

 

[Mousie]

Sometimes my long hauls last as long as the time it takes to smoke one (corona size) cigar. There are too many interesting things going on here. Several of the majors signed confidentiality agreements with AGY after they acquired their Burundi properties in 1999 and IMHO there is a lot of chatter going on between them all.

LOL sydney does this mean you're looking to get out ASAP? If so you'd have sold @45-46c this morn...else your previously indicated target price of $16 seem to indicate hope of another PDN/FMG, and they take a few years...definitely not cigar time LOL

 

[sydneysider]

LOL sydney does this mean you're looking to get out ASAP? If so you'd have sold @45-46c this morn...else your previously indicated target price of $16 seem to indicate hope of another PDN/FMG, and they take a few years...definitely not cigar time LOL

I have not sold any, bought more on the lows to-day. Please do not construe $16 as a price target, it is not intended as such, but it does indicate that AGY is sitting on a very major deposit of ni laced with PGM's. IMHO the current price is undergoing a very substantial re-rating and may continue higher. My sense is that we are headed much higher.

I tend to play each stock as a momentum play and currently AGY seems to fit this bill perfectly. I do not think that she will break down at these levels, althou there could be some "churn" and my gut tells me that the next four weeks should see substantial news IMHO we have three angles here (1) Burundi Government OK's development of the project (2) A major steps in to take a major position (3) AGY re-lists on a Canadian Exchange. All of these points are speculation at this stage and well researched and punted speculation can be very rewarding.

We just closed at 38 cents on a volume of 5,760,000 shares which is indicative of interest from lots of various parties. The typical collapse after the "spike" did not happen to-day.

 

[the barry]

Sting has definatly gone out of this one. Not much on the buying side at all. With the meeting around the 19th of april, will need some announcements to keep the share price up. Will not be suprised to see it drift back to the mid 20's in the next couple of days.

 

[sydneysider]

Sting has definatly gone out of this one. Not much on the buying side at all. With the meeting around the 19th of april, will need some announcements to keep the share price up. Will not be suprised to see it drift back to the mid 20's in the next couple of days.

AGY is a Canadian company. When we trade AGY securities in Australia we are trading Chess Depositary interests (the shares stay in Canada). At the moment AGY is a public company in Canada but it was de-listed from the Toronto Venture Exchange back in 2002 due to lack of interest. They collected $7,000,000 from Norilsk for their breach of contract on a Caledonian nickel project JV several years ago (which has kept them going).

Their filings with SEDAR are very current. Last year they said that they would discontinue them to save money and change the domicile back to Australia. Everything seems to have changed and IMHO they are planning to re-list in Canada. They also file with the US SEC which is very interesting. Each year they file their U.S. 20-F on the 31st of March. IF they file one at the end of this month it means that they have complied with US listing requirements. Typically small Canadian resource companies list on AMEX when they have major projects underway and require funding and exposure. It also means that an AMEX listing qualifies u as suitable for investment from 401K's and pension funds.

 

[sydneysider]

There was a fascinating (and large) article about Aussie miners who are in the Congo on the FRONT PAGE of the US Wall Street Journal this morning. It went into the history of how Anvil Mining went to Belgium to pour over a tresure trove of old hand drawn (century old) and very accurate mineral maps created by the Belgians when they ran the Congo (they also collect a massive amount of mineral samples). These maps and samples allowed Anvil to peg some of the choicest bits of the Congo and develop a very profitable and growing mining company.

The Congo is really a massive treasure trove with the likes of BHP on the hunt for elephants, they are everywhere. The Belgians also administered Burundi for a lengthy time and assume they went over Burundi in the same manner. Burundi is the small pimple that is stuck to the Eastern side of the Congo and is an extension of the same highly mineralized systems.

After contracting with the Burundi Government to develop Musongati AGY completed a feasibility study in 2001-2 that conclued that Musongati's 2.4 million tonnes of open pittable lateritic nickel was a "marginal" economic operation when all of the infrastucture requirements were considered. At the time nickel was US$6.50 pound and cobalt was US $3 pound. AGY then turned to evaluate the PGM potential which is very extensive (see my earlier post). They were looking to gravity seperate the PGM's from the oxidized layer of 185,000,000 tonnes in the open pit zone. Their agreement with the Government also required AGY to come up with the funds or a JV partner to develop the deposit and they entered into a number of confidentiality agreements with various majors to continue various studies.

Interestingly enough they set their Canadian office up in Langley (a suburb of Vancouver) which is nearby some of the worlds best and very innovative folk who build gravity seperator plants. Assuming that the 185,000,000 tonne resource carries 1 g/t then we have 6,000,000 ounces of PGM's. Platinum at the time was US$600 oz, now it is $1,300. Nickel is now over $20 pound and cobalt is at $30 pound. I do not think think that Musongati is marginal at this stage. I bought more this morning. Good luck to all longs.