ATN - Ashburton Minerals

[Fancypants]

I would expect the price of Ashburton Minerals to increase to 10 cents in the coming weeks as they are reporting results of the new mine. I bet the results will be very encouraging and if you can get in at these cheap levels, you may possibly make a fortune. Good luck to those wise investors getting in now....

 

[beatle]

I would expect the price of Ashburton Minerals to increase to 10 cents in the coming weeks as they are reporting results of the new mine. I bet the results will be very encouraging and if you can get in at these cheap levels, you may possibly make a fortune. Good luck to those wise investors getting in now....

Hi Fancypants, I noticed your post above, when I was about to post on ATN myself, and wondered which "mine" you refer to? My assumption is that you refer to Obi Island (in Indonesia) and not Yea (in Victoria) although Yea has been drilled in the past few weeks.

I understand that Obi is the subject of drilling in the coming weeks - a drill rig has arrived at Obi Island in the past few days and they have it set up at one of the target locations.

 

[beatle]

ATN’s Obi Island gold/silver project has the hallmarks of being a company maker for a number of reasons, and an investment at current levels in the company will provide an excellent entry point, even though it is speculative in nature.

I can see ATN moving up sharply within the next month based on the technical characteristics of the Obi Project, which is summarized below based on ATN announcements, plus other aspects which should also be considered - I will post some of those aspects over the next week or so.

ATN’s project on Obi Island is targeting a large epithermal gold/silver/base metals system that has been the subject of extensive recent artisanal gold mining by around 1,000 miners – that area of artisanal mining is substantial:

The 7,700 Hectare licence area consists of NUMEROUS BRECCIA ZONES AND VEIN SETS, CHARACTERISTIC OF A LARGE EPITHERMAL GOLD/SILVER PROJECT (possibly similar to Gosowong - see *Note below), with OVER 1 KM OF STRIKE on current main artisanal workings – those artisanal workings include over 200 pits, shafts and adits scattered on the northern slopes of a hillside. Some of the larger veins appear to be continuous along strike for several hundred metres. At least 4 - 5 separate veins are noted across strike of the main zone, with individual veins occasionally worked to depths in excess of 50 m.

Random sampling of run-of-mine ore by Ashburton geologists, comprising 15 samples which were brought back to Perth for analysis, showed average grade to be 16 g/t, ranging from 4.3 g/t to 42.3 g/t.

Reconnaissance by Ashburton staff along the corridor extending southwards of the main artisanal workings confirmed scattered workings EXTEND FOR AT LEAST A FURTHER 3 KMS within the licence area. Numerous epithermal quartz vein boulders were noted in the river upstream from the artisanal workings indicating more mineralisation occurs to the south and southwest within the licence in areas yet to be investigated in detail.

* Note: Obi Island is situated to the south of the larger Halmahera Island which hosts the FIVE MILLION OUNCE GOSOWONG GOLD DEPOSIT with REGIONALLY SIMILAR GEOLOGY comprising a range of Late Eocene to Pliocene volcano-sedimentary sequences CHARACTERIZED BY EPITHERMAL MINERALISATION.

 

[beatle]

ATN has released a status report on various exploration activities occurring in March. The most significant of these relates to Obi Island and its gold/silver/base metals epithermal project, with the first of 3 containers of drilling equipment arriving at the Island, and another 2 containers due to arrive within the next 8 - 10 days. Upon arrival of the remaining containers drilling at the Obi project should soon be underway thereafter. That means there is a couple of weeks of opportunity to get ATN shares at a reasonable price before the expectation of excitement mounting for that drilling (and an expected reflection in a move upwards in share price!).

On the trading front, ATN closed at the days high of 5.1 cents, with continual good volume, of 2.26 million shares traded. I welcome someone to post a comment on the technical aspects of ATN - from my basic observations the chart looks good with a solid build up in share price, towards a test of the recent intra-day high of 5.5 cents (and a day high of 5.2 cents). If ATN breaks through those levels I could imagine traders will begin to get excited - but that's my imagination running away with an expectation of a big push up in the short term of course!!! Certainly though, there were quite a few solid bids close to the close of trading today with one buyer bidding 1 million shares at 5.0 cents (and getting 276,630 shares, left with 723,370 on the bid at the close).

 

[beatle]

Further to the comments about ATN and its Obi Island epithermal project:

Once drilling is underway on Obi Island, the share price is likely to be on the move IMO. And any possibility of obvious gold/silver mineralization could start “filtering back” into the market over the following weeks, therefore if you’re into “speculative punts” the current share price could be the last opportunity to secure a highly leveraged position in ATN.

Since there is a General Meeting on 19 April to ensure that some of the directors are “set” in case the share price goes for a big run I suggest that the run up to that meeting is the best time to slowly buy up shares in ATN - its only human nature that certain people will want to keep a “lid” on the share price until that date, thus the company is likely to issue no further positive news prior to that meeting (or news of a neutral to negative tinge in them, ala like yesterdays announcement, lol) which otherwise could influence the share price upwards - thus no news flow should assist in capping the share price prior to that meeting (being the cynic that I am!). But it also represents the best time to buy shares, as after that date surely its in the best interests of all, esp the directors to let it "fly"!

 

[beatle]

Since my first reply to Fancypants comments I have been surprised that no one, including Fancypants, has posted on the ATN thread.

Therefore I provide some statistics on ATN on this ASF website:

Fancypants' initial post on the ATN thread was on 19 March 2011.
Until I replied to his post a total of 136 views had been made on this thread. Since my first post on ATN, made early on 1 April 2011, there has been a total of 222 views made (which of course includes a few of my own to be able to post as well!). Since I have made 4 posts (prior to this one) maybe those viewers are repeat viewers as each new post is made, Thus in the past three days there has been around 80 odd views made by others (which might be 20 odd repeat viewers) - but unfortunately no other posters to mine have been made.

Whilst at first glance the fact that I am the only active poster on this site is disappointing, it is clear that there are people sufficiently interested to open up and view the thread, and maybe some of those viewers are either considering an investment or already actively buying/trading ATN at the moment. I confirm that whilst I am posting I remain an active bidder/buyer of ATN shares, but already hold a sizeable parcel. Perhaps some of those viewers don't want to post until they have a larger holding in ATN, who knows.

Whilst an investment in ATN is speculative I have a very strong belief that ATN will move up after the next few weeks, particularly post the General Meeting (19 April) and especially when the drilling is underway on Obi Island. I don't think we will see another positive announcement by ATN until the General Meeting is over. It is not in the interests of certain ATN management to put out a positive announcement until the General Meeting is over and certain resolutions passed at that meeting. Post that meeting there is every reason to provide as much positive news as possible!

 

[beatle]

Some more thoughts about ATN with regard to its Obi Island epithermal gold/silver/base metals project:


1. ATN currently has a market capitalization of $37 million (share price of 5.1 cents), and has recently raised $4.5 million to fund ongoing exploration, principally at its Obi Island project.

2. The best “upside analogy” for ATN share price is with ROL and its large gold project centred on Romang Island, also located in Indonesia. Whilst the share structure is very different for ROL, with only 85 million shares on issue and a market cap of $160 million, compared to ATN having 726 million shares, if we remove the cash that ROL currently enjoys (ca. $60 million) and ATN holds (ca. $4.5 million), then bare bones “Enterprise Value” of ROL is $100 million, and ATN is $30.5 million).

Thus upside potential for ATN on a “steady state” basis based on ROL is 100/32.5 = 3.07 x 5.1 cents = 15.5 cents!!! But in the immediate weeks after ROL’s first successful drill result being announced ROL share price was much higher (and also had negligible cash), thus the immediate upside to any positive drill result being announced is possibly FAR HIGHER:

IF we use the ROL analogy where ROL pre-drill price moved slowly from about 30 cents to 60 cents at the time of drilling and at the time of announcement it went from 60 cents to 240 cents!!! Thus ROL doubled from its pre-drill price, then went 8 times at the time of discovery from pre-drill price ie if ATN did a “RO:L” it could go from say 4 cents (pre-drill) up to 8.0 cents at time of drilling, then UP TO 32 cents if there is a discovery!!! (Although not certain of discovery this is NOT A WILDCAT drilling program, its a drilling of an ALREADY ESTABLISHED where considerable high grade gold samples have been taken by ATN geologists!!!).

 

[beatle]

NOTE: The Non-Executive Chairman of ATN is Ric Crabb, of Paladin fame - a company that rose in price from a few cents (and market cap of almost zilch!) to a price of several dollars (and a market cap of a couple BILLION!) when it acquired the uranium interests in Africa. I suggest that Ric has got a powerful investor base, many of whom would be ready to step into supporting ATN if there is any suggestion that ATN has got anything like a Gosowong or Romang Island at its Obi project!

 

[beatle]

I'm very surprised to see ATN trade down so far immediately after the open, even if the announcement would be interpreted to be slightly negative, ie a delay of 8 - 10 days in drilling commencement!

Does it really mean anything significant though? I think not, it just provides an opportunity to buy shares at a cheaper price, and those dumping watching it go up beyond their selling price! Maybe they will have to rush to get those shares back later on (which can only add to buying pressure!).

What I don't have any doubts on is that once drilling is underway you won't see that sort of opening on ATN, it should start to move higher, and not just by 0.1 cent intervals over a trading session! IMO of course, but I am confident knowing the fundamentals of the Obi Island project are not just sound, but VERY exciting!

 

[beatle]

I welcome any other poster interested in ATN, to broaden the focus of posts, beyond what I have posted. Its good to have an opinion but its not healthy if there is no cross-fertilisation of thoughts IMO.

I would particularly be happy to hear others thoughts re ATN share price from a chartists point of view. Whilst I have posted on a rudimentary basis on ATN share price, I am an amateur and there are some very good posters on ASF commenting on chart interpretation.

ATN has now settled slightly below close of last weeks level, and I would say its been a good positive start to the week, knowing we have got to endure another 2 weeks before the General Meeting (Tues 19th April) which I personally tip as being the blast-off week!

In anticipation ....

 

[beatle]

Please correct me if I am missing something re technical charting re ATN today:

We have had quite a largish number of shares traded (with 1 hour still to go till close) - 6.2 million - almost as many as the recent biggest number of March 29 (8.7 million shares traded), in between that there has been mostly around 2 - 3 million shares traded. Since that largish number has been traded on a down day for ATN, it could be interpreted as a negative for the stock I presume.

And yet we are now only about a week away from the drilling rig and all its parts are expected on Obi Island, in readiness for it to begin drilling! That MUST be a bullish activity, surely to be followed up soon thereafter with a confirmation of drilling commencing (presumably an announcement of such will be put out on or soon after 19 April! Thus why is it such a down day on such strong volume for ATN? Beats me, all I know its a great opportunity to buy more!

 

[mgm1a]

hi beatle, i had a look at this over weekend as i have been stalking your posts I had a lick at this as an unsuccessful day trade on 18 NOv when they got into the project.

The fact they obviously have gold is attractive but how does it work with the company eventually asking the artisanal miners to leave ? There is obviously quite a few. Seems to be a risk factor?

 

[beatle]

Hi Mgm1a, and FINALLY - and what a great person to be co-posting with!!! You've made my day Mgm1a.

From a longer term point of view you raise a very important question and to be totally honest I don't know exactly how it works with these artisanal miners, and I haven't confirmed the exact relationship of the tenement holder (PT Eka Samudra) with the artisanal miners - but there does appear to be some relationship as the earlier announcements by ATN refers to the fact that the Small Scale Mining Area ("SSMA") of 300 Ha lies within the larger 7,000 Ha IUP that ATN has got access to (along with a share of profits from gravity processing of SSMA gold won based on a processing facility that ATN will provide to the artisanal miners - that suggests to me that there is a good relationship between ATN and the artisanal miners via PT Eka Samudra (of course that is conjecture by myself).

I have not considered anything more from a longer term point of view as I think that its a much longer term issue that may or may not be resolved, but in the meantime we are surely going to see a considerable number of positive advancements for ATN that should be reflected in large jumps in ATN share price. Of course the fact that ATN has a jv with PT Eka Samudra Nusantara on a valid IUP suggests that at least there is a legal right to explore on the licence, while in a practical sense when in a development phase there might be some interesting discussions between the parties.

But gee I'm so happy to see your post Mgm1a! My aim is to follow the story as much as possible, and regularly post on ASF to keep the limelight on ATN for all over the following months etc, as things develop, I hope you remain posting as well, as there is strength in numbers. As i see it, there are few raw exploration plays around at the moment that have the same potential in a company with such a low share price and potential to run up. Its very exciting, and having watched on the sidelines to SFR, ROL rocket up I'm hoping this follows their lead!

In my estimates we have around 10 more trading sessions where it might be capped before it begins its move upwards, what is your view Mgm1a?

 

[beatle]

I wonder what the breakdown of trades in ATN is each day, from the point of view of daytraders and versus longer term holders. IMO there are a fair number of daytraders in ATN that don't take so much interest in what the company has got, and are happy to take a few points each trade. While that provides more trading liquidity for all, it also presents a wall of resistance at each new higher level (I guess also a floor of support at each level too!).

WHEN ATN is about to move, based on actual activity on the ground on Obi Island, I wonder if that trader mentality will continue or if it will force a rush of buying to get back into the stock. I know that ATN has traded very strongly when it has run on two occasions over the past months, and it has got as high as 5.5 cents on one day, and that move up was only broken when ATN got a speeding ticket and reported nothing of note other than to confirm the Obi Island arrangement. I have no doubt that when ATN reports that the drilling on the ground is about to commence, thus no speeding ticket from the ASX to worry about, it will run strongly past that 5.5 cent mark. That time is likely to be at about the time of the Gen Meeting, its amazing how those sorts of occasions coincide with activity on the ground and the run on the share price! IF that is the case, then we only have to wait 10 more trading days (ie 2 weeks) before it is all clear for ATN to start revving its engines.

Knowing that, would short termers in ATN sell? Do they bother to think about a bigger picture than the last nano second of trading that makes them a few hundred dollars, lol (or am I being naive?). Posters with a different view are welcome to contribute their 2 bobs worth ....

 

[beatle]

Quite a big dump at 4.7 cents and all it does is make ATN looker even more attractive to BUY!!! Now less than 10 trading days to a rocket launch IMO!!!

 

[beatle]

Another down day for ATN on reasonable volume, seems the traders continue to rule the roost with it at the moment. Not sure what will turn it around in the next few days as surely the company is unlikely to put out anything of a positive note until the Gen Mtg on 19 April, so it might become even more attractive (ie cheaper) over that next 9 trading days!
And yet by that same argument, as each day runs down towards that Gen Mtg it becomes more likely to run back up in anticipation of the drilling being 1 day closer. I have no doubt that around the day of the Gen Mtg there will be a positive announcement about the drill being ready to embark on the 3,000 - 4,000 metre diamond drilling program on Obi. And that should create a lot of positive momentum for ATN share price in anticipation. IMO of course.

 

[mgm1a]

beatle it was me excited to find you delving into something else .
Still early days for me - actually the graph looks pretty strong - definite trending since Nov. (should have held) with 30 day and 90 ema sloping upwards and SP hugging the top of bollinger bands, and a strong differnce to previous 4 years. Looks good enough to justify getting a small opening stake.

Still more research to do...i notice the last qltry didn't forecast the next $500k about to be paid to Eka, shoddy.

I think they are up against getting more drilling before next wet season (sounds familiar) when the 12 month term finishes and they should have spent $1m and pay another $2m to Eka. The planned $0.4k drill program, now, means at least another $0.6k in drill and geo work.

will mean cap raise fairly soon if they want to have enough time to raise a good lick of $5m + since they needs $2M and more drilling and working capital

I know zero about INdonesia but i do wonder about the 77km² they have - wonder what companies hold nearby and surrounding and if they also want to deal? Looks very prospective surely outside they tenement?

Actually just noticed the 25% profit share with upgraded facility! Wow! given what the artisans uncover this could be substantial?

 

[beatle]

Hi Mgm1a, and a great post - you certainly do your research which is great to see, that way there are 2 sets of eyes watching it and coming at it from different angles.

I'm glad to hear your view that the chart is ok, as my amateurish approach on that front can't be relied on. I do tend to watch the momentum in the market from time to time just watching the shares trade, and I have got to say that last Friday's late announcement, which simply delays the anticipation of drilling by a little over a week, had the desired affect of dampening the traders enthusiasm and therefore the past 2 days have been on a downer. I can expect this negativity will continue a bit longer until it becomes clear that the time for the drilling is approaching and the Gen Mtg is almost on us. Its only 9 trading days before that Gen Mtg and I wouldn't mind betting that we get a positive announcement out regarding the drilling soon enough around that meeting time!

As for the profit share on the SSMA profit that you refer to, what I read in that is as much about a good relationship between the artisanal miners and PT Eka Samudra Nusantara (ATN's JV partner in the 7,000 Ha licence area) which will be further enhanced by them assisting the artisanal miners with an improved gold processing facility, as the profit sharing arrangement - although that clearly will be considerable (IF they can properly control the gold won by artisanal miners and what are considered "profits").

I have been involved in various Indonesian investments in the past, and clearly there has been considerable successful mining operations by Australian companies working closely with local Indonesian groups (generally through the Contract of Work licence), but from what I understand of the new mining law the IUP licence provides for a more effective means of mineral ownership by the licencee than the old KP system which in contrast did not guarantee continuing rights after each 12 month anniversary date and didn't allow for a licence to be held by a foreign entity in their own right (in the case of ATN from what has been announced the ownship of the licence will most probably continue through PT Eka Samudra Nusantara, as the farm-in only provides for ultimately 85% equity to ATN unless there is a provision in the agreement for ATN to convert final equity of PT Eka Samudra Nusantara to a royalty but I am unaware of this).

As for exploration expenses and timing for a capital raise etc, I would refer you to ROL where it has had a lot of success with its Romang Island exploration (some ways south of Obi Island), and has raised a considerable amount of cash to continue drilling at an accelerated rate. IF ATN can similarly have the initial success that ROL has had then raising the cash should not be an issue! And as I have stated elsewhere, the Chairman of ATN is Ric Crabb, who not only is a very successful operator with other groups (as well as being a very experienced commercial lawyer particularly involved in mining ventures to boot), he is also the Chairman of Paladin, so I suggest he is well placed to raise as much money as is necessary to continue the momentum of the exploration activity if initial results are successful.

 

[beatle]

Trading in ATN yesterday was interesting for a few different reasons based on what I noticed sitting at a screen for most of the session (haven't I got something better to do, lol!):

1. Someone was playing games at the start, and expecting to induce traders to buy higher (or so I thought at first, but actually after the start I realised it was an initiative to tease sellers into selling slightly lower!). This worked as the sellers were frustrated not getting 4.7 cents at the open and finally pushed it lower to 4.6 cents.
2. Then for most of the session it was a stalemate, until buyers started to trade it back up to its original position of 4.7 cents.
3. Then at the close someone traded 5,000 shares at 4.6 cents.

I detected (just my feeling, nothing I can objectively point my finger on!) that the downward momentum was waning, and someone is now getting set for it to change upwards again!


Now this morning before the open, I notice that a seller (is it the same person playing games like yesterday morning at the open) is trying to persuade the market lower (with an Offer at 4.0 cents, lol!). I wonder if this is actually the flag that signals the start of upward momentum.....

Its now only 8 trading days before the Gen Mtg, and 1 day closer to the drill rig and all the support equipment arriving on Obi Island in readiness for the drilling of its epithermal gold/silver/base metals targets!

General market sentiment must be positive with the Dow closing up slightly and gold in all time record US dollar territory, with silver only cents from a US$40/oz level. Timing for ATN couldn't be any better . . .

 

[beatle]

Wow, I did see the downward momentum coming to a slow stop, but I sure didn't see it turning around so quickly! The 4.8 cents offer was taken out in one foul swoop, and it looks like ATN now has turned the corner, but has to take out just over a million at 4.9 cents to confirm its move up! Looks like people realise that last weeks news is simply that, last weeks news!
I would imagine that with the Gen Mtg coming closer day by day the expectations of the drill announcement is getting closer too, and this should those longer term holders who believe that Obi Island has the potential to be a real company maker!