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AXO - Aurox Resources

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Seems to me that in the current market AXO is hands down the best iron ore play. The SP is stagnant atm as Hartleys is closing out a position. However looking at the fundamentals of this company it really seems a no brainer to me. They have one of the best resources in Australia albiet not as large as some of the more cheerled stocks. However the resource will no doubt be upgraded in due course. The have a very low capex and have 100% of their current JORC resource sold. Just compare mkt cap to some of its peers

IMO this is a $5 stock by end 2009.
 
Up 11% atm? New to the game and can't see why.:banghead:
Anyone got any info?...............................................
 
AXO Balla Balla Iron/vanadium BFS released today. Figures seem quite healthy and project v.feasible as per figs below. Capex seems reasonable given the projected revenue flows, Does anyone have some thoughts on AXO or the BFS. SP finished slightly down at 1.18 today (mkt. cap $164 mill) despite the upbeat BFS, expectations of a tripling of the current resource, plenty of cash in the bank , cashed up Chinese partners, confirmed sales & well as other projects of interest on the cooker...
Not much traffic on this thread recently.. am I overlooking something??

FINANCIAL FORECASTS
NEW BFS & RECENT ECONONIC DATA
AREA TOTALS
Ore reserves 104Mt @ 45.7% Fe, 0.63% V2O5
Ore mining 10 million tonnes per annum
Project life 12 Years
Concentrate production (57% Fe, 1% V2O5) 6 million tonnes per annum
Total cash operating costs A$ 30.40 per tonne concentrate
Capitals cost all inclusive A$ 603.4 million
Revenue A$ 418 million per annum
Earnings Before Interest, Tax, Depreciation and
Amortisation (“EBITDA”)
A$ 216 million per annum
Project Enterprise Value @ 7x EBITDA A$ 1.5 billion
Project NPV A$ 523 million
Project IRR 21% pa
Revenue assumptions include:
1) Iron Ore Sales Price: Independent Market Study - 27 September 2007
2) A$ : $US Foreign exchange: 80 cents flat rate over 12 year project life
Applying an average iron ore sales price of US107.5c/dmtu and an average unit cash
operating cost of AUD30.40/t, the Project generates a healthy operating margin making the
Project robust and able to withstand movements in key economic variables.
It should be noted that on the 4th of October 2007 Aurox announced the signing of a revised
contract which increases the annual production and sales of iron concentrate from 6 to 10
million tonnes in the 5th year of operations. The above figures do not account for the extra
revenue and production cost savings from economies of scale due to this increase.
Aurox Resources Limited
Charles Schaus
Click to expand...
 
AXO looks to be gaining momentum again.
This is is going to be a mid to long term hold for me as i previously said, i believe in all the figures and support for this mine but it will take time a bit of time.

I presume that most of the profit taking has taken place back in July judging by the volume and volatility there. I too took profit myself there and bought back a bigger parcel after that, as i did anticipate a pull back.

Technically, a cup is forming nicely here and the share price is edging to break out at $1.20. MACD is heading up since August and crossed strongly a week ago or so. If the cup and handle forms and breaks out from the resistance of $1.40 this could head towards $1.70.

Still looking closely at this one and happy with it :D

Any other thoughts?

Hypnotic
 

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Thanks for the chart Hypnotic. I think the sp may benefit short-medium upon digestion of the BFS figures. Moreso in the current environment where iron-ore is receiving high profile coverage as the annual negotiations approach & the angst between the first-tier miners & the Chinese/Japanese buyers picks up
Holding a small few but might grab a few more for the medium-long term basket....
 
AXO responding nicely to BFS release yesterday and to a good presentation on this on BRRadio this morning. Up about 12% with plenty of support.
 

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AXO is looking great pushed through 1.30 today. Looks like the news were well received.

Last Trade Today's Change Volume Open Today's High Today's Low
1.310 0.130 11.017% 2212017 1.210 1.350 1.205

Up 11% today on relatively high volume!!!
I personally believe this is going to run this time round and stay up there judging by the numbers and sales and technically supporting this too.

Good luck to all holding.

Hypnotic
 
The Boardroom Radio presentation was pretty emphatic about the upside potential at Balla Balla beyond that covered by the BFS. The BFS projections are reasonably conservative given they dont factor in the late announced 66%! increase in sale product (ie from 6 to 10m tpa from Yr 5) and the scale benefits associated. Also they appear pretty confident they can triple the resource beyond 300mt....& a 25 year project life.
 
The Aurox update...enthusiasm from BFS-related buyers early, opened at 1.37; followed by day high 1.435; day low 1.30 & finished fairly strongly at 1.35 for a 3.1% daily gain. Volatile day...!
Volume ~3 million - with some of the buyer interest in AXO no doubt due to the MMX takeover lunge on MIS & sudden increased focus on advanced "small-cap" iron-ore plays, courtesy of this.
Will we see continuing consolidation in this sector?ie, to achieve scale/pool transport/ensure funding...
Even the perception that this consolidation could occur may spur both local & OS players into a bidding frenzy aimed at snaring their chosen patches.
What value will the market put on AXO & its "advanced" status....(BFS-complete with stated project upside to 300million tonnes over 25yrs) under this scenario? A task made easier by knowing the price MMX is offering to pay for MIS. I'm sure there's a few doing the sums....
 

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I wonder if this price of $1.35 have factored in the potential of expanding the life of the mine and increase of resources yet???

Anyhow i am going to sit on this for a few months and wait for the drilling program to confirm their resource for the remainder of the 11km according to the boardroom radio. Just hope iron hasn't lose it luster by that time.

Good luck and fingers crossed for a big one tomorrow.

Does anyone know which website i can check for iron ore prices, i have tried googling to no avail.
 
AXO retracted today, fail to break through the $1.40 and closing lower today
at $1.28. Is this going to be the handle for the cup??

I feel the new support line is around $1.18 it wont be good if it falls below this point.

Any techies out there willing to offer some insight technically??:confused:

Cheers,

Hypnotic
 
Bought into this one today as a spec stock (looking long term though); time will tell whether it was the right decision..anyone else holding or have news or thoughts on AXO?
 
Looks like Mac Bank just took up 5.15% of this company...

That should explain the recent jump in share price... looks like Mac bank also finds value out of this gem..

Still holding for long term.

Cheers,

Hypnotic
 
Just read their last quarterly activity statement.
They have plenty of cash.
In construction phase on balla balla project.
Encouraging drilling results released recently.
Steel mills lined up and waiting to take the ore, plus their other projects they seem way under valued.

I'm only an amateur am I missing something or is this just another result of this market down trend?

Any thoughts on this would be appreciated:D
 
This stock seems to be suffering more than most, and on the back of little news that I am aware of.
The SP is presently under 70c -- less than half its peak in the latter part of 2007.
Even given the volatility, they seem very well cashed-up, have made no adverse announcements [that I am aware of], and their prospects seem to be consistent with the projections of late 2007.
Far be it from me to pretend I know what is transpiring, but does anyone else have any thought to share?
Some of the earlier posts on this thread suggested a very promising future for AXO. Has this changed?
 
The market's a funny thing sometimes....:banghead:

Guys I think there is a bit more going on here than just a simple down-turn in the market to account for the AXO sp movement.

I think part of the problem might be the vanadium connection at Balla-balla, and the marketing (or lack off) that AXO have undertaken to advertise themselves. I gather the magnetite contains significant quantities of vanadium (a potential contaminant) that AXO were originally intending to exploit, but then changed their focus to magmetite 2-3 years ago. So are people wondering:

A.) Are these guys a vanadium company or an iron ore company?

B.) What's with the vanadium anyway?...is it being co-extracted with the magnetite and being exported to China like this?

You'd think with two major Chinese steelmakers onboard, $70M in the bank and an economically robust project, that this would be going gangbusters perhaps, but there are several issues that require clairification here imo.

Maybe the biggest hurdle will be financing Balla balla, I imagine in the order of $500-600M? at least. Although magnetite ore is certainly more energy intensive to process than straight shippable haematite, it can be done by specialised outfits in China.

Comments from any holders?

jman (DNH)
 
Some insider news on AXO?

Can someone explain the price move today?

up 24 cents or 31.58% so far, was up as high as 29 cents.. followed from yesterday's 8.5% rise.

Hypnotic
 
Some interesting action today,

AXO threatened to break through 1.00 on a very strong morning session, before finally closing 3.8% up at 95c.

I would say the recent rise from approx 65c in AXO was partly due to the glowing AGO report released by ML. Probably the sentiment has filtered through the sector to a degree. No such in-depth coverage available for AXO however, they probably need a broker to raise their market awareness.

So what do these guys actually have?? The items in bold, I consider to be either key milestones to be achieved, or positive factors:

- Ordinary shares on issue: 149M

- Project construction costs $850M

- Production start-up Sept 2010

- Approx 45% Fe grade, magnetite ore body

- Very favourable project economics

- Targeting 650Mt resource/350Mt reserve Spet 08

- 6mtpa concentrate production, target 14mtpa 2014

- $72M cash on hand.

- 15 year contract with Chinese customers :D

- Slurry pipe transport to Port Headland

- Strip ratio during operations Y1 through to Y5 of 1:1 :D

- Long-lead items on order; SAG mill, crusher.

- Secured stockpile areas at Port Headland

Probably the main thorn in their side is the not-so-small amount of capital required to fund construction at Balla balla, in the order of $850M. They're hoping to debt fund potentially up to 65% of the costs, and then use an equity rasing to obtain the remaining cash. Probably they will withhold the equity raising until they obtain some traction in the price, too dilutory otherwise. New Holland Capital, the AXO debt advisors, have held introductory talks with several Australian and overseas's groups interested in financing the project.

This whole phosphate issue raising its head has me a little bemused tbh. Sure, lab tests may be able to show that economic amounts of phosphate can be extracted under highly-controlled lab conditions, but to apply this technology at a plant-scale is an entirely different scenario. The 5% initital phospahte grade from the waste needs to be concentrated to 30% for a realistically saleable product, requiring crushing, grinding and flotation, so basically a separate flow sheet altogether! :eek: Perhaps they're just looking for a bit of attention. They seem to be saying "yeah well we have to mine waste to gain access to the magnetite ore body anyway, so we can kill two birds with one stone!" Hmmmm....I'm not entirely convinced of this argument just yet, if they can demosnstrate this process at pilot-plant scale, then well....I might pay a bit more attention.

Anyways, looks like a pretty robust project, and one that has flown under most people's radar I'm sure. If they can keep their focus, and not become distracted with the phosphate issue too much, this could get very interesting very quickly. I am watching this extremely closely. Look out for any positive news re financing to drive this north.

jman

Disclaimer: DNH
 

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