AZC - Australian Zircon

[bullant]

Would like your views on this company. Seems to be going nowhere at the moment. Would appreciate comments.

 

[yogi-in-oz]

Hi folks,

AZC ..... as requested, here's some time cycle
analysis for this stock:

01-02062006 ..... minor ... finance-related???

05062006 ..... negative news here???

09062006 ..... minor and positive

23-26062006 ..... negative spotlight on AZC

27062006 ..... positive cycle ... finances???


21-24072006 ..... negative cycle ... finances???

27-28072006 ..... 2 cycles here ... minor and positive.

happy days

yogi

 

[bullant]

thanks for the quick response yogi

bullant

 

[potofgold]

Very underrated stock at these prices.

Production to commence in Aug. Payback over three years at $15m pa.

I have just purchased stock today at 21c. Expect to double my money within a few months.

Do your own research.

 

[Joe Blow]

Very underrated stock at these prices.

Production to commence in Aug. Payback over three years at $15m pa.

I have just purchased stock today at 21c. Expect to double my money within a few months.

Do your own research.

Pot of Gold... you are going to have to be more specific. Why do you expect the price of AZC shares to double in the next few months?

 

[rederob]

Pot of Gold... you are going to have to be more specific. Why do you expect the price of AZC shares to double in the next few months?

Joe
You have assumed potofgold meant he would double his money on AZC, which he did not say would double in price in a few months.
I assumed he would double his money gambling.
Bet we are both wrong?

 

[prawn_86]

hey guys,

in the current market environment, AZC represents a 'safe' small cap investment, with the potential to make over 50% on your money by Jan 08.


It is a near term producer, in the like of QOL. so once their cashflow starts it should see a re-rating of the company.

Here are my calcs:

286mill shares * 28c = $80mill current market cap

45mt * 3.6% = 1.62mt of THMs

1.62 * 22% = .36mt zircon = 360000t
.1mt leucoxene
.1mt Rutile
1.04mt Ilmenite

Zircon = 360000 * $700 = $252million
Rutile = 100000 * $400 = $40million
Ilmenite = 1million * $60 = $60million

Total = $350million – 10% for slimes = $315million measured NPV



JORC Indicated:
127 * .03 = 3.81mt

640000t zircon * 700 = $448million
175000t rutile * 400 = $70 million
2.52mt Ilmenite * 60 = $150million

Total = $670million – 10% = 600million


So, 600 + 315 = $915million NPV.

MC of 10% NPV suggests AZV should be valued at $90mill, which it is close to.


BUT


One must note that all of their mine has been fully funded and paid for. A friend alerted me to this fact and described something known as 'enterprise vale' (EV).

This means that their $50mill mine should be deducted as technically the market should have factored that value into the share price.

So: 80 mill - 50mill gives AZC an EV of $30mill

In other words well below what it should be.


ANother way of looking at it is this:

Their forecast EPS is 5 - 6c. From previous experience a co should be at aboput 10x its EPS when it does start production.

this gives AZC the potential to go to 50 - 60c.


Please feel free to question my calcs as im here to learn

enjoy

 

[prawn_86]

anyone out there have any other opinions as to AZC?

prime buying opportunity if you ask me. see my previous post for details why.

 

[prawn_86]

i find it strange that not one other person in this forum follows this stock...

im going to stop talking to myself now

 

[prawn_86]

ok i love talking to myself so here is part of a response i got from the AZC CEO Jim Wilton.

At the Mindarie Zircon Mine, we are in the process of commissioning the Mine Pump/Slurry Unit, and the Concentrator. We are expecting to be producing concentrates within a week, and at that time the Concentrate Upgrade Plant will be ready for commissioning also. By the end of the month the Mineral Separation Plant and Rail Loadout facility will be being commissioned. So by the end of the month we should be railing magnetic concentrates, and possibly some other products also. As you may have read, we have also commenced a pre-feasibility study on the WIM150 resource in Victoria.

Full production is forecast to occur within the 1st 3-6 months, and cash inflows are forecast soon after delivery of product to the facilities at Port Adelaide

So by the sounds of this i would say within 6 - 8 weeks they will have a cashflow, and by xmas will be operating at or very close to capacity.

Historically stocks tend to spike once production and cashflow start as it is a trigger for many people and fund managers alike as the co moves from 'risky' explorer to 'tidy' earner.

anyone else can feel free to join this thread

 

[shakes]

I hope you are right about AZC, I hold these and I worry they will turn into another bmx, only time will tell.

 

[prawn_86]

I dont know what your investing strategy is, but my plan is to hold until full production is realised and then re-evaluate from there.

historically re-ratings do occur when cashflows begin.

I am also originally from the area the mine is in, and know that they have been advertising for jobs for a while now and that as the CEO said most of them are filled. If i was to work at a mine i would rather live there than somewhere i had to fly in and out of. All the regional newpapers have had stories about the economic benefit they will bring to the region, which will be good in the middle of a drought.

But as you say, only time will tell, but i am confident with my holding.

 

[greenfs]

Very underrated stock at these prices.

Production to commence in Aug. Payback over three years at $15m pa.

I have just purchased stock today at 21c. Expect to double my money within a few months.

Do your own research.

Well with hindisght you might have doubled your money PROVIDED you sold on 05/07/2007. Apart from that day your bold prediction looks ???

 

[shakes]

Where did you get your stock today (azc) @ 21c? Today there were only 4 trades, (one was mine at 25.5) todays trading range was 25.5 - 26c, I would buy more at 21c!

 

[prawn_86]

that was posted way back in Jan.

Production is running a bit behind schedule, as just about every mine development does. I can handle a couple months behind, better than a couple years.

I hold from 26c and am very comfortable with it. Exit above 40c if all goes to plan

 

[shakes]

Sorry read the thread wrong, thought I'd missed something. I'll increase my holdings of AZC at 25-26c.

 

[prawn_86]

report out last night states that everything is still on track and under budget, with cashflow to start by end of september 07!

even if it isnt till october im still happy. full production scheduled for march next year.

PFS of WIM150 due to be complete by the end of the year also, and if all goes to plan they will be able to develop WIM with the profits from Mindarie.

IMO this will begin to appreciate as it moves from explorer to producer in the next 4 - 6 weeks, and then hopefully finds a base around 40 - 45c.

 

[prawn_86]

Ann out today stating that all is on track and below budget.

They have begun mining and first delivery of concentrate to occur mid october.

This is a totally unhedged company that have already sold as much as they can dig up, and payment is made when the product reaches Port Adelaide, not China.

All starting to line up and still cheap at these prices imo considering they will have cashflow within 4 weeks maximum.

I am originally from the area and i know that they have been doing a lot of things on a corporate level such as event sponsorship in order to get themselves to be seen as part of the community and it certainly is working.

Report on Stateline about them tonight

http://www.abc.net.au/stateline/sa/default.htm
transcript will be up there shortly

 

[prawn_86]

another production update.

Railings will commence towards the end of October, with first shipments scheduled for early Novemeber.

all falling into place also worth noting that payments come through when the product reaches the Port by rail, not when it reaches China

 

[prawn_86]

First Ilemite shipped off today, with Zircon and the rest expected to be shipped within the next couple weeks.

All starting to fall into place. Their products have already been contracted and China will take as much as the dig up.

Also, payment is made as soon as the minerals are on the ship, not when they reach China

Lets see what the market thinks...