AZR - Aztec Resources

[doctorj]

Re: AZR Aztec Resources- Little guy going Up?

Small steps.

There's still significant risks between now and production, namely construction of the sea wall and other necessary infrastructure.

I hold, but I don't think its time to get too excited yet.

 

[el_ninj0]

Re: AZR Aztec Resources- Little guy going Up?

Seems to be strugling to get past 30 cents today. Its been going between 29.5 and 30 cents all morning.

 

[RichKid]

Re: AZR Aztec Resources- Little guy going Up?

Thanks for the shares review doc, only AZR was really tipped as being seriously undervalued atm, nice to see the figures, the funnymentals people can do the math. This is bound to be in Shares again in a few months when it's higher so more support as we get to the business end of this year.

 

[RichKid]

Re: AZR Aztec Resources- Little guy going Up?

A bit concerned about AZR atm, see my last post with a chart (post #212 of this thread), I didn't draw the lower trend support line at that stage (but I should have), it turned out to be a bearish wedge (Started as a channel). The price oozed down and if theory is correct it should go further towards the base of the wedge around 18 to 20c.

But since the fall is probably due to the news not coming as soon as expected (and the recent general market weakness) it should be stable unless there is a real delay in the anncts. I sold part of my holding (a bit too much in hindsight) but will buy again later if need be. Volumes are a bit low. At least I've locked in some profits so it's easier to sleep!

 

[doctorj]

Re: AZR Aztec Resources- Little guy going Up?

Buying when most of us did, it was always going to a 6-12 month proposition to realise the type of profits that we thought might be possible and achievable for Aztec.

The BFS should provide more clarity to the direction of AZR in the short term. I too sold a portion to lock in profits and may look to buy some more at the levels its at. Bottomed out at 22c, which was incredible given how it has traded since mid-feb. Good to see it have a fairly strong close on Wednesday, rejecting lower prices.

I wouldn't put too much in that trend line of mine, you can place them anywhere in hindsight and it was a 3second job for this post.

That said, I'm still happy to hold and may pick up some more when it resumes its uptrend. The amount I'm holding currently is free-held and I'm happy to almost leave that in the bottom draw.

 

[RichKid]

Re: AZR Aztec Resources- Little guy going Up?

Just read this about related developments, goes to show that we have to be careful in case the current MOU's don't lead to what we expect. Doc is spot on about all the risk that still has to be overcome before production. Underlines the importance of good trade mgmt. Fortunately AZR has better mgmt (ie more than one showman) than Fortescue.

From the SMH:
http://www.smh.com.au/news/Business/Highlands-Pac-signs-up-China-Metal/2005/03/31/1111862532815.html

Highlands Pac signs up China Metal
By Jamie Freed
April 1, 2005

Signing a four-page framework agreement at a fancy reception in Western Australia does not mean a deal with Chinese companies is complete, as Fortescue Metals learned last week.

But Highlands Pacific said it hoped a 150-page master agreement with the same Chinese company signed at Papua New Guinea's Parliament House yesterday carried more weight.

Fortescue Metals shares tumbled more than 40 per cent last week after state-owned China Metallurgical Construction Corp suggested the framework agreement for Fortescue's $1.85 billion West Australian iron ore project signed last August was not binding.

Fortescue has since released four-to-five page agreements with CMC and two other state-owned companies to the ASX, with chief executive Andrew Forrest insisting they were binding.

Highlands Pacific shares rose 2c to 53c yesterday after it signed a master agreement to give MCC an 180-day option on 85 per cent in Highlands' Ramu PNG nickel and cobalt project in return for supplying 100 per cent of project development funds, estimated at $US650 million ($841 million).

Highlands Pacific managing director Ian Holzberger said it was "very comfortable" the deal would go forward. "[It] has been a very detailed 12-month assessment and negotiation process," he said. "There are no more details of the joint venture to be determined."

Highlands has worked with the PNG government to get tax advantages which Mr Holzberger said could clinch the deal.

Highlands would have 8.56 per cent carried free, rising to 11.3 per cent with an option, at market price of another 9.25 per cent after project debt is repaid.

Critics have said that Fortescue may have publicised its deal with MCC too heavily in its initial stages, leading to the massive share price drop when uncertainties came to light.

A Highlands Pacific spokesman said his company consciously took a different path when dealing with the Chinese.

"They didn't want to promote this too quickly," he said.

There is speculation that Fortescue's 44 per cent share price decline might trigger an investigation by the Australian Securities and Investments Commission.

ASIC could also look into Mr Forrest's $13 million sale of 3 million shares at $4.50 each in February; the shares closed at $3.10 yesterday.

Mr Forrest holds 47 per cent of Fortescue shares, down from 48 per cent before his February sale.

 

[el_ninj0]

Re: AZR Aztec Resources- Little guy going Up?

Just read this about related developments, goes to show that we have to be careful in case the current MOU's don't lead to what we expect. Doc is spot on about all the risk that still has to be overcome before production. Underlines the importance of good trade mgmt. Fortunately AZR has better mgmt (ie more than one showman) than Fortescue.

From the SMH:
http://www.smh.com.au/news/Business/Highlands-Pac-signs-up-China-Metal/2005/03/31/1111862532815.html

Richkid, When should be expect to see some results from AZR?

 

[RichKid]

Re: AZR Aztec Resources- Little guy going Up?

Richkid, When should be expect to see some results from AZR?

Wish I knew mate, only clue in the past was increased (ie very high) volume before an annct but that's gone down the drain with the crowd jumping into iron ore. I'd expect it in April, but whether that is the resource upgrade or the BFS (less likely) or the results of the price negotiations or all at once is another question.

The market will be looking to see if the construction costs are higher than expected (there are shortages of men and equipment out there). The Shares mag article extracted by Doc J recently was the most detailed for figures that I've seen. It's not unusual for AZR to trade well below where it should be (eg fair value) so this may dip if it breaks that very important trend support line.

 

[el_ninj0]

Re: AZR Aztec Resources- Little guy going Up?

Wish I knew mate, only clue in the past was increased (ie very high) volume before an annct but that's gone down the drain with the crowd jumping into iron ore. I'd expect it in April, but whether that is the resource upgrade or the BFS (less likely) or the results of the price negotiations or all at once is another question.

The market will be looking to see if the construction costs are higher than expected (there are shortages of men and equipment out there). The Shares mag article extracted by Doc J recently was the most detailed for figures that I've seen. It's not unusual for AZR to trade well below where it should be (eg fair value) so this may dip if it breaks that very important trend support line.

Could you give me a chart with some lines on it to mark out the trend support line? Please?,

 

[RichKid]

Re: AZR Aztec Resources- Little guy going Up?

Could you give me a chart with some lines on it to mark out the trend support line? Please?,

Hi EN,
It's the one drawn on Doc's chart a few posts ago, have a look, it's clearly marked. My old one is also there on the previous page of this thread. I'll post a new one if anything significant happens. No new lines to draw till then.

 

[doctorj]

Re: AZR Aztec Resources- Little guy going Up?

I'd expect the resource upgrade to be released as part of the BFS.

As Richkid pointed out, the BFS is due out by the end of April. Part of the BFS is a detailed estimation of the predicted costs, outputs and hence cashflows and profits. At this point, the market will rerate AZR on the basis of their discounted cashflows as well as a discount for the risk in the lead up to production - such as sea wall and sales.

Richkid makes a good point. I suggest that the risk discount will now be higher given Twiggy's debacle. An upgrade to 3mtpa or more (as per the rumour I passed on a little while ago), makes AZR's current share price look quite lucrative. I have some simple numbers here, but I'll hold them aside as making predictions of earnings per share on such broad estimations are dangerous and the BFS is just around the corner anyway.

I wouldn't expect FMG's disaster to be replicated in AZR. Indications are that management is very astute, experienced and above all prefers to understate rather than hype a project's potential.

 

[The Barbarian Investor]

Re: AZR Aztec Resources- Little guy going Up?

my stop lossfor ZFX kicked in the other day, but was a great opportunity to pick up MGX and AZR..put some green into my folio

 

[el_ninj0]

Re: AZR Aztec Resources- Little guy going Up?

my stop lossfor ZFX kicked in the other day, but was a great opportunity to pick up MGX and AZR..put some green into my folio

Would have been a great opertunity to pickup AZR and especially MGX. Wish I had done the same, or not bought in at 81 cents for MGX. If i had waited a day I could have got myself another 3000 in MGX. Sorry. Wrong thread....,

 

[RichKid]

Re: AZR Aztec Resources- Little guy going Up?

This may be a wave like retracement as the speculators tire of waiting for the annct. Might be some buying opportunities soon.

Hey Croc!
Haven't seen you for awhile... still following AZR? Any news or info?

 

[doctorj]

Re: AZR Aztec Resources- Little guy going Up?

I'd wonder why they are getting tired of waiting since its been public knowledge that the BFS was due this month for a while now.

 

[el_ninj0]

Re: AZR Aztec Resources- Little guy going Up?

I'd wonder why they are getting tired of waiting since its been public knowledge that the BFS was due this month for a while now.

Sorry, but what is a BSF?

 

[doctorj]

Re: AZR Aztec Resources- Little guy going Up?

The Bankable Feasibility Study (BFS) defines the mining project. It's carried out by an Independant Consultant and deals with everything from the mining plan from the time they first get something out of the ground until they want to close the mine down, including permits, infrastruture and environmental concerns.

The idea is that its done by an independant in sufficient detail that a bank can decide whether or not to provide financing for the project, so it includes things like projected costs, revenues and hence profit and cash flow.

AZR has been completing a series of drills as part of its BFS with the aim of increasing production from 2MTPa to 3MTPa or more. This is significant as it has the potential to drastically change AZR's valuation. The BFS is also significant as its seen by the market as the next stepping down of risk before production is scheduled to begin.

 

[el_ninj0]

Re: AZR Aztec Resources- Little guy going Up?

AZR has been completing a series of drills as part of its BFS with the aim of increasing production from 2MTPa to 3MTPa or more. This is significant as it has the potential to drastically change AZR's valuation. The BFS is also significant as its seen by the market as the next stepping down of risk before production is scheduled to begin.

Thanks doc. Has anyone seen anything of this BSF?, or heard anything about its prospect for feasability?

I assume that it is since its been going on for some time now. However I am untrained in this aspect and dont know what im talking about.

 

[crocdee]

Re: AZR Aztec Resources- Little guy going Up?

hi rich
yep still following.
don't hold atm unfortunately got a few bob on mul and playing a waiting game which is really not doing me much good atm.
also hold plenty mml & mmlo which i have a lot of faith in[been in from day one and well in front] plenty more to come from this one and not too far away.
actually looking at getting back into cue which i believe have a big future with santos and the Oyong field which has to be getting closer to coming on stream as a producer especially now oil prices are going through the roof.

as you know haven't had much in put for awhile just sitting on the side.
great to say hello again.
regards croc

 

[RichKid]

Re: AZR Aztec Resources- Little guy going Up?

hi rich
yep still following.
don't hold atm unfortunately got a few bob on mul and playing a waiting game which is really not doing me much good atm.
also hold plenty mml & mmlo which i have a lot of faith in[been in from day one and well in front] plenty more to come from this one and not too far away.
actually looking at getting back into cue which i believe have a big future with santos and the Oyong field which has to be getting closer to coming on stream as a producer especially now oil prices are going through the roof.

as you know haven't had much in put for awhile just sitting on the side.
great to say hello again.
regards croc

Hi Croc,
Nice to hear from you again. Glad to see some of your cash cows are doing well!! It'll be good to have you back when you have more time, some of these metal stocks should start going again.
Hope you manage to get out of MUL at some stage, it's tough but you'll be happy once you do.
It's probably the right time to be on the sidelines, this market is a bit jittery atm, even for the smaller stocks.
I'll be hoping to get in on CUE too but it's probably going to just range or fall lower imo as Jeruk may stay quiet for a couple more months but it's hard to tell. I might buy in if it falls to the mid teens, no near support though so it's risky for me.

Anyway, have fun and keep in touch!