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RAU - Republic Gold

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kennas said:
Looks like a more significant longer term breakout may be on the cards here. Cracking and holding above 5 cents will be very significant IMO.
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This is a very intersting little "speccy" with a variety of interests. The core tenements are around Mareeba and built around a number of ex-BHP tenements (they were seeking high grade, large gold deposits). These leases are peppered with hi grade anomalies that have been mined for a variety of metals from (mainly) tin, tungsten, gold, antimony. RAU has an option over the Mt Carbine tungsten Mine which at one time was the world's largest producing tungsten mine and appox half a million ounces of gold nearby. Other assets include uranium leases in Central South Australia and copper gold in NSW.

Some of the projects have advanced significantly such as the hi grade Whumbul tungsten prospect. RAU is attracting significant interest from Asian investors and held its AGM to-day where the should have approved the issue of 60 million shares to Hong Kong and Malay investors. The Annual Report was issued this morning and it is a very interesting read. It helps to explain the bullish trend that has emerged.
 
sydneysider said:
It helps to explain the bullish trend that has emerged.
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I would say a longer term breakout if it hold above 5 cents, but no long trend yet. Certainly short term up trend with higher lows and highs in place...
 
kennas said:
I would say a longer term breakout if it hold above 5 cents, but no long trend yet. Certainly short term up trend with higher lows and highs in place...
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Kennas i agree with u on the fact that this chart pattern does not confirm a long term uptrend. The fundamentals are a different kettle of fish. The XRF "re-assays" of the first round of soil sampling by Chemex of Brisbane, at Whumbal for tungsten pushed up the original agua regia assays by 1050%. Theses re-assays also confirmed the presence of significant amonuts of tin.

The second round of assays was due several weeks ago and may have been subjected to a similar re-assay. These assays include tin, tungsten, antimony and gold and cover a number of large anomalies in the general Whumbal area. My sense is that the "totality" of this work is pointing to a significant number of substantial targets. This work is starting to attract Asian interest and a rising stockprice.
 
Some interesting tid bits from yesterday's Annual Report. RAU is in legal talks with Luzon Minerals to recover a registered charge over Luzon assets now totalling C$2,103,719 and growing at 15% pa interest. This follows on from their aborted attempt to takeover LZN. LZN has over one million ounces of hi quality gold in two projects in Bolivia AND yet its Canadian listed securities have completely collapsed to trade at 7 cents with a market cap slightly under C$4 million.

LZN stockprice collapsed several months ago from its typical trading range around 10-12 cents and higher and at times was very well bid. Seems that the Canadian market must have got wind that RAU is attempting to collects its debt. LZN has very little cash and its two main assets are the leases that RAU was after. RAU says that the written agreement to amalgamate the two companies was illegally aborted by LZN. One of the projects is under terms from Vista Gold and LZN is under contract to produce a bankable feasibility study. RAU paid for and completed most of the BFS and is refusing LZN access until funds are repaid.

One would assume that the demand for repayment of the unpaid C$2 million would also carry a heavier threat to seek substantial damages for the loss of the "bargain". One million ounces is a VERY substantial asset. There is comment about litigation on one of the Canadian penny stock threads but i cannot verify this other than RAU's comment about legal talks.
 
Hi sydneysider

I would imagine the canadian shareholders have got wind of a bad smell alright. RAU made a comment in a recent ann to the ASX that they were advised by their canadian lawyers that they had a strong case, but I have not been able to get any more information as to how things are proceeding in terms of whether Luzon is disputing that it owes RAU the money or is it that they don't have the cash to pay.

I haven't had a thorough read of the Annual Report yet, but the impression I had was that RAU was withdrawing from those projects, because Luzon was too difficult to deal with, and focus on their Aus prospects.

Is it your impression that RAU could, or is attempting to, acquire Luzons leases via the legal settlement, if successful?

That raises the questions:

What are the leases worth?

Does Luzon have any prospect of raising the cash to settle with RAU, if RAU wins, and keep the leases ?
 

I got the distinct impression that RAU is prepared to settle this matter by taking over at least one of the properties. In exchange RAU would turn over all of the BFS work on the Amayapampa property and discharge the debt. LZN needs the BFS work to comply with the option terms owing to Vista Gold.

IF they let one of the properties go then they have a fighting chance of getting the shareprice higher.

IF they dig in and fight then the stock price goes down and the Vista option will lapse and they loose the deal.

The current miserly market valuation seems to indicate that LZN is truly between a rock and a hard place and RAU may be in the catbird seat to dicate terms. IF RAU goes to Court and wins then it will be nearly impossible for LZN to raise funds as its sole use will be to payout a C$2.1 million debt + court costs + potential damages that would probably exceed their current market cap.
 
To-day's report about Whumbal soil sampling indicates the following speculative conclusions (1) Soil sampling has indicated an anomaly that is about 5,000 meters long and 2,000 meters wide and is still open. This is a MASSIVE target (2) By comparison i superimposed this anomaly over the Watergarden tungsten project next door (Vital Metals 750 x 500m drilled out) AND Whumbal is ten times larger (3) The very high grade core is about 2,500 x 1,000m in size. Soil sampling at Whumbal is very extensive and very high grade whereas the earlier soil sampling at Watergarden was over a small area and much lower grade.

Speculative conclusion is that we are onto a potential massive high grade target. Drilling starts in 2-3 weeks.
 
I thought it was some good news, but the market isn't really reacting favourable to it. I wonder if the pending legal issues are still a deterrant.
 
gordon2007 said:
I thought it was some good news, but the market isn't really reacting favourable to it. I wonder if the pending legal issues are still a deterrant.
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The legal issue IMHO is not affecting the shareprice at this stage. The market has assigned this a nil value. HOWEVER there is some interesting stuff going on. Some months ago RAU served demands on LZN for the repayment of C$2.1 million of secured debt. Their AR says (from memory) that they are in discussions to recover this money. LZN does NOT have the money and their share price has collapsed as a result. I assume that the market in Canada anticipates a sorry result for LZN. It may be the case that RAU may be able to force LZN into bankruptcy or settlement and claim their assets/part assets in lieu of cash. That is one million ounces of high grade gold in Bolivia in two deposits with lots of extra potential.
 
I understand what you're saying Sydney. But I still can't figure out why with what I thought was good news today the fall in SP. Seems to me the support level really fell today.
 
gordon2007 said:
I understand what you're saying Sydney. But I still can't figure out why with what I thought was good news today the fall in SP. Seems to me the support level really fell today.
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I don't think there is reason to worry about the SP movement today Gordon. Fundamentals haven't changed, if anything, it has strengthened them.
One reason for today's SP movement may have been that the announcement had already been factored into the SP on its recent strong movement up on no public news. Profit takers may have been cashing in today.
I agree with Sydneysiders comments in regard to the legal battle with LZN. By the sound of your research Sydneysider, if RAU ends up with some of the LZN gold projects in Bolivia as settlement, there may be additional upside yet to be determined from these prospects
 

We dont have any details of the Vista Gold deal, although it would not surprise me if there was a clause that allowed Vista to declclare the deal void in the event of Luzon being placed into administration or receivership. This is a fairly common term included in contracts so that the surviving party is not dragged through the administration process, which can often go on for years.

This may be why RAU is stepping carefully and trying to negotiate rather than commence legal proceedings.

Holding
 
It's been a bit quite here since the run up. Have noticed it's being mentioned on the possible breakout alerts.
 
I may have spoken too soon. News out about some drilling and results. Could be another interesting day?
 
RGL
ASX ANNOUNCEMENT
10 October 2007
The Manager
Companies Announcement Platform
Australian Stock Exchange Limited
DRILLING UPDATE – VISIBLE COPPER, GOLD AND TUNGSTEN MINERALISATION
ENCOUNTERED AT THREE PROJECTS DRILLED TO-DATE
The Board of Republic Gold (“Republic” or the “Company”) today announces an update on its
drilling programmes. In Far North Queensland the latest phase of drilling at the Northcote Gold
Project has been completed and the drill rig is currently drilling at the Mt Carbine Tungsten
Project. In New South Wales a second drill rig is well advanced in the drilling programme at the
Burraga Copper-Gold Project
New South Wales - Burraga Copper-Gold Project
Drilling commenced at the 75%-owned Burraga Copper-Gold Project in September 2007. This
programme of 12 drillholes is testing a number of targets at and around the substantial historical
copper producer, the Lloyd’s Mine.
Exploration in the 1980’s indicated an extensive soil geochemistry anomaly associated with
geophysical features suggesting a larger mineralisation system than that mined previously. Initial
drilling at that period encountered mineralisation associated with these features and supported
the potential of the area.
Some of the current drillholes are twinning, i.e. being drilled adjacent to, old openhole percussion
drillholes from the 1980’s. Current RC and core drilling techniques are considered to provide a
better sample than earlier openhole techniques, so the new drillholes are being used as a check
on the older drillholes
Drilling on the current programme is expected to be completed in the next week.
Visible copper mineralisation has been reported from the field in a number of drillholes and
importantly, previously unknown zones have been intersected away from the historical mine itself.
Final analysis results will be available over the next 6-8 weeks.
Far North Queensland - Northcote Gold Project
Drilling has been completed at the 75%-owned Northcote Gold Project.
Drilling was in the vicinity of the East Leadingham deposit, the highest grade gold deposit located
on the site. Current programme drillholes intersected the main East Leadingham structure and a
structure further to the east. Visible mineralisation has been encountered in many of the
drillholes.
For personal use only
 

These are very encouraging results. The Northcote gold drilling is getting very interesting IF they are getting visible gold in the core then it is much more than just a few grams per tonne AND it is shallow where they expected nothing AND it was encountered in "many" of the drill holes. This increases the grade, quantity of gold and the economics. Very good news.
 
I must get that book that YT has suggested, something about valuating mines. Believe it was written by a victor or something. I shall look back and find it.
 
gordon2007 said:
I must get that book that YT has suggested, something about valuating mines. Believe it was written by a victor or something. I shall look back and find it.
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It may be a bit early to start calculating resource estimates, but it would be nice to get some drawings or photo overlays with the next results to get some mental idea of the sort of project sizes they are talking about.
 
gordon2007 said:
I must get that book that YT has suggested, something about valuating mines. Believe it was written by a victor or something. I shall look back and find it.
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I did a google for you...got me interested too!

Amazon.com: The Mining Valuation Handbook: Books: Victor RudennoThe Mining Valuation Handbook (Paperback) by Victor Rudenno (Author) ... Valuing Mining Companies: A Guide to the Assessment and Evaluation of Assets, ...
www.amazon.com/ Mining-Valuation-Handbook-Victor-Rudenno/dp/1875857818 - 123k -
 
gordon2007 said:
I must get that book that YT has suggested, something about valuating mines. Believe it was written by a victor or something. I shall look back and find it.
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Guys, like most stock market related books, you can find this one at the ASF Investment Shop: http://www.moneybags.com.au/default.asp?d=0&t=1&id=2716&c=0&a=74
 
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