AZR - Aztec Resources

[RichKid]

Hey folks!

Anyone interested in Aztec Resources AZR, AZROA(options)?

Currently AZR is bouncing between 10c and 11c.

It's got a high grade Iron ore project on Koolan Island in WA and big international investors (eg CITIC (multi billion dollar Chinese state owned co), Societe Generale). Also a Tantulum project in the Kimberley, but I haven't heard much about it.

Looks like it's struggling to complete the right shoulder of a Head and Shoulders reversal pattern. Maybe the start of an uptrend or further sideways movement. Brokers have it valued at between 20c and 24c (See www.aztecresources.com.au for broker reports etc).

Makes me wonder if it's creating a base from which to rise again as 10c has provided considerable support.

Aztec also has a high profile, highly experienced chairman (Ian Burston, ex-Portman mining) and hope to start producing by 2H 2005. BFS to be completed by Jan/Feb 2005. It's listed on the London Stock Exchange AIM and the Berlin Stock Exchange.

I can't understand why all the positive news has not resulted in a price rise- maybe it was expected or people have forgotten about the company because of oil and gold.

(The options AZROA are very volatile at the moment.)

Any views? Observations on technicals or fundamentals?

RichKid

[Joe Blow]

Hi Rich!

crocdee picked AZR for September's Stock Tipping Competition.

I haven't done much research on it just yet but it's certainly an interesting one and has made its way onto my watchlist.

[RichKid]

Hi Joe,

Thanks for that, didn't realize it had been picked- so many entries now, good to see the list growing!

There's also a free broker report of AZR at aer.com.au (a good site for free reviews- no price targets though for the free versions).

I was also trying to get a chart up for AZR showing the H&S pattern over the last year (OHLC) but can't figure out where to find free charts to post here- any tips about where I can find one in future?

I don't use personal charting software or I could have done it myself.

Thanks,
RichKid

[RichKid]

Okay, I've found a place to get free charts from (BigCharts). As I understand it they're completely free and there is no trial period so I can keep using it- what a relief to be able to use charts (I love TA!!!).

This first chart is to show the head and shoulders pattern, although it may not turn out to be a reversal as all the fundamentals are strong (see posts above). Still, the TA odds are in favour of a downturn as volume corresponds to the classical pattern. Only the odd shape of the shoulders is worrying but 10c has solid support. If it doesn't complete the reversal in the next two weeks I'd think the reversal has failed.

(Hope you find this useful Crocdee)

RichKid

[RichKid]

And these are the options AZROA. I expect it to fall back to about 0.003 again and to trade between 0.003 and 0.006c but it's a bit too early to call it that accurately yet.

RichKid

[RichKid]

Well, looks like that support is holding for AZR, and AZROA is trading more or less as predicted (except 0.006 is looking too high now). (See charts above). The positive resource estimates will keep it going sideways till it resumes the uptrend IMO. Question now is will it fall back to 10c support or find higher support?

I've been in and out of AZROA- anyone else trying this? Risk is high now for AZROA as it may step down to a new support level but the underlying share AZR is knocking on 14c so it may keep the option at the current level.

Anyone else following AZR or AZROA? Any views? Fundamentals are strong for the non TA people.

[crocdee]

ian burston is in china this week. they need $60mil to build the port. a deal with the chinese should give the sp a kick and get the oppies home. should also help get the bankable feasibility over the line. a positive announcement maybe next week. my thoughts only.

regards croc

[RichKid]

That's interesting Croc, thanks. Looks like the market is ready for some action now as the stock has woken up from it's lazy 10c-12c range. Let's hope Burston has some luck in China. sp falling to 14c (support?), options plummeting too- coming close to expiry (Jan 05). Let's see where this settles.

[crocdee]

hi richkid
i don't have any doubt about this stock it is only a matter of time but they really need to get the oppies over the line. they have until 31-1-05 and there is $25mil at stake. i wish i had some more money to buy more at these levels.

regards croc

[RichKid]

Hi Croc,

Well looks like they've got the funding to finalise things- hope these oppies (AZROA) get going- a bit cheap at $0.003 in my opinion (AZR at $0.155) but it depends on how AZR is going to travel- I can see it at 20c+ just don't know why it isn't getting there- hopefully there'll be some success with the current work before the oppies expire and it'll jump as it did recently.

Are you thinking of buying in now that they've got funding? I hope to have some soon to sell on the next leg up- $0.003 is providing good support (touchwood!!). Might drop to $0.002 but volumes are tiny (ie only a few hundred dollars worth the last time it fell there) and the AZR price was lower.

Noticed that AZR rises before annoucements and then settles a bit lower- no firm trend though. With iron ore prices expected to do really well next year this'll be a goer. The market should notice it soon- a real alternative to the blue chips IMO for exposure to iron ore.

[crocdee]

hi rich

i don't think they have full funding yet to build the port and definetly no news on any contracts with china at this stage. bfs is not complete yet they got $3mil last week to progress it. md is also have talks with the japanese.

things are looking good but it all takes longer to put it all in place than we would like.

i would buy more but don't have any funds left am into mul too heavily and will ride it out.

it's just a matter of time with azr it will happen fast when it all starts and i thinkn it's no too far away. the new year will reveal all.

regards croc

[RichKid]

Hi Croc,
Yep, still a lot to sort out- good news from my point of view is that further resource upgrades or discoveries may be possible, especially with the extra cash. I think that may push it past 16c and maybe on to 20c. Any deal with the Chinese or Japanese to complete the works you mention would be the key.

AZROA- the short time to expiry seems to be killing the oppies; funny how it all comes down to the last few weeks with holidays and all that. At least there's still a good chance with this one.

I can't see all those big instos sitting on the register and doing nothing. Next few weeks will see some action IMO. All broker reports sofar value it at 20c+ (see posts at start of thread).

I haven't heard of any recent reports (last six months) let me know if you hear any news please.

[crocdee]

hi rich

the only news i can report that hasn't specificaly been mentioned to date [ and which you may already know] is that the chinese were here in perth being entertained by the md 2 weeks before xmas. i'm sure something will eventuate from there the koolan island project is too big for it to fizzle out and with $25mil in the oppies to expire worthless by the end of january doesn't fit with logic [but it could happen] however i still think azr is a winner especially at its last close of 15c. once again it's a waiting game of which i'm prepared to back the md.

have a happy new year croc
ps i think you should research MML ALL THE REPORTS ARE ON THE ASX
i've said it a few times here but noone has taken the challenge. if you think AZR have the goods check out MML and tell me if i'm wrong.
regards croc

[RichKid]

Hey Croc,
I was wondering where the Chinese had disappeared to- glad they were being looked after. Let's hope it works out, as you say it's unlikely they'll let 25m just go like that- also with a huge chinese investor in the stock already I can't see why we wont have some news before then; at these price levels AZR only needs a bit of promising info on the chinese deal to climb to 20c. Things always slow down during holiday periods. Next two weeks will clinch it or maybe they'll keep us on edge till the last minute.

I noticed an article in the Australian, Intersuisse mentioned AZR and tipped it to be one of the handful of juniour resource winners next year: http://www.theaustralian.news.com.au/common/story_page/0,5744,11793162%255E643,00.html

As for MML Medusa Mining, I've had a look, hope you were holding when they ran to 70c. I'll find the thread on it and post more.

[RichKid]

Here's details of the last major announcement referred to above. Might help the 'fundamentalists' if you folks need more info.

Note the last line on upcoming drilling results- this short-term (good) news may get the oppies (AZROA) over the line.

An announcement about a deal with the Chinese would help as well, as discussed above. The fpo's (AZR at about 15c at the moment) have much less risk than AZROA and is going to make it to over 20c easily imo, just a matter of whether it'll happen in January or February. This is not a recommendation and time will tell if I'm right.



From Mineweb.net:

Aztec Resources
Posted Thu, 09 Dec 2004
ABN 45 078 548 562
6 Kings Park Road, West Perth, WA 6005
Telephone 61 8 9420 1700 Facsimile 61 8 9420 1777

Website: www.aztecresources.com.au
Email: azr@aztecresources.com.au
Australian Stock Exchange Code: AZR

ASX Release 9 December 2004

Société Generale backs Aztec to complete Koolan Iron Ore Project Bankable Feasibility Study

SG Australia (“SG”) a member of the Société Generale Group, has today agreed to fund a Bankable Feasibility Study (BFS) for Aztec Resources Limited’s 100% owned Koolan Iron Ore Project, which will help speed the development of the resource. SG will provide Aztec with funding of A$3,000,000 to complete the feasibility study that is already under way and to provide working capital. The feasibility study loan indicates SG’s intention, subject to credit approval, to support Aztec with project finance. The first loan will allow Aztec to fast-track to the project financing stage, saving time with due diligence and documentation. Aztec considers the terms of the SG funding to be attractive. It includes options issued to SG at an exercise price of 23 cents, a premium of 58% to the market price of Aztec shares at the time of approval. SG Australia currently holds 4.7% of shares in Aztec. Commenting on the agreement today Chairman of Aztec, Ian Burston, said “We are delighted with SG’s support, which affirms our belief that the Koolan Iron Ore Project will be a robust long life project. We expect the study to confirm the feasibility of an initial production rate of 2 million tonnes per annum of iron ore over a mine life of 15 years.”

Details of the Project

In October 2004 the Company announced the details of a successful drilling program at Koolan Iron Ore deposit, Western Australia that resulted in a 60% upgrade in the resource. Preliminary modelling work then confirmed the robust nature of the project. At Aztec’s AGM, the company set out preliminary feasibility study parameters which showed that the project would generate free cashflow before tax and depreciation of $240 million.

The preliminary study parameters are set out below:

Mine Output 2mtpa
Life of Mine 15 years
Mineable Ore 30mt
Iron Ore Revenue A$30/t
EBITDA Margin A$10/t
Total Project Revenue $900m
Total Costs $600m
Total Income $300m
Capex $60m
Net Cashflow* $240m

* Before Tax and Depreciation, undiscounted

The above figures assume a 100% fines product and iron ore prices based on 2004 benchmark prices of around $30 per tonne for fines.

Iron ore prices for 2005 are predicted to rise by 25% to $37/tonne for fines and around $47/tonne for lump. Any increase in iron ore prices, together with the potential for some lump product at Koolan, would have a significant positive effect on the project’s profitability. Funding Package SG has offered funding on competitive terms that will enable Aztec to fast track completion of the BFS and to move rapidly towards the realisation of value of the Koolan Iron Ore Project for shareholders.

SG will provide Aztec with loan funds as follows:

Loan Amount: A$3,000,000
Purpose: To fund the costs of completion of the BFS
Term: To June 2007

Lender Options: On signing SG will be issued 15 million options at an exercise price of 23 cents or 58% above the trading price on the date the terms of facility were agreed. The exercise of the options would inject up to $3.45m into Aztec. Moving Towards Development

Aztec is continuing exploration and development activities at Koolan with BFS work progressing rapidly.

Current drilling at Koolan has been focused on confirming and increasing the resource base at Mullet-Acacia and Eastern-Barramundi, identifying potential new resources at Acacia, and deep drilling at Main Pit to confirm continuity and grade of the existing resource for ore reserve estimation. Results of the drilling program are expected shortly.

For further information contact:
Australia
Ian Burston, Aztec Executive Chairman +61 (08) 9420 1700
Rozanne Ichikowitz, Grant Thornton +61 (02) 8297 2522
UK
Laurence Read/Leesa Peters, Conduit PR +44 (0) 20 7936 9095/+44 (0) 7979 955 923
Jonathan Guy, Seymour Pierce +44 (0) 20 7107 8009
Fiona Reid, Grant Thornton +44 (0) 870 991 2318

[RichKid]

Noticed that Aztec have got a mention in the January edition of Shares Mag- there's a section on junior miners and Aztec is considered one that will be re-rated once it completes the BFS stage. The lower risk profile is described as the trigger once the preliminary work is completed, especially with rising iron ore prices. (Thanks to Ghotib in another thread for mentioning the article.)

The next three weeks will see a lot happening for junior resources stocks as people see the cycle continuing, people will be back from holidays as well.

[crocdee]

hi rich

yep january has to be a big month for AZR, they have too munch in the ground for it not to happen.

bring it on baby.
croc

[crocdee]

hi rich

news just to hand CBA have increased their holding as of 30-12-04.
sounds promising fingers crossed

regards croc

[RichKid]

Hi Croc,
Yes, looks like CBA have increased their current holding by 20% to 6%. They must be preparing for the activity that is to follow. Maybe they'll want to get in if there is an opportunity for debt finance.

My understanding as far as expected news is that the drilling has continued since the last upgrade in October. Which means they should be announcing any further upgrades this month- or have they taken an extended break due to the holidays?? No suggestions of such a break and announcements are generally limited to a few a month so maybe they'll just announce it all of a sudden just before the funding for the wharf (if the Chinese help out- or maybe some local banks now that CBA has joined)?

Acacia and Barramundi ore bodies- continuing drilling is expected to lead to a further upgrade (see October annoucements). Just a matter of whether the news will come in the next two weeks. The good thing with AZR is that when they make an annoucement it's usually something important (unlike some junior oil explorers) but in between annoucements it's pretty quiet.

[RichKid]

Found the bit about what to expect in January 2005. Also noted that work on Jetty and related survey work has commenced, so all systems are go once they get a bit of extra money to see it through. The oppies would certainly help if they come through.


From the AGM presentation 25Nov04- see annoucements:

...Drilling work is continuing particularly with respect to infill and
geotechnical programmes and updated resource estimates will
be finalized in January.

Ore density revision will then be available to a higher order of accuracy and additional ore is being currently sought in two additional satellite pits.
We are now confident that an operation can commence at a two million tonne per annum rate and exploration work during 2005 will be aimed at lifting this amount to a three million tonne annual rate at least.

[crocdee]

hi rich
well it does look great for AZR. these bits and pieces all take time to put together[longer than us traders would like] however the light at the end of the tunnel here is a fire.

this is what i think the play will be with regards to announcements this month
1 completion of bfs proving it's a goer and now backed by Societe General Group.
2 finalisation of deal with chinese with financial support.
3 results of continued drilling on Acacia and Barramundi ore bodies which will lead to further upgrades.

all to happen before january 31 which will bring the 20c oppies well into the money.

now how do you like those little apples
regards croc

[RichKid]

Hi Croc,
Yes, certainly looks positive- the market depth for AZR certainly proves it, lots of orders either side of 15c. 16c is the resistance level imo that will need to be broken for it to go 20c+, the market is sitting just short of it waiting for any good excuse to fly through it imo.

My only concern is your first point in your last post, the BSF looks well advanced but they'll need to announce it before the end of the month for it to affect the oppies, knowing AZR this'll happen suddenly but since they don't release regular tid bits of info we'll have to wait, it may even be early Feb but if the other two bit of news you mention turn out well the oppies will be ok regardless of the BSF. Even a very positive resource upgrade alone will be good enough imo as the last run was on the back of an upgrade. This is even before considering the unexplored areas on Koolan which will be drilled over the next year. There's also the Tantulum and rare metals project in the Kimberleys which has taken a back seat for now. Hence the market re-focus on AZR is clearly not surprising, it's been a long road but it's finally coming to fruition.

Also noted that part of the finance arrangements saw the shares valued at 23c so that's is the minimum to be expected now for the sp valuation in the short term (next two months or sooner imo); it's the transition stage risk premium that's keeping the sp down in the short term. sp also falls away when no news is expected (as it did when it fell to solid support at 10c last year, an easy gain of 50% for those who knew and bought AZR then) so its continued strenght at 15c suggests confidence in the upcoming news.

[RichKid]

Stumbled on this while searching for info.

Use Google and type in 'aztec resources fat' and checkout some early stock analyst reports on AZR. I didn't post it direct for copyright reasons. It's totally free.

[crocdee]

hi rich

went to the site had a quick look around but only found really old news.
did i miss something?

regards croc

[RichKid]

hi rich
went to the site had a quick look around but only found really old news.
did i miss something?
regards croc

Hi Croc,
If it's the fatprophetsreviews found via Google (I did mention it was not up to date- "early") then it is old, just good for some background from an independent perspective rather than from the co itself, hence my post.

I couldn't find any new info, Ian Burston must be neck deep in negotiations.

This link has an old presentation from around mid 2004, video from a presentation http://www.imediat.com.au/riu/ec/2004/AZR/

I had a look at it to get a better idea of where things are, now that most of what was discussed there has occurred. Again nothing new, just a guide to the overall project. Burston seems to have a healthy sense of humour, might be good to charm the bankers and investors! The funny bits are at the end during question time...

[crocdee]

hi rich
went to''imedict" link with no success seems i might be lacking in some software however no big deal seems that i"m not missing anything as nothing we don't already know. thanks anyway.
a little better volume today with a good close. have to admit that i'm not so confident atm of the oppies getting over the line. would be a shame for the company but has no immediate impact on me.
AZR is still a winner in my books.

regards croc

[RichKid]

Yes, does appear to be bad for the oppies but we wont know till later, it's a lot of money for the co to sacrifice.
AZR is certainly a goer, the market depth and chart shows it.
Yes the link is a problem, try the audio only link if you prefer but it's not essential info imo.

[tech/a]

AZR is certainly a goer, the market depth and chart shows it

Rich and Croc.

Certaintly seems we have opposing veiws on quite a few prospects.
Think the difference is that you see a fundumantal opportunity,but your not sure when it will be reflected in price,so your forced to take a position when you first become aware of it.

I on the other hand have no idea on any stocks fundamentals and dont become interested until a stock proves its bullish.

UTB is one example been on that since $3.60 a couple of years ago.

How do you choose which opportunity is the best to trade?
Wouldnt you have more fundamental opportunities than cash or do you just sit in all of them?

[crocdee]

tech
you and i trade differently, that is blatantly obvious. infact you probably trade differently to most who are on this site, but that doesn't mean we don't make money either.

i prefer to buy [at opportunity] a stock that has a good fundamental grounding. if the sp doesn't jump the next day it doesn't worry me because it more than likely will in due course. my homework goes into what the company has and what its plan for the future is, so unless you can fault the fundamentals of my research will you please get of my case. you have no idea when i buy or sell a stock but i do hold it longer than you do [i presume]

i have no intention of explaining to you the way i trade anymore but i am still willing to talk about stocks in general.

by the way if you had bought MUL when i posted it at a buy @ 2.8c and sold @ 3.1c there was a profit of 10+% anyway lets not go into that again.

without question you do have a good input to this site so perhaps you might be able to alert us to some stocks you watch and when you reckon they are a buy. i'm sure many of us would be very interested in following your recomendations

regards croc

[RichKid]

I can't see what's wrong with finding stocks with good fundamentals and then trading on price breakout or if the information is so good that it needs to be acted on immediately via entry. In my case, if support is nearby and it's near enough for my stop loss relative to entry then why not enter? For example break above 16c on volume can be a valid signal as that has been the resistance so far, I don't know if that ascending triangle pattern will look quite the same if it does break out later but chances are my entry price will be close to 17c if the breakout is strong (as required) with stop loss at 16c. (Breakouts at apex of triangles aren't always the strongest- pattern may change to a consolidation by next week or if prices drop it may become a longer triangle with a lower gradient/upward slope....will have to reassess then)

I also agree with Croc's comments, no point trying to shoot down everyone who tries to put up their views on this board when it is contrary to yours, there must be some basic level of etiquette no matter how much better your analysis is than ours (but we don't know that since we're not in your league).

I don't know what Joe (the Boss) thinks but he's going to have to get involved in this at some stage imho as things may get ugly (ie too much slanging). I note reputable (ie well known and well respected) people like Daryl Guppy (for example) help out in other boards and they present their views without knocking people down. People will stop using these forums if they think they are going to be bulldozed by overly assertive experts.

I too welcome your comments but let's just get along.

[tech/a]

What the???

My post above wasnt meant to be aggressive or assertive.I re read it and I cant see anything than an admission that we look and trade stocks differently.I then present my veiw.

I present 2 basic questions which you ignore!

Youve all got this idea (50% here) that Im trying to prove Im a better trader than all of you---------what rubbish.
If that was the case why would I post my selections on another site?

http://www.reefcap.com/ubb/Forum48/HTML/000024-2.html

I dont post for other people to follow my trades.
I post with ideas to the methodology of trading it.Live examples of (WIN LOSE OR DRAW) of implementation of a trade.What you do when your winning and what to do if your losing are FAR more important than what your trading!!!!
I see heaps of stock selections and discussions on this site but NOTHING on how its being traded.

Why's that??

I endeavor to make my posts informative and with a purpose.

Im sick of this Rubbish/Inuendo that Im making a personal point!
Ill say it once again for you Croc,Rich,Crashy and anyone else who thinks I have a personal agenda---Constructively criticise the input but leave the personal digs in your Bleeding Volvo's :fu:

Ive highlighted it in BOLD cause Im not happy.(Particularly when you put in hrs of your time in the endeavor to help others in their endeavors and then this Bullsheet!)

[Bingo]

I don't know what Joe (the Boss) thinks but he's going to have to get involved in this at some stage imho as things may get ugly (ie too much slanging). I note reputable (ie well known and well respected) people like Daryl Guppy (for example) help out in other boards and they present their views without knocking people down. People will stop using these forums if they think they are going to be bulldozed by overly assertive experts.

I too welcome your comments but let's just get along.


Richkid,

Let me first say that I find that the alternative views put up by participants are helpful. I ask you to reread the comments by tech/a as I found then OK and he was just offering an alternative viewpoint. You both come from opposite points of view and will no doubt disagree from time to time.

Have a nice day.

[Joe Blow]

I've been keeping an eye on this thread and thought it might be a good time to step in and make a few comments.

It's okay to disagree and even argue heatedly. Forums like this are all about the exchange of ideas and information. They're also about people of different life experiences, methodologies and areas of expertise coming together. In my opinion that is extremely valuable.

The one thing that I won't tolerate on these forums is personal abuse and name calling. That is easy enough to find on other forums. But in my opinion nobody here has crossed the line. As an example, calling someone an "idiot" is probably going to get a warning from me. While calling someone "misinformed" will not. Everyone is entitled to their opinion, misinformed or not.

It's okay to disagree lets just all show each other some common courtesy and basic respect.

Other than that, please carry on... interesting thread. :)

[crocdee]

tech
went into reefcap. an interesting site thanks for the link
croc

[RichKid]

What the???

My post above wasnt meant to be aggressive or assertive.

Okay Tech, maybe I'm too sensitive and should toughen up to your style. I'm glad you weren't Trying to be overly aggressive (which is my main point).
Thanks for the link, that thread on Reefcap is great, maybe I'll have more of a look there and in similar forums from now on, glad you're still going with CUE I remeber we first discussed it sometime ago when you were thinking of setting up a strategy for penny stocks (before your untimely departure for a short time). I still think strong language is strong language, even if you spell the words differently.

Let's just keep these forums going...

[tech/a]

Hey no problems Even You Crashy.

Personally I appreciate anyone who calls a spade a spade provided-----

They have content to the issues they raise.
Wish more people would do it there would be less misunderstanding/procrastination both qualities that should not be part of your trading arsenal.

tech.

[RichKid]

AZR is certainly a goer, the market depth and chart shows it
....
Think the difference is that you see a fundumantal opportunity,but your not sure when it will be reflected in price,so your forced to take a position when you first become aware of it.
....
How do you choose which opportunity is the best to trade?
Wouldnt you have more fundamental opportunities than cash or do you just sit in all of them?

Just from my perspective good fundys doesn't mean I buy immediately, I wait for the technical trigger. I missed an opportunity to buy in at 10c because I wasn't sure if the head and shoulders reversal pattern had been invalidated although it was eventually by time confirmation and consolidation at 10c support followed by a breakout. I had no real system so didn't enter. Instead I traded AZR via the AZROA oppies for more leverage through more movement and clearer support/resistance lines. Now I'm looking at entering AZR fpo's as the options (no time value) are dying (unless good news takes AZR over 20c, which could seriously happen, pretty spectacular if it does- only a small chance of it now).

So far no real trigger for me to enter AZR. I note your resistance line is higher than mine, which means your entry would be safer. I didn't consider that, instead I went for a slightly riskier trade trading the breakout from 16c resistance on volume (see my post on this above)- from observing this stock I would see an annoucement near the surge in price and that would help determine exit strategy. I note this wait and see approach to exit is similar to yours on Reefcap for the small speccies and although I would have a predetermined profit usually this one is worth the extra risk IMO as it may yield more, anticipated support at 16c is also good imo for reducing downside. Still too early to call, the price action will unfold day by day, patterns change.

[crocdee]

hi rich
looks like things are starting to make a move 1.7mil trades so far.

buying depth has also strengthened 7.985mil on the buy side as against 4.5mil on the sell side.

regards croc

[RichKid]

An article on some action in this sector (iron ore), let's see if it rubs off on AZR with market interest focused on these little co's. As for volume today on AZR, I'd like to see at least double (or triple) that volume, but from what you've described Croc it really is building up.
http://www.smh.com.au/news/Business/Foreign-predator-eyeing-Portman/2005/01/10/1105206051740.html

I was just doing some maths on the oppies:
If I buy in at the smallest figure (ie $500, plenty of AZROA sellers at $0.001, it'll buy you 500k oppies ) and AZR runs to $0.20c+ (as it appears to be preparing to do) then the oppies will be in the money (exercise at 20c) so an investment of $500 will become (500k x $0.20c) $100,000 at least! (Check my maths to be sure). Risk to reward 1:200 There is a very high probability of losing $500.

So if there is any sign of the AZR sp going north AZROA will be a VERY VERY high risk speccy to get into. Remember, AZR only has to go up by about a few cents above the recent resistance for the oppies to be in the money. So you basically look to lose $500 with HUGE upside, one for the crazy gamblers, I'll be watching this closely, hope I'm around when the action starts. Somepeople may just consider $500 to be cannon fodder (like buying a lottery tix). It all depends on AZR, worth watching!! Two weeks to go...

I've done the maths above mainly to see the theoretical outcome but may actually trade it if things look good, I know it sounds crazy but I'll be watching in case it's worth entering the oppies. The AZR trade (see posts above) of course is much safer but the returns are lower too.

This is not a recommendation to enter a trade so please don't!

[crocdee]

hi rich

the oppies expire 31-1-05 so nearly 3 weeks to go.
be very interesting to see how it all pans out over that period but with no takers on the oppies @ 0.1c too risky for me to even contemplate.

regardless of whether the sp increases to get the oppies over the line or not AZR wiil definetly be a very profitable company in due course.

burstan is well regarded in the industry so he probably has more than 1 ace up his sleeve.

volume increased today with more buyers than sellers so it appears the interest is generating. where to from here well tomorrow is another day but things are looking more promising than last week. as always we will have to wait and see.

regards croc

[crocdee]

hi rich

AZR looks like is finally on its way

regards croc

[RichKid]

hi rich
the oppies expire 31-1-05 so nearly 3 weeks to go.
be very interesting to see how it all pans out over that period but with no takers on the oppies @ 0.1c too risky for me to even contemplate.
regardless of whether the sp increases to get the oppies over the line or not AZR wiil definetly be a very profitable company in due course.
burstan is well regarded in the industry so he probably has more than 1 ace up his sleeve.
volume increased today with more buyers than sellers so it appears the interest is generating. where to from here well tomorrow is another day but things are looking more promising than last week. as always we will have to wait and see.
regards croc

Hi Croc,
With the option expiry- I thought they stop trading 21Jan05- I haven't traded oppies so close to expiry before hence my estimate of time. There are now buyers at $0.001c. Expiry is 31Jan so I guess you have to convert by that time but if they aren't tradeable after 21Jan then I assume we have to transact on the exchange by then. Please correct me if I'm wrong, still learning this stuff...

Today (Tuesday) has seen volume EXPLODE to over 8 million, recent volume has been under a million, it'll probably close the day at over 10m as it's only 12.30pm atm. Vol explosions usually foretell an annoucement so let's hope it's a great one! Must be due this week. The only other explanation is that the
Portman play has attracted investors to this sector as AZR may well end up a takeover target considering their high grade ore and low costs. The expected resource upgrade will also see them approach Portman in size of ore shipped per annum.

Tech; looks like you were right as well, this one appears to be a goer, let's see how the price settles, an action packed week ahead...

[crocdee]

hi rich
i am in the same boat as you about options have never held them this close to closing date so can't answer your question.
maybe tech can shed some light on it for us both.

volume will be well over 10mil today nearly there now infact just hit 17.5c which is the resistance point to higher levels much higher i hope.

are you a holder yet?

regards croc

[RichKid]

Hi Croc,
Yes, volumes are going higher and higher, it should quieten in a bit for the arvo as it reaches 17.5c. I'm not a holder yet but should be sometime today. Also wathcing oppies very closely, they've come to life again!! One day isn't going to turn it for this co so, we'll see how it pans out over the next few days. Technicals are shaping up well. It's the annoucements that are the key...Are you thinking of entering AZR/AZROA?

[crocdee]

hi rich
i entered AZR 27 -9-04 @ 10.5 and have been waiting patiently for it all to come together.
AZROA is too risky for me atm and more than likely stay that way.

regards croc

[RichKid]

Hi Croc,
Glad to hear you got in early, that's a nice profit you're sitting on!! If you're already in AZR no point getting overexposed.
I've just got in at 17c with a tight stop at 16c. Still watching AZROA. Currently AZR around 17c may dip to 16c or shoot through to new highs, volume is very positive, now for that news!

[DTM]

Hi guys

Decided to hop on the band wagon for the ride at .175.

Happy trading :D

[RichKid]

Welcome aboard the ride, hope you weren't relying on our views alone, make sure you have an individual plan.
AZR volume is at an all time high (beat previous high of 15m), currently on its way to 19m, sure to be known to a lot more traders by the time the day is out, it has now broken all previous highs, including previous resistance at 17.5c and looks like it'll close the day on the up at 18c or above...let's see how it pans out.

[tech/a]

Yup.

17.5

[RichKid]

Yup.

17.5

Tech,
Does that mean you bought the stock at 17.5c or that you reckon it's finally on it's way as you predicted once beyond 17.5c?

As for volume- wow!! This sort of thing usually sees a query from the ASX unless an annoucement is made- am I wrong???

Still looking at AZROA, remember 20c is the exercise price and AZR is within spitting distance of it!! It still needs to go 20c+ to be attractive. BUT EASY TO GET WIPED OUT ON AZROA FOR THE UNWARY (people like me).



As at 11Jan05 for AZR:

Bid Offer Last
0.175 0.180 0.175

Change Open High Low Volume
+0.025 0.155 0.185 0.150 23,697,800

[tech/a]

Bought it.
Triangle says 19c
Close beyond 17.5 would have been nice.
Stop 15.5 which will indicate a return to consolidation (For me anyway).

[RichKid]

Bought it.
Triangle says 19c
Close beyond 17.5 would have been nice.
Stop 15.5 which will indicate a return to consolidation (For me anyway).

I had 19c as my initial target too for the same reason, I didn't think it'd go past 18c today but all that volume at the tail end of today suggests it'll continue through there tomorrow to new highs. Also note the large descending triangle (or pennant?) on the long term charts (support at 10c), upper border broken today before last third of triangle suggesting a strong breakout, especially with the volume. Sometimes tech charts look perfect but it doesn't follow the theory so nothing is certain yet. I'm looking to lift my stop to 17.5c as soon as practicable, if this is a solid run then that'll become solid support.

[doctorj]

If the volume continues tomorrow with the price continuing to head in the right direction, AZROA all of a sudden becomes interesting.

[RichKid]

If the volume continues tomorrow with the price continuing to head in the right direction, AZROA all of a sudden becomes interesting.

Yep, volume tomorrow above 17.5c will seal it. I reckon it's pretty fascinating already, just a matter of confirmation over the next few days. The buy depth is there alright and a lot of people would have seen this come up on their screens due to the volume spike. Also with the iron ore sector in play now it looks good. My only concern is that the annoucements expected need to be made this week or next week latest for this to blossom into one hell of a run. I hope we just haven't had a bunch of iron ore sector speculators jumping in, but HUGE volumes suggests otherwise.

Have you bought into AZR docj?

[RichKid]

Excerpt from story on iron ore sector and Portman consolidation. Includes reference to iron ore price hike and Aztec Resources AZR. Might explain some of today's interest in AZR and confirms long term prospects of AZR.


http://sg.biz.yahoo.com/050111/15/3ps06.html

....Analysts expect benchmark iron ore prices to rise more than 30% next Japanese fiscal year starting April 1 as Asian steel mills try to lock in supplies of the key steel making ingredient.

The latest round of price negotiations between Japanese buyers and the three biggest iron ore producers are set to begin in Tokyo Wednesday.

BHP and Rio Tinto - which export mainly from Western Australia - and CVRD are in a strong position due to an acute shortage of iron ore in Asia, analysts say.

Some analysts believe that the takeover interest in Portman will spread to smaller iron ore miners in Australia, such as Perth-based Mount Gibson Iron Ltd. (MGX.AU).

Mount Gibson shares rose nearly 6% Tuesday after the company said that a unit of China Railway Materials & Supplies Corporation, or CRMSC, recently bought a 5.9% stake in the company.

The current Portman takeover speculation follows an unsuccessful merger approach from Perth-based Consolidated Minerals Ltd. (CSM.AU), which sold its Portman shares last month.

Brokerage firm UBS said in a note to clients that Portman could potentially be worth A$5 a share and re-ignite takeover speculation for other mining companies that are involved in the steel-making process.

"Other iron ore players that do not have substantial links to their customers already, if there is further appetite for iron ore, could include Midwest Corp. (MIS.AU), Mount Gibson Iron, and Aztec Resources Ltd. (AZR.AU)," UBS said.

The broker said possible coal sector targets might include Macarthur Coal Ltd. (MCC.AU), Excel Coal Ltd. (EXL.AU) and Gloucester Coal Ltd. (GCL).

"For manganese, one could consider Consolidated Minerals," it added.

By Stephen Bell, Dow Jones Newswires; 61-8-9245-5120; stephen.bell@dowjones.com
-Edited by Ian Pemberton

[crocdee]

hi all
well well wel AZR did perform today however i also consider the close a little disappointing.
interesting to read the last few posts.
presumably by now we all know the fundamentals of this company, now i'm waiting for an announcement for confirmation.
todays action is nothing new in the market, it is the rumour mill at work in the lead up to an announcement or possibly more [which really should be the case here] regardless there is one in the wind within the next day or two.

the question now is where do we make an exit.
i will be waiting to see what they disclose at the announcement then i will re-assess my position.
like all other stocks there will be tradible positions for the daytraders and others wish to try their luck.

looking forward to tomorrow
regards croc

[doctorj]

I'm in the process of moving my brokerage to Comsec and unfortunately placed a buy order on this stock when my account was activated at about close today.

I've placed the order but I'm considering withdrawing it to be re-submitted @ market 10-30mins into trading tomorrow. At the moment I'm torn between rumour of an announcement and a nagging suspicion the stock will retrace tomorrow.

Speaking of which, where do I set up stop-losses with Comsec?

Edit: What I also meant to say, was to Croc - we exit the same time we always exit... when it hits the stop or begins consolidation at a new price.

[tech/a]

Re stop/exit

If it goes then Ill look at it but currently Im at 15.5 stop if its taken out Im out thats the first issue.

[doctorj]

I ended up getting in at 0.170 and adjusted my stop from 0.160 to 0.155 accordingly. A fairly soft looking open, possibly profit taking from yesterdays highs. MRX looks like it's generating some interest today.

[RichKid]

I ended up getting in at 0.170 and adjusted my stop from 0.160 to 0.155 accordingly. A fairly soft looking open, possibly profit taking from yesterdays highs. MRX looks like it's generating some interest today.

Welcome aboard AZR doc, yes, it has been a soft open, right on the resistance at 17.5 Good depth though and already upto 2m, let's see how it is once the usual morning turmoil is over and the smart money starts flowing after lunch.

As for Matrix Metals (MRX), see this thread (below), it's on saucer patterns and has an explanation of my strategy, if it does well I might win the tipping comp too! Yeay!!! http://www.aussiestockforums.com/forums/showthread.php?t=761

[tech/a]

An inside day is very common with rises so sharp over short timeframes.
Its tommorows and the next day that will be the key.

Ill be suprised if the Stop is threatened.
Pretty normal so back to work!

[crocdee]

hi all
yesterday md ian burstan added 366918 shares to his holding.
how positive is that?
question now is how far away are we from an announcement?
definetly a hold situation for me.

good luck to all who hold this looks like it could be big.

regards croc

[RichKid]

Here's the details of today's news as mentioned by Croc,


Change of director’s relevant interests in securities
Name of Director: Ian Fred Burston

Date of last notice: 17 June 2003
Date of change: 11 January 2005
No. of securities held prior to change: 1,000,000 Shares

Number acquired: 366,918 Shares
Number disposed: Nil
Value/Consideration: $53,203.11
No. of securities held after change: 1,366,918 Shares


This suggests he bought at 14.5c, which is good value, looks like he's got great timing!! Let's see what the annoucement is. Always good to see the top dog at AZR buying in.

Price is steady around $17.5c atm.

(Just an afterthought, if Burston bought in at an average of 14.5c yesterday (Tue11Jan) that means the price should have gone down to 14.5c that day but my charts show it didn't go lower than 15c, which means he probably bought the day before (Mon 10 Jan) when it was at 14.5c)

[DTM]

Pardon my ignorance, but what are the AZROA 31 Jan options?

:confused:

[tech/a]

Company Traded Options AZROA.
You can trade them as you do a share or you can buy and hold them and if in the money exercise them for shares at the expiry date.
Just another way for the company to make a $$.

Dont see a 50K increase in holdings to be much to go balistic over a good house cost $400K.If the Director thought it was going to fly short term then more would be bought.
Chances are its more a long term proposition.

[RichKid]

Dont see a 50K increase in holdings to be much to go balistic over a good house cost $400K.If the Director thought it was going to fly short term then more would be bought.
Chances are its more a long term proposition.

The MD has increased his holding by over a third but as you say Tech it's not a huge amount (especially for him). He still holds 1.36m shares which is a fair amount. This is just my opinion but I think he may be just timing his purchases to give himself and the market the best chance. For the MD it was a great price, for the AZR watchers it's an indication of confidence and good things to come, might also be a try at getting the options (exercise price is 20c) over the line to net the co a cool $25m (or was it more?).

If the co was valued at about 20-23c by most analysts upto a year ago then it should at least be at that price after the resource upgrades and diminishing risk profile of the last six months. So any current reports should see it at atleast 20c, I can't see why it's still waiting on annoucements to hit 20c. But that's the fundamentals side of it, maybe the current rally will see the technicals bring the price to fair value. (see first few posts in this thread for reference to AZR valuations and report locations- on AZR website).

This has been an interesting week, sure to get more so as the days go by....

[tech/a]

Rich you could be right CUE Directors did exactly that.

I cant post charts the sizing is to small.

[crocdee]

hi rich
good post can't say anymore than that. lets wait and see what will happen from here. generally after a good volume and price hike day there will be a pullback. the good thing here is the close of today was the same as yesterday. its only time for it to all come together and it will.

for me i will wait for the announcement and see what they say, well knowing what the full storey is. i will then reassess my position.

regards croc

[tech/a]

Here is what I tried to post yesterday.

Thanks Boss.

[crocdee]

hi all

well we got off to a good start today 18.5c as i speak. buy depth much stronger atm. be interesting to see what the day has in store for us.

croc

[RichKid]

Yep, volume stronger than yesterday too and already hit a new high of 18.5c. People may finally have 'discovered' the true value of AZR after the iron ore action and may mark it up to fair value. Let's see. I'd like to move my stop up as soon as practicable, let's see what kind of tech pattern is unfolding...

[doctorj]

If we can break 0.190 today on good volume, my TA suggests we're in clear skies. Looking at the market depth we might just be able to do that.

[crocdee]

actually now that i have had time to settle down, looking at the chart 18.5c poses a double top, which if not broken usually signifies a down turn.
buy depth very strong so hopefully we can make a new high today.

what are your thoughts tech

regards croc

[RichKid]

Yes, interesting point Croc, but it need not be a double top, could end up a being a flag or ascending triangle with 18.5c being the resistance, or even a pennant, just depends on how it pans out. Have to agree with Doc about the potential for 19c to be taken out, depth in favour of bulls atm. If AZR releases even a reasonably favourable annoucement this week confirming the bullish prospects this one'll just keep going.
Let's see what Tech's view is, the more perspectives the better but we can't do much while this is playing out as it is...

[doctorj]

Has anyone raised there stops yet?

[RichKid]

My stop's at 16c and I haven't moved it but I think Tech said his had gone from 15.5 to 16. 16.5 seems to be the current support. I'm still waiting to see the pattern that unfolds, I'm looking to move mine to 17.5c...

[tech/a]

Here is a 5 min tick chart nothing much happening.
Break of 18.5 is the key to this chart.
I dont raise stops when its doing its thing.
If there is a sign of weakness than stops are tightened.(I then have a reason)
Youll never get a big profit taking a small profit

You lot really get excited!

[doctorj]

I've lifted mine from 15.5 to 16.0. As Richkid suggests, 16.5 seems to be providing good resistance, in my opinion if it breaks 16.5 there isn't much reason to hang around the extra half before stopping out.

As for excitement, I'm in Perth and my better half has been heading off to work lately the last few weeks, giving me precious little to do till I head on in to the office at a very leisurely 9.30 :)

[RichKid]

Here is a 5 min tick chart nothing much happening.
Break of 18.5 is the key to this chart.
I dont raise stops when its doing its thing.
If there is a sign of weakness than stops are tightened.(I then have a reason)
Youll never get a big profit taking a small profit

You lot really get excited!

Tech,
In terms of your tactics, you said in the commenatary to the last chart you posted (post#69) you might exit at 16c if it closed there- but I assume that was when the patten was still a bit shaky and we thought it might fall back. So once it's going in the direction anticipated you stick to stops till the price has moved well away in strength? (that is what I do, more or less) Just checking if I understood it. My stop has stayed where it was set, let's see if the sp cooperates!! I see 19c as crucial as that's the measurement I got (see previous posts).

I'm enthusiastic about this one because I've been following it and things are finally coming to fruition or will soon. It's good to see the effort being rewarded. This is the enjoyable part of trading- touchwood, this one could still come back a bit.

[DTM]

Hopped off AZR @ .18 and hopped into ADY @ .081.

Hopefully see you guys again.

:)

[tech/a]

DTM

Ooops

[doctorj]

Any thoughts on today's trading and the future for AZR?

Lots of volume but unable to better 18.5. End of day profit taking saw the stock fall back to the open price.

[RichKid]

Yes, looking slower, but still at high levels, let's see if it can break that resistance. Volume is still high but a close above 18 would have been convincing. Time will tell...

[tech/a]

Well the price action is pretty lackluster.
Todays volume better than yesterdays and price couldnt go in with it.
Close of 17.5 indicates late sellers rather than buyers.
Right now there is a balance between buyers and sellers.
In candlestick patterns we have a Tweezer Top (Double top).As most know this indicates failure to break resistance and some see it as an entry for a short in this case.(Top Pattern)

Stop still at 16c for me but dont think we are going to get rich from this one on this thrust.Tommorow will show pretty clearly whats in store.

[crocdee]

howdy all
for me a disappointing close leaving us in the double top syndrome however buyers still out number sellers. 116 buyers 10996528 shares as against 112 sellers 8748824 shares but that could all change oneway or the other tomorrow.

something to ponder on?????

getting the oppies whilst raising $25mil will bring another 121mil shares on to the market with an end result a dilution of the sp.
if the oppies finish out of the money the funds needed for further development will have to come bank loans or placement or perhaps both.

it all now depends on what and if an announcement is made to test the fate of the oppies. wouldn't you like to be a fly on the wall.

regards croc

[RichKid]

Hi GP, good point about the options but it depends on where the price ends up at the end of the month, for options to be worth converting it'll have to be 20c+, if it makes it to 20c it could go to 23++ rather than just stopping dead at just over 20c so dilution may not have an effect till later. All depends on the share price and annoucements...
Good news though is that by looking at previous swings up it generally ends up breaking that resistance before long, hence my remarks about flags, pennants, triangles, can't say till the price action reveals the pattern. Very short term view doesn't look as bullish as it did before, espically as those spikes keep hitting resistance, a bit toppish. Might end the day as same as yesterday. Volume is still solid, as at 11.30am about 3m. Depth has picked up now and this co is certainly more actively traded now.

(speaking of technical sp changes due to option exercise I've started a thread on Bolnisi Gold (BSG) which fell due to that reason as prices were adjusted, it's a tech and fundamentals play imo--> http://www.aussiestockforums.com/forums/showthread.php?p=5884#post5884

[crocdee]

hi all
well i think a pretty lackluster finish to the week, however a better close @ 18c than 17.5c which could have easily been.

we will now have to look forward to next week to see what unfolds.

regards croc

[crocdee]

hi all

well will today be the start of a big week
the open looks ok at this stage

regards croc

[crocdee]

18.5c resistance broken, getting interesting now
buy depth looks strong

regards croc

[doctorj]

According to one well informed chap on sharescene, InvestmentWise tipped AZR this week which has resulted in the large number of small parcel trades. Also, apparently there are some rumblings of AZR as a TO target soon in some media outlets. I can't say I've seen that, but I don't think its particularly believable for the time being.

Anyone decided to take a punt on AZROA yet? :sly:

[RichKid]

Nice to see it hitting the min move expected at 19c, let's see if it can stay there. Yes, the lagging tipsheets would be in by now. Some brokers have tipped AZR long ago so it just adds to the momentum. This might make people start doing the math on valuations and it may go to the old estimates in the early twenties (20-23c at least).

Takeover rumblings are probably because of the Portman deal igniting the iron ore sector but that was not about high grade iron ore (as AZR is) so unless someone knows of a co looking to muscle in on Japanese and Chinese interests which have been associated with AZR for awhile it is just speculation. Doesn't hear to have publicity though.

AZR volume currently nearing 13m- looking really good!! Would be good to have more buying depth though, lots of orders. Not sure if enough time left for AZROA, this'll be a very close one for the oppies, especially as no annoucements have been made.

[doctorj]

What a dodgy day for our dear mate, AZR. The market got the announcement they were waiting for and were obviously disappointed. Ended up droping considerably in the dying minutes of trading.

[crocdee]

dj
todays announcement is only the beginning of the unfolding storey behind koolon island.
patience is the virtue here it will take its time but it will happen.
many more announcements to come yet.

regards croc

[RichKid]

Agree with Croc, Doc.
Issue is these negotiations take time, it's just our luck that it hasn't been done in time for the oppies or the co would have had a lot of money in the bank. Now it looks like they are just trying to give out as much positive info as possible without misleading the market. With the worldwide iron ore price negotiations not far away lots of deals will be being done so they are working furiously, it just hasn't happened in time for the sp to skyrocket but it is a healthy trend.

Thanks to Croc's observation about the dilutory effects of the options we can atleast take a positive into next month- ie sp wont be affected negatively as the oppies appear to be dying a slow death. BUT anything can happen between now and the 31stJan (see below). The current trend suggests the oppies 'may' (slim chance) end up in the money. Whether many will be exercised in time (thus affecting AZR sp) is another question.

I am still trying to find out if the last trading day is 21 Jan (Friday) and if the last day to convert to shares is 31st Jan. I expect it is but no one seems to know as I posted a thread on it in the Beginners Lounge: http://www.aussiestockforums.com/forums/showthread.php?t=839

[crocdee]

tech
do you still hold.
atm it doesn't look good for the oppies and looks like we are going to stay around the 18-19c range until they expire.

i'm still holding and probably will until the get most things sorted.

burstans plan will be well set by now, would be great if we all new what it was.

any thoughts
regards croc

[tech/a]

Yes.

Right now Im happy to keep for a while.
However no movement or a close at 16.5 within 3 or 4 days will see me looking for another opportunity and placing this on watch for a breakout if and when that occures.

[crocdee]

hi all
has anyone given thought to the scenario that the chinese might [ at the eleventh hour] underwrite the oppies thus making a cheap entry and then perhaps even offering further funding to get the show on the road.
there doesn't appear to be any reason why AZR should be dismissed as a player in the iron ore market. all reports tell us they have the ore in the ground with a futher potential to increase production from futher exploration.

it really now becomes a question as to where we as shareholders say bank and take profit before the sp falls. thats the crystal ball stuff for us.

atm the peak could be 22-25c [maybe more who knows] but where do we get out and where do we re-enter if you believe there is more potential for money to be made.

just a few thoughts that are going through my mind.
anyway something else to think about.
comments anyone.

regards croc

[RichKid]

Hi Croc,
Sorry for the delayed reply. Not sure about the underwriting but it is a reasonable possibility. Really is a shame they couldn't tie up the options, but in hindsight for me personally it'll at least prevent dilution- we'll see next week (31JAn).

Anyway, last quarter activities report released today (monday), looks great, no mention of anything unusual, full steam ahead, upgrades will be announced in a few weeks from what I can see in the release. Looks like 20c is about to fall as price surges! AZR is going to be a star performer this year. My only concern is with the native title negotiations, hope it comes through as planned (but that's for later on).

[crocdee]

hi rich
have finally completed reading the report.
it looks like a very busy 6 months ahead to complete all the loose ends in the lead up to production.
company now too far advanced for the project to fall over.
all about time before the sp takes off however i think it will take longer than we all would like so are going to have to be patient to reap the reward on offer.

regards croc

[RichKid]

Hi Croc,
Yes, certainly is a busy 6months to a year ahead. 2005 will see AZR firmly on the map. Once the iron ore price negotiations are over and the new prices are known there'll be even more interest from latecomers.

Next event for us holders is the resource upgrade, probably will be as expected that'll definitely take this one over 20c. Sp will range till then imo, unless they announce the financing deal before then, appears it's just the details they need to sort out, a lot of the arithmetic will depend on the resource estimates so that's the key.

[crocdee]

hi all

buyer depth has increased significantly today

croc

[RichKid]

Yes, looking nice. I'll be surprised if it closes above 20c this week, only Thursday and Friday left for trading as Wed is a holiday. So next Monday is the last day for the oppies to get in, I'm hoping they wont so it doesn't dilute the sp as you mentioned Croc.
I've also managed to figure out the answer to my question about the oppies AZROA. Basically you can't trade em after the day it says they stop trading (21Jan) and from then on until expiry you can only convert them to ordinary shares (if you want to). This is my understanding, not sure if it is at all correct.

[crocdee]

hi rich
yes you are correct about azroa they have now been suspended from trading and need to be converted by 31-1-05.

buy depth even stronger since i last posted.
looks to me like many of the oppies will be converted

croc

[RichKid]

Eat my shorts! Can't believe it, at 21c already. Stop moved up to 17.5c, it'll stay there unless something unexpected happens. Let's see if it closes at 21c or moves below. Strong depth continues. Wonder what the effect of the oppies will be, hate to see a retracement. Nice to see some extra cash for the co if they are itm. Still a few days to go.

[tech/a]

Nice to see.

[doctorj]

Tech and others, what is your take on how the options affecting the share price. I agree with you that the chart looks like its off again, but its likely to revalue lower come Jan 31 with the dilution, right?

I'm not that experienced in these situations, any help is appeciated.

[crocdee]

hi all
what a great finish today

1 a new nigh created
2 openned lower and closed on that new high
3 volume up
4 buyer depth exceptionally strong
177 buyers 13950144 shares
107 sellers 7455201 shares
what more can you ask for of a stock?

conclusion STAY IN THE TRADE for the time being.

MY THOUGHTS
the oppies are now in the money- but only by 1c.
if they are taken up it will add another 121mil shares to the existing 362,644,601 on issue, which will mean a dilution to the sp and inevitably a pullback to around 18.5c which now seems to be the new support level.
with the activity of today there looks like another announcement in the waiting ie before jan 31 which will more than likely kick the sp a bit more from todays close.
after the anouncement i believe the sp will pullback.

anytime now is an exit for me and i will wait for a re- entry at lower levels to enjoy the ride again.

these are my thoughts
reallly interested in any other comments

regards croc

[tech/a]

Croc.

You seem to be taking an each way bet.Stay in for the time being and your out anytime for a re entry.


Me Ill watch price action and stay with it.
Option expiry will have little influence on price.

[RichKid]

Options expiry, seem to be the major issue at the moment re dilution. I've been watching BSG and they adjusted their sp to reflect the exercise of options (look at pricing on Bigcharts.com (old pricing) and compare to current pricing (eg CommSec- adjusted price) OR see the Bolnisi thread. Basically high adjusted from 60c+ to 56c but obviously the dilutory effect varies according to the number exercised, the sp how far they're in the money etc but that's just my guess. So options about 30% more shares will be issued if all AZROA are converted (which means AZROA holders have to have the dough to pay for the AZR shares). The higher AZR goes the less the effect for me by options on sp as my profits will be preserved.

As for getting out of this trade- not for me, I want my profits to run- 18c for shares like this is a psychological price that is common imo, sounds silly but with the co on the verge of something big it should range to low to mid 20s. For you Croc, you've made a heap on this one so I can understand you wanting to cash in without risking more. Perhaps a reentry with a smaller position size if I were you, but this is not advice as I have a habit of being wrong (ie didn't buy in at 10c! went for short term profits in AZROA instead). Another strategy is to take your capital out and leave the profits to run as you have doubled your money. All depends on your individual plan. Please don't be misled by me views if you have another plan- I know it's sometimes hard to exit.

Recent rise in volume and strong close bodes well for AZR, let's see what the annoucement is, if there is one. I'm waiting on the final rounds of the iron ore negotiations to see how much they hike prices by (30%+). I expect Australia will ask for a higher hike than the others once it's our turn.

[crocdee]

tech

staying in atm but now looking for the right time to exit before a pullback which i think will occur shortly.

sorry about the confusion.

croc

[RichKid]

I suppose this is where Gann and Fibonnacci may help with those percentage lines giving an idea of where price may change ahead of the current high (hence a target to exit at). (A 'key level' as called by some). I'm just watching the sp atm, can't do much when there's no reason to.

[crocdee]

hi rich and all
yep azr has been good to me.
i researched early made my entry and have been waiting patiently for it all to unfold which is now happening.

we all know the storey here with quality of the ore and the chinese/japanese contracts which are yet to be finalised.

i think the sp will still go higher from here, how much who knows [25c maybe] but at some stage it is going to pullback for a breather.
the next announcement will tell us more, just how much we will have to wait and see.
the real money will come when they go into production but thats not until july[i think] many things still to do eg build camp, port etc all takes money and time.

azr atm i believe is in the over bought mode and at some stage this will change.
to me buy depth has been a good indicator and i will be watching that very closely along with the other indicators of change.

i'm staying in till the next announcement -- see what they say then re-assess from there. i think we should know something by monday at the latest.

these are my thoughts in open book form.
i'm still in the learning game and very interested what others think about how to play this stock.

azr is a winner lets get as much out of it as we can.

regards croc

[tech/a]

Croc.

Buy and sell depths after the first 2 tiers are pretty meaningless.

Lets face it those logged in to buy at 5 ticks below current price arent all that interested millions are traded while they sit and wait.
They are also buying a falling knife and often disappear when a fall comes.
Those on the sell side are only serious sellers at the first 2 levels as well,any longer and they are just logging to take profit and they often disappear as price rises and chace price when it falls?

A 2-5 min tick chart will tell you way more!

Anyway thats just my veiw!

[RichKid]

Funnily enough this is the stage at which most bigger brokers start to get interested. As mentioned elsewhere by Ghotib there was an article in Shares mag discussing how juniour resource stocks get major reratings as soon as they move out of the initial high risk phase- ie securing funding, building plant, securing buyers etc before production.

Clearly we're not there yet but the tipsheets will now be reassessing the chances for the next few months and I expect greater coverage and support as a result, not just becauae iron ore is on the map. So this is a stage at which I expect more people to come in (rather than out). Look at the number of reports available on the AZR website for example, and that was a year ago when things were much less certain.

The next month will be very volatile imo as funding deals are announced, ore prices are negotiated, new resource upgrades are announced etc. So the sp will be very sensitive to news. I feel I've bought in low enough to absorb most of the volatility- it's the downside risk that is my concern atm.Then it's just a matter of the BFS coming out and construction going ahead. Hope this makes sense, I'm just trying to break it up into different periods while keeping the sp in mind.

[crocdee]

hi tech and rich

thanks for the reply now lets see what happens from here.
atleast we all have a very interesting period ahead.

bring it on
croc

[doctorj]

Good early buy depth again today. Will be interesting to see how this one fairs over the day.

[RichKid]

Annct- nothing much imo, old news from October. Three months since then(Nov, Dec, Jan) let's see if they have something new to offer next month on the more recent work. I think they're just feeding us odds and ends till the real news hits. Still solid depth on buying side despite price falling to 20c.

[tech/a]

Ever thought that the news your getting IS THE news??

If it keeps rising then keep it.
If it stops long enough then decide if you want to keep it or move on.
If it falls enough sell it.

No need to guess hypothosise or worry.

But thanks for the info on the announcement.

[crocdee]

hi all

just to let you know i'm out @ 20c
whether thats good or bad will have to wait and see.

will look for a re-entry now in the near future when i think its the right time.

good luck to all who still hold.

regards croc

[doctorj]

I'm out on this one too this morning. My sell order is in at 0.21 and now I'm just going to wait it out. AZR is a great stock and I wouldn't be at all suprised to find this stock reaches 70c one day in the not too distant future, but its time for me to leave for the time being and buy back in a little bit later on.

Good luck to those that hold AZR, I'll be back with you shortly :)

[RichKid]

Ever thought that the news your getting IS THE news??

If it keeps rising then keep it.
If it stops long enough then decide if you want to keep it or move on.
If it falls enough sell it.

No need to guess hypothosise or worry.

But thanks for the info on the announcement.

Good point, this is why the charts determine my strategy (provided I don't get mixed up in the process with all the 'news'). Still away from my stop so no worries and I'm more interested in my other holdings now, AZR trending well even now. We're in February next week and this co will get a move on- it'll all be in the chart- it discounts everything and reflects it in the sp (or so the theory goes). Option expiry on Monday. I'm still not as experienced as you are Tech so till I get the hang of being calm and collected I'll be getting excited about my movers, have to admit AZR is slowly slipping from memory (but always watched) as the danger period is moving away. Will be nice to see solid support becoming evident next month.

[crocdee]

hi rich
as you know i'm now out. the reason why is my reading of the charts indicates a pullback so i'm not waiting for the stop loss to be hit.
have made a good quid on this one and it's in the bank.
do have a lot of faith in azr they are a winner i just think the sp will take a breather for a while before it takes off again.
todays announcement although positive did nothing for the sp and with the oppies due for conversion on monday @ 20c with the close today @ 20.5c there is no incentive, also in the lead up to the final day there has been no announcement of any oppies being converted. to me it looks like they are lost and a placement is on the cards to Sinom who are going to provide finance for development and construction.

that's they way i read it atm time will tell how it all unfolds.
don't get me wrong there is still a big quid to be made here and i hope i can get some more of it in due course.

will be watching this one very closely
regards croc

[crocdee]

hi doc
see you are on line what are your thoughts as you have also made an exit.

croc

[tech/a]

AZR

[doctorj]

Like I've said, AZR has excellent management and should succeed. I will be looking to buy AZR, especially if they fall as low as tech/a has suggested.

[doctorj]

Excuse my foray into comparitive unfamiliar fundamental ground, but it is my advice that perhaps the options finishing in the money is a big positive for Aztec as it edges them ever closer to production.

I'd be very suprised to see it trade at or below 19, but if it does I'll be buying. I've also repurchased a portion of my original holding at 20.

This forum does have a heavy bias towards short term holds of speccies, but I firmly believe that AZR does have a very positive future and I will look to accumulate this stock.

[RichKid]

Excuse my foray into comparitive unfamiliar fundamental ground, but it is my advice that perhaps the options finishing in the money is a big positive for Aztec as it edges them ever closer to production.

I'd be very suprised to see it trade at or below 19, but if it does I'll be buying. I've also repurchased a portion of my original holding at 20.

This forum does have a heavy bias towards short term holds of speccies, but I firmly believe that AZR does have a very positive future and I will look to accumulate this stock.

Yes, I guess I shouldn't be so negative about the options as any effect will be temporary. I'm comfortable seeing this fall towards 18c as the trend took off a bit faster than I thought. Might buy more at that stage but depends on the circumstances (eg if it's a resource upgrade and the sp is sitting around 18c and it starts to rise on volume I'm in as I doubt any upgrade has been priced in to the chart).

As for short term bias, it's probably a sign of the number of inexperienced traders (like me). I for one thought it was easy to make lots of money quick if I had the right entry strategy and good TA but after losing money I know I am wrong. Van Tharp has a brief profile of that type of newbie who either loses all capital or is so scared that they never trade again when their $1k didn't turn into $100k overnight. But since I've woken up a bit and adjusted my money mgmt abit, things have improved dramatically. As Van Tharp says it's getting to know yourself that is the first and most important thing (or something to that effect).

Thanks to various factors ranging from Daryl Guppy's books and Safety in the market's money mgmt emphasis to TechA (great thread on positive expectancy) and Van Tharp etc. Getting there slowly, experience (of any nature) is invaluable! But I'll hold AZR if it runs as I too agree it's a long term story. TA will still determine my strategy, the chart will keep me honest.

[doctorj]

Yes, I guess I shouldn't be so negative about the options as any effect will be temporary. .

I guess how negative you are depends on your trading plan and your goals. If your focus is maximising returns over time by trading stocks then perhaps you should be negative about it. If however you're happy to ride a stock that has very good prospects in the not too distant future then perhaps you are being overly negative.

Being flexible does have its advantages, however I suggest borrowing a cliche from sport - stick to the gameplan.

[RichKid]

however I suggest borrowing a cliche from sport - stick to the gameplan.

Touche! Yes, I mustn't get distracted. I've got my strategy written down for this stock, just have to follow it, exit time is still some way away. Tech's approach is probably an example of how you begin to focus on the material factors (rather than the irrelevant fears and hopes playing on my mind) after years of experience.

[doctorj]

Yes, I mustn't get distracted. I've got my strategy written down for this stock, just have to follow it, exit time is still some way away.

You physically right down a strategy for each stock you trade? I'm impressed, I may just try this myself. I'm prone to occasionally diverting from my original strategy (with good and bad results). This may just help.

[RichKid]

You physically right down a strategy for each stock you trade? I'm impressed, I may just try this myself. I'm prone to occasionally diverting from my original strategy (with good and bad results). This may just help.

Mate, if it was as simple as following what I'd written I'd be much better off. But believe me it IS REALLY HARD FOLLOWING MY PLAN!! Writing it took me a long time and it may be completely wrong. I do not allow myself to place an order without having a written plan with specifics. Makes me think twice about the whole trade that way.
I basically break down my trade into entry, trigger, exit, positions size, risks etc and fill in details for each trade BEFORE entry. Still getting there and this will change but it gives me peace of mind. Even when I lose money at least I can see where I went wrong (most of the time). Sometimes I find I don't really write down the REAL reason I set a stop at a certain level or why I entered at a certain price but I'm getting to know my wiley inner self and am getting a bit better. Long way to go though. I still can't understand the numbers and matrix in Tech's position sizing thread (hence the reason I'm reading Guppy and Van Tharp) but do want to succeed. I'm a newbie so be warned but there is nothing wrong with writing it down! ;)

I'll only know if my written tactic works in a year or so.

See the threads on trading plans- a few months old but there are some good links in those threads. That was when I was getting started with writing things down. These forums are GREAT!

[tech/a]

R/K great idea to write down your plan.
Just a couple of ideas.
If your trading in a discretionary manner dont be afraid to alter it in reaction to the latest price action.
Have a FIXED STOP.
If you ever design a mechanical system then everything must be fixed.

KISS Keep it Simple (And due to flack from below "Sensible") just doesnt sound the same does it! ;) ;)

I still can't understand the numbers and matrix in Tech's position sizing thread (hence the reason I'm reading Guppy and Van Tharp) but do want to succeed. I'm a newbie so be warned but there is nothing wrong with writing it down!

Perhaps Ill let this be answered by some others who seem keen to take over some educating.If there is no reply or your answers arent clear then Im happy to help out.

I did notice you didnt mail me for the Matrix? Youll get a far better knowledge using it than just talking about it.

tech

[RichKid]

R/K great idea to write down your plan.
Just a couple of ideas.
If your trading in a discretionary manner dont be afraid to alter it in reaction to the latest price action.
Have a FIXED STOP.
If you ever design a mechanical system then everything must be fixed.

KISS Keep it Simple (And due to flack from below "Sensible") just doesnt sound the same does it! ;) ;)

I still can't understand the numbers and matrix in Tech's position sizing thread (hence the reason I'm reading Guppy and Van Tharp) but do want to succeed. I'm a newbie so be warned but there is nothing wrong with writing it down!

Perhaps Ill let this be answered by some others who seem keen to take over some educating.If there is no reply or your answers arent clear then Im happy to help out.

I did notice you didnt mail me for the Matrix? Youll get a far better knowledge using it than just talking about it.

tech
G'day Tech,
Thanks for the tips, much appreciated. In fact I'm still in the early stages hence need to get around the basics of my plan. I do move my stop up but not down. So are you saying you don't move it at all? Also need to know how to react to price action without losing consistency of method- that is the only way I'll be able to assess its success. Maybe if I do well I'll be able to move to a predominantly mechanincal system. Don't have the software for it yet so it'll take time.

I also note that as Guppy says one of the advantages we traders have is that we can trade when we want to (unlike instos who have to be in the market), so I'm trying to be patient and not overtrade.

As for the Matrix, I thought if I'd emailed for it I'll just end up saving it and doing nothing, thanks very much for making it available. I'm not an excel expert so that's another reason I'll have to take it easy at first. I haven't even organised my data properly and honestly I don't have the time atm to get things in order so I'm trying to gear down my trading till my records are organized and then go full throttle on your thread and plug in figures into the matrix. I'm also one of those people who like to look at the mathematical theory so I really know what the figures produced by the matrix are showing so that I can understand the use of the formulas- all this takes a bit of thinking. I also like Van Tharps explanations it gives me a better idea of what you are referring to Tech, as you obviously can't spell out every single point or idea since the audience is so varied here. I suppose you'll want to write a book on your experiences, methods or something in future, might be fun. I'm still reading Tharp. Still getting to know my personal risk tolerences etc and haven't finalised my goals. It all starts on the inside.

And yes! (ha ha) KISS is the motto and it makes me more comfortable as well- just difficult at first simplifying it and seeing if it works. I got carried away at the start and thought I could do anything. I'll leave complex derivatives and high leverage plays to the experts.

AZR will test my exit strategies as it has gone past the stop and has solid fundamentals (something I look for to reduce risk in my trading). Anyway, won't goo too much off thread here, might have to move it to your pos expec thread. Thanks for the encouragement.

[doctorj]

Looks like perhaps selling was a mistake, though I guess nobody ever went broke taking a profit.

Now its just a matter of waiting to see how long it takes them to come out of the halt.

[tech/a]

though I guess nobody ever went broke taking a profit.

They can actually.
It does happen.Lets say you take 10/10% profits on capital of $20k
During those 10% profits you have one loss thats costing you $6500 and you dont want to take the loss(You know how it is) and youve taken 5/15% losses of $3000.Your capital is slowley eroded.

No one ever went broke taking enough profit,and ofcourse enough needs to be quantified.

[doctorj]

Fair call. Fortunately my capital doesn't look like doing that atleast for the moment. Any guesses as to when it will come out of the halt?

[crocdee]

february 2nd

[RichKid]

The anncmt says 2Feb or earlier (if annct is released before then). I'd go with Croc and say it'll be the 2nd Feb.
BTW, what is AZRN? Listed as some sort of deferred option?? In the notice. Comsec doesn't show any price history. Reckon it's a new issue to be announced? The annoucement could be anything from AZROA exercise to a financing deal or resource upgrade (may be a bit early). Have to wait and see.

[doctorj]

Possibly even an underwriter for the options.

[RichKid]

Possibly even an underwriter for the options.

Yes, good point Doc, could be that, I recall Croc flagging that as well. So how would that work?

Does the underwriter just take up (for free?) all the unexercised (expired) options by buying that number of shares at 20c by paying the co?

I don't hold AZROA but I'm keen to know.

[crocdee]

pays company 20c for all unexcersised oppies.
only guessing but that looks like what's happening.
if it does i think sp will pullback a little.

regards croc

[RichKid]

pays company 20c for all unexcersised oppies.
only guessing but that looks like what's happening.
if it does i think sp will pullback a little.

regards croc

So if I hold AZROA (I had a high risk strategy outlined a number of posts above) I only have the choice of converting to shares at 20c per option held.
(rather than selling an AZROA oppy at 20c to the underwriter (which would have been a HUGE profit for those who bought AZROA at 0.001c, and would be unprofitable to the underwriter- glad I didn't go ahead with it! It was close though).

Thanks Croc, let's see how it goes, I hope any dilution (and repricing) doesn't trigger my stop or it'll complicate things.

[doctorj]

For those lurkers following this thread, AZR confirmed the underwriting of all of its unexercised options today as expected.

What this does to the share price remains to be seen. It is likely the shareprice will retract tomorrow, especially given the triple top formation from Friday's close. How much remains to be seen.

[RichKid]

Anncts look good, director buying at 20c for $100k (albeit due to Director's option exercise) is not bad at all. Also like the terms of the option issue to underwriters, might be standard but seeing AZR over 30c is nice so no dilution there in the short term.

So only need to get through this next week or so after AZROA conversion. Another interesting fortnight ahead.

[doctorj]

I'll be watching closely for opportunities to buy over the coming days.

[doctorj]

On AIM, AZR closed at what is approximately equivalent to 22.5c, so perhaps those buying opportunities won't come.

AZR's AIM Quote (http://www.londonstockexchange.com/LSECWS/Templates/I1.aspx?NRMODE=Published&NRORIGINALURL=%2fen-gb%2fpricesnews%2fprices%2fsystem%2fdetailedprices %2ehtm%3fsym%3dGB0007219479GBGBXAIMI0721947ROS&NRNODEGUID=%7b1B713125-A605-46EB-9DFB-901FFF03010C%7d&NRCACHEHINT=Guest&sym=AU000000AZR4AUGBXAIM%20B00LKY6AZR)

[RichKid]

You never know doc, people might get nervous and you may get some at your order price. Still 20c seems solid but option exercise may test it temporarily, Tech reckons it wont affect the pricing, if he's right (the sp is staying strong) then buying around 20c wont be bad as this will turn into a strong run. Every annct so far has reduced the risk profile of the co, that is what is holding it back atm. Hope you get the price you're after.
As for AIM prices, things always fluctuate between markets so be watchful.

[doctorj]

Looks like 19.5 may be tested tomorrow, pending what orders come in before open tomorrow. I've picked up another portion of these today and will continue to look for opportunities to do so.

[crocdee]

i still think sp will pullback to 18.5c possibly 18c in the short term.
definetly a wait and see for me.

regards croc

[doctorj]

Close at market highs yesterday is a bullish signal for this one. Most likely just seeing what I want to though. However, a good announcement this morning for AZR and pre-open sees 2.7mill shares on the buy side at or above 21.5 a share.

This stock continues to suprise me.

[RichKid]

Here's the release, I'm surprised by the buy depth too but when you look at it things couldn't be better for AZR, everything has gone to plan so far (even the oppies are fine) only the resource upgrade left to be announced as exploration continues further upgrades are likely and the iron ore price negotiations are nearing completion worldwide. The underwriting agreement specified 30c as a condition of exercise, which indicates that is the next stop in the medium term for the share price.

....Well, went upto 22.5c there for a bit on open, volume ALREADY AT 11 million!! Another record day coming up. Compare AZR to Fortescue's venture, no BGS even yet and they think they're in heaven. Much better to be in a steady strong mover like AZR for iron ore imo, with top management! Read the Fortescue story in Crickey.com for some interesting info.


3 February 2005
ASX RELEASE
Buyers Signed for 100% of Proposed Iron Ore Production
Aztec Resources Limited now has buyers committed to take all iron ore produced from its proposed 2 million tonne per annum iron ore mine at Koolan Island, Western Australia for the coming 15 years.
The company announces the conclusion of a Memorandum of Understanding with CITIC Resources Australia Pty Ltd (“CITIC”). This follows a similar arrangement with Chinese iron ore trading company Sinom (China) Ltd, announced on 28 January 2005 and MOU’s with China’s MinMetals and a large Japanese trading house in December 2004.
The company has now secured MOU’s for the sale of over 33 million tonnes of iron ore over the life of the mine.
With commitment for the start up tonnage now secured and continuing strong buyer interest in Koolan ore, Aztec will be focusing attention on exploration aimed at an early ramp up to at least 3 million tonnes per annum rate of production. The recent successful option underwriting exercise to raise $24.3 million fully underwritten by LCS Capital (wholly owned by Zurich
Financial Services Australia Limited) and Grange Securities will enable an exploration programme to be established through 2005 with this intention.
Details of CITIC arrangement Iron ore tonnage to be supplied to CITIC will be a minimum of 10.5 million tonnes of ore over a period of 15 years at a guaranteed rate of 700,000 tonnes per annum for a period of 15 years or
the life of the mine, whichever comes sooner. Subject to mutual agreement on the conditions of the purchase and the viability of the project; finance for the development and construction of the project will be made available by CITIC.
Agreement terms will be based on:
• The project being considered viable by both parties;
• Mutual agreement of the detailed conditions on the purchase of Koolan ore; and
• Approval by the Purchasers Board.
Commercial details will be provided on the completion of contract negotiations.
Background on CITIC CITIC Resources Australia Pty Ltd is a subsidiary of CITIC Group, one of China’s largest stateowned enterprises. CITIC Group has assets in excess of US$60 billion and revenues of US$4.4 billion. CITIC Group‘s activities include financial businesses (including commercial banks),
industrial investments (including those in the energy and raw materials sectors) and international trade. It is headquartered in Beijing, People’s Republic of China. CITIC Resources Australia is also a shareholder in Aztec Resources Ltd.

[RichKid]

AZR is holding up well, looks like it'll be mid February before the price effect of the option exercise is known. Today's annct said 14 February, only some holders have converted so the underwriters will be useful.

[doctorj]

With buyers at 0.22 and a nice strong close at 0.225, we could be in for an interesting few days.

[RichKid]

Yep doc! Looking good, hit 23.5 this morning and very high volume on the up again suggesting this'll gradually climb through to 24c.

Have you read the annct on the underwriting arrangement from last week? If what I see is correct we hardly have to worry about dilution till the sp gets to over 30c as they aren't allowed to exercise their 23c options till then.

There was only a small number of AZROA 20c options converted, at these prices and volumes it wont have a big effect imo. If many more AZROA holders had converted the story would have been different.

The current trend line is nice and steep and all the recent lows have been bouncing off it.

[RichKid]

I'm still surprised by the buy depth and volume (16m today) but it just goes to show what happens when the market gets behing a stock that wasn't on the radar screens and revalues it from the silly price it was at not long ago (recall the old broker valuations of 23c before recent resource upgrades). I thought this may go sideways for a few days but people are obviously expecting more good things soon, let's hope the anncts don't dissapoint.

[doctorj]

It is still edging its way up and finding new support levels. With the results of the BFS due soon and the resource upgrade presumably somewhere in the near future the 30c target for those options may only be a month away.

I too have been impressed by the depth. I'd decided to stop trading this share after taking a cent and a bit here and there back around the 20c mark and shove it in the bottom draw, but all this action seems to warrent following it more closely. The way it hit 23.5 early this morning seemed particularly encouraging.

[doctorj]

Maybe not. This has lost 2.5c between its high of 23.5 to now. I wonder if the market believes 21-22c represents fair value for AZR.

[RichKid]

Yep, falling back abit, may go to 20c judging by depth, probably just sitting tight waiting on more news. Hard to say for sure but volume has dropped. Resouce upgrade news should come sooner than the BSF, the BSF may take till next month but if we're lucky it'll be sooner. If I recall correctly the co said BSF completion was expected first quarter 2005 which technically gives them till March, unless they extend it to second 2Q05.

[tech/a]

Sold this morning at 20.5

[doctorj]

Well, it certainly has been a decent fall. It bounced off the high of 23.5 and back down to 20 - where support is beginning to look a bit shakey. I wonder what has been the catalyst of all this. AZR has dropped like a stone the second someone bought at 23.5.

[crocdee]

Well, it certainly has been a decent fall. It bounced off the high of 23.5 and back down to 20 - where support is beginning to look a bit shakey. I wonder what has been the catalyst of all this. AZR has dropped like a stone the second someone bought at 23.5.

hi doc
well my oppion is they got their money for the oppies.
still a lot of work to do to bring this one into production.
there will be another buying opportunity soon then blue sky ahead.

regards croc

[Warren Buffet II]

hi doc
well my oppion is they got their money for the oppies.
still a lot of work to do to bring this one into production.
there will be another buying opportunity soon then blue sky ahead.

regards croc

blue sky ahead :rolleyes:

There are so many stock out there to wait for that blue sky.

[crocdee]

wb
why do you keep repeating yourself
croc

[Warren Buffet II]

wb
why do you keep repeating yourself
croc

I would like to ask you the same question?

Regards,

WBII

[Bingo]

This one looks to me atht is it having a rest and will go to new highs by the end of Feb.

Bingo

[RichKid]

Agree with the general sentiment about a breather for profit taking and also while the weak hands who jumped in during the general iron ore run get out. Then it'll be just the true believers (or those who bought low enough) looking to continue. It aint over yet folks!

WBII, if we just said blue sky for this stock then you'd be justified in being cynical but this is a long thread and you will see our reasons (both technical and fundamental) for supporting this stock over many months. Hope you don't overuse that red thumbs down icon, it's kinda depressing for us AZR fans ; )

I've noticed this is a volatile time for steel related stocks like BSL and OST, they've been yoyoing recently, maybe the uncertainty over iron ore price negotiations and profit anncts for the half yearleis etc. All will settle after February and trends will become clearer imo.

[doctorj]

Good call, myself and other AZR holders have seen more red than we're used to of late. Like Tech, I sold a portion, but at 0.21. I still retain a holding of AZR, happy to wait out till March.

I guess the sudden drop from the rosey looking high at 23.5 which was supported by good depth just caught me a little off guard, fortunately it didn't catch my stops off guard.

[RichKid]

Hi doc,
Yes, it's good to be watchful when prices are volatile or in uncharted territory.
I have heard from people who hadn't been in AZR before and they just jumped in with the crowd for a quick buck on iron ore news, I was wondering how long it would take those short timers to jump out and looks like it is happening now. Let's see where this stabilizes. My stop is still at 17.5c (or was that 18c? gotta check my plan) so it's still safe, was tempted to take profits at 23c but that wasn't the plan (unless volume had been weak) so I'm going along waiting for the resource upgrade and and other news, share price spike in the interim was just a bonus for me. Who knows I may be stopped out but I have faith in the technicals and the co. The trend of course is more important as it's what the market thinks of the sp.

[doctorj]

So I guess we sit back and get out the old magnifying glass and cast our eye over other companies for the time being. I wonder if I can drum up some discussion in FAR. I'm keen to hear what others think of it :)

[RichKid]

Keep a close eye on AZR till it settles.

See my comments here about FAR: http://www.aussiestockforums.com/forums/showthread.php?t=961

[crocdee]

hi rich
may fall to 19c possibly 18c then it will bounce
don't think it would be a good idea to sell if your stop is hit

regards croc

[tech/a]

Why have a stop then?

[doctorj]

With the way the market depth has been the past month, I believe that if, as you suggest it gets thru 19 to 18.5, the SP is going to be in World's of hurt in the near term. There's really not a lot there to hold it up in the near term and if as you suggest it gets thru 18.5, I believe it may reach as low as the 14-16cps. That said, 19.0 looks pretty solid, so perhaps we won't get the buying opportunity.

Croc, I have to ask, why would you suggest we don't sell when it hits our stops?

[crocdee]

tech
just my oppinion
i raise my stops as the sp increases. isn't that what one should do ?
you sold @ 20.5c presumably thats what you did
no doubt you will probably buy back when you get the right signal i know i will

croc

[crocdee]

doc
not suggesting you don't sell when stops are hit thats why you put stops in place.
stops should be raised as the sp rises and as AZR hit 23.5c rich's stop should be higher than 17.5c therefore locking in profit on the way up.

with the f/as behind AZR you would not think the retacement would fall lower than its support level @ 18c but you just never really know as trading is a day to day business

regards croc

[doctorj]

Thanks for clarifying, you're first post was a little... ambigious.

[tech/a]

Agree with you both.
I sold not because of a stop but a technical fall from its rise.
As I did with ZFX as well.
The short term trend was broken.
I may go back in if I have spare funds,Currently havent opened any more positions.

I must say I dont like discretionary trading,its like trading in a reactionary manner.For me taking a little bit here and there and hoping to get a positive overall return is too time consuming and because I only allocate a smll amount of $$$s to it not worth the time .

Much prefer getting on a decient trade with a decient buy and riding it for as long as it holds a primary trend.

But thats me.
I guess everyone wants instant gratification.(Its human nature)
But you know Ive always found that the slow and steady method of wealth creation has always come out with the biggest returns in business,property and stocks.

tech

[RichKid]

Yep, it is hard knowing when to exit, I checked my plan and stop was last raised from 17c to 17.5c (mentioned it somewhere in this thread). Still think solid support at 17.5c and see no reason why AZR wont recover after a breather. Can always buy in again if I need to. I suppose I could have sold at 23c or thereabouts but there is too much good news to flow to exit this one, if it was a lesser stock I would have sold as soon as it went above 22c and just banked the profit and moved on.
Let's see if I win on this one.


BTW, Croc/anyone do you know when news of iron ore price negotioation (ie new prices) will be released by BHP/OST etc? That will have a bearing on AZR too.

[crocdee]

hi rich

you are testing my memory bank here and after pondering for a while i think it is somewhere towards the end of march but can't recall where i read it.
sorry i'm not more specific.

regards croc

[RichKid]

hi rich

you are testing my memory bank here and after pondering for a while i think it is somewhere towards the end of march but can't recall where i read it.
sorry i'm not more specific.

regards croc

Thanks for trying to remember croc, I'll keep an eye out for news in the press; negotiations take awhile, they have several rounds apparently.

[doctorj]

Finally something happenning here. I was beginning to consider selling out and shifting to action elsewhere.

Two small parcels of shares totalling 13000 went today, either side of 640,000 shares going at 20.5. Not sure what it means yet. Why take only a few thousand dollars worth half a cent higher than what its been trading at for days? Inexperienced Commsec types? Or someone trying to rattle the cage?

[doctorj]

About 108k shares went for 0.21 and the it managed to close at the daily high on a volume of 2,400,000.

Any thoughts on this from the enlightened amongst us, or is my inclination to find volitility in the short term a move I should make?

[tech/a]

technically AZR seems to have found a bottom at 19c and this thrust to 21c looks like the correction is over.
Any trading above the last high will be very positive and any trading below 19c will mean that Im wrong.

[RichKid]

Up and down to be expected, if no news in the next week or two I expect it to go lower into late teens.
Wish these iron ore price negoatiations didn't take as long, I hope Burston is a top class negotiator! Relations are supposed to be tense between iron ore producers and steel makers.
Resource upgrade may be announced in the interim, any spike in volume will foretell an annct imo.

[doctorj]

Was going to post this in another thread, but didn't think it was warrented.

Shamelessly stolen from a well informed chap at Sharescene.

435 words
22 February 2005
19:03
Dow Jones International News
English
© 2005 Dow Jones & Company, Inc.

TOKYO (Dow Jones)--Nippon Steel Corp. (5401.TO) said Tuesday it has agreed to a 71.5% hike in the price of iron ore it will buy from Companhia Vale do Rio Doce SA (RIO) in the fiscal year starting April.

Japan's largest steel maker said it will pay between $36.80 and $37.36 per dry metric ton, up 71.5% from the price it has been paying this fiscal year through March. [ 22-02-05 0823GMT ]

The jump in prices for Rio Doce's iron ore means Nippon Steel and other Japanese steel makers may have to accept similar price hikes in negotiations with Australian producers.

Nippon Steel said that based on the latest agreement with Rio Doce, it will continue making efforts to reach an agreement on prices in talks with Rio Tinto Ltd.'s (RTP) unit Hamersley and BHP Billiton Ltd. (BHP).

The 71.5% rise in Brazilian iron ore prices is larger than the 50% increase reported by local media since late last year.

The leap in price for next fiscal year, fueled by robust steel demand particularly in China, may be damaging to steel makers worldwide if they can't fully pass on the increased raw materials costs to their own prices for steel sheet and plate products.

Steel makers are also grappling with rising coal prices and freight charges.

Japan's top three steel makers, including JFE Holdings Inc. (5411.TO) and Sumitomo Metal Industries Ltd. (5405.TO), agreed late last year to a rise in coking coal prices for next fiscal year. They will pay around $125 per metric ton after their talks with one of their main suppliers, BMA, a joint venture of BHP Billiton and Mitsubishi Corp. (5058.TO). That is a painful hike from $50-$60 a ton they have been paying this fiscal year.

After agreeing on their raw materials prices, the steel makers will start full-fledged price negotiations with major steel users such as auto makers and shipbuilders. If they raise their steel product prices again, fiscal 2005 would be the fourth consecutive year that Japanese steel makers have done so.

Nippon Steel has estimated that the expected increases in raw material prices and shipping costs will translate into a Y1 trillion jump in production costs across Japan's steel-making industry the next fiscal year, adding to the Y700 billion increase estimated for this fiscal year.

[RichKid]

Doc, shameless or not that's a great grab of info! Should be reflected in iron ore stocks and puts pressure on Burston to get a good price. Bad news for iron ore consumers like BSL but not for OST as they produce their own iron ore (see relevant threads for more info). BSL has pricing power though to pass on costs.

My understanding is that any Brazilian hike will be less than what Aussie producers will be able to squeeze out (ie Aussies will get a 70%++ hike if we're good at negotiating). What do you all think?

(PS. correct me if I'm wrong but do the Japanese use alphanumeric codes for their stocks, looks like a number followed by abbreviation for Tokyo stock exchange?)

[crocdee]

hi all
looks like AZR is off again for another little run
market depth quite strong

regards croc

[doctorj]

Tomorrow or Friday would be a damn good time to come out with the BFS, give a little more fuel to the run as I doubt it will get higher than 0.23 on the back of Iron Ore prices.

Interesting is Portman, I bought a small line of 3000 shares yesterday on hearing CSFB were still buying, they're up 6% so far this morning with decent buy depth. Perhaps another TO offer in the works?

[tech/a]

PMM yes have held for many months nice to see a move again.
One of the good points of long term holding caught the gap up as well.

[doctorj]

Well, it looks as though something happened after 2pm EDST yesterday. Great price action for those that hold, including what is a rumour of a u bidder buying up at 24c.

It disappeared at about close, but it should provide a fairly reasonable floor to the price in the short term while we continue to wait for the BFS and upgrade.

All up a good week for those that hold while we continue to wait out the period of time before mining starts.

[doctorj]

8.5 mill shares traded, peak at 25.5 - could be another good week.

[RichKid]

An article on iron ore price negotiations, imo the recent price rise in AZR is due to the iron ore price hike, hence probable resource upgrade and BFS completion not built in yet (BFS needs to be positive re costs and timeframe for AZR to really fly). Wonder if AZR will be forced to undercut the big players? Let's hope BHP gets the premium it wants for the freight advantage as this would flow on to other Aussie miners. This frenzy is not going to last more than a year or two so we might as well reap the profits while we can. The sooner AZR goes into production the better, we're lucky the work started months ago.

http://www.theaustralian.news.com.au/common/story_page/0,5744,12372237%255E643,00.html

[RichKid]

A solid day today, might even be an all time high for volume (haven't checked yet). If the pattern holds (ie no new news in the next week or so) then it'll fall back a bit to the low 20s and then rebound. A nice trend support line developing since the breakout, nice angle too.

[RichKid]

Has anyone been able to read the latest (feb 05) Grange Securities report on AZR? It's in pdf on the AZR website but it doesn't open. If anyone else has any luck let me know as it may be my computer/software. (I'm able to open other Acrobat docs but not that one). If it's a universal problem then AZR we'll have to fix it. I'm interested in the new figures Grange may have come up with for AZR since it's reached their previous target.

http://www.aztecresources.com.au (click on 'Investor' and then 'broker/presentations')

Please let me know if anyone is able to read the report.

[doctorj]

Works normally here.

Check you are using the latest version of adobe reader (www.adobe.com)

[RichKid]

Works normally here.

Check you are using the latest version of adobe reader (www.adobe.com)

Thanks doc, I've actually got the newest version- some people say the older versions are more reliable. Might have to dowload Acrobat 6 again.

Is the report good? I'll see if I can read it tomorrow. Remember that Grange have a vested interest as they are very close to AZR and underwrite, gives us something to work with though.

[doctorj]

The report was very dry. It felt as though I'd read it before.

I haven't had the chance to compare it to old ones, but it was dated Jan 28 - so I may well have read it.

It lists the current at 19c and a 12month target of 31cps. It only factors in an assumed 30% rise in Ore prices and says the BFS is due March/April.

[RichKid]

It lists the current at 19c and a 12month target of 31cps. It only factors in an assumed 30% rise in Ore prices and says the BFS is due March/April.

Thanks doc, it's the unexpected increase in prices that has the iron ore sector alight. You can bet your bottom dollar we'll be looking well above 30c now, closer to 40c perhaps with the resource upgrade (which is near double the current AZR price, which is why I'm holding). Once it actually gets production going by the end of the year or early next year I'd say it'll be 50c plus. My view is that as other resource stocks slow on higher costs and stabilizing Chinese demand iron ore players may see more people switch into them, especially as they become producers. Remember that Aztec is still exploring the remainder of Koolan. Let's see what type of price Burston gets out of them, it doesn't have to be 71% for us to target 35c+ as even 60% will be a significant re-rating.

The good news apart from the expected resource upgrade is the imminent release of the BFS, I'd give it at least a few weeks. The Aussie dollar may go a bit lower after the next interest hike so that'll add to the attractiveness of the BFS figures. I have a feeling they'll release the upgrade close to the BFS. The biggest risks in the next 12mths are operational/construction problems as is typical for this stage of a venture.

[doctorj]

From the completely unsubstantiated rumour bin (read: Hotcopper), somebody is claiming they plan to upgrade reserves by 50%, due in the next 4-6 weeks.

[RichKid]

I think that is expected from previous anncts and discussion but I don't know the exact figure or when it'll be released. I'll see if I can dig up a recent presentation to that effect. I expect further upgrades over the next 12-18mths as drilling progresses.

...Doc I may not have time to dig up the estimate but I think it was either in one of the broker reports on the site or in a Burston/Co comment/annct.

I wouldn't sweat on this one, it'll be positive, only issue is how much is incorporated in the sp and how much is the market expecting. Both answers appear to be positive in view of the current sp imho.

[RichKid]

AZR seems to be holding up a bit stronger than expected, thought it may settle abit. Nice to see.

[doctorj]

Buy recommendation in The Age this weekend had targets of 30c and then 50c for AZR.

[RichKid]

Buy recommendation in The Age this weekend had targets of 30c and then 50c for AZR.

Geez Doc, you sure have your ear to the ground, that is good news to hear as punters can't get enough of these stocks atm and it'll keep AZR up (only risk is added volatility when people who buy off newspaper tips jump in), I wonder where they got the 50c from? Do you recall the name of the columnist that tipped it? Usually the columnists get their tips from tipsheets or brokers (or just plain rumour).

I found this in The Age about AZR and others resources co's but no ref to a target price:
http://www.theage.com.au/news/Barry-Fitzgerald/Xstrata-plays-the-spoilt-brat/2005/02/06/1107625064493.html

[RichKid]

Latest AZR chart. Early days yet but this appears to be developing into a nice uptrend channel. A pullback of a cent or two should not surprise. If more newspapers and tipsheets start to tip this one then there may be odd spikes here and there.

[doctorj]

Sellers were pretty thick all day today, any thoughts (ie. TA) regarding AZR's near term future?

[RichKid]

Sellers were pretty thick all day today, any thoughts (ie. TA) regarding AZR's near term future?

Looks like we were posting around the same time doc! Any views on my observations above on the chart? Buy depth would suggest a small decline.

[tech/a]

Pretty normal trend developement.
Higher highs and higher lows.

[doctorj]

What a morning!

Up 2.5cps on the back of nearly 15million traded! And that's just the first hour...

[RichKid]

Looks like AZR is leaking news- motoring towards 30c, probably an incorporation of the resource upgrade and iron ore price hike finally being reflected in the sp. Remember that the old (over one year ago) sp valuation by the brokers at about 23c was before the iron ore price rises and before any definite resource upgrade upside. Might be further entries for newcomers once it settles on the lower side of the channel again.

Are you holding on to your seat Doc? I know this would have got you excited ; ) I didn't expect it to fire up so soon. But as Tech says, it is just normal movement for a stock that is trending this way. Let's see how the volumes hold. Currently at 28c (10c above where most of us here entered).

[doctorj]

Sitting back and watching the show and planning that trip to -really- run with the bulls in Spain!

In all seriousness though, it's not going to suprise me to see AZR as a 60-70cps company, with more upside if the resource upgrade is a serious one (ie. in the realm of the rumour).

[RichKid]

Sitting back and watching the show and planning that trip to -really- run with the bulls in Spain!

In all seriousness though, it's not going to suprise me to see AZR as a 60-70cps company, with more upside if the resource upgrade is a serious one (ie. in the realm of the rumour).

Doc,
Are you referring to the estimated 50% upgrade? News should come through before long judging by the volumes (AZR normally vol spikes before an annct). The real upside is in the relatively unexplored areas on Koolan. I'm not good at number crunching so I don't know when it'll justify a 60c+ valuation but I know it'll get there if it goes like this. Remember it still hasn't started producing anthing so we have to watch the charts carefully.

BHP did a good job of flooding the pit and destroying ('dismantling') the jetty and infrastructure or they'd be producing by now. Also heard that BHP is expecting an 100% increase in iron ore prices, they are holding out for that figure. Might get 90%- just my guess. A lot is upto Burston now, he's got to get the best price, the higher BHP goes the higher Burston can go.

PS I'm also in FXR (Fox Resources, same MD as AZR), might be another goer, similar shareholders too. Not a tip as such, more a technical story after sp dilution. I started a thread on it, let me know if you've heard any news in the FXR thread (http://www.aussiestockforums.com/forums/showthread.php?p=8401#post8401.)

[RichKid]

Well, up to 30c recently, near vertical climb for AZR and still more news to come. Looks like the major action is due for April/May going by the indication in the recent annct. Let's see if they can get that resource upgrade out this month, they have lots of time to do the maths. When AZR becomes a producer I am guessing price will be quite a lot higher by the end of the year, slowly moving out of the 'speccie' category.

Nice spiral at present on good trajectory.

[doctorj]

AZR is rumoured to make an appearence in the April edition of Shares Mag. I'm also lead to believe that 'Resource Stocks Magazine' has an article on Aztec in circulation at the moment that touts it as a potential takeover target.

[jhop]

So if there is a potential take over, will this see a rise in share price? if so before or after?

[tech/a]

Normally before a deal is done.
and normally only to around the figure offered.

Of co**** after the take over its a little difficult for it to rise as its no longer there!

Rule of thumb is that which is being taken over generally rises and that doing the taking over generally moves up or down to the extent the market percieves the takeover will benefit or hinder the parent co.

[knit 1 pearl 2]

hi guys(and girls)

so is it tooo late?, or is this bussiness about to boom?

enjoy the threads and it's good to have a lot of people doing research i would think of,

appreciate any tips

gav

[blackdogsbarking]

This little number is another of the Paul "MR NOTHING" Matich & Mik "MANY NAMES" Chemmessian.

The problem is that Kulin is an island and, according to a former employee, leaks like a sieve!

how are they going to fix the leak? (http://www.blackdogsbarking.com.au/content/insiderail/insiderail-imf21022005.htm)

[RichKid]

BDB,
Geez! Thanks for the info but I'm glad the chart was what I was relying on together with Ian Burston's reputation and the fundamentals (ignoring personal history of some management). I can't believe none of the people you mention have tried to sue you for defamation?? Or is it all true?

I'm always interested in different perspectives so keep it coming, provided it has a factual bases and is constructive. Might also be good if you cut and pasted the info rather than putting a link to it as it's only a small blurb. Also see our code of conduct at foot of this page just near the paypal link.

[doctorj]

Courtesy of Shares Mag and some chap called Herger.


BY Tim Treadgold, Tim Treadgold is a Perth-based business journalist who has written for BRW and Shares magazines since they were founded. He studied geology but switched to journalism in 1969 during the Poseidon nickel boom.

Hard as (high-grade) nails

Apart from uranium, it is hard to find a mineral that fits the description of flavour-of-the-month better than iron ore. So strong is the demand, and so hard are the company spruikers working, that it has even prompted humorous comments from resource industry leaders such as BHP Billiton boss Chip Goodyear, saying that you only had to chuck a bag of rusty nails over your fence and within a week your neighbour would declare his backyard an iron ore mine.

Goodyear's joke aside, the reality of iron ore today is that it falls into the hot, hot, hot category, thanks to surging Chinese demand, which delivered a 71.5% price rise for ore delivered after April 1. For market leaders like BHP Billiton and Rio Tinto that means their profit margin on iron ore has risen sharply, and for small companies wanting to enter the market there could never be a better time.

This is terrific news for big name players like Andrew Forrest and his Fortescue Metals Group, and it is equally good news for smaller fry like Mt Gibson, Midwest and the stock that has done its best at avoiding publicity, Aztec Resources.

Unlike some of its bigger rivals, the sales spiel of Aztec is simplicity itself. It knows it has an iron ore mine because it is essentially reworking an old BHP Billiton mine on Koolan Island in the far north of Western Australia, in much the same way that Portman is re-working another ex-BHP Billiton mine in the south of WA at Koolyanobbing.

The big difference is that Aztec is yet to restart production, but that is shaping as a formality because demand for its high-grade ore is so strong that it has pre-sold its start-up target of two million tonnes a year for the next 15 years. The game now, backed by a vigorous exploration program, is to expand the annual export target to three million tonnes.

Assuming Aztec gets about $78 a tonne for its ore, a price similar to that won in the recent price settlement negotiated by Rio Tinto, that means annual sales at two million tonnes will be valued at $156 million. On a 10% profit margin, that infers an annual profit of $15.6 million, which, at a 12-times earnings multiples, values Aztec at $187 million.

That number crunching exercise is largely for illustration only, because no one yet knows the exact iron ore sales price, or Aztec's profit margin. What is almost certain, however, is that the 10% profit assumption is miles off the mark because the big boys of iron are working at closer to a 50% profit margin, so great has been the increase in iron ore prices.

Potential investors can amuse themselves by factoring in alternative profit margins, and varying tonnages, but whichever way they go, they soon discover that Aztec looks to be seriously cheap at its latest price of about 24¢, which values the stock at $117 million.

[el_ninj0]

Courtesy of Shares Mag and some chap called Herger.

That said. What is everyone elses predictions from this point on?
I think mabey 60-70cps is a bit low for the forecast.

[doctorj]

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]

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

[RichKid]

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]

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]

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]

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]

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]

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]

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]

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]

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]

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 :D

[el_ninj0]

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 :D

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]

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]

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]

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]

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]

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]

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]

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!

[RichKid]

Well, big boy BHP has been strongarmed by the Chinese- no extra price hike for being an Aussie!! But maybe next year when they use their brains and team up with RIO. So doesn't bode as well for AZR price negotiations, kinda getting a bit annoying waiting for the annct. Sp appears to be looking for a level to settle at, volumes have just drowned!

[The Barbarian Investor]

They got a price rise..just not what they (read we) wanted.. :(

AZR still positive on my folio though i'm glad to say, MGX has dipped though

[RichKid]

AZR appears to be heading lower imo, won't be surprised to see a quick dump one day, the trend is definitely down in the short term. That bfs is taking its time. All the iron ore stocks are taking a breather, general market downturn is not helping either, people are jittery.

[doctorj]

A good day for AZR today with plenty of volume, closing 1c up at 25.5 on the back of more than 5,000,000 shares traded. VWAP at 25.74c

The BFS is due out in April, which means some time this week. This may explain today's buying. Lets hope Ian and the crew enjoy meeting their deadlines and can get it out to us before COB Friday.

Champagne this Friday night for all holders hopefully.

[RichKid]

A good day for AZR today with plenty of volume, closing 1c up at 25.5 on the back of more than 5,000,000 shares traded. VWAP at 25.74c

The BFS is due out in April, which means some time this week. This may explain today's buying. Lets hope Ian and the crew enjoy meeting their deadlines and can get it out to us before COB Friday.

Champagne this Friday night for all holders hopefully.

Nice chart doc, did they actually commit themselves to an April deadline? I thought it was sometime this quarter but could be wrong. Nice to see the volume. Been quiet for awhile by AZR's standards. I expect the retracement to continue lower but hopefully will be wrong.

[doctorj]

I will see if I can find the documents that have lead me to believe they committed to April and get back to you.

[RichKid]

I will see if I can find the documents that have lead me to believe they committed to April and get back to you.

Thanks doc, I'm too lazy or I would have done it. I think I did do it last month but didn't note the source. Would have been a recent annct. If they said it was April and they delay it'll drop real quick. The other issue is general market risk- it's affecting the money flow to speccies too so the Allords will have some effect.

[doctorj]

I've seen it noted in several places, but you can view it in the Second Quarter Activities Report released on 24/01/2005.

Within the report it states, "Bankable feasibility study well advanced for completion in April 2005."

[RichKid]

I've seen it noted in several places, but you can view it in the Second Quarter Activities Report released on 24/01/2005.

Within the report it states, "Bankable feasibility study well advanced for completion in April 2005."

Thanks doc, I haven't been too concerned because I'm primarily following the chart atm, but it does help to be prepared. 3 days to go!! Will get very exciting for some! A lot of work to be done between now and shipment of ore so it's got to come together smoothly. 10m is a notable mark for volume.

[doctorj]

Latest news from AZR about the BFS is that there have been delays in receiving some quotes. They expect the BFS to be complete early May now.

Also, for those that have noticed their website being broken, that's because they're upgrading the old one. An interim one should be available again at the old URL before the end of the week.

Oddly enough, someone by the name Jess Gush responded to the email query from the address Jess.Gush@foxresources.com.au. She indicated her position was executive assistant, but I wonder just how closely these companies are interwined.