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AMG - Ausmex Mining Group

Discussion in 'Stocks 0-H' started by System, Mar 6, 2012.

  1. peter2

    peter2

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    I want that drill report to be announced before the end of Feb but that seems unlikely as the drilling takes time and the lab work more time. I might have to select it for the next month's comp. Don't you steal it first.

    Looking at the latest qrtly cash report, they haven't got much left. Probably only enough for this 850m drill. They'll need some good news before asking for more capital.

    I don't trade or gamble in this sort of company.
     
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  2. barney

    barney

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    Unfortunately ….. or fortunately:p …. I do:D …..

    You are correct Pete …. they don't have a lot of cash in the coffers so the current drilling could be pivotal.

    Management have done well in recent times to keep funding under control. Fortunately they aren't just a one trick pony so I think they will be able to raise more as long as the upcoming results show potential.

    Recent price action shows some dedication from longer term holders if I'm reading it correctly. This is generally a good sign, but we shall see how it all pans out when the dust settles.
     
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  3. barney

    barney

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    Below info taken from today's announcement ….

    SP currently up 25% on low Volume … I'm not complaining:)



    ASX RELEASE
    (abbreviated)

    Independent Expert Emeritus Professor Kenneth D Collerson (PhD., FAusIMM) has presented findings validating the significance of a large IOCG (Iron Ore Copper Gold) or ISCG (Iron Sulphide Copper Gold) mineral source below the Little Duke Gold Mine, located within the Ausmex controlled Mt Freda Complex

    Key Findings Include:

    ➢ data indicates that Little Duke.. is proximal to a deeper and fertile IOCG or ISCG mineral system.

    ➢ The Little Duke drilling data (LD18RC006) is highly significant, and it is recommended that diamond core drilling should continue

    ➢ Little Duke drill hole LD18RC006 combined Gold and Copper down hole mineralisation : (Refer ASX Release 29th November 2018) of 67 m @ 1.33 g/t Au and 0.47% Cu o Gold assays up to 8.00 g/t Gold, 1,100 ppm Cobalt and 1.43% Copper.

    ➢ Little Duke Drill Hole LD18RC006 was possibly drilled into the contact of a Tier 1 IOCG target that Ausmex shares with Newcrest Mining Limited (ASX:NCM) (Refer ASX 19th February 2019).
     
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  4. barney

    barney

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    More good grades in the Golden Mile drilling. Shaping up nicely for a decent deposit even discounting the potential IOCG with Newcrest.
     
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  5. barney

    barney

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    Currently in Trading Halt pending Results …..

    They only started the latest round of drilling the other day so for them to have results worth a trading halt means it will be an upbeat announcement:)

    Market Cap still under $20 million but more cash required soon so good results followed by a cap raise looks a possibility.

    The 5klm grid based survey over the old Burra Mine area looks very interesting. Proven mineralised area but now being surveyed with modern techniques could open up a big can of friendly worms:wideyed::D ... holding tight at the moment.
     
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  6. peter2

    peter2

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    They've found gold. I notice that NCM are interested in the results also. Hmm..
     
  7. barney

    barney

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    Yeah the Gold has been basically known about for a while but they continue to find more. Newcrest are digging on the same land next door and very tight lipped about what they have found. Speculation it could be a large IOCG copper/gold find.

    SP has raced up on the speculation … the 10 cent area is notoriously hard to break but liquidity has been thin …. interesting times.
     
  8. barney

    barney

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    The Price action was as it seemed … it seems:p …. posted on 17th Feb. The dust has stirred if anything but the SP has risen steadily.

    SP has been well traded today ….. Pushed up on Speculation …. Sellers around the 10 cent area as expected.

    Until the current drilling is reported on we are still skating on speculation regarding the potential of the IOCG tenements held in conjunction with Newcrest.

    The word on the street is Newcrest have drilled several very deep diamond drill holes but remain tight lipped.

    They also invited AMG boss Matt Morgan to a "discussion" regarding the jointly held tenements but security protocol could not be agreed on …. The plot thickens.

    Positive news from either NCM or AMG could see me eating scotch fillet next month ….. Average news and I'm back to corn flakes and toast:D

    Chart to follow.
     
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  9. barney

    barney

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    Just under 3 million shares traded today at around $282,000 so all in all its still under the radar of any day trading activity …. that's a plus given the recent rise.

    Late last year the Top 20 Shareholders owned around 70% of the Co. so I imagine that is still the case. That makes sense as to why it is fairly illiquid at the moment.

    Closed the day back at 10 cents so all in all … pretty positive if the upcoming news is good.

    I still hold … and still hope:D


    AMG12March2019.jpg
     
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  10. debtfree

    debtfree

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    Nice pick guys :xyxthumbs I'm thinking about those Scotch Fillets @barney, what day was the barbie :rolleyes:
     
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  11. barney

    barney

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    Lol @debtfree …… It's moved quickly for sure ….. Could be the trade of a lifetime:cool: …. could end in tears!:eek:lol

    I'll let you know whether the BBQ is warmed up in a week or two after the drill results are announced;)

    At 50 cents I'll supply copious amounts of Scotch fillet for all and sundry …. at a Buck … I may be slightly intoxicated for a week or two!!:D
     
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  12. barney

    barney

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    Interview with Professor Ken Collerson regarding the potential of both Ausmex tenement areas.

    The Mt Freda area at Cloncurry where Newcrest are also drilling and the Burra area near the old Burra Monster mine in SA.

    At 7 minutes 24 sec into the interview he mentions the Platinum and Palladium levels found in widespread surface samples along the whole Golden Mile area as the highest he has ever seen. No wonder Newcest and RIO are sniffing around the area:cool:

    Another sharp rise in the SP so far today. If it holds up into the close the chart will start to look vertical which is generally a pre curser to a pullback. Supply looks to be coming in around the 16-16.5 cent area so far today …. there has to be some profit taking after such a run you'd think.

    Link to Interview below

    https://ausmexgroup.com.au/independ...significant-potential-of-cloncurry-and-burra/
     
  13. barney

    barney

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    And on queue the Profit taking came in as expected with the SP down 16% today.

    Everything is typical of Spec behaviour at this stage ….. The million dollar question is whether there is a large IOCG ore body to be found .... behind/under the recent speculation:cautious:

    Given the many and various "Pathfinder" Statements:D from respected Geologists … plus the Newcrest "interest" …. I'm happy to ride the roller coaster for a while longer;)

    The profit taking has been on "normal" Volume … so I expect the overall current trend to continue pending further news …… I doubt we are going to see a Sandfire or Cudeco price blitz … but there are many positive similarities at this early stage to give Shareholders good hope that there may be more than just gold in them there hills:D

    Holding and hoping as always:watching: ….. mashed potato tonight unfortunately … scotch fillet put back in the freezer:p
     
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  14. barney

    barney

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    CAP RAISE.

    As expected, the Company was always going to need more cash given the extent of drilling required.

    Interesting that the announcement today states they are "seeking a trading halt pending the release of a material announcement in relation to a proposed possible fund raising"

    Reading between the lines on that, it wont surprise me to see one of the big boys (preferably Newcrest) getting involved here :cool:….

    If the announcement is "material" but still only "possible", I'd say Matt Morgan may be trying to negotiate the capital at a premium to the SP …..

    If that is the case, it would be a certain indicator that they are sitting on something substantial at Cloncurry and the SP could easily spike further ….. cheering if that is the case:D

    On the flip side, it could be the exact opposite:(:p
     
  15. barney

    barney

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    A little fly on the wall indicates the Cap Raise will be fairly substantial but not at a premium ….. This is still hearsay until proven otherwise, but if that turns out to be correct, I would hope for over 10 cents at the minimum. If not at least 10 the SP will suffer … Preferably 12 cents or higher.

    If they issue 50,000,000 shares at 10 cents= $5 mill less costs or at 12 cents = $6 mill less costs

    The Major S/H's will not want excessive dilution but we need the cash to drill.

    The Stock is illiquid so hopefully Matt Morgan has been able to squeeze out a reasonable deal …. Still holding and hoping:)
     
  16. barney

    barney

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    My Fly on the wall guy was close to the money it seems:)

    58 million shares at 12 cents to raise $7 million before costs ….. That is actually very good considering not long back they were trading at 7-8 cents ….. Well done Matt Morgan!

    This sets a solid bar for AMG now … If they dig up anything half decent, the SP could really spike given how tight the register is …… Not sure if all the rain water has cleared around Cloncurry yet but they will be keen to get the digging started:beaver::bear::chicken:(3 diggers)
     
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  17. samso

    samso

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    Ausmex Mining Group or Ausmex (ASX: AMG) has had a lot of attention lately with announcements that they are possibly sitting on top of an IOCG (Iron Ore Copper Gold) source. Recent drilling results have been very encouraging, and they are in elephant country in terms of talking about IOCGs. When I think of IOCG, I think of Olympic Dam, and if what Ausmex have is anything like that, this is going to be a fantastic story for shareholders. I am a shareholder of the company and have been for almost two years. A long-suffering shareholder until the recent rise in share price.

    History
    I became a shareholder of Ausmex nearly two years ago when they listed on the ASX (Australian Stock Exchange) in May 2017. It was a rebadging of a company called Eumeralla Resources Limited at a price of AUD$0.08. It has been a long ride, and the share price has gone as far down as AUD$0.032. The original concept was to explore and add value to the Mt Freda group of tenements. They have some stockpile of ore that they were going to commercialise, but I was intrigued by the package of projects and the historical drilling results.

    One of the things I have learned about the Cloncurry area is that it is a very mineralised corridor, but it is not very big in terms of strike length (length of the region). There have been some big mines and the potential of developing a project to get some of the cream will be good.

    Corporate Information
    Market Capitalisation:
    63.8M (04/2019)

    Outstanding Shares: Approx. 470.7 (04/2019) -including 58.3M placed on 2 April 2019 (Not including 89.25M unlisted options)

    Top 20 Shareholding: Approx. 70.4% (2019) - Before placement

    [​IMG] Ausmex Mining Group (ASX: AMG) 3-year share price chart. (source: Commsec)

    What is an IOCG?
    (Source: Geoscience Australia)

    Iron oxide copper-gold (IOCG) deposits are a diverse family of mineral deposits characterised by the following features:

    (1) Cu with or without Au, as economic metals,

    (2) hydrothermal ore styles and strong structural controls,

    (3) abundant magnetite and/or hematite,

    (4) Fe oxides with Fe/Ti greater than those in most igneous rocks, and

    (5) no clear spatial associations with igneous intrusions as, for example, displayed by porphyry and skarn ore deposits.

    Uranium-rich IOCG deposits in which U is an economic metal are an important yet uncommon subset of the IOCG family.

    Currently, the Olympic Dam deposit is the only IOCG deposit in which U is extracted as a significant economic commodity. This deposit is the world’s largest single resource of U (BHP Billiton, 2010 Annual Report, www.bhpb.com).

    In a global context, most of the other IOCG deposits containing higher grades of U are found in the Gawler Craton and Curnamona Province of southern Australia

    Based on current knowledge of IOCG deposits globally, it would appear that the IOCG deposits with the highest grades of REE are also confined to southern Australia.

    [​IMG] Diagrammatic sketch of the iron oxide-copper-gold mineral system illustrating the relative location of deposits types within the overall setting and the likely distribution of critical and other commodities within and around these deposit types. In the commodity lists, blue indicates essential commodities, underlined bold indicates major products, bold indicates commonly recovered by-products, underlined standard font indicates commodities with limited recovery as a by-product (usually during downstream processing), and the normal text indicates commodities that are geochemically anomalous, but not recovered. (source: Geoscience Australia)

    Distinctive features
    (Source: Geoscience Australia)

    High to extreme paleogeothermal gradients is the critical driver. What that means to the average person is that it was damn hot at the time of mineralisation. To achieve this extreme gradient, it has to be of a crustal-scale hydrothermal system to accomplish the massive scale of alteration systems and the masses of hydrothermal precipitates (mineralisation) in individual IOCG deposits. When we geologists talk about crustal scale, what we mean is that it is a big system. It's like comparing the Grand Canyon to the trench you would dig in your backyard for your garden reticulation pipes.

    There is the presence of two distinct fluids during deposit formation:

    (1) a highly oxidised fluid (e.g., meteoric/ground waters), and

    (2) deep-sourced high-temperature brines (magmatic-hydrothermal fluids and/or fluids reacted with metamorphic rocks).

    In many IOCG systems there is also evidence of volatile-rich fluids during ore formation (e.g., CO2-bearing; see review by Williams et al., 2005, and references therein).

    To collect so much "mineralisation", you need to have a topographic depression such as calderas, grabens, maar complexes…etc). They are conducive to mixing of shallow-crustal and deep-sourced fluids.

    IOCG deposits are characteristically diverse in their minor element compositions and contain elevated concentrations of many critical commodities. Recently published data for the Olympic Dam deposit have revealed the presence of an extensive range of minerals and corresponding geochemical variation. More than 90 minerals have been identified, and in addition to Cu, U, Au and light REEs the deposit is enriched to strongly enriched in As, Ba, Bi, C, Cd, Co, Cr, F, Fe, In, Mo, Nb, Ni, P, Pb, S, Sb, Se, Sn, Sr, Te, V, W, Y, and Zn (Ehrig et al., 2013). It is interesting to note that almost all of these elements are included in the current study of critical commodities.

    Australian IOCG Provinces
    There are two major IOCG provinces in Australia of global significance:

    • the Olympic IOCG Province along the eastern margin of the Gawler Craton in South Australia, and
    • the Cloncurry district in the eastern Mount Isa Inlier of northwest Queensland.
    In addition, there are several other metallogenic provinces that contain or may contain medium-sized or small IOCG deposits,

    • including the Tennant Creek district (Northern Territory),
    • Curnamona Province (South Australia and New South Wales), and
    • the Aileron province, Northern Territory (Schofield, 2012).

    Mt Freida Story
    (Source: Ausmex Mining Group)

    The project area is approximately 38km from the township of Cloncurry. The famous Ernest Henry Mine which is an iron oxide copper-gold deposit lies in the same area (35km NE of Cloncurry). As of 2017, the mine had the following resources,

    Measured, Indicated and Inferred Resources for the Ernest Henry Mine (source: Evolution Mining)
    95.30Mt @ 0.63g/t Au for 1.92Moz
    28.59Mt @ 1.17% copper for 334kt

    Ore Reserves for the Ernest Henry Mine
    51.40Mt @ 0.55 g/t gold for 902koz
    15.42Mt @ 1.07% copper for 165k

    [​IMG] Ausmex project locations. (source; Ausmex)

    The main component of the whole story is that you have this massive IOCG target that is being worked by Newcrest Mining Limited (ASX: NCM) within a stone's throw from the tenement boundary. I have been a fan of the whole Olympic Dam story, and hence I am excited to be associated with a story such as this in Ausmex.

    SAM could make all the Difference.
    Why do I keep bring up Olympic Dam? When you read about the extent they went about chasing the concept, you realise that it could have been a non-event. Looking at the image below, the SAM (Sub Audio Magnetic) conductor could be more than impressive. Remember my article about Carlow Castle, the only geophysical method that picked up the mineralisation was SAMS. In the world of exploration, no one way works 100% of the time, and it is this kind of logical optimism that drives discovery. If SAM is picking up something real, then this could be the game changer that will work in this instance.

    The great thing about and IOCG target is that it is big and as mother nature intended, completely random where it put or shares its mother lode. Looking at the location of that blue speck for the next phase of drilling, one has got to be quietly excited. As in Olympic Dam, it was no the area of the high that drove the discovery. It was the periphery of the high, and the participants admitted that it was a stroke of random genius that decided on that area.

    The conductive structure that has been defined is an easy target, and if the drilling comes up with good results, this will be a sitting target to drill out. Imagine what Newcrest would think if a minnow like Ausmex makes such a discovery. Imagine what the Ausmex share price would do with discovery.

    [​IMG]

    Why Do I believe?
    I do get some of my "confidence" from the fact that you are not dealing with hundreds of meters of cover and being in the middle of the desert. The intercept at Little Duke when they got 59m @1.25g/t Au, and 0.43% of Cu is very significant in my books. The first two significant drill holes at Olympic Dam was, RD1 which came back with 38m @1.05% Cu and RD5 with 92m @ 1.01% copper. Although the copper values are more significant, one has to be encouraged with the length of 59m from a depth of 73m. In my book (and it's not a very detailed book), I think if management can zero in on the source, I am going to be holding onto my shares.

    [​IMG]

    There is a diagram (see below) that was released in an announcement that gives a cross-section view of the whole concept. I am a big believer of a schematic diagram as it simplifies the technical into a cartoon view. This view was something that sold me on the story, and the funny part is that I think the story got better over time. As I have said, it has taken a long time, and I hope this comes good.

    You can interpret the diagram below in any level of technical confidence, but we all know that a missed drill hole could mean a lot, but a persistent team will most likely make up for that missed hole. Just like the story of Sirus Resources Limited using the last remaining budget to drill holes which led to the discovery of the Nova-Bollinger nickel sulphide mine.

    [​IMG]

    The flip side of a schematic diagram is that it is a cartoon and one has to become aware that it does not become a real cartoon. Schematic diagrams are made to simplify a complicated view :)

    [​IMG]

    What does this all mean?
    The big prize is the potential of tapping an IOCG source, and the reward can be astronomical. The issue with chasing IOCG style mineralisation and chasing this big pie in the sky is that you will (not potentially) be spending a lot of money. Western Mining Corporation which is now part of BHP started searching for a copper deposit in 1953 and only found Olympic Dam in 1976. They spent in today's terms around AUD$45m to discover that copper mine. Fortunately for WMC, they not only found a copper mine, but they also found the mother of all mines in copper and uranium and to a lesser amount, gold. I think they commercialise a few other commodities.

    It is good to see that Ausmex raised the AUD$7M as they will need that to keep the momentum going. There is no doubt that there is a lot of noise around and management will have to be very scientific on where to drill. I don’t think there are too many people out in the geoscientific world today that will doubt the way WMC went about exploring. When you read the book "The Olympic Dam Story" by David Upton, you will see the long and meticulous way the people went about looking for "Olympic Dam".

    It took them years of postulating and finally ten holes to get the discovery. Only 3 of those holes were not barren. It was almost a 3-year journey, and it took another 13 years to get to production (mostly due to the anti-uranium program). RD1 was a start, and RD5 was a teaser and RD10 was the discovery. The time from RD1 and RD10 was over 12 months.

    Hence, the point is that it is going to take even more patience and even more efficiency on the part of Ausmex management to create even more value for shareholders (ME… :) )

    Conclusion
    To close on this article, the storyline that the management of Ausmex is telling people is the potential of a significant find. As a shareholder, I hope they are correct, and they spend the AUD$7M wisely and manage their salaries like how a chinaman would (if they want advice on how to do that, they know where to contact me) do if they were running the company.

    I don’t doubt the storyline, but as many "investors" will attest, there have been many great stories that have become lemons. In my experience, I always say that the proof of concept is the numerous smoke that is in the area and that Newcrest is spending money on the same idea. It is not a lone ranger concept, and that gives me some confidence.

    The conductive structure is the other piece of confidence. Technology such as SAM was not around in the 1970s, so the comparison I have made with the discovery of Olympic Dam may not be so pertinent. However, as a shareholder, I bloody hope it is the holy grail…..

    At the end of the day, Olympic Dam is a big deposit. It had 10B tonnes of ore. Something close to that would be punching above Ausmex weight and all shareholders will be happy.



    NOTE: I am a shareholder of Ausmex, and I do want to highlight that this Insight is not meant to give advice and not to influence anyone to buy or sell the shares of the company. This is my research and my thoughts on the activities of the company. I have not been paid by the company to write this Insight.
     
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  18. barney

    barney

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    Thanks for the detailed post @samso I am also in the AMG boat. They are chasing a big and usually elusive dream, but the Little Duke drill hole also got me ultra keen …. The copper content for near surface is pretty damn good …….. If they happen to hit another 60 mtr hole down deeper and double the copper grade it could really take off.

    Obviously a Spec Punt at this stage, but not too many Specs have Newcrest digging hundreds of metres of diamond drill holes literally on their doorstep:D
     
  19. samso

    samso

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    @barney, this is what I am trying to highlight... One powerball and we are off to the moon....
     
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  20. Anastasia

    Anastasia

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    Thanks for the post. I note that you have mentioned the application of SAM numerous times. With regard to Burra, AUSMEX have been pioneering the application of MT and AMT through a gridded program.

    My research has confirmed that both BHP and OZ have been using MT/AMT to define their known IOCG’s in recent times (perhaps in preference to SAM???) and for further exploration in the Gawler Craton. AMG’s use of SAM in the Cloncurry area and MT/AMT in Burra seems to be worlds best practice by this junior and their efforts are being rewarded.

     
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