AZM - Azumah Resources

[yogi-in-oz]

Hi folks,

AZM ..... will be alert for some positive news,
around 15092006, as two significant cycles
come into play .....

happy days

yogi

 

[Sean K]

Looks like it has the potential to come up with a 1m oz resource and be a stand alone operation in the future.

This ann out this am:

Drilling Extends New Bepkong Discovery

Azumah Resources Limited (ASX: AZM) is pleased to announce excellent results from the first 21 of a recently completed 36-hole reverse circulation and diamond drilling programme at the Bepkong gold discovery at its Wa-Lawra Gold Project in north-west Ghana including:

32m at 2.40g/t gold from surface, incl 4m at 6.31g/t gold from 20m;
20m at 2.90g/t gold from 44m, incl 4m at 10.70g/t gold from 52m;
24m at 2.24g/t gold from 28m; and
12m at 1.71g/t gold from 12m.

These holes were drilled to follow-up an intersection of 16m @ 4.9g/t gold from 50m, including 10m @ 7.1g/t gold from 54m, obtained from the first hole drilled into the northern end of the 1,400m Bepkong power-auger gold-in-soil derived anomaly, just 2km north of the 500,000 ounce Kunche resource (Fig 1). A diamond tail extension to this hole returned 4m at 1.41g/t gold from 81m.

“This definitely heralds Bepkong as a new, near-surface discovery at Wa-Lawra and gives us enormous confidence that we can achieve our next objective of delineating a one-million ounce resource to underpin a possible stand-alone mining operation within our 100% owned, 2,800 km² licence area,” commented Azumah Executive Chairman, Mr Stephen Stone.

I wonder why it went up 15% last trading day? LOL

Just 81m shares at 11 cents (just $8.1m mc ) makes it potentially one of the lowest oz au to mc resources out there.

 

[So_Cynical]

Most of the hits are shallow too....AZM almost certainly have 1 Mill Ozs.

why the hell i didn't buy at the ridiculous prices a few weeks ago...ill never know.:dunno:
if nothing else AZM must be a take over target for a cashed up, mid tier Goldie.

 

[Sean K]

Most of the hits are shallow too....AZM almost certainly have 1 Mill Ozs.

why the hell i didn't buy at the ridiculous prices a few weeks ago...ill never know.:dunno:
if nothing else AZM must be a take over target for a cashed up, mid tier Goldie.

Yep, I agree, a bit of speculation, but anyone else in the region who could take them? How far away is the new LGL/EQI?

If they can shore up 1m oz au in those 2 deposits, near surface, open pit, then it's gotta be worth more than a few mil.

On 1m oz, their mc (@.13 = $10.5m) to oz au ratio is.....10.5? That seems pretty damn low to me. Actually, it's half that of any other goldie that I have on my resource to mc comparison table..

A nice little bounce yesterday. Still not trending anywhere but down right now though.

 

[cordelia]

On 1m oz, their mc (@.13 = $10.5m) to oz au ratio is.....10.5? That seems pretty damn low to me. Actually, it's half that of any other goldie that I have on my resource to mc comparison table..

Hi sorry to ask but what does that mean? Can you explain a bit further for the less knowledgable

 

[jman2007]

On 1m oz, their mc (@.13 = $10.5m) to oz au ratio is.....10.5? That seems pretty damn low to me. Actually, it's half that of any other goldie that I have on my resource to mc comparison table..

Hi sorry to ask but what does that mean? Can you explain a bit further for the less knowledgable

This is basically an indice that allows a value comparison to be made based on a companies market cap to their attributable resources (in this case, the 1 million ounces is a hypothetical figure, and is based on potential resources that could be uncovered at Bepkong and Kinche).

So we have: $10,500,000/1,000,000 oz = 10.5

So as the number tends towards zero, this represents increasing "value" or more simply; more bang for you hard-earned buck.

I don't really use this index myself, so Kennas pls correct me if my explanation is incorrect or misleading, but I definitely do see the value of what it can provide for investing purposes.

The anomalous geochem zone between Bepkong and Kinche to be tested by 15 RC holes could be very important for the company. Potentially Bepkong and Kinche could be part of one large mineralized system, considering their proximity to each other. If think Azumah would try and make a strong case for this scenario if the drilling results indicate this. The value this could add to the company could be very significant. But plenty more work to be done yet...

I don't quite understand why the recent Bepkong RC results were sampled as 4 meter composites.....This is the first time I've seen composite sample results reported for RC drilling. Perhaps this was done to reduce exploration expenditure (ie less assays) during first-pass drilling. Whether the competent person views this as acceptable when considering a block model is something I can't answer. Perhaps they will need to re-assay on a 1m basis to satisfy requirements under JORC.

Anyways, imo this represents good value when compared to other West African explorers, especially when using the MC/oz index.

My
jman

(At least So Cynical and me have finally agreed on a gold stock for once!!)

Disclaimer: DNH

 

[So_Cynical]

Yep, I agree, a bit of speculation, but anyone else in the region who could take them? How far away is the new LGL/EQI?

Anglo Ashanti has a big position in Ghana, but i doubt AZM has enough gold to
interest them...i reckon the LGL/EQI mine in Côte d'Ivoire is about 3 or 400
clicks away...as the crow flys.

Theres a few international goldies operating in Burkina Faso, sorta Nth west of
where AZM is...maybe 1 of them would be interested.:dunno:

http://en.wikipedia.org/wiki/Burkina_Faso

 

[Sean K]

This is basically an indice that allows a value comparison to be made based on a companies market cap to their attributable resources (in this case, the 1 million ounces is a hypothetical figure, and is based on potential resources that could be uncovered at Bepkong and Kinche).

So we have: $10,500,000/1,000,000 oz = 10.5

So as the number tends towards zero, this represents increasing "value" or more simply; more bang for you hard-earned buck.

I don't really use this index myself, so Kennas pls correct me if my explanation is incorrect or misleading, but I definitely do see the value of what it can provide for investing purposes.

Yep, I use this as an initial guide to indicate potential value. There are MANY other factors to consider including grade, depth, ground, water, infrastructure, country, management, etc. So, it's just a start and a method to try and compare apples with apples. And yes, the 1m oz au, is their target. Company is pushing for 1 to 2m. On their 500K JORC the ratio is about 21, which is still VERY low, for a potential open pit with OK grades at around 2g/t. But the company seems to think they need 1m oz to have a stand along operation.

On another point, how refreshing is it that management are a bunch of geologists, instead of ex bankers, traders, and dot com wreckage!

Anglo Ashanti has a big position in Ghana, but i doubt AZM has enough gold to interest them...i reckon the LGL/EQI mine in Côte d'Ivoire is about 3 or 400 clicks away...as the crow flys.

Theres a few international goldies operating in Burkina Faso, sorta Nth west of where AZM is...maybe 1 of them would be interested.:dunno:

http://en.wikipedia.org/wiki/Burkina_Faso

Cheers. I do note in one of their last presentations they stated that they were looking to be part of the consolidation in W Africa. Can't see them being a predator though. Yet.

 

[jman2007]

On another point, how refreshing is it that management are a bunch of geologists, instead of ex bankers, traders, and dot com wreckage!

Had a yarn with Bernard Aylward today, GM of AZM

I asked him about the rationale behind the 4m composite RC sampling at Bepkong, and his response was that it was mainly done as a cost saving measure. For further delineation of the prospect they will be going back to do 1m sampling, which will also be a requirement for future resource classification.

Much of the geochem data that AZM spent a good deal of time reviewing and interpreting was collected from the mid-90's onwards, and also includes data from AZM's own auger drilling programme. Much of the auger sampling was collected in the top 2-3m, so the integrity of the data should be good ie. not contaminated with recent aeolian/colluvial material.

When I asked about the spatial relationship between Kinche and Bepkong, Bernard preferred to use the term "camp" to describe this area, which is more or less an amalgamation of deposits over a short area of strike. The potential upside looks really good, though plenty more drilling to come for sure.

Still dnh

Cheers
jman

 

[Sean K]

I didn't realise AZM were tied up with the opes thing. eeeek.

Number of shares as at end of trading on 4 April 2008 in respect of which ANZ has an interest as a result of transactions entered into pursuant to the Opes Prime AMSLAs
5,700,000

Total number of issued ordinary shares as at 4 April 2008 (based on publicly available information)
81,000,000

Percentage of ordinary shares
7.037%

I had a small order in there at 9.4 that was taken and I could have done better by the looks.

Has come off a bit already, and this only makes it cheaper IMO. MC to oz au, on 9.2 c with 500k JORC is 14.9. Any lower?

And they're likely to get over 1m oz au, so it's looking compelling IMO.

 

[TheAbyss]

I am astounded at some of the companies on the ANZ list. Some of them are a long way off producing anything. To borrow money for a bet on a race horse is pretty silly and obtaining a ML for some of the high risk explorers on that list is just as rash imo.

Having said that it will crate an opportunity for some and heart acvhe for others.

AZM have been declining for more than 12 months prior to Opes so why buy now? I would welcome some positive points.

 

[TheAbyss]

List of companies form ANZ attached if you have not had the chance to snag it elsewhere.......How many words to make 100?

 

[Sean K]

I would welcome some positive points.

I'm interested in them as potentially a low cost producer. Could have 1m oz open pit, decent grades, with significantly more exploration potential. Currently, on an MC to oz au comparison (about 14) they're very undervalued. Average explorer ratio is above 20. Developers 50+ and producers 150+.

 

[TheAbyss]

Thanks Kennas. Any reasoning on the slow decline or just a lack of patience from investors perspective? Looks promising and one for the black book if some confidence in the market generally can be found

 

[jman2007]

Thanks Kennas. Any reasoning on the slow decline or just a lack of patience from investors perspective? Looks promising and one for the black book if some confidence in the market generally can be found

AZM's ground along the Wa-Lawra belt is fairly under-explored Abyss, their tenure is also in a fairly interesting area in the NW of the country, so geographically this is fairly far removed from the Ashanti belt where a lot of the "world class" deposits have been found. This may in part explain why AZM has so far received scant attention from the market. But in a lot of ways, this adds to the appeal of AZM imo and their recent exploration success should give them a high degree of confidence that their exploration strategy will continue to pay dividends.

Probably the chart reflects the general apathy and volatility over the last 6 months, and lets face it, this is greenfields exploration we are talking about here. Exploration is all about risk, or reduction of risk I should say, but as Kennas notes, the potential upside here looks promising.

jman

 

[Sean K]

I didn't realise AZM were tied up with the opes thing. eeeek.

Number of shares as at end of trading on 4 April 2008 in respect of which ANZ has an interest as a result of transactions entered into pursuant to the Opes Prime AMSLAs
5,700,000

Total number of issued ordinary shares as at 4 April 2008 (based on publicly available information)
81,000,000

Percentage of ordinary shares
7.037%

ANZ still have quite a few shares to get rid of. Just sold a few hundred K so far but still hold 6.7% of the company. This is going to depress the sp until they find a big buyer, or they're more slowly disposed of. I can't see them getting back above 10 cents until this is achieved. Disappointing timing for me, but perhaps an opportunity to accumulate for anyone believing in the story longer term. I won't be buying too many more until ANZ are closer to finalising their position.

As far as upside now, it's going to be a waiting game I think. At leat till the next drilling campaign produces some results.

“The last three drill campaigns at Wa-Lawra have confirmed the tremendous prospectivity of the 100km of Birimian greenstone belt hosted by Azumah’s licences, “said the Company’s Executive Chairman, Mr Stephen Stone.

“Our next drilling programmes commencing in May will be designed to define JORC compliant resources at Bepkong; to infill the new southern extension; to infill and test to greater depth the mineralisation at Basibile; and to test other auger soil anomalies” he added.

“With over 20 quality targets yet to be tested, we remain confident of delineating a near-surface gold resource in excess of 1 million ounces to underpin a stand-alone open-pit mining operation”

 

[vegemite]

AZM, (along with PRU and IGR) get mentioned in the latest issue of (9th April 08) of StockAnalysis. Main points:

* going gangbusters on exploration front but this hasn't been reflected in the share price
* pleasingly higher grades are dragging the resource towards 1 million ounces
* stock price kept down by being caught up in the Opes Prime situation
* he (Peter Strachan) thinks it represents bargain buying

approx $7.8 million mkt cap (at friday's 9.7 cents), with $2.5 million cash so an enterprise value of only $5.3 million. On this basis, I've bought a few (not too concerned about the Opes angle as a temporary factor which might just provide good buying opportunities)

Cheers, V

 

[jman2007]

The Opes collapse is unfortunate for AZM,

I had no idea that they were tied up with this either. Over the short-term it may turn into a bit of a waiting game as you mention Kennas, as we discover how ANZ will play their cards. Over the long-term, I can't see it doing too much damage to the AZM cause though.

I'm still not entirely convinced by the AZM story...yet . I would be a lot happier if they had another deposit like Kinche in their hip pocket, but that's just me being me :.

With a MC of this size, I imagine there would be a few other bigger fish watching AZM closely as well, still agree this is looking cheap on a peer-comaprison basis.

jman

 

[vegemite]

thanks jman,

would be interested of course to hear what your reservations regarding AZM might be.

i'm going to the gold coast resources showcase in mid june. azumah are presenting there (along with 40 other companies) so i'll be taking the opportunity to find out as much as i can etc,

cheers, v

 

[jman2007]

thanks jman,

would be interested of course to hear what your reservations regarding AZM might be.

i'm going to the gold coast resources showcase in mid june. azumah are presenting there (along with 40 other companies) so i'll be taking the opportunity to find out as much as i can etc,

cheers, v

Hi Vegemite,

Well not really reservations as such....more to do with the inherently risky nature of greenfields exploration I suppose. As I've said before, exploration is all about risk. Once the dust settles from the Opes situation, and if AZM can begin to supply a steady stream of positive news to the market, this stock may become a great one to trade on a short-term basis.

For me personally, they don't suit my investing style atm, but based on their huge tenement holdings and potential upside, I'm going to continue to watch with interest. The Gold Coast resource show sounds great. Maybe you can give us a lowdown on any gold presentations there, and you thoughts. Long way off though.

jman