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A1M - AIC MINES LIMITED


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Lifted off the channel bottom, headed towards the middle.

 

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I'm not on yet, but noticed the Fibonacci levels on the 30-minute Intraday chart. If there's follow-through tomorrow, I'll join you.

 

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Hindsight is a great tool.

 

Fundamentally Melua was happy to enter in the low 40's. That's fine.

 

As a Technical Analyst I wasn't. Further confirmation was required in regard to a low being locked in position. Yesterday's gap fill and subsequent strength was the trigger for me. Again my target is $1.00 from an Elliott Wave perspective. May go higher but we can re-evaluate as the patterns progress. Looking good so far.

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I am more than happy with my entry though. It's all about risk for me. It was too risky entering at the exact bottom.

 

Let's just see if a decent trend can develop rather than a Dead Cat Bounce. I am confident in the prior.

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From a FA aspect, I saw low 40's as just too cheap. I know technically it could have gone lower but you know what? If everyone relied on TA, then every down trending stock would go to zero. At some point, someone has to buy for a stock to turn back up.

At 40c, the company was valued at just $210M which included $130M in cash and no debt. Therefore the EV (enterprise value) was just $80M.

 

$80M for 15 billion pounds of copper and 25 million ounces of gold in situ? Crazy.

 

That's why fundamentally you have two brokers with target prices of $1.95 and $3.25 (RBS and Shaw). One can justify at least $2.00 on fundamentals but two things need to happen for that to eventuate IMO.

 

1. Direct equity negotiations to be finalised.

2. Forest re-zoning to be approved.

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Although I don't focus on fundamentals it's always nice when they align with T/A.

 

I don't agree that using T/A alone would mean every stock goes down to zero though.

 

Both from a conventional & Elliott Wave perspective there was every reason to suspect

$0.40 would hold. Agressive trader's would have bought near the low. In this market I

wanted further confirmation that a reversal point had been met and rejected. it's still not

certain but probability is now in our favor.

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From RBS Morgans site visit June 26:

 

"The gold-copper sulphide at Tumpangpitu - geology has come a long way

 

The current drill pattern of the sulphide porphyry to define the current inferred resource incorporates a line spacing of 160m, with holes spaced at between 100m and 250m along the lines. The current drill program occupies 5 drill rigs.A good geological model is emerging, with the porphyry at depth, overlain by a higher-grade carapace up to 150m thick, and draped over the underlying porphyry. There is a structural and/or alteration overprint from the south, which extends as fingers or sheets up and to the northwest, through the upper leves of the porphyry and the carapace.

 

We had a good look at the core from (1) the major part of the Tumpangpitu porphyry, (2) from the carapace and (3) from the higher grade part of the deposit on the eastern side - GTD 11-248 which intersected 689m @ 0.85g/t Au and 1.0% Cu including 244m @ 1.06g/t Au and 1.42% Cu. We also reviewed core from Katak and Candrian (which appeared similar) and from Salakan, which has higher molybdenum values than the other porphyries.

 

An "Indicated" resource at Tumpangpitu should be delivered with a hole pattern of 80m X 80m. This is expected to require a further 100,000m of drilling with an estimated cost of US$25m. The next release of an upgrade to the resource is likely to see the application of more geological controls than previously. We'd expect this to pull the tonnage of the current resource blocks down a bit, but there may be a very slight grade increase. Overall the resource is likely to be larger than previously with the addition of recent drilling, but the confidence and understanding of the deposit and its controls has increased markedly. It's a continuation of the high quality geological effort which has characterised this project from the start of Intrepid's involvement. the resource upgrade is expected before the end of the September quarter, although the scoping study is not anticipated until early 2013.

 

There are currently 5 rigs from Maxidrill (one drilling the oxide and two drilling porphyry holes) and 3 from Boart Longyear in operation The porphyry rigs have a depth capacity of 1,000m, with the Longyear rigs having a depth capacity of 1,100m to 1,200. PT IMN has also contracted an LF230 rig from Boart Longyear with a nominal capacity of 2,000m. Batu Hijau has a vertical extent of 1,700m, and Intrepid is looking to obtain an understanding of the depth potential of Tumpangpitu, so a couple of deep holes will be drilled. More significantly the rig will be used to collect PQ and/or HQ core from the Tumpangpitu deposit to provide high quality samples for geotechnical studies (with a block cave now being considered) and for metallurgical test work."

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