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AUZ - AUSTRALIAN MINES LIMITED


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Anyone got any idea why AUZ is so sluggish given they have no debt, a mine that is in production with plenty of upside, good tenaments and an on-going exploration program? Seems a sound basis to me yet the share price has fallen rather substantially over the past year.
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Just got me self a bunch of this dog.

Nickle just went up in London to around US 6.80 a # so this out fit should get at A $19,000 a tonne with expenses of $8066 they had better show around 11 million in profit per year on 1700 tonne of Ni .

not bad for around a diluted 200 million shares ($23 M cap @ 11.5 cents) with 2 M in the bank.

Expenses have blown out but at $3.66 a # OPEX theres still lots of cash flow and around 12 M in tax credits. hate paying that tax man you know.

Grades are on budget but doenst look like they have a show in hell of getting there 140,500 tonnes of ore throughput per annum.

Looks more like around half that going to go through the plant on an monthly basis going forward.

 

Dont know why they are cheap guess they are just not as hot as being a buyout from CSM

like REM.

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Actually AUZ made a smallish profit in the last quarter. They have stage 2 mining up and going so hopefully there will be a significant increase in production. However, we have heard nothing from the company in regards to this so I think most punters are on the sidelines awaiting the quarterly report.
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In reply to: Mookie on Monday 10/01/05 03:29pm

I am disapointed by those latest drill results low grades like that and no real extension better take that drill bit somewhere else rather than worrying about doing more infill drilling IMHO I am not a geo.

Still the quarterly should be out soon and that should be very good I expect an extra 1.5 M to be added to the bottom line

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Actually there may be life in this old dog yet...any steeply dipping resource will be difficult to drill because if its limited surface area and the need to drill in the right place and to the right depth. Most of the resource may well be below most current drilling and in a different direction. Now they know the general dip direction you would hope the next phase of drilling should come up with a more definitive answer....hopefully a good one, specialy if it is backed up with more detailed elecromagnetics. Don't forget the resource at Blair is steeply dipping too...it would be rather good to find another one of those.....

 

2nd qtr report should be out soon and hopefully profit results might return some value to poor old AUZ

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In reply to: MrGreedy1 on Thursday 20/01/05 03:06pm

McGreedy I had difficulty working out how they can assume its dipping to the North due to the results being so low in % of Ni all round. Are you a geo or had experiance in this?

I think they were hedged at around $20000 a ton Ni but I wonder what the tolling costs them they didnt mention that in their last update on production they just said the cash costs were around 3.91 a pound and I am sure that does not include tolling charges, unless of course the tolling is being paid by another mineral in the ore.

I am holding it as an earlier report gave them a value over 22 cents a share not much seems to have changed although maybe thats the problem as people may have been hoping for a reserves upgrade.

 

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In reply to: hayboys on Thursday 20/01/05 05:32pm

What could kill AUZ is that their costs of production is bleeding them dry they budgeted on around $110 a ton and they are at an actual 200 a ton of ore in production cost, its the difference between 1 Million before Amortiisation and depreciation in profit and 2.9 million before A @& D in profit. Same problem at FXR and MCR

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Hi Hayboys..This qtr report should be critical in sorting out how the cost structures look. A lot of the past work has included refurbishing the old declines, now these costs are out of the way the cost of mining should decline....As for the dipping of the exploration area, it is difficult to tell, except that presumably the cores give an indication of the dip and the dip direction of the area of highest mineralisation, and that current drilling to the north has not been sufficiently deep to intercept this ahead of the central area with the highest grade. If this was not the case presumably they would pull up stumps and move on to other prospects as you suggest they do.

 

Share price plummeted today 9c at present. I bought in as I see the fundamentals are good, but who knows why the price dropped ahead of the qtr report...maybe there is bad news on the way??? Hopefully not!

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In reply to: MrGreedy1 on Tuesday 25/01/05 01:51pm

Its hard to lose buying at this cap based on last quarters bottom line, unless the current quarterly shows a negative botom line.

I nevr thought much about refurbishing the mine as causing costs earlier on I thought that would have been part of CAPEX but on reflecting the nature of the mine would require refurbishing going deeper as it spirals and is not an adit.

THe company had 2.3 M in tax credits it can carry forward plus several million in the bank, someone said on another forum that the contractors pulled out and there was an asbestos problem but if they had gone to care and maintenance mode I am sure we would know.

More likely when they went to using air leg mining they didnt need the mechanised machinery of the contractor.

Also they have 300 t hedged at $20,000 so doubtfull the bottom line will be hurt they could make money just trading that on the LME!

I just bought IGO after seeing they have close to a PE of 3 and costs in the high $2.00 range per #. I note the drop in price of AUZ was on very light volume so insignificant for the company but a good deal possibly for you.

I am still holding this.

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