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Argonaut Securities Research Report
Set Apart
First gold from 2013: |
Azumah Resources (ASX:AZM, TSX:AZR) is set to become a West African gold producer from 2013 at its Wa project in north west Ghana. A Feasibility Study is nearing completion for a US$135m, <100koz pa open pit gold mine with a potential 50% increase in throughput (15% additional capex for an extra ball mill and tankage).
In parallel with the Feasibility work, AZM is continuing its accelerated exploration program ($15m / 5 rig / 250,000m drill budget). With <10% of 150km of prospective Birimian strike investigated, the aggressive effort is justified and is likely to yield stepchanges in the existing 1.2Moz Resource over time.
The current program is expected to be completed by March 2012 with ~190,000m already drilled. The Company is planning for another high intensity effort in 2012, already securing three drill rigs at attractive fixed rates. Key brownfields targets include between Kunche / Bepkong, north and south of Kunche / Bepkong, and depth extensions.
News flow over the next 3 months includes: Ongoing � Infill and exploration drill results (~20,000 samples or 50,000m in the labs), November � Kunche / Bepkong maiden Reserve, and December � Julie maiden Reserve.
AZM recently listed on the main board of the TSX. No capital raising was associated with the listing. |
Impact: |
Positive |
Argonaut�s valuation is $0.90 assuming US$1,100/oz long term gold, and an expanded throughput case - 1.5Mtpa, 2.2g/t average head grade, >100koz pa production, US$160m capital expenditure, US$575/oz cash costs and commissioning in June Q 2013. |
View: |
Positive |
A reduced risk profile sets AZM apart from its African gold peer group:
- Low sovereign risk location in Ghana
- Conservative Resource estimate
- Proximity to the first gold pour
- Value - EV/Resource oz US$116 v peer average US$150
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Recommendation: |
Spec Buy |
The stock is likely to command a re-rating as production plans firm over the next 3-6 months. SPECULATIVE BUY recommendation maintained. |
View the complete Argonaut Securities Research Report. |
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Azumah Resources Limited
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DEVELOPMENT STAGE |
CODE : AZM.AX |
ISIN : AU000000AZM5 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Azumah Res. is a gold exploration company based in Australia. Its main asset in development is WA in Ghana and its main exploration properties are KUNCHE and BEPKONG in Ghana. Azumah Res. is listed in Australia. Its market capitalisation is AU$ 18.6 millions as of today (US$ 12.4 millions, € 11.5 millions). Its stock quote reached its highest recent level on November 05, 2010 at AU$ 0.83, and its lowest recent point on August 02, 2019 at AU$ 0.01. Azumah Res. has 582 569 984 shares outstanding. |