the week in review
A good week for AUL. Exciting results were announced from Manindi, which had the share price trading as high as 3c after opening the week at 2.4c.
Some spectacular intersections were encountered, with the overall result being summarised in the Announcement as:
“The drilling was successful in all its objectives, delineating both massive sulphide mineralisation in a number of new prospect areas, as well as extending the known areas of economic mineralisation.”
Since we know that development options are already pointing to a ‘self sufficient’ mining and processing operation, with low capex and high returns, this is all just icing on the cake. No doubt we’ll be hearing more in coming weeks about the now-assured resource upgrade, about processing and treatment details, as well as further planned drilling programs.
The Zn price this week has moved ahead strongly again above US$3,000/t, closing Friday night at US$3,441/t. That, on the already-established Manindi resource, gives an in-ground value of $US276m, or about AU$367m…that’s 54c per share!!!
The current market cap at Friday’s close of 2.6c, with now 680m shares on issue, is $17.7m, but with the options exercised, AUL has cash in excess of $7m, plus probably another $1m in tradables.
Friday saw the issue of new shares to holders who exercised options. We saw some of those immediately coming out onto the market. I’d expect a bit more of that to follow, possibly a cascade effect. However, now that many of the ‘unknowns’ have been removed from the equation, and given that the story has never looked better (AND that the shares previously traded above 4c!), I believe this current retracement may be a great final opportunity to climb on board at discounted prices.
As best I can determine it, the underwriters are unlikely to be sellers at anywhere near the current low levels. In this connection, it’s interesting to note that the $150,000 underwriting fee was taken by way of options exercisable at 5c rather than as cash. So perhaps this gives an indication of how bullish they feel on the story.
My view? This week, buy on the back foot.
AUL Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
