Ann: Confirmed High Grade at Bepkong Strengthens case for UG, page-12

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Heeman

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30/12/18

12:25

Post #: 36983883
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Originally posted by pygmyhipppo ↑

While a rising gold price would certainly not hurt Azumah (the rising tide lifts all the boats), the big question IMO is whether they finally look on track to make the quantum leap to developer/producer in the foreseeable future. I think if the next feasibility study and ore reserve update look good, they might have a clear pathway and a compelling case to attract funding.

The big issue for them as far as I understand is that while there's a known resource of 2.5 Moz of gold (certainly not a figure to be sniffed at, and likely to grow substantially IMO) the gold is spread out and not sitting in one deposit. In particular Julie, Azumah's biggest deposit at just over 1 Moz, is some 80km or so away from Kunche and Bepkong etc where the processing plant is meant to be. The 2015 feasibility study update (Ann 23/3/2015) states cost of $35 million for hauling Julie ore to Kunche for processing. Of the 1 Moz resource at Julie, only 200 koz have made it into the ore reserves in the 2015 update. This is partly due to part of that resource (350 koz) being in the inferred category and hence not considered for reserves, and I think the current drill campaign will address that to a point, but also due to a high cut-off grade being used for Julie ore in the feasibility study. This is a challenge, but I hope something can be done to address that, e.g. perhaps some processing and concentrating ore at Julie to bring down haulage costs. They've got some clever people who know a thing or two about mining.

Overall, I think with the Ibaera deal, they have the money to drill out more resources and they know where to look for them. So fingers crossed they get the ore reserve up near the magic 1 Moz mark, hopefully then a development decision and funding will come.

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I’m thinking we will need more than 1moz to justify a go ahead. If it shows signs of becoming a 200koz pa operation for near 10 years at a decent AISC, AZM becomes a lot more appealing to a much wider audience. Thinking WAF here

AZM Price at posting: 2.6¢ Sentiment: Buy Disclosure: Held
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