People please don't be afraid to get your fingers dirty and do a bit of research! Plenty of info on the internet and Mr Atkins has always been very approachable...
My research suggests around US$15/tonne to mine and bauxite is at around US$31/tonne, however this price was quoted back in the 1st quarter of 2009 before the market had even started any sort of serious recovery... all research and economic reports suggest the price of bauxite will rise (if it hasn't already)... and taking into account that the price of Aluminium has increased by 40% since 02/03/2009...
Please keep in mind that we are experiencing the biggest global financial crisis ever witnessed... as a result, all commodity prices have been hit hard - bauxite included... so unless a wand can be waved at this point in time and every bit of bauxite within our tenaments is extracted and placed in stockpiles at various ports, you will receive around US$31/tonne gross...
As I have said in previous posts, patience is required. This is not a stock for daytraders but for investors who understand the medium to long term investment potential of this company and believe in their vision statement...
What potential investors should be impressed with, is what this company has managed to achieve over the last 2 years since listing... having bolstered their management team with some extremely experienced personell... having secured buyers for their bauxite and at the same time $9.85m in the bank from the SDGM 'significant premium' placement (remember the SP was trading at 26c at the time of this 50c placement announcement)... continuing to increase their tenement area - remembering that the JV with SDGM includes extracting minerals 'other' than bauxite from these tenements (the expenses for which are fully funded by SDGM)... MOU recently announced with Yankuang Group for a potential refinery (and smelter)... the recent purchase of their own land in Bindoon and subsequent setting up of their mining and analysis base... plans implemented for the woylie conservation park... trialling of spot bauxite shipments to chinese customers to ensure the DSO kicks off without any hitches... $16.5m in the bank... etc...
One must also look deeper into the whole timing aspect... Management have been completing important boardroom business during these winter months, ready for mining in the spring/summer months... from an economics perspective, the market has picked up and most leading economists are falling on the side of being bullish rather than bearish... one can only assume that come 1st quarter 2010 when our 1MT DSO gets under way, the bauxite spot price will have significantly improved... heres hoping, but would agree that there has to be some risk when investing in equities?
DYOR!
Keeping the faith, Jalinski
BAU Price at posting:
44.5¢ Sentiment: Buy Disclosure: Held
