I agree that AZC looks very attractive - and for that reason it was one of the early candidates into my DIY super fund. (I flagged its potential in a post on 29/06/2004 when it was lolling around 10.5/11.0 cents).
All the milestones are getting ticked off on the way to getting into production. When they announce the financing just watch it go.
In addition to some of the points you mentioned it is worth noting that AZC has flagged the prospect of doubling Mindarie's initial planned production in the near future.
What I liked in some of the company's announcement were the statements that they basically only drilled up enough resources to get the project off the ground. They have only explored something like 15% of their ground, and appear pretty confident that there will be plenty more reserves uncovered when they do get around to poking a few more holes into their ground.
The broker reports on their web site (although a bit dated) paint a picture of a very profitable operation - and that is with some conservative assumptions. For example, since they were penned, zircon prices have jumped substantially and AZC's new mining and processing approach will lower capex and opex costs relative to those in the feasibility study. Those reports also don't reflect the huge increase in profits that will come should AZC double the size of their operations.
An indication of just how profitable AZC's Mindarie project is likely to be can be found in its latest Annual Report. That report states that assuming a 63% gearing, the project will achieve an after-tax return on equity of approximately 70% and a payback of initial capital of less than 2 years. Impressive eh! Just imagine how much more attractive it might be if the company decides to double production.
I intend to top up when I get a bit more spare readies ...
