agm notes

I was going to post my initial thoughts immediately after the AGM... which would have read like this:

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Firstly, my suspicion of Andrew Waller was increased when he was a no show at the meeting. He is the Chairman for crying

out loud, and he can't even make the AGM which was booked a month ago? Trevor G apparently flew in from SA for the

meeting... so why couldn't AW make it? The company secretary was absent as well... so there were only two of the four

directors up the front at the Company AGM.
My point on this is that I have been to other AGMs this month where the entire board was present, introduced, and

contributed to the meeting... so to have two of AEX's board send their "apologies" just didn't cut it for me.

Secondly, let me acknowledge that Craigs primary point throughout the entire meeting and question time was that the

companies ABSOLUTE priority is to prove up Denny Dalton to Indicated and then Measured status. What Craig refused to

commit to (despite repeated, similar questions from different attendees) was how much drilling that would require, how

long it would take or when that upgrade is anticipated to be completed, no guidance like 2-4 months... nothing. All he did

suggest was that they were committed to drilling the bejesus out of the tenement to accompolish this.

The reasoning for this became clearer for me as the meeting progressed, as the presentation by Craig and Trevor yesterday

did nothing to convince me that Denny Dalton is a "strong" project in any shape or fashion. How Mabex Consulting (MCG)

came up with the concept of Denny Dalton being a "medium-advanced" Uranium Gold exploration project is totally beyond me.
To refresh everyone's memory on the status of Denny Dalton, of approx 241 holes drilled (4269m of Diamond drilling and

8501m of percussion drilling) prior to acquisition by AEX, 77 holes hit mineralisation... a 33% (approx.) strike rate. The

rest of the holes didn't hit anything.

The Phase 1 drilling program put down 20 holes (869m worth of Diamond drilling i think), of which 15 hit mineralisation.

These were reported on in the 19th October ann, but the 5 which hit nothing bore no mention in that ann. This led to

speculation from the market about what happened to those remaining 5 holes.

The impression that Trevor and Craig gave was that until CCIC can generate a good geological model of the Mozaan Contact

Reef (MCR), it is pretty much hit and miss with the current drilling programs. They are still trying to define the MCR

dimensions/size/shape and payshoot locations/strike direction etc... as this is not currently understood.
Craig expressed increduality at the markets lack of understanding as to why AEX didn't already have a Measured resource on

it's hands after 20 drill holes? He re-itereated that this could not be expected to be completed after a 20/40 hole drill

program, and when pressed on how much more drilling he was non-commital, but intimated that there was alot more drilling

to be done. Perhaps the fact that AEX has consistently quoted MCG's sales pitch of Denny Dalton being a Medium-Advanced

Uranium Gold project was slightly misleading?

This bothered me that neither Craig nor Trevor could give an approximate timeframe to the JORC status upgrade. All they

committed to was that it depends on the results of the drilling campaign, which in turn will contribute directly to the

generation of a geological model, which would guide future drilling campaigns. So from that respect there seems to be a

bit of tail chasing going on.

Craig was quoted as saying was that the Diamond drilling costs about 700 Rand/metre (approx 5.5 Rand to the AUD$) and the

RC drilling costs approx 250 Rand/metre. That would put the cost of the Phase 1 drilling program at R608,300 or

AUD$110,000.
Given the recent Qtrly with Cash at hand of $1.6million and the recent $2.25million just raised, I can't see why AEX would

need to raise funds again next year or at least untill they have drilled another 10,000m (which would average another 10

drill programs similar to Phase 1) and upgraded to JORC measured. Bear in mind here that none of the drill holes are going

deeper than about 70m, most are approx 50m and Trevor said that the current drilling program was yielding 1 hole per day.

Also, expect a slow down over christmas for a few weeks on the drilling.

The RC drilling due to start on the 4th Dec is supposedly going to start infill drilling. To my amazement, neither Craig

nor Trevor could supply the planned grid spacings of the infill program. They claimed that this was unknown untill the

initial results of the infill drilling came through... more hit & miss style drilling?? How they could not know this was

beyond me. Either it is still exploratory drilling, or it is infill drilling... but infill drilling is done to a planned

grid spacing in order to provide a sound basis for an increase in density/confidence of results for the competent person

generating the JORC status!

Depsite Trevor maintaining utmost enthusiasm for the project, he declined to comment on why it wasn't good enough for him

to invest his own hard-earned in shares. Craig said that he had discussed the same point with Waller, and that Waller had

agreed to purchase some shares as well. Whether or not this was just to keep shareholders placated... well... you will

have to make up your own mind about that. Sounded like a band-aid policy to me.

It is hard to speculate on how much drilling will be required. If CCIC are non-committal to this, what hope have the rest

of us got?
My best case scenario is that the Phase 2 drilling results (combined results from drilling commenced on 8th November and

the RC drilling to commence on 4th December) - which could be anywhere between 15 - 30 holes - will be enough for CCIC to

provide an initial Geological ore body model, and at least enought drill data to upgrade the status to JORC Indicated. I

would not be expecting this to occur before beginning of March at the earliest. On the flip side... we could be drilling,

assessing, re-planning drilling and then drilling again for the next 7 months before any conclusive statement can be

given. Remember that MCG determined their Inferred status from almost 13,000m of drilling. In my experience, to upgrade a

resource takes at least as much, if not more drilling.

One point I didn't get to clarify at the meeting was how the Qtrly lists Exploration and Evaluation at $192,000, and

Administration at $347,000... what on earth was $350k of Admin for?

My take on AEX is that they have the biggest challenges ahead of the many exploration mining companies on the ASX that I

have researched. Whether my holding in AEX will prove to be fortunate or unfortunate will definately come to a head some

time in the next 12 months.

I don't recall seeing a single shareholder leave the room with a smile on their face.

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... but my OFFICIAL stance is:

Plenty of drilling results due over the coming months... keep those fingers crossed!