It's not a question of getting over the million ounces but when. Next step is 1.5M and then after that 2M in my view.
The orebody appears to be very good. Generally at shallow depth and the discovery areas appear to be within reasonable proximity of one another. It is not yet known how deep the orebody might run and that's another potential upside area.
There is also the upside in the new areas that have produced very good results but have not yet been drilled extensively. These could be particularly interesting.
My view - may be wrong - is that there should be more upside in this stock than many of the other West African juniors. Whether that turns out to be the case is another matter.
But if you look at things on the EV/Oz measure this stock looks seriously undervalued relative to its peers.
It lies in the same greenstone belt as AMX which is just across the river.
There have also been some recent changes at Board level which may assist the SP price going forward: eg, the ex AMX chair moving from AMX across to AZM.
All of these factors IMO mean that this stock should undergo a re-rating hopefully sooner rather than later. But one never knows with the vagarie of the markets.
AZM at its current EV/Oz is valued not that much more highly than AMX if one uses its AMX's current SP and factors in a resource size of 4M - 5M Oz.
Perhaps part of the lagging SP is to do with the market waiting for it to cross the 1M threshold at which many orebodies in West Africa become commercial.
I thought the Indaba investor presentation was an excellent information document.
AZM Price at posting:
23.0¢ Sentiment: Buy Disclosure: Held
