Was checking back earlier Azure announcements to see what else...

Was checking back earlier Azure announcements to see what else they tell us about ERW’s likely progress and timelines for how quickly SP’s can change.

One quote jumped out at me from Tony Rovira on 12 Oct 2020 when they issued their first announcement of a major find after a Trading Halt on 9th. Tony said ..

”The Andover project area does not appear to host sulphide-rich sediments, graphitic shales, conductive overburden or other characteristics that may generate false signatures for the EM surveys, and their absence is exciting given the size, depth and intensity of the conductors we have identified and are targeting”..

It’s a great comment. Considering both the proximity of Andover West (AW) to Andover, and the geological similarity, this quote reminds us of the potential at AW.

Looking at timelines, it also appears that Azure had about 2-3 weeks between commencement of actual drilling and hitting the first intersection. Given that ERW started around 1st Feb after some issues with the site’s preparation and a mechanical problem, we are now about 3 weeks in and thus at the point in time when Azure first went into a TH on their first campaign. Let’s hope that indicates an ERW TH or Ann this coming week. And if Tony’s comment holds true, any Ann should be positive !!

Next what does Azure tell us about possible SP movements for ERW?.

1. in the months leading up to Azure’s acquisition of 60% of Andover from Creasy Group, AZS’ SP was about 5-9c. MC was about $15m (noting they had some gold assets back then)

2. In July the SP jumped to 16-17c after the acquisition was announced. MC was then about $45m.

3. When they announced their first major Ni hit the SP jumped to 36c then to 90c. I believe they had 275m SoI back then so at peak they had a MC of about $240m. To run from acquisition (MC 45m) to the peak was 4 months. The elapsed time from the start of actual drilling to the peak of the SP was about 6 weeks. (Drilling to first hit was 3 weeks). In the 6 weeks they had two trading halts for major announcements and four other announcements for successive so at peak finds in their first 5 drilled holes.

4. They then over-cooked (in my opinion) a Placement at 72c for $37m leading to 20% more shares. The SP never regained the 72c. Today the SP is 31.5 and MC $103m.

What does this suggest for ERW “IF” they hit with similar results over next month or so? The market is less bullish now in general but on the other hand ERW owns 80% of AW. And it appears the targets at AW are shallower (easier to mine thus more economic value). AZS is a bit more advanced with Li hunting and partnerships but it’s very likely AW has similar qualities or Li and has Errabiddy.

All in I’d say that if AZS can sustain a MC pf $100m with its rather deep hits and 60% ownership, then ERW should be able to manage the same MC or better after a few results. Based on the current MC of $13m that implies an 8X could be in store or more with a significant hit and market enthusiasm. That brings $2 a share into view over next month or two if they hit successively. Possibly more.

Where does a placement or cash raise sit in this? AZS did their’s six weeks after the first hit. If set them up nicely but seems to have been a disaster for the investors. For ERW a good thing is they can raise $4m in cash thru options in the 40-50c range as the price rises. Obviously there’ll be a Raise but hopefully not a panicky monster like AZS.

sorry it’s long. Fingers crossed