feas

Any idea what see Feas will show ?

The bottom in my opinion would be only the stand alone mobile plant with an output of 200.000 tonnes per annum as mentionend in the annual report.

Starting at the Beta deposit with 4,5 g and 95% recovery would bring about 28,000 oz.
With cash costs of about 600 AUD/oz, the current price of gold of about 900 AUD/oz, the cash flow after tax will be approx 5 Mio AUD per year in the first 9 years.

What will we need capex for this project? Integra for example has something about 45 Million, but the operation is 5-6 times as big as the above assumption of 28 k oz.

When I calculate with 8 m capex and 8% discount interest the NPV will be about 40 Mio AUD.

I guess the valuation will be higher due to the very very long mining lifecycle. When we calculate with an SP/CF ratio of about 10 this project should be valued with 50 Mio AUD.

Narnoo Gold, the uranium asset and the nickel assets should be worth in this early stage level maybe 15 m AUD.

So we would have a marcetcap target in total after successful SOP about 65 Mio AUD.

Currently AAM have 95 m shares, at a SP of 0,315 a marketcap of 30 Mio AUD, included 6 mio Cash.
Let’s guess they need furter 5 m cash raising to go into production. I hope the will finance it after a good newsflow (Narnoo-Desertex Spin-Off, Feas, Nickel JV) somewhere in the 40ies, so we could see another dillution of about 13 mio shares.
-> in total 108 mio shares after dillution (excluded the options, I don’t summarize these in my calculation cause I also have no positive cash/exploration effects included).

65 m / 108 k shares = 60 cent target in Q1/Q2 2009

But I hope we will see more than 28k oz output per year. In my opinion the management should invest in the standalone plant and should on top of this option treat further ore in a toll-treatment agreement. So AAM could have the highest possible output and I’m sure that would be the best solution to maximize shareholder value.

Regards
Maigret