i reckon i know whats coming, page-2

Pattersons out with a note:
Brave given the guys they put in at $1.30:

While the investment thesis for AMX has faced significant headwinds over the past 12 months we believe the market malaise over the past two weeks has seen the stock sold to levels ($0.40/share) where its resource base is valued at discovery cost (direct and indirect of circa A$14/oz). Little value is being placed on an exploration portfolio that has been significantly de-risked, is four years advanced from initial discovery and which contains a significant and very likely commercial gold resource. Ahead of market sentiment turning now is the time to be accumulating the stock. BUY PT $1.09/share.

· Management focussed on building oxide inventory. AMX management has re-affirmed the exploration prospectivity of the Batie West gold camp and outlined plans to build on the current 3.1Moz Au resource and its focus on the Doubema and Foumbiri oxide deposits.

· Sell off creates opportunity. AMX has been caught in the downdraft of (1) risk aversion and downgrading of the West African gold sector, (2) concerns on metallurgy, (3) negativity surrounding director and management changes and (4) a takeover / corporate sale process which fell flat (no sufficiently high bids).

· Cheap on an absolute and relative basis. AMX is now trading on an enterprise value (EV) per ounce of $14 which is only 30% above its direct discovery cost of $12/oz. Including indirect costs the company is trading on par with the risk of exploring and a huge regional ground holding ascribed minimal value. While acknowledging a lacklustre market and disappointment felt by most when low recoveries from deeper ore zones at Batie West were announced the recent sell-off has left AMX trading at extremely cheap levels.

· Valuation and Catalysts. Patersons’ AMX valuation is $1.09/share which includes dilution for a future $100m equity raise at 95% of the current share price. This is a DCF derived cash flow valuation based on recovering 1.86moz Au in a 3Mtpa mining scenario commencing in 2015. Look for (1) exploration success at Foumbiri and Doubema (2) development progress and BFS update and (3) consolidation in West Africa gold juniors to close the gap between share price and valuation.