looking into 2012

Today's ann confirms that the main focus of AZM over next 12 months is to expand the recourse. Hence, a massive 150km of drilling has been scheduled. Aim is to discover gold in several new areas and expand gold resource in the most promising of earlier discoveries. So what can we expect in 2012?
1) More widely spaced drilling will (hopefully) produce more shallow discoveries.
2) Aim is to demonstrate that the tenements held by AZM contain numerous deposits across a wide area.
3) The resources defined will be in the 'inferred' category and a LOT MORE drilling will be required to convert these into proven reserves.
4) AZM will go-ahead with DFS in one of their deposits.

Implications
1) I reckon chances of finding more shallow gold is high. Hence, a resource (not reserve) of say 2.2-3m ozs by end CY2012 is a 70% possibility imo.
2) The single DFS due in 1QCY2012 is important because it will illustrate the viability of mining AZM discoveries. No use finding gold if it's not payable. The shallow deposits, reasonable infrastructure, cost of labour etc make me hopeful that cash-cost in $450-550 range is the outcome.
3) Massive drilling programme alone will burn through the remaining 21m cash over next 12 months. Clearly, AZM will need to raise capital to pay for a processing plant. Could be a combination of SPP and loan. I hope its not 100% capital raising as dilution hammers longer-term holders. A good DFS will ensure banks are willing to finance project albeit with hedging in place.

So what will SP do? It will be affected by 2 main factors imo.
a) grade of future discoveries. If these can be maintained at over 2g/ton investors will stay with AZM.
b) POG itself. Should POG reach/break $2,000, then SP will rise substantially.

So over next 6 months we'll have a DFS and more drilling results. Expect announcement is about April/May re how much cash is required to continue. In short term any announcement with some decent strikes e.g. 4+m @ say 14-18g/ton will add several cents to SP. Strikes in 20-25g range will see money pour-in.