With the cobalt price just hitting an 8 year high and fomo starting to creep in to the AUZ stock again. I am hoping for a 10 cent close
It would also be remiss for us not to be reminded of Xsol's 400 thumbs up post from Ben's email on Friday as well. Pasted below. Thanks again Xsol!
POST:
With all the negativity and crap being posted on HC, I took the initiative to email Ben yesterday with the following questions, and he replied back with his awesome response. This should calm all the nervous nellies who are selling for no reason AS THE FUNDAMENTALS HAVE NOT CHANGED! (Ben's response is in bold to each respective question)
Q: I was wondering if you had any insight or reason for the huge drop in AUZ SP today?
A: Nothing has changed at AUZ – the Sconi Bankable Feasibility Study remains on track for a Q1 2018 delivery, results from the Flemington resource expansion drilling are also anticipated to be released in Q1 of 2018, and the Thackaringa results remain on track to be announced in December 2017.
Given the sheer volume of misinformation I have had to correct from people quoting statements taken from Hot Copper, I suspect that there are people out there believing the crap that a handful of down rampers are spinning on the Hot Copper forum rather than taking a more objective view and using the company’s ASX announcements as the basis for their investment decision. After all, all Australian Mines’ ASX announcements are reviewed (and approved) by the geologist at the ASX before they are released.
Take the spin about the head grade at Sconi for example. The story being peddled by the Clean TeQ shareholders on the Australian Mines’ forum (I have no idea why the CLQ guys are active on the AUZ thread – perhaps they a little bitter about overpaying for CLQ shares when they could have bought AUZ shares for a discount).
There are different methods for estimating an overall mineral resource grade and an expected feed grade. When estimating the size of a mineral resource, a deposit is considered to be a single ore body zone. For the Sconi Project, the Mineral Resource estimate was calculated based on the Sconi deposit as a whole. The deposit contains both nickel and cobalt, each in varying grade levels. Some areas of the deposit contain high-grade cobalt and some areas contain low-grade cobalt. The same applies for nickel. In practice however, a deposit is not mined as if it is a single ore body. While lower grade ore and dirt is stockpiled, it is the higher grade ore material that is targeted, mined, treated and processed. When high-grade ore is processed, the material fed into the plant is of a higher grade than the overall mineral resource grade estimated, which includes the lower grade ore and dirt. As a result, the expected feed grade is a higher percentage than the overall Mineral Resource grade.
The Sconi Project contains two zones of high-grade cobalt which will be targeted and mined. While the mineral resource estimate for the Sconi Project is 0.06% cobalt, these zones contain average feed grade of 0.11% cobalt.
Q: Also, are you in a position to provide any update on when the announcement for the Geophysical Survey will be out for the Thackeringa cobalt project, and what your prediction will be on it considering the recent great announcement on COB for their Thackeringa cobalt project, and now they are in a TH as they are looking for funding.
A: The Australian Mines and Cobalt Blue geophysical survey is the same survey. AUZ and COB both contributed to fly a single survey and the data is being processed and interpreted by the same geophysical consulitng firm in Melbourne.
I can tell you now that neither COB or AUZ has received the final data from this survey, nor have AUZ or COB received any interpretation from this survey.
I suspect COB based their announcement on the raw field data as they felt a need to rush some news into the market. However, AUZ would rather wait until we have the final data that has been subject to the appropriate levels of QA / QC processes before reporting the results to the market. After all, it would be awful if one of the ‘targets’ on the raw data provide to be a survey artefact rather than being a real target. As a geophysicist I have seen quite a number of ‘targets’ end up being metal sheds or scrap yards because a company relied on the raw data rather than the corrected final data.
COB have their AGM tomorrow. I suspect that was the driver for releasing the information early.
AUZ is on schedule to release our full interp in mid-December (and expect an announcement from COB around the same time on their final data too)
Q: Any update on the Demo Plant, and when are we looking for it be online. Once the demo plant is up and running, when do you think the 9 potential off takers will be receiving the sample end product?
A: I am in consistent communication with our potential off-take partners as you would expect.
If I was looking for someone just to buy the cobalt and nickel sulphate products from Sconi, I could sign a binding off-take agreement right now. But I am not looking for a customer otherwise I would have just sold 100% of the product to someone like VW. Instead, I am seeking a partner to assist fund the construction of the plant. This takes a little bit of time but I suspect that Q1 of 2018 looks like the sort of timing on this.
Q: There are 9 potential off takers from what we know of from the previous announcements, is this still the case or has the number potential off takers increased?
A: We are almost being approached by companies regarding a potential off-take discussion. The issue becomes sorting through the serious ones from the tyre-kickers.
If I entered into discussions with everyone who expressed an interest in Sconi, I would probably have 20 discussions underway at the moment. But it’s better to focus on the best 9 or 10 potential partners, which is the strategy adopted by AUZ. I remain confident that we will get some of these across the line.
These are multi-billion dollar deals so they will take some time to complete. Safe to say, though, that they are progressing.
DYOR
Expand
(20min delay)