STT FA LONG AMI
AMI - Aurelia Minerals SP .31c
Current Shares on issue: approx 700 mill post acquisition to be completed in early Jan 2018
Cash Position: approx 35 million
Catalyst - trading on a PE of 2.5 versus a PE of 15 for its peers.
Located: Cobar NSW Australia
Infrastructure: two operating mines one of which has been operating for 25 years.
Net Debt: 129 million - Glencore have provided the debt facility to get these guys into production, they are also substantial holders.
Top 6 Holders:
TIN AUSTRALIA - TDK RESOURCES - 7.11%
GLENCORE - 6.68%
NEW GOLD & ASSOCIATE BODIES - 19.9%
TRIBECA -5.12%
SINGPAC -5.38%
PACIFIC ROAD CAPITAL MAN -27%
TOTAL TOP 6 HOLD 71.19%
AMI is a mining company that produces Gold, Zinc, Silver, Lead and soon also Copper with two operating and profitable mines: Hera and Peak both located within 150 kms of each other in the Cobar basin of NSW.
AMI on 100% of the infrastructure that is worth hundreds of millions itself as well as enviromental bonds on the facilities.
The group recently purchased the Peak Gold mine for $58 million US, this mine has been operating for 25 years and has produced over 100k of gold per annum for the last 5 years at an AISC of AUD 900 - 1100.
The groups production guidance for the remainder of the financial year is 125,000-140,000 ounces of gold equivalent with an AISC of A$900-$1100, next FY they have a target of between 185,000-210,000 oz at an AISC of A$900-A1,100.
These production numbers at a conservative gold price of $1600 AUD per ounce and equal approximately 54 million in profit for the remainder of this financial year or 108 million if you annualise.
Next year on the guidance given equates to approximately $120,000,000 in earnings, these earnings should conservatively continue for a minimum of 5-8 years.
The mine life is currently sitting at a conservative 5 years however the company has mentioned in several annoucements that it is looking more like 8-10 with over 1,385 kms of exploration land around the two production plants.
An institutional placement was recently completed to fund the Peak mine purchase closing heavily over sub and raising 70 million AUD. Also worth noting that AMI have twp Non executive directors that currently hold roles with Glencore & Pacific Capital mamagnement, as well as the former manager of the Peak mine.
At an extremely conservative PE ratio of 5 for the next financial year the share price should be .90c (.18c per share in earnings) (if you apply the industry average of 15 it is $2.70
This is all my opinion, i am not an adviser and this is not a suggestion to buy or sell share, this is purely my opinion that could be wrong. All information has been taken from recent annoucments by the company and quarterly activity statements - check all figures yourself and always to speak to a licnsed adviser etc etc....
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