Great positive annual report released late Friday. Aztec well on the way to be an Iron Ore producer, also majority of Iron Ore sold already with potential increase in reserves through further exploration on island. This stock is definately undervalued...
Dear Shareholder,
It gives me great pleasure to confirm that the Company’s efforts during the year have culminated in the completion of the successful Bankable Feasibility Study (BFS) for the Koolan Island Iron Ore Project.
The BFS, which commenced in late 2004, has concluded that the Project can sustain a financially
attractive mining operation, supplying approximately 4 million tonnes per annum of iron ore to the market when in full production. As announced to ASX and AIM on 8 August 2005, based on 29.1 million tonnes of saleable iron ore, the BFS forecasts a net present value (before interest and tax) of A$217 million at a 10% discount rate and an Internal Rate of Return of 39.7%. The initial capital cost of A$108 million includes mine development costs of A$26 million.
Due to the very encouraging result of the BFS, your Directors have decided to proceed with preconstruction
activities in the remaining months of 2005, which include detailed engineering design, selection of preferred contractors, financing arrangements, finalisation of sales contracts and agreement with Traditional Owners.
Subject to receiving various Government approvals, mining permits being granted and Board approval of funding arrangements, I expect construction of infrastructure and mine development to commence in early 2006 and the first shipment of iron ore to take place in late 2006.
Also in the new year and after being granted the appropriate mining leases, we shall continue our
exploration programme on Koolan Island to identify additional iron ore resources. Completed in August
2005, the BFS took no account of exploration upside on Koolan Island which we are confident will materialise in due course.
Subsequent to the year under review, two important personnel initiatives have been instigated. Firstly, Mr Geoff Clifford has been appointed as an independent Non-Executive Director on the Aztec Board. For the past eight years, Geoff was General Manager Administration and Company Secretary of iron ore miner and exporter, Portman Limited. He has considerable experience in equity raisings, debt funding and corporate governance and will play a significant role in the development of your company into a profitable iron ore producer and exporter.
Secondly, Mr Peter Bilbe, who has been Project Manager on a contractor basis for the Koolan Island
Project over the past 15 months, has been appointed Chief Operating Officer of the Company. Peter also worked for Portman Limited as General Manager Operations for Portman’s Koolyanobbing and Cockatoo Island iron ore projects. With his extensive experience in managing mining operations, Peter’s appointment as a permanent employee will add great value to your company’s future operations.
Regulatory focus continues to play an evolving part of our business with the “Principles of Good Corporate Governance and Best Practice Recommendations” established by the ASX Corporate Governance Council and published by the ASX in March 2003, being adopted during the 2003/04 financial year and updated prior to finalisation of this Annual Report. Our Corporate Governance practices are outlined in the Corporate Governance Statement contained in this report and further detailed information is available on our website.
On behalf of the Board, I would like to acknowledge and thank our management team, contractors and employees for their respective contributions during the year which allowed your company to achieve a significant milestone. I would also like to thank Mr Brett Matich (who resigned as a Director and Executive on 21 September 2005) for his contribution over the past few years and I wish him every success in his future endeavours.
Shareholders are invited to visit our website (www.aztecresources.com.au) or contact myself or
Darryl Edwards (Company Secretary) at any time to obtain further information about your Company.
Yours sincerely
Ian Burston
Chairman & CEO
AZR
aztec resources limited
