With many explorers the biggest issues they face is capital to explore, then the onging costs of drilling, if nothing shows as they drill. Dilution is massive and if they do find something of economic value they are unable to unlock it due to the massive costs it entails. They simply do not have the resources to make it feasable .So lets look at AQD business model. Lets get a massive player in the industry in this case S32 to do a partnership with us to explore. Not only that , we are not "sharing the costs " as would a normal partnership operate, lets have them PAY for the costs of drilling. That in itself is a great model. But hey lets go 1 step further , lets ask them to pay 15% as an admin fee to cover all staff costs etc on top.How good is that ? Now some may say AQD are giving away too much and only will retain a small percentage 20-30% of anything commercial "tier 1"Let me discuus another scenario : If we did NOT have the Strategic agreement in place with S32, where would AQD be situated.?Well in the last 5 years to do the amount of exploration we have conducted , we would have diluted the share registry by billions of shares to pay for it .We would not be involved in 10 or more projects , we could have never gone the next step in many of the projects , so we would be like so many other explorers that "if" they managed a good drill core, what next ?As I see it, my own theory , and not founded on anything but my own ideas, is : Out of the projects we are involved in S32 want a big one.. What if we start looking like we have hit one. I dont think S32 would want to be hamstrung , and held back by a mining minnow to get the project to fruition. I think they would simply write a "petty cash cheque " for say $50 to $100 mill minimum to take over the 100% of the project , and allow AQD to continue to explore the other projects. That could equal a 6 c to 12 c cash return to investors
Or they could simply issue some s32 shares to AQD in liew of cash, it would have the same effect on our share price, and we also get the upside of s32 share price increase.Alternativly they could buy us out completely, and again, offer cash, or shares. Either way AQD is in a position as explorers go , to be as risk mitigated as posssible .Its been 5 years since the agreement was inked, and they renewed it in Dec last year. If they were not happy with what AQD is doing or the joint venture projects then it would have been terminated. The very fact mostly we drill and then advance onto more it a massive vote of confidence for Ausquest.As shareholders (those of us who are) looking at the top 20 shareholder list is always an important factor in my opinion. Nearly 50% is top 20. So is quite tightly held, a positive in my book. The shares the directors have are not just free issue shares, they have PAID for them. The last cap raise $400 k by no 1 holder and $50 k by Graeme . Also a positive.When you drill down (Pardon the pun) 5 or more of the top 10 holders are directors or geologists working for the company. The geologists are the coal face of the company, who are out there, looking tec, and it would seem are content to have plenty of shares in the company.AQD type of investment is not for all. Sure its risky, 1.9 cens downside , and endless upside
. On AQD website Barry Fitzgeralds report is quite informative , take time a have a look, read it, read the information on all our projects . This is why I have come to the conclusion where we sit right now with all factors taken in consideration we are undervalued. I have for that reason invested accordingly .Do your own research, and its great having other posters with "technical knowledge" sharing their thoughts on Ausquest .
