RE:RE:RE:RE:RE:RE:AZX NR of 28 March 2018Here's that repost (march 26 - 9:13 am) written by GH that I made reference to in my post this afternoon. It's very informative. Hope people have a chance to read it. goldopp
RE:Reserve Estimate
GB&U,
My previous post was not proof-read last night, hence there are some spelling errors. Usually I would read the post before pushing the "post" button, but because of the rush trying to catch CBS "60 minutes"....Hope that you all can detect the errors and ignore them.
In addtion, I did not have a chance to complete the other half of the story. It's the analogy to the chop-shop, where they would take apart an expensive car and sell the parts and make a lot more money than trying to sell the whole car (which can easily be tracked down).
For AZX, it could be devided, for example, in 4 chunks (you could do it diffrently).
1. Non-core, out-of-pronvince: WIM, Hudvam, etc...1MozAuEq...name your price, this could be spun off, or put on the market for sale to get some cash. As a rock bottom price, let's say the BoD would let it go for $25 -30M (to make it equal to PRB cash hoard).
2. JV with PRB: PRB would be a good candidate for this east end of the Cadillac Break (which includes Sleepy). So, if they want to upgrade this JV to 100% PRB, i.e. if AZX want to sell this part to PRB, how much could AZX get? ($10M, $15M,...may be $5M cash plus stock ?). Note: Sleepy has an Inferred resource of 0.307Moz x $30/oz in-situ (rock bottom price to get a floor price) = $9M plus the premium for future potential this large piece of property. Bet that Dave Palmer would be interested to get 100% rather than 60% or 70% after spending some $7M plus.
3. Akasaba: This has 0.381Moz high grade (~6gpt) and 0.146Moz OP (ave: 1.6gpt, better than Cote Lake, so IMG would be interested?) for a total of 0.527Moz (x $30/oz in-situ = $16M floor price) plus the premium for future potential.
4. Orenada: This is the flagship where the updated RE would be the focus of our discussion. How much better the deposit will be compared to the 2009 RE?
x2 = 1.0Moz
x3 = 1.5Moz
x4= 2.0Moz
Name your price $xxx/oz in-situ (from 30 to ???)
If we add up all the parts from 1 to 4 we could end up with quite a few $M. Have fun with simple math.
Cheers,
GH
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