"Growler, not a disparaging comment but are you researching Aura as a potential investor or sitting on the sidelines to see how this plays out?"
Nothing disparaging in asking. Happy to answer and elaborate.
In my first post on AEE I disclosed: "I am interested in AEE as a U-spec. Unfortunately, it seems management focus is on V and the possible IPO. Further, I hold AVL and Largo."
The SP at the time of my post was 2.1c and was 2.5c when I put AEE on my watchlist. So anyone thinking I am talking this down to get a better price is a little deluded.
In my experience, it seems it is far easier to talk a stock up and encourage others to hold/buy as people off-load. Those left holding are called bag-holders/baggies. Is there an equal but opposite terms for someone selling on a "tree-shake"/irrational fear? I am unsure.
The SP has fallen 20+% since the call re: Haggan IPO whilst the V price and SP of higher grade miners and hopefuls has more than doubled.
One reason could be the market not believing the Haggan blurb of high-grade. Haggan has an inferred resource; nothing indicated or measured. AEE bulls seem to be posting financial cases based on a measured resource. Additionally, the review of historic test work says "V... probably hosted in in mica mineral roscoelite".
Look at the recovery rates (see image) on 0.42% grades and compared it to others with 1+% grade and 87-93% recovery. True, Haggan recovery is yet to be optimised.
So here we have AEE outside the norm re: ore, with an inferred resource. of lower grade and lower recovery. These are immutable facts. Do people read the announcements or just block out anything which doesn't confirm the bias?
Further the SS seems delayed. On 31/7/18 the company said: Process flowsheet and mass balance development is expected to be completed by early August 2018 and draft scoping study completed by late August 2018."
So where are the announcements and why is it late? Is there a spanner in the works? The "spanner" could be positive or negative. Positive could mean they are rejigging their strategy. At the moment, it is all about "battery metals" for AEE. And yet the driver for V price/demand is rebar. 98% purity is required for rebar at lower cost/Capex compared to 99.5% purity for battery metals. I think a phase approach is best.
So if the market is believing the AEE Haggan story, then why is the SP falling? The general consensus is the "capper". So what is the motivation for the capper? I hinted in a previous post: https://hotcopper.com.au/posts/36120445/single
1. Capping to accumulate.
Maybe. But we haven't seen any recent sub holder notices which doesn't necessarily mean anything: notices are often filed late or holdings can be disguised in multiple accounts.
2. Capping for a CR.
This is a common reason. Is it likely with AEE? In the previous quarterly, AAE spent $1.224m against forecast of $710. For September they forecast $640k with admin costs of $160k. AEE are averaging $600k per quarter for admin. The longer it takes for the IPO spin-off, the more expended by AEE, the closer a CR.
3. Capping to prevent the IPO.
I have touched on this previously without spelling it out. At the current MC, AEE could not hope to spin-off Haggan. What if Haggan is the jewel in the crown as suggest by others? Why would SH want the Haggan spin-off? It doesn't make sense to me. If Haggan is IPO'd, then SH here cannot vote on resolutions or attend the AGM as they can with AEE. Further, SH's will only see value of Haggan if the markets are efficient. That is, a 10% rise in Vanadis, will see a direct reflection in the AEE SP. Maybe the capper disagrees with the IPO and would for it to stay directly under AEE.
I will continue to sit on the sidelines until I have a clearer picture of Haggan in terms of IPO and the value of the resource compared to other plays. The SS could remove a lot of my doubts. As I said, the SP was 2.5c when I first looked into AEE. Time may derisk AEE. I have changed my sentiment to hold. Why not hold at 1.9c? Minimal downside IMO unless there is a CR. We will know within 2 weeks of when the next CR is likely.
PS. I do not understand why people respond emotionally to a contrarian argument. You responded to one of my posts with great research including Copperstone. We are all better off for this knowledge and maybe my post was the trigger for your research/sharing the info. Cheers.
AEE Price at posting:
1.9¢ Sentiment: Hold Disclosure: Not Held
(20min delay)
