from a recent site visit see the below...people dumping the stock in panic last week will be disappointed to see when people start to buy the stock again at market and get this back to 50-55 cents in no time......as you can see the depth in the stock we can see this stock move 20-30% on very little volume...
We visited Auzex?s Bullabulling project west of Coolgardie. The visit included a detailed presentation, and a tour of a number of existing pits.
Low grade, consistent geology: We were impressed by the apparent consistent and predictable geology along a 6km trend at Bullabulling, which would make mining predictable.
Resources:Auzex are anticipating an interim resource upgrade in the next few weeks. The upgraded resource is designed to convert Inferred resources into the Indicated category. Auzex will also be lowering the cut off grade to 0.5g/t gold, which will see an increase in tonnes and contained ounces. A further resource upgrade will occur in November 2011, which Auzex is hoping will include results from areas outside the current resource boundary, as well as further conversion of resources to Indicated.
Conceptual mining operations:Potential mining at Bullabulling is all about cut off grade; above 0.7g/t gold, the resource becomes complex, and complicated by structure. Below 0.7g/t gold, Auzex is anticipating a bulk mining operation, with potential 5-6Mtpa processing capacity from a pit 4km in length, and a second pit 2km long north of the highway. Management considers the grade too low to justify moving the highway. Management are benchmarking costs to the low cost Regis operation, which if achieved will generate over 50% margin at current prices.
Exploration potential:Auzex are currently testing potential southern extensions to mineralization at Titan. Should this exploration strategy prove correct, there is potential for additional ounces south of the Titan pit. There are also geophysical targets to the south east, which warrant testing. Potential for an underground deposit will be contingent on a change in geology at depth to a unit capable of hosting higher grade mineralization. Current drilling shows the footwall sequence appears to persist to depths of 400m below mineralization.
Corporate Issues:Auzex is currently involved in a hostile takeover by GGG Resources. The uncertainty is weighing on the share price, and management is frustrated with the situation. Despite the corporate issues, the project is proceeding as planned.
AZX Price at posting:
36.5¢ Sentiment: Buy Disclosure: Held
