Share Name Share Symbol Market Type Share ISIN Share Description
Aurum Mining LSE:AUR London Ordinary Share GB00B00T3528 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 1.85p 1.70p 2.00p 1.85p 1.85p 1.85p 638,030 07:55:56
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Mining 0.0 -0.2 -0.1 - 3.23

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Date Time Title Posts
08/7/201619:07Aurum MIning plc - 2013124
28/8/201308:56Aurum Mining - Exciting Times Ahead1,211
22/7/201009:33Aurum MINING - Starts Trading 07/05/04....45
16/7/200820:38civil case2
03/2/200821:40AURUM ----Russian play ----dealing today194

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26/09/2016 11:40:592.0024,550491.00O
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Aurum Mining (AUR) Top Chat Posts

DateSubject
26/9/2016
09:20
Aurum Mining Daily Update: Aurum Mining is listed in the Mining sector of the London Stock Exchange with ticker AUR. The last closing price for Aurum Mining was 1.85p.
Aurum Mining has a 4 week average price of 1.09p and a 12 week average price of 1.02p.
The 1 year high share price is 1.85p while the 1 year low share price is currently 0.53p.
There are currently 174,350,286 shares in issue and the average daily traded volume is 1,285,454 shares. The market capitalisation of Aurum Mining is £3,225,480.29.
23/10/2012
08:52
commie bstard: Well they have a lot of followers in the sector, I think buying and selling influences the share price, and not many shares to go round here. Mining Maven subscribers get their communiques and form their own conclusion. I have done quite well from some of their info this is what they said. http://www.miningmaven.com/mining-blog/showing-up-on-the-radar-our-october-pm-stock-picks/ AURUM MINING (LON:AUR): Investors with long memories may recall this company from its troubled Kyrgyzstan days; but since then it has had a major overhaul and is now refocusing on gold and tungsten in North-Western Spain. If latter day investors haven't as yet grappled with the huge prospectivity the region has to offer, the Romans certainly did; using it as a source of material gold production for the Empire. Now, with 118million shares in issue and a market cap of just £2.8million, the market has yet to pick up on the surprising and hugely positive first set of drill results from its gold licence interests or its recently completed tungsten deal. And with a follow up drilling programme currently underway at its Peralonso project, we are eager to see what this will deliver. @theminingmaven: Aurum Mining LON:AUR serious potential broker note from Fairfax. http://t.co/58jHg0LD
07/2/2011
21:34
awertr: guys This is not a ramp but check out SRO The share price is 7p but cash reserves in bank is 12 pence per share. Thats not all! SRO also have gold assets and lignite assets The company is exploring options for these assets. Lots of possibilities for cash rich companies just now
24/9/2010
16:29
scotswhaehae: Thought I'd just post a friday pm offering on the day the 15p cash circular is posted What do we guess the share price will become ex the 15p ?? Best wishes all..its taken a while...stick your winnings in BAO? (no advice intended!)
12/6/2010
07:07
flinnyourin: I was shocked to see that KIBO MINING after there fund raising of £1.2 are left with only £629.000 quote `Listing on Aim's not cheap, and now that the company's shares have arrived on Aim it's sobering to note that having raised well over £1 million as recently as March, there's now just £629,000 in the kitty`. At least all our money is in the bank in US DOLLARS ready to pick up a bargain, i know the well conected and sensible management can do and i do`nt think we have long to wait now, a good investment could easily push the share price north from here.
01/4/2010
10:26
flinnyourin: Skyracer - From dec intrims, The Board is conscious that Shareholders want to see Aurum emerge from this current phase as a stronger company and whilst it is aware that this is best expressed by a strong share price, it is also cognisant of the fact that there is not an unlimited time period in which this needs to happen. As outlined in the recent Circular, it is the Board's intention to finalise its work on the proposals that it is currently assessing and complete the appropriate work required in order to make a recommendation by the end of the Company's financial year.
18/12/2009
18:12
flinnyourin: That would be nice if that happened FQR714BHP, as i have said before if the share price stays too low what could stop an investment company buying us out at or around the cash price of 19p and getting 10% of a gold mine for free with no development costs (which could end up a very good earner for them) the average price of Aurum before the court case was £1.10 so 10% = 11p and gold has shot up sinse then so lets say 15p and when this goes into production it will be worth alot more than 15p, so the bid price of 10.5p looks excepionally cheep and i cannot see it being around for long.
15/9/2009
22:11
lr2: Robo, this July note from Arbuthnot should explain the interest here. Aurum Mining Upgraded to Buy From Reduce By Arbuthnot - Target price 15p Business Financial Newswire Following the return of cash to shareholders in April, the management of Aurum has been working on crystallising value of the Andash copper / gold deposit and the results of this were announced this morning. Aurum has granted an option over the Andash deposit and the mining equipment to Australian listed Kyrgyz explorer Kentor Gold [KGL]. The net benefit to Aurum would therefore be $13.8m in cash. In April, following the return of £16m to shareholders Aurum had £2m in cash; the current share price equates to a market cap of £2.3m, thus the prospect of an additional £8m ($13.8m) should see the shares much stronger today. The offer along with the existing cash equates to approximately 20p per share. While there is obviously some risk in Kentor completing a fundraising and exercising the option, we believe there is a better-than-even chance of this occurring. It is also a positive signal regarding the potential value of the project and associated plant. Analyst lifts target price on the company from 5p to 15p and moves to Buy (from Reduce).
01/4/2009
11:44
davius: I'd be very surprised if the court case were anything other than a formality. The question is what will the AUR share price be tomorrow? With 33p heading back it would be expected to open at 2-4p. Yet with a further 4p per share in cash and a 1m+ oz gold mine that must be undervalued. Virtually my entire investment should be repaid so I think it's worth holding on to see if they can come up with a deal on the mine, and whether they will be able to make a further capital repayment to shareholders as previously suggested. Once the 33p has been taken out this becomes a highly geared investment. If we were to assume fair value now might be 35-40p a share, that would become 3-7p a share post repayment. Small movements in the perceived value will have a marked impact on the share price. So perhaps a chance to double any investment (or halve it of course) as of tomorrow.
19/3/2009
12:45
lr2: Nope. Don't agree. And you put a question mark at the end of your post which indicates that you do not know for sure. AUR share price has risen this morning. That should tell you something.
17/7/2007
19:08
jimbob: >>>For anybody interested and for what its worth a recommendation on UK-AnaIyst.com today Subject: Tuesday's recommendation on UK-AnaIyst.com comes from GE&CR and is to buy Aurum Mining at 101p with a 192p target 17th July 2007 Contact: Robert Tyson robert@t1ps.com 0207 562 3370 Aurum Mining Plc - Speculative Buy at 101p – Target 192p Key Data EPIC AUR Share Price 101p Spread 100p – 102p NMS 3,000 Number of shares in issue 47.99 million Market cap. £48.47 million 12 month range 84.5p – 134.5p Market AIM Website www.aurummining.net Sector Mining Exploration Contact Mark Jones (CEO) 0207 478 9050 Shares in Aurum Mining were marked sharply lower in late May on rumours that it was facing political difficulties in the Kyrgyz Republic. These rumours were false but they have presented investors with a significant buying opportunity. Aurum is an AIM listed mining exploration company which is fully funded to take its significant gold and copper resource in the Kyrgyz Republic into production by next year. In the future, the company aims to expand its core project at Andash and is also planning to acquire other gold and minerals projects in the Former Soviet Union (FSU). Having completed a bankable feasibility study at the end of last year on Andash, it aims to bring the first part of the mine (Zone1) into production in the second half of 2008 and following the successful placing of £30 million shares at 100 pence in February this year and the subsequent appointment of an experienced operational management team to lead the construction and commissioning of the mine, it is on the verge of a major step-change as a company. On a pre-close update announced yesterday, Aurum Mining reported significant progress on preparatory work on the construction of the Andash Zone 1 open cast mine. Over the last number of weeks, Aurum has made significant progress on detailed design work that meets the Licence's specifications, which will enable the physical construction of the mine. Road-building equipment and contractors have already been sourced, in preparation for the construction of the access road to the mine, with the company currently finalising the sourcing of the ball mills for grinding ore when Zone 1 enters into production. It is expected that construction work will start imminently with production anticipated in second half of 2008. We have valued Zone 1 on a range of gold price scenarios and arrive at a range of valuations of between 149p a share and 246p and based on current gold prices ($650 oz) we value it at 192p per Aurum share. Zones 2 and 3 at Andash also have clear exploration potential and in addition there are two other very exciting exploration areas - each of these have the potential to increase our valuation significantly. The company's flagship Andash project in the Tallas valley, in the North West of the Kyrgyz Republic, has a confirmed proven and probable reserve of 19.2 million tonnes at 1.09 grams per tonne of gold and 0.39% copper, which equates to 1.2 million oz of gold and gold equivalent. The bankable feasibility study completed in late 2006 by Wardell Armstrong International states that an open-cast Andash operation will combine low costs with high production rates and having now gained a permit to mine on Zone 1. The equity finance raised in February 2007 is earmarked to fund the construction and commissioning of the open-cast mine at Zone1 and develop JORC compliant resources in Zones 2 and 3 as well as to conduct preliminary exploration work on two other sites, Tokhtonysay and Nakhodka. The company's balance sheet remains strong with £28.3 million of net cash at year end, with the company incurring some expenditure based on design and other requirements and taking into account the lead times involved in sourcing heavy equipment and plant. The feasibility study anticipates a mining rate of 2 million tonnes per annum with a pit life of 8.5 years and an average cash operating cost of US$223 per ounce. An open-cast operation will combine low costs with high production rates resulting in a payback period of 3.5 years and an NPV of 36.9% based on Wardell Armstrong's price assumptions. Our valuation models assume a 1.2 million ounce of Au and Au equivalent resource extracted over 8.5 years, the life of the pit, with initial production of 75,000 oz of gold equivalent, rising to 125,000 plus per annum thereafter. Our models use a range of gold price forecasts, from $550 oz to $750 oz and even at $550 we view Zone 1 as being worth 149p to Aurum. At $650 oz it is worth 192p and that is our target for the shares. However since we take a modestly bullish view on the gold price and given the real scope to increase output and mine life as Zones 2 and 3 and the other exploration areas are brought into production, we see significant scope to increase that target price in due course. We initiated our coverage of Aurum on 6th October 2005 with a stance of speculative buy at 45.5p. The company has delivered on its promises and we believe that it will continue to do so and thus at 101p the stance remains speculative buy. Background Aurum Mining floated on AIM in May 2004 as a cash shell with the aim of acquiring FSU gold & mineral projects and raised £1.5 million at a placing of 47p. Its early promoter Haresh Kanebar was well known for floating shells into which projects could be reversed and had already established a successful track record in this area ahead of the Aurum flotation. Source: Aurum Mining Plc The company acquired, Kaldora Company, the owner of Andash in January 2005 for $1.5 million with all bar $300,000 payable in shares. Kaldora brought with it three known ore bodies and five exploration targets. Subsequent financings have raised £34 million at between 90p and 100p to advance exploration work on the ground and resource updates. Since taking control of Andash, Aurum has undertaken sufficient drilling in Zone 1 to show a Proven and Probable reserve of 1.2 million ozs of gold and gold equivalent in copper. The licence area, which extends to 53 square kilometres, includes a further two ore bodies and five exploration zones, offering a substantial opportunity to increase the Andash's Project's resource base and to maximise the mine life and cost efficiency of the proposed mine at Andash Zone 1. During the fiscal year ended 31 March 2006, Aurum embarked on an exploration program to test the extent of Zones 2 and 3, which lie to the west of Zone 1. Source: Aurum Mining Plc Kyrgyzstan In financial terms, gold is the most important metal mined in the Kyrgyz Republic but it also produces uranium, mercury, antimony, tin and tungsten. There has been a dramatic increase in mining activity since the break up of the Former Soviet Union (FSU). The country currently produces twenty tonnes of gold a year, compared to three tonnes a year during the FSU era, so making the country the biggest gold miner among the CIS countries after Russia and Uzbekistan, and the seventh largest producer in the world. Historically gold production has accounted for between 6% and 18% of the country's GDP. There is strong local mining infrastructure and skilled labour force available near to the company's operations in Talas Valley, and recent political changes within the Republic have taken place without creating any noticeable unrest. Source: Aurum Mining Plc Aurum has continually endeavoured to research and accumulate management information and political knowledge, whilst avoiding political allegiances. The company has sought acceptance from the Kyrgyz authorities, by following procedure and protocol, respecting and adhering to cultural norms and ensuring that the company adheres to the acceptable business processes and practices. In addition, the company has sought guidance from Dr Shirin Akiner, an associate fellow of the Royal Institute of International Affairs, who has strong experience on cultural and political transformations in the former Soviet Union over the past number of decades. Assets - Operational Overview Andash has three known mineralised zones and five additional exploration opportunities located within the 53 square kilometre exploration licence area. The Andash Zone 1 is the company's most developed asset and is set to go into production in 2008. Aurum has made further progress with other exploration zones within the Andash licence area. Five further targets have been identified by mineralogical analysis and geophysical exploration, including Tokhtonysay and Nahodka. At Nakhodka, recent geological mapping suggests a possible faulted extension of Zone 1, and at Tokhtonysay, a recent geophysical study backed up by sampling and trenching, revealed highly promising results. Andash Zone 1 In their feasibility study for an open-cast mine and processing facility at Zone 1, Wardell Armstrong International forecast that costs to bring the mine into production would be ca. $55.5 million. However on the 27th June 2007, the company announced that it has identified significant potential values from the Wardell Armstrong design and that the costs are now expected to be in the region of $48.5 million. This significant reduction in the capital expenditure on the mine is due to a combination of identifying local equipment, both new and second hand as well as managing the build of the operation internally. This has caused us to revise upwards the estimated project value for the Andash Zone 1 mine by approximately 7.5p per Aurum share. Source: Aurum Mining Plc That significant capital cost can now be funded entirely from equity as a result of the successful £30 million placing at 100p completed in February 2007. The fact that Aurum needs to raise no debt for Andash means that it will not be forced into entering the hedging programmes which lenders demand. The funds from the placing are also being used to support Aurum's exploration programme within other areas in the Andash licence – Zones 2 and 3. Initial production from Zone 1 is expected in 2008 with output rates reaching 2 million tonnes per annum by 2009, so establishing Aurum as a low-cost producer with significant additional exploration opportunities within the Andash licence area. Source: Aurum Mining Plc The Wardell Armstrong International (WAI) bankable feasibility study completed in December 2006 confirmed a Proven and Probable reserve at Andash Zone 1 of more than 1.2 million ozs of Gold and Gold equivalent in copper giving an in-ground value of over $750 million. The feasibility study stated that an open-cast operation would combine low costs with high production rates: a measured and indicated resource based increased to 19.2 million tons (12.5% increase) at 1.09 g/t gold and 0.39% copper, a mining rate of 2 million tonnes per annum with a pit life of 8.5 years, a stripping ratio of 0.8 tonnes of waste to 1 tonne of ore, a payback period of 3.5 years and an NPV of 36.9%. These assertions are based on WAI's conservative mineral price assumptions. In June 2005 Wardell Armstrong International generated a digital Resource estimated for zone 1 Source: Aurum Mining Plc With the award of the mining licence, completion of the bankable feasibility study, and finance now in place, Aurum has moved swiftly to secure the services of an experienced operational management team, augmenting the existing management team, to lead the construction and commissioning of the open cast mine and bring Zone 1 into production in the second half of 2008. The cashflows generated from Zone 1 will support aggressive exploration of Zones 2 and 3 at Andash and the other prospects. The operational management team put together in the spring of 2007, consists of Operations Director, Jeff Geissman, Financial Controller Andrew Howson, and Project Manager Norman Livingston. This team has significant international experience in mining and other projects delivery, including projects in the FSU. Exploration of Zones 2 and 3 Aurum has already undertaken material exploration work to test the extent of Zones 2 and 3, which lie to the west of zone 1 and has also embarked on a preliminary exploratory programme to intersect the large IP anomaly identified to the north of zones 2 and 3. The drilling results have improved the company's understanding of the structural and morphological characteristics of these zones. Further drilling activity is expected during 2007 with updated results expected to be announced by late summer. Nakhodka Prospect Aurum announced on 7th December 2006 details of the discovery of a new exploration zone, Nakhodka, within the Andash Licence area. The new zone shares the geological, mineralogical and structural features of Andash Zone 1, as it has the same host rocks and similar chemical elements both in type and grade. The new zone has a strike length of approximately 1000 metres and is represented by strongly altered breccia with intensive sulphide mineralisation (pyrite/chalcopyrite) and visible gold. The company believes that the mineralisation represents the upper part of the Zone 1 orebody. Grab and chip samples identified gold and copper values up to 124 grammes per tonne of gold and 1.05% of copper. Trenching results also showed strong mineralisation running 9.9 metres at 7.89 grammes per tonne gold, and 9 metres at 5.04 grammes per tonne of gold. The company considers Nakhondka as another opportunity to expand its resource base at Andash. The company expects to begin a drilling programme during the summer of 2007 to assess resource levels. Tokhtonysay Exploration Target During the summer of 2006, a comprehensive programme of geophysical exploration, including dipole-dipole IP and a magnetic survey, was undertaken at Aurum's Tokhtonysay exploration target, which also lies within the Andash exploration licence area. Tokhtonysay contains seven outcropping mineralised zones, four of them are situated within the Andash exploration licence area, with the other three within the adjacent Korgontash licence area. The central body of this body is characterised by a very strong magnetic anomaly, similar to Zone 1's orebody content of significant amounts of magnetite. This indicates that Tokhtonysay may have similar mineralisation to the structure within Zone 1. Earlier investigation work to determine the extent and grade of surface mineralisation, has shown gold grades up to 12.8 grammes per tonne and copper grades of 7%. The company will commence a drilling programme during 2007 to further assess the area and work with mining consultants to establish a resource base. Strategy and Growth outlook The short-term focus of Aurum Mining is to bring the Andash project Zone One into production at 2 million tonnes per annum. At the same time, the company will look to increase the resource base and the level of exploration within the licence areas. In time, the company will be seeking to acquire other gold and mineral projects in the FSU, capitalising on the company's significant regional strength. The cash that Zone 1 will generate means that with no debt on the balance sheet, Aurum can work quickly to expand its resource base at Zones 2 and 3 and at the adjacent properties to increase both the minelife and the annual output at Andash significantly which will have a material impact on the Net Present Value of the project. Results, Balance sheet and Cash The results for the six months to 30 September 2006 showed another period of significant progress for Aurum, particularly in terms of the development of Andash Zone1. The financial metrics is of no great relevance. However, for the record, during the six months period ended September 30th 2006, on nil revenues, Aurum made a net loss of £0.7 million, up from £0.4 million in the six months to 30th September 2006. The increased losses were due to significant additional expenditure incurred in completing the bankable feasibility study for Zone1. Administrative expenses were £0.65 million and net cash at the period end was £1 million, up from £300,000 six months earlier At present, we believe that the company has a monthly cash-burn without drilling and acquisition costs of around £60,000. In our view, the company needs around 2 million pounds in order to cover its monthly operating costs until Andash is generating cash and to complete a drilling programme at Andash. On February 26th 2007 the company raised £30 million through an equity placing at 100p a share to construct an open pit mine and processing plant at Andash, which means that Aurum is now able to bring the mine into production by the second half of 2008 without having to see any additional funding. The Zone 1 mine will generate sufficient cashflow to fund both the corporate overhead and further exploration activities to expand the resource in the Andash region. All costs associated with mining development and investment are capitalised on a project-by-project basis pending determination of the feasibility of the project. Costs incurred include technical and administrative expenses. If a mining development project is successful, the related expenditures will be amortised over the estimated life of the commercial ore reserves on a unit of production basis. The intangible fixed assets on Aurum's balance sheet as at 30 September 2006 amounted to approximately £2 million , up from £1 million a year earlier. The value of the convertible debt at the end of the interim period was £0.64 million pounds, net current assets were £1 million and that meant that Aurum ended its half year with net assets of £2.63 million. The loan notes were issued for cash at par on 15 February 2006 with a value of 1 million pounds. The Loan notes can be redeemed at par at any time after the first anniversary of the commencement date, and prior to the third anniversary and are convertible at the lesser of 35 pence per ordinary share and the price at which any future fundraising takes place. Risk Factors and Upside Possibilities As with most mining stocks, the regular risks of exploration, mining, processing, commodity price and exchange rate volatility are all potential risks that the company faces. In addition, the specific risks associated with operating in the Former Soviet Union (FSU) were brought into sharp focus by the events of late May 2007 when press rumours of political disruption to the Andash project circulated. The company is constantly endeavouring to identify and managing all the risks it faces and is looking at ways of mitigating potential risks. Some of these risks have clearly been reduced since the company commenced operation in Kyrgyzstan. For example, the Kyrgyz Republic has implemented a western style approach to commercial law, banking reform, mining JORC related standards code and currency regulations. The country is increasingly stable politically with its tried and tested legal and fiscal regime. Gold production accounts for 6% of the country's gross domestic product (GDP), with gold seen as an important contributor to the economy. In addition, Aurum has sought to reduce political risk by investing in local pool of workforce, hiring local mining teams, regularly seeking guidance from regional experts and by abstaining from supporting any particular political party. The company will continue to invest in local infrastructure and human capital, will build a strong local team and provided opportunities at local level, in order to build solid foundations and strong relationships with local stakeholders. The company values the importance of building trust and strong relationships with local government, the mining community, NGO's and other related parties, and as a result it has invested considerable time, effort and resources to solidify its position, reputation and build trust in the region. Management Mark Jones- Chief Executive Officer- was appointed in June 2005 having previously spent five years as a senior professional manager with the diversified industrials firm Ingersoll Rand. A graduate of the Camborne School of Mines, Jones started his mining career in Zimbabwe and South Africa before moving into the mining related explosives industry. Haresh Kanabar- Executive Director- has a reputation as one of the more successful floaters of cash shells on the London market. Kanabar has been involved in the listing of Blue Star Capital, India Outsourcing and Greenfield Construction. Chris Eadie- appointed Chief Financial Officer in November 2006. Eadie is the newest addition to the company's Board. Eadie is a Chartered Accountant who qualified with PricewaterhouseCoopers (PWC) and he has 10 years post qualification experience. After leaving PWC, Eadie held a wide variety of senior financial roles at Cable and Wireless, including five years in the Corporate Finance team. Prior to joining Aurum, Eadie worked as Financial Controller on the integration of the acquired Energis business into Cable and Wireless' existing UK business. Sean Finlay- Non Executive Chairman- has over thirty years experience of the mining industry, including a spell as Chief Executive of Celtic Resources. Dr Colin Knight- Non Executive Director- joined Aurum in September 2005 and has almost 5 decades of mining experience in academia, in industry- including a spell with Rio Tinto- and as a consultant working for, amongst others, the World Bank. Knight has in-depth experience of assessing and advising on gold projects in the FSU. David Bryans- Consultant- provides his services to Aurum via his company Tyry Services, with the purpose of bringing new property opportunities to Aurum. Bryans is a former director of Celtic Resources - one of London listed FSU mining resources stories - and has 15 years experience of assessing resource projects in the FSU. John Webster, who had served as Non-Executive Director stepped down in April 2007 after agreeing to provide consulting and engineering services in relation to the construction and commissioning of the Andash mine. Webster has 20 years mining experience including 10 years in the FSU. Webster was the owner of 20% of the Kaldora Company and has also held executive positions with Far East Gold, Nelson Gold and JD Welsh and Associates. Webster acted as managing director between the signing of the Andash deal and the arrival of Mark Jones. Shareholders with over 3% holdings There are 47.99 million shares in issue. The parties directly or indirectly interested in 3 % or more of the nominal value of the company's share capital are as follows: Holder Shares Altima Central Asia Master Fund 10.72% F&C Asset Management 10.09% David Bryans 6.29% Tau Capital 6.04% Gartmore Investment Ltd 6.02% Talyn International Ltd 4.69% Halcyon Enterprises Plc 3.83% The Equity Partnership Investment Company Plc 3.42% Kantanna Company Ltd 3.12% Forecasts, valuation and conclusion Our valuation of Aurum is based solely on the deposit already identified in Zone 1 of Andash. Clearly there is therefore considerable upside if, as we expect, exploration work undertaken by Aurum expands this resource and firms up commercial resources in Zones 2 and 3 as well as the other exploration targets. This however must be treated, at this stage, as additional potential upside and not the basis of a core valuation. In valuing the Zone 1 deposit we assume relatively low recovery rates of ca70%, current forward metal rates and minimal exploration upside in neighbouring and other prospects. Our valuation model uses WAI's assumed cash operating cost per ounce of gold (Au) and gold equivalent (Au ev) an average cost of $223 oz. Given that copper, approximately accounting for 0.59 million ounces of gold equivalent, takes a different and costlier recovery process, we have allowed an additional copper processing cost of $50 per ounce of gold equivalent. Our valuation models assume a 1.2 million of gold and gold equivalent production over 8.5 years, the life of the pit, with initial production of 75,000 oz of gold and gold equivalent, rising to 125,000 oz per annum thereafter. The two big variables for the valuation are the size of the resource and the prevailing metals prices when it goes into production. In order to provide a wider perspective and balance on the value of Zone 1, we have made use of three different gold prices as well as the current forward gold prices. The four gold prices range from an achievable gold price of $750 per oz, a current level of $650 per oz, and a modest price of $550 per oz. Our valuation model uses a discount rate of 12.5%, a royalty rate of 3% on net revenue paid in 1 year arrears, a taxation rate of 30% and a Sterling/dollar exchange rate of 1.95. We arrive at a best case valuation for Aurum Zone1 of 246p (£118.45 million) based on current forward gold prices and worst case valuation of 149p (£70.46 million) based on a low gold price of $550. Our middle price model valuations of $750 and $650 value Zone 1 at 236p and 192p respectively. We consider the 192p price for Andash Zone 1 as our base for our valuation purposes. At the moment, we attach no value to Zones 2 and 3 in our valuation, as we take a conservative approach at this stage of the company's development. We expect that as the Zone1 construction of the open cast mine begins and with more drilling results from Zones 2 and 3 during this year, we expect to reduce our heavily risk weightings on Zone 1 and consider attaching some value to Zones 2 and 3. At 101p, and given the upside potential for enlarging the JORC compliant resource in Andash as well as further development of Aurum's other identified targets, our stance is speculative buy.
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