African Aura Share Discussion Threads

[greenroom78] 08/4/2011 13:08

I'm wondering if this is a bit of a shake on top of the split valuation. There has been a chunk of buying going through which suggests they either have a big sell order to fill or they have pushed for panic and capitulation before letting it find its level. Will be interesting to see how Canada starts off as that is SETS and not MM driven.

[soundbuy] 08/4/2011 13:05

TDW want 195p at present.

[pote] 08/4/2011 13:04

edit: sorted

[greenroom78] 08/4/2011 12:53

Longsight is that target a combined share price for both AFF and AUE?

[woodpeckers] 08/4/2011 12:52

Greenroom - think your "can I afford not to invest more" at these prices is right! I'm selling other stocks to invest here. Really seems crazy not to today.

[longsight] 08/4/2011 12:49

The share price today will look an interesting historical curio in a few years time. I think my new long term target of £333 might prove closer to the mark by 2016.

[soundbuy] 08/4/2011 12:46

Split well flagged, punters expected a whoosh, never happened so bailing as many will be on margin/T trades

Will last today I'd imagine then upwards. Looking to buy in around here. Never expected the fall as others...

[j1nxed] 08/4/2011 12:40

The Total FE in my calculation is 1 949 Mt, but i haven't included any dilution for the putu PFS and extra drilling in nkout and the reason why i haven't done this is 1) i'm not sure how long they are planning on retaining their stake in putu and they could very well sell their stake before the PFS to retain a non dilutive carried interest of maybe 10% without and funding requirement 2)they don't need to do an equity issue untill later this year since they are supposed to be fully funded for the current drill program in cameroon

in my charts i have the following peers and their current EV/total FE (i have many more peers that i can compare to). the price above their corresponding bar reflects how much Afferro would be valued if you applied the same EV/Total FE multiple

Sundance Resources = SDL
Baffinland = BIM
Sphere Minerals = SPH
African Minerals = AMI (not really sure about the EV for this one and if anyone knows it please tell me)

[kacker1] 08/4/2011 12:33

Surely buying now is a bargain.

yesterday the share price was 307p - Mcap of £265mil
today the share price is 196p - Mcap of £170mil

So this assumes AUE should list at 110p £96mil???

what do we think?

[parthus] 08/4/2011 12:29

It appears that IG have done this:

2 companies

Afferro prices as todays price.

Aureus is priced at 1.02 and has not varied since 8 am. That being their estimate when it opens on wednesday.

[greenroom78] 08/4/2011 12:25

I guess I have to wait until Wednesday to see if buying more yesterday was the right or wrong move. 200p seems very cheap for the IO side but I guess if AUE is 105p i've done ok. Come xmas i'm sure i'll be winning anyway, but it will be interesting to see if those buying pre-split get it cheap than those buying post split or not.

j1nxed, thanks for your input. I now need to decide if I can afford more AFF (or decide if I can afford not to!)

[longsight] 08/4/2011 12:24

Since I don't want to be accused of being negative about the prospects here I shd point out that Jennings also used an earn in valuation based on the gross IO [as opposed to contained] of US$1.50 a tonne. This wd then give a share price target of £68 a share using j1nxed's projected IO figures.

So a range of possible share price targets for Affrero:

£1.96 if the stock market is right
£11.50 on j1nxed's figures
£38 to £68 on j1nxed's figures x Jennings earn in valuation metrics
£333 - my own target of m cap £5bn+ divided by 150m shares.

I appreciate that these targets might look a bit disappointing so many will wish to sell & instead buy tickets in the National Lottery but at least we also have the potential of AUE as well.

[dandick] 08/4/2011 11:54

gold spot is rocketing!!!

[j1nxed] 08/4/2011 11:42

@longsight

you are correct

the floating box above the bar represents the share price and the black number at the end of the bar represents the EV/Total FE of the company

[longsight] 08/4/2011 11:38

j1nxed, if I read that right, the target price for Affrero will be approx £11.50 a share on the basis of US$.75c a tonne of contained IO.

We might note that Jennings used a suggested earn in valuation basis per tonne of contained IO of US$2.50. That wd give a target share price of £38 a share.

Obviouly these figures will prove conservative as the resources are upgraded to measured & indicated & as actual mining ops draw closer.

[ppidkw] 08/4/2011 11:35

It seems the market has set the price for AFF comfortably above my average for AAAM - bring on Aureus next week, gold is flying today.

Anyone any views on whether there is any chance that us lowly PI's will be able to buy in to the Aureus fundraising as and when it happens?

[j1nxed] 08/4/2011 11:17

this is the valuation today (using a dollar pound conversion rate of 1,6)



below is the 2012 potential valuation based on 4000Mt in nkout, 1732Mt in putu (4500Mt at 100%) and at 34% ore grade



this ignores the upside from ngoa and akon ...

[longsight] 08/4/2011 11:08

So why does it matter that Affrero is looking to establish 4bt at Nkout & that we might suppose that this might be in fact more like 6bt+ in Nkout / Ngoa / Akon?

Well if they do this then this shd result in a 35m t pa mining output.

Why does that matter?

Well if you look at Sundance's projections for a 35mt pa output, they estimate this will produce revenues of US$2bn pa inititially rising to US$5bn pa revenues. Just taking 2015, this produces approx US$2.5bn revenue less opex of approx US$.6bn i.e. approx US$1.9bn gross profit [approx because I'm using their charts & can't measure precise numbers].

So if we can do similar, Nkout / Ngoa / Akon might be good for over £1bn gross profit pa.

I think this might underpin a m cap of perhaps £5bn. Current m cap is just £172m.

Of course we also have our stake in Putu as well.

So I think this potential is worth bearing in mind since it might encourage investors to hold the shares for the next few years.

[weasel31] 08/4/2011 11:01

Looking at the trades on ADVFN, it looks like a lot are listed as sells which are actually buys.

[j1nxed] 08/4/2011 10:53

@longsight

if i knew how to add visible pics to my posts i could show everyone the valuation charts based on peers

[longsight] 08/4/2011 10:50

j1nxed - I'll be very surprised if AAAM don't have minimum 2bt contained IO by late 2012. That much seems plain from the most recent presentation.

At US$1 per tonne that is approx £1.25bn m cap or £14.50 a share - just for Affrero.

OK, there will be dilution but there will, imo, also be a lot more than 2bt contained IO. I think Nkout / Ngoa / Akon will have that much at least by themselves.

Given the size, quality & location of Nkout / Ngoa / Akon, there will be overwhelming logic to the Sundance rail / port being funded & built. With that planned to be operational by Q1 2014, there is a massive incentive to get Nkout etc into mining production asap after that date. At 30 - 35m tonnes pa output from there, the potential cash flows & profits will be mindblowing.

[cjdrum] 08/4/2011 10:48

What share price weakness. This is just the reduction in value which will be offset (and hopefully more) when we receive our gold shares. It's like when a share goes ex dividend.

[horneblower] 08/4/2011 10:42

LS, You had it right all along. I was certainly confused yesterday.