Central Asia Resources Producing Soon (In Kazakhstan. VERY NICE)

T

tthace

New Member
Lol couldn't resist the Borat quote.
My new holding... entered at 4.65c (Gladly pay up to 5c)
680m shares, 80m options ex 3.5c so ill just round it to 775m shares
Market cap around 30m
Around 10m in cash with 5.5m allocated for this quarter due to commencing production
additional 3m from conversion of options at 3.5c


JORC 1.2m+ Gold and lots of silver. 20000oz producer in 2011... potentially 60000oz-85000oz in 2012

Projects: Dalabai, Altyntas, Bizhe, Kengir andKepken ( I will just focus on Dalabai, Altyntas and Bizhe)

Dalabai
Status: In development of 0.5Mtpa heap leach project
Resource: 3.98Mt at 0.97g/t for 124,000 oz gold (Table 2)
Schedule: Mining September 2011, production Q4 2011
Project: 20,000 oz gold, 140,000 oz silver per annum, 2.5 years
Significant exploration upside
US$10.7 million capex, cash costs US$545/ounce
Net cashflow ( initial 2.5 years, undiscounted, @$1,300/oz) US$37.7M
I expect this to reach at least 20m due to gold price being at 1850$ or more. Silver upside as well.
High chance of upgrade to mine life from extra explorations on Dalabai and from Bizhe (18km away)

Altyntas (Main project)
Status: Preparing for development in 2012 (June)
Resource: 16.5Mt at 1.14 g/t for 598,000 oz gold (Table 2)
Schedule: Test work, exploration and scoping study in 2011
Project: Potential heap leach and/ or CIL processing
CIL production estimated 65,000 oz per annum, 7 years
Target resource 1 1.2 million ounces
Development funding from Dalabai cashflow

If they go for heap leach, capex is only 15m..with 40000oz per annum, profit is 20m at a gold price of 1300$
If they go for CIL, capex is 50m with 65000oz per annum, profit is 50m at a gold price of 1300$
They used 1300$ gold so you can imagine what it is at today's prices.
Heap leach can commence in June, CIL q4 of 2012. Depending on the gold price in March next year and more feasibility studies they will make a decision later on.

Bizhe
Status: Early exploration
Schedule: Exploration and evaluation 2011
Project: Potential feed for Dalabai heap leach, 18km away
Preliminary testwork indicates 90% recoveries from heap leach
Very good trenching results... check Bizhe exploration ann... 11m at 23.6g/t and 3m at 8.85g/t
Could easily see this adding to Dalabai and extending mine life to 5 or more years.



I think this is a steal at a market cap of 30m. It is going into production this year with profits of 20m per year. Cash flow will be used to put Altyntas into production and make this junior a 60000oz per annum producer at least in 2012. I can see in the future with additional explorations on Dalabai and Bizhe... the Dalabai plant will be upgraded and will produce over 30000oz per year. The only thing i dislike about this share is the high admin costs... 1.8m used in 6 months... pretty high but they seem to do a decent job. Dalabai is on schedule and on budget. Kazakhstan is relatively stable and the mine is very close to its biggest city. Something that would make Borat proud :D

Tell me what you think about it...
 
Whos managing? Finance/marketing guys or are there some experienced (15 years + experience) Mine Engeneers?

Whats the ticker and website?
 
I think they hired an in country geologist. He's pretty experienced with 20+ years exp with a lot of it in gold. I just left for work so don't have much time till tonight to reply properly. Check out mr Earl of Warwick. One of the biggest shareholder.

The grades are low but high grades don't matter much unless u can get it out of the ground. Dalabai is mainly going to be used to ge some cash flow to get the bigger picture going. I expect bizhe to produce good grades to feed dalabai. In this type of market, I think being able to get into production now is quite favourable as they build funds to complete other projects. Capex for heap leach in altyntas is only 15m and can produce 40000 oz on top of 20000oz in June 2012.
 
Anyway the low grade is still at 545$ cash cost per oz. Have a look at the Ann on explorations in Bizhe. I expect grades to be pretty good. It is 18km away from dalabai n will add to the heap leach. Recovery rate 90%. They want to focus on getting immediate cashflow first. IMO 20000oz is just short term.

I find this market terrible for those wanting 50m plus to get into production. Which is why I reduced my holding in myg. Still very cheap but will pick up mygob in future.
 
Reminds me of the time a few years ago when I met a Cuban geologist on a train in Kazakhstan. At the time I found it odd but obviously there are a lot of minerals in Kazakhstan that could be mined... potentially a veery wealthy country in the future but corruption is endemic.
 
Mr Medved said:
Reminds me of the time a few years ago when I met a Cuban geologist on a train in Kazakhstan. At the time I found it odd but obviously there are a lot of minerals in Kazakhstan that could be mined... potentially a veery wealthy country in the future but corruption is endemic.
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Yup I agree. High corruption. I suspect this may explain the high admin costs. Wouldn't be surprised if they had to bribe their way for mining approvals. Would love anyones opinion on this. Glad they got everything done. Btw there is a director from kazakhstan who is a respected and successful businessman there.

www.centralasia.com.au/

lol literacy rates are higher in Kazakhstan than australia. Interesting stuff.
 
tthace said:
Yup I agree. High corruption. I suspect this may explain the high admin costs. Wouldn't be surprised if they had to bribe their way for mining approvals. Would love anyones opinion on this. Glad they got everything done. Btw there is a director from kazakhstan who is a respected and successful businessman there.

www.centralasia.com.au/

lol literacy rates are higher in Kazakhstan than australia. Interesting stuff.
Click to expand...

Corruption is basically the same throughout the former Soviet republics but to different degrees. I'd call it cultural corruption as it is absolutely throughout the whole of society. You get ripped off left, right and centre. Government, non-government, in the markets, on the streets, mostly everywhere. For example, I know of a meat trader who pumped meat full of water, froze it, and sold it at weight... most of the weight was just water!

If you want to get anything done you end up facing the need to provide a "gift" or be railroaded by low level government employees (police, customs, admin staff, etc.), though I doubt it is too different if you get up higher, and then you're dealing with the really dodgy, big $$$ stuff.

High admin costs would also do with the level of bureaucracy in the country. Fill in this form, fill in that form. Wait in line. Oh, you made a minor error in your reporting? Ends up being a $50,000 fine - true story. It happens, if you don't know the system you get absolutely reamed. For example, foreigners have different coloured license plates for their cars so are like honey pots to traffic cops. Driver licenses are often contained in small booklets or are in fact small booklets. A note is generally tucked inside, the cop pockets the cash, hands back the license and says "no problems, have a nice day!".

Companies often have a person/role called a "krisha" in those parts - krisha means "roof" in Russian. They take care of "greasing the wheel". Everybody knows it, it is common knowledge.

One time I had a minor visa issue, a friend sorted it out with a bottle of cognac. Then there was an experience of a police shakedown for cash, you would never EVER experience something like that in Australia. I met a foreign businessman who had obtained ID as a deputy chief of Police... all through connections and $$$. He had some interesting stories to tell. People I know had an importing business, they knew they had to provide a "gift" to customs so they offered two grand, customs people asked for six. The choice was either pay up or have the goods stuck with customs for six months (and expire). Not much of a choice. Most things can be done but have a price. I also read about a uranium company that Bill Clinton was associated with. It went up 3x then crashed back down... looked like a classic pump and dump scam. Every person in Kazakhstan will have their own stories to tell.

A guy I met who moved from the US to KZ in the early 90's said back then it was really the "wild, wild east". Things are not so wild as in those days. If I had the opportunity I would have loved to moved to Kazakhstan, Russia, etc. during the early 90s... once in a lifetime experience... maybe once in a multi-century experience.

Nazerbayev has been ruling for 20 years and is effectively President for life... untouchable really. There may be a power vacuum following his death which may lead to instability in the country. A few years back I heard he was worth $20B USD... secretly took money from oil sales, etc. and moved it into Switzerland, or so I'm told. He's used some of that to develop the country, particularly Astana, and may not be your archetypical thieving dictator.

Big money is in Kazakhstan. Oil money. Minerals money. Energy money. Right next to China too. Some people have ridiculous amounts of money there - so much they don't know what to do with it, while most struggle to get by. Slowly the middle class is growing larger year by year. Make no mistake it is a country on the rise in spite of its problems. Almaty is a fantastic city and there are plenty of positives about the country, I do like it in spite of the statements above. May even move back there in the future. If you're only reference to KZ is Borat then you have no idea what the country is like. I even convinced a friend to come out for some skiing... he said the views were stunning but the skiing not as good as in Europe... such a hard life!

If any company says they don't involve themselves in corruption then I'll call bullshit on them because I simply don't believe it... it's not possible!
 
thanks for the input medved. Do you know how the locals view foreign investment. I hope the royalties are put to good use. Wouldnt want any trouble like Kentor gold with their locals.
 
Here are the reasons I dont like this play.

Country Risk - possible corruption and multiple kickbacks

Managment - Seems a hodge podge of money men with no people who have really brought any mines into production (and they could probably loose two or three off the board and save their salaries without losing any experts)

Tenament holdings - small

Flagship Project - Dont really have one

Grade - This is the big one - low grades awith a 0.2 cut off on some - makes it look like they know that they are shit and just want to look better.

This is just my opinion, for the money there are better lower-risk options

A good point is if they can mine ore at their predicted cost or under.... if they can do that (and thats an 'if') they might be worth watching for more exploration success.
 
Apart from the entrenched corruption by locals, the world bank is also heavily there. For me that rings alarm bells. I know this because one of my old school chums headed up the world bank delegation there!
 
Bullion Baron said:
tthace said:
Hey hobo.. wats ya take on Bizhe trench results.
http://ss01.boardroomradio.com/files/CVR/CVR20100726.pdf
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Wouldn't get too excited about trenching results. Was a few weeks ago I was reading through CVRs anns and I don't recall seeing the results with follow up drilling results, would be interesting to see if grades were consistent in deeper tests.

I seem to recall similar trench grades at GOA's Sao Chico, but think the deposit ended up being quite nuggety and difficult to mine. Unsure how that project is progressing (now managed by another company), but haven't seen any updates which suggest the move to mining it has been successful.

The 90% recovery rate is decent.

I am no geologist. I have to rely on comparisons with other companies and only have a fairly basic understanding of drill/trench/geological results :)
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Yea in the ann they said they will commence a short drill program to test the depth of it. The mineralized zone defined by trenching extends over a strike length of approximately 350m and in places covers a surface zone of up to 100m in width. The whole Bizhe is around 240km2 and this is in the west side.
 
joshrichy said:
Here are the reasons I dont like this play.

Country Risk - possible corruption and multiple kickbacks

Managment - Seems a hodge podge of money men with no people who have really brought any mines into production (and they could probably loose two or three off the board and save their salaries without losing any experts)

Tenament holdings - small

Flagship Project - Dont really have one

Grade - This is the big one - low grades awith a 0.2 cut off on some - makes it look like they know that they are shit and just want to look better.

This is just my opinion, for the money there are better lower-risk options

A good point is if they can mine ore at their predicted cost or under.... if they can do that (and thats an 'if') they might be worth watching for more exploration success.
Click to expand...


Country risk - Always will have corruption in these types of countries. That is where Mr Kanapynaov (Director) comes in. Connections with professionals and govt. Equipment sourced from China.

Management - This is why they hired 2 very important people. Mr Campbell-Hicks is in-country manager.

Mr Campbell-Hicks has over 30 years experience in all aspects of gold processing from design and supervision of test work programs, conceptual design engineering, clients representation for detailed design engineering and EPCM through to staffing, plant commissioning and post commissioning optimization. He has a depth of experience and specific knowledge of heap leaching and gold recovery via resin technologies. He also has practical experience in working in CIS countries including Kazakhstan.


Duncan Greenaway Exploration Manager
Duncan Greenaway has over 35 years of wide-ranging, international experience in exploration, mining and contract drilling throughout Australasia, Southern Africa and Eastern Europe. This includes 22 years in gold production and exploration. Duncan's previous positions include Vice President of Exploration Superior Mining International Corporation (TSX Listed), Exploration Director Goldstar Resources
NL (ASX Listed), and Exploration Manager at Gabriel Resources in Romania.
In these roles Duncan has been responsible for significant resource growth through both exploration and acquisition.

Tenement holdings - Bizhe is 246km2

Flagship - Altyntas is their focus. targetting 45000-65000oz per year. Dalabai is just to generate some cash flow but could become as big as Altyntas if Bizhe is enough to feed the heap leach.

Grades - This was always going to be a low-grade high tonnage thing. Higher-grade mine will move more barren, worthless rock, to access the high-grade ore, so margins are not proportional to the grade of deposit. What I look for is what is the Capex to get into production, cash costs and how many tonnes are we talking about. A mine could be 10g/t grade but capex is 50m and higher costs of underground mining. This is a simple heap leach production and is uncomplicated. There might be more complications with an underground mine which makes it harder to make production targets. Not the case here. Mr Campbell is quite experienced in it.

I like this one because it has a clear production path to Altyntas unlike some future producers needing another 50m to start. Cashflow is coming in this quarter and will trigger a re-rating.

Would like to hear what other lower risk producers with the same market cap of 30m that is going to make 15m-25m this financial year and 45m to 75m the next. Most of them would require heavy dilution at crappy prices or debt finance at cutthroat terms. :P
 
lolz
1) find stock
2) write up opinion
3) ask what people think
4) debunk their thoughts

man the internet is funny...
 
Agauholic said:
lolz
1) find stock
2) write up opinion
3) ask what people think
4) debunk their thoughts

man the internet is funny...
Click to expand...

clearing up misconceptions and contributing extra info. What else is there to do? Post YouTube links? Lol. You are right about the Internet lol.
 
tthace I was also thinking that you must really love this stock for some reason. Are you in danger of getting emotional about it? Im just saying that not as an accusation but just as a self-check.
 
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