Bill and all, I posted a response to Fijiman on RB and have copied the salient parts over here as well.
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I spoke to Doug Ramshaw, AZC VP of Corporate Development yesterday. I must say that I could not have been more impressed. Doug is the kind of exec I look for in any company I invest in. VERY Bright and very well-spoken. Not "slick" or overly reserved. He knows their operations inside and out. I was not particularly easy on him, and he answered every question I posed to my satisfaction.
Even though Doug represented the company's interests well without divulging anything he shouldn't, I can tell you that I got confirmation of what my DD is telling me. Corporate mgmt has tremendous enthusiasm for the mica project. From what I gather, they are proud of all their projects in terms of where they are right now. But from they way Doug spoke, I feel they see the Black Canyon mine as their best short term revenue source. Maybe they will rename it "The GREEN Canyon Mine".....HA.
Much of what Steve reported on Raging Bull AZC thread was confirmed in our conversation. The numbers were based on commodity pricing for the reasons we have listed (i.e. Mine Plan not quite approved, SEC, etc.). He also indicated that it would not be in AZCO's best interest to divulge its pricing policies right now in terms of the competition not being entitled to know. I can tell you he did not deny the range of price we have been supposing.
I look at the AZC picture, and the only thing missing is revenues. They have been in some serious development for the last 2 years or so in a down market for metals. They have an excellent business model I feel. They provide funds for mines and equipment, but do not manage the day to day operations. They keep out of the messy and time-consuming parts of mining and interact on the financial side mostly. They have laid the groundwork so that as these projects expand, they will be burdened with having to open the mail and cash all those checks for their share of the bounty! Smart plan.
I've looked a bit at copper for instance. Their project with Phelps-Dodge in Mexico has been and is in the development stage. It looks like a good producer will emerge here. Even though copper hit a near 12 year low yesterday, AZCO is well positioned. The level of worldwide reserves is up and many big producers are in the position of feeding their daily operations with cash from reserves. The competition is feeling pain. A drop to say .55 would further hurt the companies who will have to curtail operations. Many mines may close. Layoffs might mean that certain companies may find it difficult to attract labor when they choose to restart or rejuvenate their infrastructure. We, on the other hand will be watching from Mexico still. As production is curtailed, backstocks will diminish across the world. When the demand is there and prices rise, PD and AZCO will be among the healthy players ready to jump in and take advantage. This scenario is just my own opinion, but might well indicate the solid model that AZCO is employing.
Mica is a cash cow here. The numbers they used in the projections infer a price for unworked mica. THEY WILL BE WORKING THE MICA. They will be getting more...much more than a $1 a pound as I see it. AZCO with no debt, a cash reserve of 15 million that may well grow and now will have the missing ingredient of revenues on the near horizon. AZC will definitely be one of my most undervalued stocks until it is discovered for what it can become soon.
BHunt |
