Auzex Resources (ASX: AZX) is finalising a merger between itself and GGG Resources (ASX: GGB, LON: GGG) to drive its jointly owned 3.2 million ounce Bullabulling Gold Project towards production.
John Lawton, managing director, fielded answers during Question Time at last night’s Proactive Investors’ 'Stars in 2012 Series' in Sydney, Wednesday 14th March.
The presentation on the night can be ACCESSED HERE.
The Bullabulling Gold project is a large tonnage, low grade deposit open to the south and at depth with 12 kilometres of strike.
A Scoping Study has identified a substantial gold project capable of producing about 230,000 ounces of gold per annum over a 10 year mine life.
Auzex and GGG are targeting an initial reserve exceeding 1 million ounces of gold to begin production in 2015. A full Pre-Feasibility Study is underway and due out in the September quarter 2012.
Question from the audience
Firstly based on his resume I’d like to congratulate you guys on recruiting a new MD and secondly, have you lost any of your key personnel during this difficult period of six to eight months?
Thanks for the question. And that’s something I wasn’t able to tell you, we’ve recruited Brett Lambert who was the MD of Thundelarra Exploration, for those of you who knew Thundelarra. I think he will make an excellent MD.
We’ve got a chairman short listed or short list of chairman potential and that should be an easier thing. Brett starts on the 1st of May.
There’s going to be two non-executive directors from both GGG and ourselves. I’m one of the Auzex directors, so that’s a six man board. That might be more than enough for a company of this size.
I think it’s fair to say, as you know, that Auzex has done most of the work on the ground. Everybody’s been employed by Auzex in this project. All the contracts are written by Auzex.
There has been, going through this phase, people start to wonder what the future holds for them. I think we have been able to convince them that they should stay with it. A smooth transition is certainly what we’re trying to meet and I think we’re achieving that.
Question from the audience
What do you see as catalyst for share price increase for Auzex Resources over the next six to 12 months?
I think there’s a couple of the one’s I mentioned now. We are completing the Pre-Feasibility. The disbelievers, I think, by the time the Pre-Feasibility is out in the third quarter will come to realise this is going to be one of the significant deposits in the country.
One of the things I didn’t mention was that we’ve got Colonial Global Resource Fund on our institutional shareholding and we should be way below their radar.
The reason why we do have them as shareholders is because they see this deposit being similar to some of the Canadian examples and they’re mega deposits. Australia hasn’t really got its head around this type of deposit yet.
Cisco in Canada operates on a 20 million tonne per year operation gold mine, similar type of grade so it’s certainly possible.
The end of the merger, I think the project just dropped off the interest of the market. It’s time to come back, the merger’s completed, we’ve got new management and it will basically be a new story with the Pre-Feasibility out in the third quarter I think people will start to see this as a very valuable project.