TGX - Tasman Goldfields

[stoxclimber]

This is a little speccy I've had my eye on over the last few days. It's a gold miner in Queensland, resources are:

Challenger - 67.k oz @ 2.3-2.8 g/t, but the company reckons they can run a 32k/year oz mine, beginning within 1 year with a 3 year mine life. They're also free carried to production.

Currajong - 26.4k @ 2.1-2.3 g/t

Mt Adrah - 239k oz @ 1.13 g/t

and a small deposit of 4k oz @ 1.25-1.5 g/t

What caught my eye was that two days ago it entered into a $25m option agreement with AusCan, a private resources company, where it created options to enter into JVs to develop its two big resources - Challenger and Mt Adrah.

As part of this agreement there was a placement to AusCan at 8c per share, which compared to a pre-placement price of 2c - i.e. a 400% premium, as opposed to the discount we're seeing on other placements. Once this good news was released the price shot up quite a lot, but its still only at 5.4c, which is a ~33% discount to the price the big boys are buying at just two days ago.

One problem with this one is that it's very tightly held, and there's not a lot of liquidity on the market - if you want to buy in for a reasonably sized parcel (like 10k) you might have to place your order, wait and hope - or pay up towards 7c where there's a bit more volume out there.

Overall this one looks pretty good to me - buying at a discount to what the big boys are paying - but I'd be interested in the thoughts of other ASF members? For me, the catalysts for a further rise in share price would be the completion of the placement on 22nd July and the completion of milestones to production on Challenger and Mt Adrah.

 

[naughtynickers]

I'm a bit of a gold nut and have watched this for a while needless to say I was in shock when I saw it up 200% the other day.

Like you said it's hard to get it in and given the publicity it's generated they are probably people waiting in the wings to pounce.

 

[stoxclimber]

Spot on naughtynickers its very tough to get into this one.

I reckon the best strategy would be to throw a bid out there in the 5-6c range and hope some of those sellers at 7c come down to fill you, although I guess if a lot of people are waiting for this one it could pretty easily cruse pass the placement price of 8c, only about $15k of stock on the depth up there, so you'd run the risk of missing out if you went the bid route. Shrug

What's your view of the resources? From my understanding they've got enough for a small scale commercial operation, and the AusCan deal would seem to suggest that's coming within 12 months at Challenger. How do you read it?

 

[stoxclimber]

For me, the catalysts for a further rise in share price would be the completion of the placement on 22nd July and the completion of milestones to production on Challenger and Mt Adrah.

Announcement of completion of the placement is due tomorrow, which I'm thinking will push up the SP. Would of course be bad news if the placement was not successfully completed.