DESCRIPTION: AuEx Ventures, Inc. ("AuEx") is a precious metals exploration company with a current portfolio of 19 exploration projects in Nevada, 1 project in Utah, 4 projects in Argentina and 1 project in Spain. The company controls about 167,000 acres of unpatented claims and fee land in prospective areas of Nevada, and 15 of the projects are in exploration earn-in or formal joint venture agreements with 8 companies who provide exploration funding. The company applies the extensive exploration experience and high-end technical skills of its founders to search for and acquire new precious metal exploration projects that are then offered for joint venture.
The information provided below is based on the most recent information we have received from analysts, newsletters and other contributors to Streetwise Reports' The Gold Report or The Energy Report. We encourage you to visit the company's web site and call the company for more specifics on this company before you decide to invest.
"Go Long. . .Fronteer Gold agreed to purchase explorer AuEx Ventures, boosting its stake in the Long Canyon project to 100% and gaining a dominating position in Nevada's Pequops gold trend. . .Under the takeover, AuEx shareholders will receive 0.645 of a Fronteer Gold share, $0.66 in cash and a 0.5 share in a new exploration company (SpinCo) for each share held (Fronteer's total cash outlay under terms is $31.8M). The SpinCo will hold all of AuEx's exploration assets outside the Pequops mining district and have $5M in cash. The fully diluted equity value for the transaction is $280.8M, which represents a 51% premium for AuEx based on average trading prices for 20 days ended August 26. Under the terms of the deal, Fronteer Gold is acquiring the remaining 49% interest in Long Canyon, as well as the rest of AuEx's interests in regional 'Pequop District,' including AuEx's 49% interest in the West Pequop Project (51%-owned and operated by Agnico-Eagle Mines and the South Pequop Project. While this deal clearly sent shares of AuEx soaring, a Bay Street analyst comments that the deal also appears positive for Fronteer."
The Gold Report Interview with Louis James (08/27/10)
"This company is a project generator. It has multiple projects, most of them in Nevada, but also in a very prospective area of Argentina that's pro-mining, and in Spain of all places, which is a better mining jurisdiction than most people appreciate. AuEx's main asset is the Long Canyon Project in Nevada, a joint venture with a company called Fronteer Gold. AuEx has 49%; Frontier has 51%. . .Long Canyon is just a peach of an asset; it's a potential open pit, which is your cheapest method of mining. . .it's very high-grade, more than 3 grams per ton gold. And it's oxide material, which means you can heap leach the ore instead of the more expensive milling. It has all the characteristics of a highly profitable mine. They did a preliminary economic assessment, and the internal rate of return was something like 66%. . .Fantastic numbers. The resource has doubled since that preliminary assessment, which will improve the project economics, and they continue to step out and discover more. . .if there is a market correction, these shares could easily go on sale at a great discount. But at the end of the day, they have a project that looks very much like Nevada's next gold mine."
View Entire Article: Louis James Gets Physical
Joe Mazumdar, Haywood Securities
(08/20/10)
"AuEx Ventures is generating value by triggering exploration options on world-class deposits (Long Canyon) through superior execution of its business model. We believe that Long Canyon has significant resource upside potential (2.5 Moz., Haywood estimate) and high grade (2.3 g/t gold, Haywood estimate) with exceptional recovery for a heap-leach operation (86.8%, Haywood estimate).
The company provided an update from its 2010 drill program at Long Canyon (40,000m drilled to date). These results support our original thesis that Long Canyon has significant potential for a larger global resource at a higher grade than its most-recent global resource estimate of 1.2 Moz. grading 2.0 g/t gold. We have revised our model for Long Canyon to accommodate a larger resource (2.5 Moz-we previously modeled a 2.25 Moz resource) and marginally higher grade (2.30 g/t gold, compared with previously modeled 2.27 g/t). We have raised our 12-month target by $0.50 from $4.00 to $4.50, a more than 20% premium to the current level, while maintaining the rating."
"AuEx Ventures is generating value for shareholders by triggering exploration options on world-class deposits. . .through the superior execution of its business model. Our opinion is evidently shared by the market, where the company's market capitalization has increased by 3x since 2007 as its partners progressed to declaring resources on their Long Canyon and West Pequop JVs.
Our target price of C$4.00/share represents a +25% premium to the current price of C$3.18/share. Our target valuation is based on the life-of-mine free cash flows, attributable to AuEx, for its two principal assets, Long Canyon and West Pequop, discounted at 4% employing a long-term gold price of $900/oz. We have applied a 0.9x multiple to the NA-PS in our target model, as production is estimated to be more than three years away (production start in 2014)."
Joe Mazumdar, Haywood Securities
(07/26/10)
"The results indicate that the Long Canyon project continues to return significant intersections of high-grade oxide gold, and that the deposit has been defined to date at a strike length of at least 2.7 km. (The au 2010 resource estimate at Long Canyon is reported at about 1.2 Moz. grading 1.99 g/t gold.) The current program is focused on resource definition and resource expansion primarily in the northern half of the deposit. Five drill rigs are now operating on the property, and more than two-thirds of the planned 45,000 meters have been drilled to date."
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