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ASX just the tip - first tip of the new year


ASX just the tip

January 1 · Issue #13 · View online

ASX just the tip -Companies I am buying and my reasons for doing so.

Todays tip is a shorter time frame high confidence tip

This company that has caused me some happiness and some success over the past 12 months. I have had some wins and some losses on it, when I sold out a few months ago I tallied it all up and I only came out $138 ahead for my considerable efforts!
Nevertheless I am back again for another swing of the bat, I never let past interactions limit future opportunities.
The stock I am tipping is AQI. For those of you who don’t know AQI is a gold explorer in Guyana (a country know for very large discoveries). 
AQI currently have two projects that they are working on: Arakaka and Ianna.
Arakaka is a J/V with Barrick ($10mill spend for 65%), Ianna is a 100% AQI owned project.
 I will include a little on the status of the J/V later but I want talk about Ianna as it is the work that is being done here that is the focus of my tip.
 Ianna is a project with some work done on it in the past and some recent sampling.
The key thing to note here is that the previous drill rig only has capability to reach 50m in depth so that 50m@2.47g/t hole was not an intercept it was the entire hole! 
The previous company intended to come back with a deeper rig but never did so below 50m for the entire project it is all virgin ground, no one has ever tested anything under those historical hits.
So what does the work program look like? It’s a doozy! 
As you can see below the program is a mix of extension drilling, step out drilling, super high grade sampling and off section soil sampling. Well, in my mind there has to be some gems to come out from this extensive program of work.
Now thats enough reason to buy right there, but why the confidence to tip? 
Well an associate of mine who has spoken to the company who say that the extension drilling hit 120m of same alteration as the 50m (that graded 2.47g/t…).
What does that mean? Allow me to illustrate:
Now, that puts us in the realm of several 100m+ gold holes here and opens up the entire area at depth, this would be a big big development.
If we look at similar companies like OKU I can tell you from experience what happens when you start bringing 50m+ intercepts to the table.
Me and the glorious leader there were the only ones paying any attention when OKU was showing some lovely auger work and even visual gold no one gave it a look in until those assays came in, now it’s $132mill Mcap company.
AQI is sitting around $14mill MC, thats 9 times lower with arguably similar, if not better results in the pipe. So thats my main reason for buying cheap compared to peers with similar result; high confidence in Ianna extension results and also due to some talk of promising visual alteration and visible gold at other prospects they are testing.
Additional bits as to why I like AQI:
The Arakaka project (65% Barrick J/V): Is still kicking along Barrick just approved more funding for more drilling. It might produce something it might not. Its a bit of a free roll, if they hook into something they can chase at some point. 
The chart: I am not a chart guy, but one of my biggest investing rules is buy on the base when no one is looking. 
Using my ultra sophisticated HotCopper chart tells me it’s been banging around that 13cent mark, something that is coming off a strong base is always key, only true believers usually remain, which makes a big run likely.
Shareholders: The below also ticks my box as AQI is tightly held. Basically 70% is held in the top 20, the free float here is minimal and the names in the top 20 are some heavy hitters.
The team: I have heard the MD present before, he is a serious guy and he’s not a joker. He is a serious exploration geologist and they are a serious exploration company. Brent Cook is a fan and he said not many people can draw you a detailed exploration map on the spot from memory on just a napkin. 
These guys are serious however they do things that annoy me, for example they have been slow painstakingly slow, but ultimately that is because they are methodical and care about what they are doing. They also pay themselves in shares which looks terrible, but actually it’s their weird way of keeping cash burn low as possible. They don’t pay themselves a whole lot either, weirdly an MD paying himself $500k cash and no one notices but an MD paying himself $50k in shares there was some upset from shareholders (me included). 
So that my tip. I am in at 13.5 and 14cents this time round.
Results from Ianna drilling are expected in early to mid January, only a very short wait. Recent highs on no results, just getting the Ianna project were 40cents, one would hope to exceed that on actual results!
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