All that is gold does shine: ASX listed Phoenix Gold, Vector Resources, Augur Resources 

(MENAFN - ProactiveInvestors - Australia) Proactive Investors examines the investment case for Phoenix Gold (ASX: PXG), Vector Resources (ASX: VEC) and Augur Resources (ASX: AUK).

Let's firstly look at Phoenix Gold. This is a company that has the right strategy and has been able to cash in on it.

Phoenix has taken a different approach to previous operators in the Western Australian Goldfields by achieving early production from the treatment of surface stockpiles and cashflow positive small mining projects through plants in the region that have spare capacity.

As a result of this and the potential to build its Resource base to over 2 million gold ounces, the company has received a buy recommendation from Veritas Securities, and a target price of A0.55, three times its last traded share price of 0.18.

Phoenix still has additional stockpiles of ore which can be monetised, and are likely to bring in between 1 million and 2 million in net cash over the next couple of years.

The company has just signed its second ore purchase agreement with Norton Gold Fields (ASX: NGF) which covers stockpiles in the southern region of Phoenix's tenement holding totalling around 90,000 tonnes at 1.2 grams per tonne (g/t).

This is in addition to an ore purchase agreement executed between Phoenix and Norton in November last year for the sale of 40,000 tonnes of ore from the northern stockpiles.

It is a strategic move for both companies with Norton's 3 million tonne per annum Paddington Mill just 20 kilometres east of Phoenix's tenement package in Western Australia's goldfields.

The current high gold price has meant the stockpiles are now economic for Phoenix, with the sale providing the company attractive cashflows to advance feasibility work at Castle Hill and Broads Dam to define maiden Reserves.

Meanwhile, the potential to deliver a 200% increase in its gold Resource base in the near term following the acquisition of Golden Iron Resources has earned Vector Resources a speculative buy recommendation and a three month price target of 0.30, four times the company's last traded share price, by RM Research.

Vector contributed to this potential recently with an increase in its global gold resource to 308,765 ounces following an internal review of the Gwendolyn East resource.

The Gwendolyn East Indicated Resource is now 2.86 million tonnes at 1.72g/t for 157,391 ounces of contained gold, and the Inferred Resource now 1.36 million tonnes at 1.31g/t for 57,109 ounces of contained gold.

The remainder of the global resource is at the nearby Mt Dimer, which is less than 100 kilometres southeast of Gwendolyn East.

Further exploration upside exists at the Gwendolyn East Project with mineralisation open in all directions. Importantly, the project shows potential for a mineable oxide resource.

Vector has previously delivered a bonanza gold strike of 1 metre at 141.37g/t from within a broader intersection of 8 metres at 21.11g/t gold from 61 metres.

Additional results comprised 7 metres at 11.9g/t gold from 81 metres, including 1 metre at 40.5g/t gold and 1 metre at 20.7g/t gold; 12 metres at 3.38g/t gold from 60 metres; and 5 metres at 6.4g/t gold from 93 metres.

The size and classification of the resource has grown by 92% as a result of the Phase 3 program, which is a 544% increase on the resource since June 2011.

Augur Resources has received a speculative buy rating from a broker based on the "golden opportunities in Indonesia" and a share price target of 0.34, well above its last traded share price of 0.038.

The company continues to deliver favourable results from its Wonogiri project in Indonesia, which most recently has demonstrated its potential to deliver high recoveries of up to 89% gold and 93.4% copper from the Randu Kuning porphyry deposit.

Importantly, these recoveries were achieved through simple flotation testing.

Further upside is that detailed analysis of the concentrate indicated that it contained silver of up to 77.3g/t.

The concentrate appears to be high quality with very little lead (0.04%), zinc (0.09%) and arsenic (0.02%).

Indonesia is host to some of the world's largest gold-copper deposits, notably the 120 million gold ounce and 96.6 billion copper pound Grasberg, 12 million gold ounce and 12.6 billion copper pound Batu Hijau and 28 million gold ounce and 15 billion copper pound Tujuh Bukit.

Gold-copper porphyry deposits continue to be highly prized given the high tonnage potential and possibility for large gold and copper production.

The mining economics are also extremely favourable with low operating costs of well below US500 per ounce for gold and under 0.90 per pound for copper, with further upside being the potential for long mine lives.

The Wonogiri project, which covers an area of 3,928 hectares, has become the flagship project of Augur.

The company has a 51% stake in the project and is working to earn 80% of the project by spending 2 million on exploration and development by early December 2012.