Anglo Asian Mining Share Discussion Threads

[csmwssk12hu] 19/4/2017 18:48

Yes but if one mine is profitable you would leave it running and invest in new machinery and staff and run two, what you are suggesting is if tesco had a store making money but thought another store could make more money they would close the first one and move the tills and staff to the second store, no they wouldn't they would equip the second store and have two profitable stores , I also like the way they quote new figures in gold equivalent ounces further hiding the decline in production, so if the new mine is unprofitable in 12 months time are they going to move all machinery back ?

[unionhall] 19/4/2017 12:35

I expect debt will drop by about 12m this year - same as last year.


All going well...

[bleepy] 19/4/2017 12:04

ferries5

The open pit and Gadir have been temporarily suspended as per strategy update..

Ore mined from the open pit has recently had a lower gold grade and a higher percentage of copper than ore previously mined. It was therefore decided to carry out an extensive programme of exploration and production optimisation to better understand the distribution of copper in the ore body and to define the resource and reserve. Mining will therefore be temporarily stopped in the open pit in Q2 2017, and during the remainder of 2017 approximately 15,000 metres of drilling will be carried out, in furtherance of this programme. It is anticipated that mining from the open pit will recommence in Q1 2018.

Mining of ore from the Gadir underground mine was suspended in February 2017. Extensive underground exploration is being carried out and development tunneling undertaken. It is expected that mining of underground ore will recommence in Q4 2017. Any ore mined from Gadir during this exploration and development phase will be stockpiled for later processing.

To provide ore feed to the processing plants for those periods when ore is not being mined, the Company will process its current extensive stockpiles. Approximately 50 per cent. of the ore processed by the flotation and agitation leaching plants in Q1 2017 came from stockpiles. This stockpiled ore was blended with mined ore to ascertain the suitability of stockpiled ore for processing. Stockpiled ore also has the additional advantage of being a lower cost feedstock.

The temporary cessation of mining in the open pit will enable the heavy earth moving equipment used in the open pit to be redeployed. The fleet will be used for transporting ore from the stockpiles and also for the road building and other development work necessary to bring the Ugur deposit into production as an open pit mine. It is expected ore will be mined from the Ugur open pit mine in Q4 2017.

[ferries5] 19/4/2017 11:37

Zhockey
If they get the debt To 19 mill they will do well, drill programme, water plant, + Uger to be developed will all cost money this year.

Rileyma

The quicker the psa kicks in the better, Only then will they be producing profit for the shareholders. Not Banks and equipment manufacturers

[zhockey] 19/4/2017 11:29

Riley, post PSA AAZ should be making $30M a year free cash flow which is more than the current Macao, that is not so bad is it? :)

[mattjos] 19/4/2017 11:24

We are a Gold, Copper & Silver miner. The split is not and has never been mandated & from which part of our estate we obtain each is up to us.The % contribution from each will always be variable as a function of the ore mined.Reporting in Gold equivalency was something I kept on about last year & pleased to see it is now happening.It should make it easier to understand the overall business for investors.

[rileyma] 19/4/2017 11:20

Psa will kick in too ?😞

[zhockey] 19/4/2017 11:17

Ferries, they said the objective is to expand production.

Either way you look at it the reality is that by the end of this year they will have close to no debt and a $200m plant. Everything they produce will be free cash flow.

Also they have what $250m of copper reserves?

At 20m Mcap The glass is more than half full I would say!

[jbe81] 19/4/2017 11:16

It's not a question of if the glass is half full or half empty, more like how many glasses there are

[ferries5] 19/4/2017 11:04

That's the problem, Now they have closed down the open pit and Gadir, Will they reopen, It depends on the results of drilling, (the word (anticipated commencment of production creates doubt)
I knew the grades were getting lower and they would have to do a comprehensive drill programme, but it happening so soon after telling us they could produce 70000 oz for the next 4 years (15 month ago)
Just not sure if the glass is half full or half empty

[zhockey] 19/4/2017 10:50

They can produce 55k without mining anything this year, the costs will be very low and they can utilise the workforce and machinery to get Ugur up and running. Then back to two pit operations next year.

I suspect they will find at least one more Gadir type deposit under the Gedebek pit.

[zhockey] 19/4/2017 10:33

CSM, I answered that yesterday. To run both pits they would need to spend $10M on new kit and hire more staff. In addition by halting mining activities they are able to drill 15000m arround the pit and look for new Gadir type deposits.

[csmwssk12hu] 19/4/2017 09:15

If it was profitable they would run both at same time it's obviously no longer profitable

[mattjos] 19/4/2017 08:29

Eyes on France now as we approach first round vote.That is next driver for gold direction, short term

[mattjos] 18/4/2017 22:34

From today's RNS:

"Given the increasing proportion of copper in the production at Gedabek, the Company will from now on present its total production target in gold equivalent ounces ("GEOs"). The comparative GEOs for FY 2016 production have been calculated using actual selling prices of metal. The FY 2017 production target in GEOs has been calculated using budget selling prices of $1,200 per ounce, $17 per ounce and $5,900 per tonne for gold, silver and copper respectively.

v

"Credit Suisse Sees $1,400 Gold By End Of 2017"


Credit Suisse said it maintains a bullish gold price outlook, looking for $1,400 gold in the fourth quarter, although the full-year outlook was trimmed to $1,323 from $1,338 previously to reflect prices in the first quarter.

Meanwhile, Credit Suisse hiked its 2017 silver-price forecast to $18.46 an ounce from $18.Analysts see $19 silver in the fourth quarter.

So, CS sees Gold averaging 10% higher & Silver averaging 8.5% higher than AAZ forecast today.

Let us also hope that prior shareholder feedback to the BOD has, in part, lead to today's use of the adjective "Conservative" in the management forecast for the FY.

Exceeding that production target coupled with metal prices above mgmnt assumptions should see the company enter 2018 in a very strong position. Between now and then I do expect the company to give us more detailed updates on the Ugur resource & why they have been persuaded to take the steps outlined today.

[brasso3] 18/4/2017 19:43

Updated production chart.

Copper to gold ratio changing drastically now over a 2 year period.

[jbravo2] 18/4/2017 17:56

Depends on how you mean "planned this for some time".
We've long known there has been a stockpile of sulphide high copper ore.
We've long known the plant can be run the other way round (flotation first) to remove copper first and prevent prohibitive costs for leaching high copper ore.

I don't think this would be happening now if Gadir was still pulling tens of thousands of tons at 6g and the open mine was still throwing up 3g.
It wasn't though and the gradual drop has been long anticipated.
The stockpile has been increased for this eventuality but I'm not sure the company was clear on exactly when it would happen as by their own admission the ore geology has meant they have often only known what they were going to get in detail as they dug it up.

Is it any cause for worry? Not really.
The area, as cannon has said, is huge. We have the plants to treat pretty much anything found now.
There's at least 10 years left in Gedabek, in its variety of sub mines, and differing ores. IMO.

[mattjos] 18/4/2017 17:39

the huge quantity of stockpiled ore, enabling them to keep producing for the next 6 months without mining, is surely symptomatic of the company having planned this for some time.
you don't just take the mining cost on the chin & then put aside 1m tonnes of ore for the sake of it.

[zhockey] 18/4/2017 16:49

Cyber, just take a look at Venezuela, it doesn't work as an economic model and Azerbaijan want to encourage outside investment not snuff it out.

[cyberbub] 18/4/2017 16:28

Or if they just ignore the AIM regulations, because they know that the FSA rarely takes action against UK law breakers, much less foreigners...I don't understand the point about naionalisation/privatisation above. If a government is desperate for money why wouldn't it nationalise a mine which is throwing off millions in cash flow every year? Free money! Even if they had to pay a measly 25p a share in compensation, they would get that back in the first couple of years of operation. And the current board would get well paid positions in the new state-owned mine, plus a percentage of the revenue in some non-transparent manner...Sorry to sound cynical, and perhaps the AAZ management are above such underhand dealings, but an awful lot of AIM companies aren't....Just challenging here, I am genuinely not trying to deramp, it's just a concern I have in this particular country. Good relations with the government is certainly positive, but when it goes from 'good' to 'cosy' is when you might have a problem.No advice intended etc etc

[zhockey] 18/4/2017 15:48

Not if they are spread across a number of distributed accounts.

[jeanesy] 18/4/2017 15:36

If someone where buying a stake we would have heard by now as an RNS on holdings would have been published

[catsick] 18/4/2017 15:09

We are talking about a 20 mio pound market cap company here, totally irrelevant to the government apart from its a solid provider of decent jobs, the shares may be being accumulated by an individual or small fund but there is nothing surreptitious going on, its just too small a company, The oil industry is 100's of times bigger in Azerbaijan than a few small mines scratching to find some decent ore ...

[jbravo2] 18/4/2017 14:26

Ah yes thanks cannon. I'd always been looking for an expanse water but of course it was under construction back then.



You're right in some respects ferries.
They are indeed offering up a variety of companies for sale in Azerbaijan. That includes mines. They were trying to sell an iron ore mine for the third time of asking only last month.

The mines taken under AzrGold are of course a notable exception. They were privately held (by a "complicated web of companies") but bought by a "government entity" in AzrGold.
Now everyone knows why this happened but the interesting question is just how much of AzrGold is govt owned?
Its a CJSC so we're not likely to find out anytime soon. Indeed all official announcements have said all 2m shares are govt controlled but who would be surprised if they weren't?

Things we know:
It's quite expensive to build treatment plants (as AAZ have found out).
Chovdar has sulphide ore and they're trying to work out the best way of treating it.
Chovdar, Gedabek and Qaradag (an early stage AG property) are all within trucking distance of each other
AAZ has a good relationship with the govt of Azerbaijan

Things we might presume:
Reza would sell at some price.
If someone wanted to buy but thought that Reza's price was too much to pay they could buy some of the company beforehand at a price far below that level, reducing overall cost or of course making a few bucks for themselves.
The financial market involved is largely powerless to stop something like that happening. They couldn't even ensure correct RNS's as bash sold down his 20%


cyber:
Having medium to heavy weight political allies and shareholders in the Snunu family means that is a course of action that is unlikely, never mind the fact that Reza also gets on well with the powers that be. Granted, unlikely, not impossible