Anglo Asian Mining Share Discussion Threads

[redtrend] 24/4/2017 13:57

Would be good to see an updated calculation of AISC as part of the next presentation, based on the revised reporting to "Gold Equivalent Ounces" (GEO). That would remove more uncertainty

The last AISC reported was in Nov 2016 presentation at $703/oz. That took into account Copper & Silver as "by-product" (i.e. credit reducing AISC).

So no doubt AISC will now increase per GEO, but even if it did, lets say to $850, with Gold at $1,250 that would still be $25.6m - $28.8m per year (based AAZ's new conservative production target of 64-72K GEOs).

[jbravo2] 24/4/2017 13:49

I too am baffled people are talking of going bust.
Simply not on the cards anymore. That passed a year ago.

We have enough ore above ground NOW to see us to the end of the payment schedule for the ATB and Gazprom loans in 16 months. The IBA loan is due for repayment a couple of months before that. They're the main three loans.

Granted I don't think we'll be quite debt free by then but it'll be c.$10m.

There is still lots of gold at Gedabek open pit but it is going to be lower grade than up til now. They are still trying to prioritise higher grades whilst we are paying down debt. Once our finance costs are lower we can look again at lower grades.

As for zh selling out now, baffling frankly, but I wish him well. I guess he was Mr £2500 man the last few days last week

[crazycoops] 24/4/2017 13:09

I had the chance of a large top up today due to new funds becoming available. I pondered all weekend and decided to stick with my current AAZ holding (which is now one of three losing positions in my portfolio) but not top up at this stage. There is too much uncertainty for me, both company specific and PoG. This aside, it did look like someone was accumulating last week in size but the share price is currently saying otherwise.

[mattjos] 24/4/2017 12:53

all this talk of going bust, why?

The CEO has $3.8m of his own money on the line here in addition to his significant equity stake!

No one can argue that his interests are not completely aligned with shareholders interests.

[ferries5] 24/4/2017 12:03

According to Mattjos figures, this company has $25 million in tax losses to utilise which equates very roughly to 22 cents or 16p per share.
Not sure who owns the plant AAZ or the government, but the land reverts to the government when mining ceases so not sure what value can be placed on that or if there be any decommissioning costs.
The licences,AZZ have access to have just under five years left to run, they must submit an application, and economic plan in under four years to retain licences. Gedabay, Gosha,Orubad.


1 Worst case They go bust.

2 They manage to pay down there debt in 3 years . But produce for five years If they do there 72000 (Hopefully) Gold equivalent oz. forecast this year it will or should make a big dent in there debt. Relinquish the licences and return cash to shareholders which should be a lot more than the present share price. =tax losses+ 2 years of 49% profit (sale of plant)????

3 . Everything comes up roses, more resources found at Gedabay Gadir,Uger,Bittibulag, mine life expanded. Maybe a tad over optimistic . But it is all about risk reward.

[jbravo2] 24/4/2017 11:15

Cant work out how to post this stuff. Also can't work out how to mark a map accurately but this'll do for most who've never looked into the area.

This is a rough map of the contract area. Also marked is the mine, the plant and tailings and the Ugur area.

The area is large. I'll bet that Gedabek isn't the only viable resource in there.
It virtually joins the Qaradag licence owned by AG above.

[zhockey] 24/4/2017 10:39

JBE, I stand by all my recent comments. Just not willing to be against the market at this point in time.

Another factor is that I am not very bullish on gold, I think it may finally break down below 1000 this year.

[2sporrans] 24/4/2017 10:28

Thanks for clarifying Zh.

I can see where you are coming from.
Why sweat out while the share price sinks to single digits awaiting some certitude wrt reserves, if you were able to sell out at a decent profit?
Taking a risk on re-entry [the cavalry arrives and you are out] is easier to live with than the downside risks of holding.

My gut feel is that AAZ are short cutting with this switch to Ugur. They think there is enough to go on with the drilling results they have already released, which were very encouraging for an open cast pit.
So, rather than delay and spend more time/£ assessing the Urgur resource while running down stockpiles [+ maybe keeping the main pit going as configured with ever diminishing returns], they are going full tilt into Urgur while the stockpile fed production option is open and supportive.
I don't get that they haven't/don't have enough time to drill but accept they may want to save cash burn and concentrate this in the Main Pit and Gadir this year.

In a sense, the risk is that the market is pricing in a resource downgrade overall, while the new approach to the main pit + Gadir is being assessed through 2017.
How much? is the question.
If meanwhile the POG tanks and the debt paydowns cease, I guess you'll have to be brave to be a buyer here even at derisory valuations.
However, if production keeps in kilter with the new targets and the POG at least stays above $1,200/oz and due debt repayments continue, this ought to settle nerves.
If cash permits, might AAZ surprise to upside from drilling in Bitibulag?

[jbravo2] 24/4/2017 10:28

We have six quarters of sulphide ore in the stockpile. I should imagine they'll find a little more gold before that runs out
:D

[andrewsr] 24/4/2017 10:24

From the last drilling up-date in December:

“We look forward to continuing to evaluate this deposit (sic. Ugur) with a view to adding gold reserves in advance of mining as we aim to enhance our entire production profile for the Gedabek Licence.”
“The Phase II core drilling programme designed on a grid for resource estimation will continue over the winter.”

In their recent update it was stated that mining would start at Ugur in Q4. So presumably they will provide a resource upgrade before Q4. As drilling will have continued through the winter, maybe a resource update will happen quite soon.

[mattjos] 24/4/2017 09:49

Been taking advantage of this ridiculous valuation this morning ... I do not for one minute believe that Reza & Stephen & the BOD would have determined this course of action unless they were very confident about the Ugur resource.

[jbe81] 24/4/2017 09:43

Hmmm,I wonder what Matt has to say about your bullish posts followed by selling out..

[zhockey] 24/4/2017 09:32

2S

I'm not sceptical of The company's plan, but I have a hunch the market is going to price in AAZ going bust. I didn't want to be on the wrong side of that, again!

Can't see there being a resource upgrade this year as I don't believe they've had enough time to drill. Also will they have to write down the Gedebek recoverable gold reserves?

[jbe81] 24/4/2017 08:52

Am convinced we will get a resource upgrade before the presentation. Even Jeansey might be tempted to buy back if it gets much lower.

[edjge2] 24/4/2017 08:15

AAZ has sold 10m gold but cannot get the link from newsnow to open from the link in

[2sporrans] 23/4/2017 23:43

Sold out 100% Zhockey.
You must be hugely sceptical yourself, being such a long term investor.

How many did you sell ?
Just wondering what % of "The market" you represented.

With the POG rally being deflated right now by the nigh certain prospect of President Macron, your decision looks that bit more prescient.

I added a few at 17.3p despite the risk of a falling knife sell off next week.
There's gold in them there hills!

Can see this becoming as much a copper play over next 2 years though.

[zhockey] 23/4/2017 22:46

After holding for 10 years I sold out at 18.5p on Thursday. I had a hunch that the market would turn sceptical on the new plans and that the share price would breakdown.

All the best.

[bleepy] 23/4/2017 16:21

Looking at the gallery pics for Bittibulag there is one that looks like an underground audit.
Update for this prospect must surely be in the pipeline. From memory Bittibulag is copper rich so the change of plant and process would suit this prospect


Mattjos with the reconfiguration of plant and process I'm sure they would make good use of any redundant plant.

[mattjos] 23/4/2017 01:46

re-read the news item a few times now and digested it more thoroughly.

I assume by start of 2018 they will be running the Oxide ore from Ugur through the Agitation Leaching plant (we've been told that Ugur ore has no copper content).

Gedabek will restart feeding its Sulphide ore first through Flotation and then the tailings flow may be blended into Agitation and/or feed the SART plant

Heap will be fed as currently with ROM Ore and low gold content ore.

The first quarter of production from Gedabek in 2013, they produced:

8,585 oz Gold
9,875 oz Silver
93 t Copper

In its first full year of production, Gedabek produced:

52,068 oz Gold
44,926 oz Silver
339 t Copper

FY18 we should be very much back on track and should produce nearer 80koz of Gold, 160koz+ of Silver & 2,000t Copper.

With that to shoot at, it looks sensible to make this switch now.

They've got plenty of Sulphide Ore stacked at Gedabek to see them through the interim period. In fact they'll only use about 50% of the stacked ore this year so, plenty in reserve in the event of delays.
The switch to flotation first & then agitation has increased the recovery rates to 84% (so far) from previously reported 72% so, that appears to justify the decision.

I'm assuming they will end 2017 with debt at $30m but, that figure should then reduce fast and be down to under $20m by end 2018 & virtually debt-free by end 2019.

There are still significant quantities of metals held within the tailings dam & it will be interesting to hear at what rate the plant is able to work at & what sort of metals extraction they get from it.
I wonder if the small (still unused) flotation plant might be used to re-process the solids in the tailings dam in the future.

[mattjos] 22/4/2017 23:47

Header updated with updated production data ... thanks Brasso

[celeritas] 21/4/2017 23:26

Ugur will surprise, plant is being moved to really go at it.

[el_duderino_7885] 21/4/2017 21:09

I'll have to run some technicals over the weekend but from a purely technical perspective the chart looks horrible.

Broken out of that descending triangle to the downside.

I agree there is risk but if it goes much lower it'll definitely be worth a punt.

I like the strategy but at the moment we have a mining company without a proven economic resource so lots of work to do.

Could be an incredible opportunity though especially with a rising price of gold.

Anyone have a handle on how long their stockpiles will last? If things don't go to plan and open pit mining doesn't recommence in Q4 when will they run out?

[jeanesy] 21/4/2017 20:03

If you think this will double this year then you must be buying more even if very few others are at the moment! There is far too much uncertainty here for me and until the company puts out some positive news it seems like it will drift lower. It may well turn out to be cracking buy but only if the POG holds up, we get some positive news on resources and drill some decent grades of ore.
There were some very strange sells this afternoon. There were 9 lots of sales which went through at 5206 pounds in value ( different amounts of shares some of them ) , never seen that before !

[brasso3] 21/4/2017 18:51

I agree it could double or even triple from here to year end so it is a good 8 month investment. I guess I would argue that it does not look like a good 3 month investment at present.