Anglo Asian Mining Share Discussion Threads

[mattjos] 28/8/2015 15:43

Nice post jbravo .. 10-15% improvement in production for a full year & the first 26 weeks of crushed feedstock is sat waiting to be processed once the plant comes on-line.
Gadir production starting now also

[jbravo2] 28/8/2015 15:34

So I've worked out the gold recovery from the AL plant for the last six quarters (we were actually told what they were for the last two quarters - probably due to the fact the improved to where they though it should be for the first time)
2014 Q1: 70%
2014 Q2: 73%
2014 Q3: 63%
2014 Q4: 70%
2015 Q1: 71%
2015 Q2: 79%

We were told the improvement in the last quarter was due to the ore type and improvements on running the plant.

We've also been told that the flotation plant should improve recoveries to 90%. This seems a little optimistic to me but I thought I'd try to work out the impact if we achieve 85% and then the target of 90%.

Given the 5 quarter average for Q1 2014 - Q1 2015 was 69% it is a significant improvement.
If we had treated that same ore over that same 5 quarter period, and look at the results with different recovery rates

69% = 49,631oz
85% = 61,333oz
90% = 64,941oz

So an uplift of 9,300oz a year at 85% and an uplift of 12,200oz a year at 90%.

Of course even 85% may prove optimistic, we'll see, but it is interesting to see the difference it will make.
It is also slightly further confounded that it still isn't clear to the company about how to use the plant for each ore type. It is being configured to treat the ore before or after the AL. We only have the results of treating the ore after the AL.
For the sulphide ore one would imagine they will clearly treat in the flotation before the AL. That is the point of the plant. It will reduce the chemicals needed to treat that type of ore.

Anyway, just thought I'd share.

[mattjos] 28/8/2015 14:47

Gold chart beginning to look rather interesting to me:

PM:PXAUUSDOZ\SP

[mattjos] 26/8/2015 13:20

5/6/14
The main differences from the last JORC compliant resource upgrade in October 2013 are related to additional drilling since August 2013 (cut-off date for October 2013 update), extensive confirmatory RC drilling in the pit area in November and December 2013 and a new discovery known as Gadir immediately north of the Gedabek mine. Geologic interpretation and recent computer modelling by CAE Mining reveals:
-- An increase of 325,400 measured and indicated to 1,449,537 gold ounces ;
-- An increase of 167,400 inferred to 293,678 gold ounces;
-- A significant increase in low grade oxide ore;
-- A two-fold increase in transition (i.e. mixed oxide and sulphide) ore;
-- A 9% drop in sulphide ore due to reclassification as transitional ore;
-- An additional 700,000 tonnes of 6 grammes per tonne measured and indicated resources recently found at the Gadir discovery immediately north of Pit 4;
-- A near doubling of the measured resources from October 2013 due to infill RC drilling;
-- A drop in average grades in all categories excepting inferred resources; and,
-- A tripling in the amount of copper resources.
Mine planning is currently underway for an updated calculation of the reserves for the life of mine (LOM). CAE Mining will issue an updated JORC report during Q3 2014.
Anglo Asian CEO Reza Vaziri said, "The significant addition of resources at Gedabek indicates that continued exploration and development in the immediate Gedabek area may result in the discovery of additional resources in 2014 and hopefully a resource of 'district size' proportion. We are delighted that this resource expansion has the potential to extend the life-of-mine for several additional years and look forward to reporting further on the exploration and development of Gedabek in the coming year."
This JORC compliant resource update has been prepared by the independent consultants, CAE. The principal Competent Person (CP) under JORC is Gerard Evans, P.Geo. from CAE Mining's Johannesburg office. This estimate has also been reviewed by Anglo Asian's CP Sean Muller, P.Geo. to ensure that the determination of oxide, transition and sulphide mineralization has been designated in accordance to process amenability.

19/11/14
Table 1: Resource Estimate for Gedabek, May 2014 (0.3 grammes per tonne gold cut-off grade)

Total Mineralisation Tonnes Gold Copper Silver
(g/t) (%) (g/t)
---------------------- ----------- ------- ------- -------
Measured 37,189,682 0.822 0.246 5.904
---------------------- ----------- ------- ------- -------
Indicated 24,606,093 0.591 0.213 4.298
---------------------- ----------- ------- ------- -------
Measured & Indicated 61,795,775 0.730 0.233 5.264
---------------------- ----------- ------- ------- -------
Inferred 9,444,918 0.967 0.135 4.739
---------------------- ----------- ------- ------- -------

It should be noted that the mineral resource statement includes an area to the west of the open pit Gedabek called Gadir. This inferred resource will be mined by underground methods, and has been excluded when estimating the reserve base.

13/7/15
-- Gadir adit has now reached the ore body with 3,000 tonnes of ore extracted to date and sent to agitation leach plant for processing. Main mining to commence in August.

[jeanesy2] 26/8/2015 12:26

Recent rally in POG has run out of steam. Seems like we are heading back down to 1100

[jbe81] 26/8/2015 12:13

except upside is potentially a lot more than 500%

[wigwammer] 26/8/2015 10:47

Key point is, at current valuation the risk is asymmetric.If they fail, you lose 100%. If they succeed, you make 500%, and I would suggest the chances of success are somewhat in your favour at current level/direction of pog.These are attractive odds to me - but up to the individual to decide how much is appropriate to leave here.

[wigwammer] 26/8/2015 10:43

They have not released them. My guess is moderate is 10%-20%.

[captain_crash_and_burn] 26/8/2015 09:59

Wigwammer, do you know where I can see the gold price assumptions you mention? Or have they not set this out publicly, it would be good to see what they are expecting.

[wigwammer] 25/8/2015 20:55

Agree there is uncertainty, but as of May 28th with pog at $1190, they stated the following, presumably to alleviate some of the uncertainty:"The Group is forecasting to meet its debt service cover ratio for the six months to 30 June 2015. For the full year to 31 December 2015 and subsequent years the Group can comfortably meet the debt service cover ratio of 1.25 as specified in the loan agreement with the Amsterdam Trade Bank.Key to achieving the Group's forecast cash position, and therefore its going concern assumption are the following:- achieving the forecast production of its gold production operations, principally its heap and agitation leaching; - its gold price assumption; and - the small scale flotation plant being commissioned on time and achieving its planned performance.Should there be a moderate and sustained decrease in either the production or gold price assumptions, significant doubt would be cast over the Group's short term cash position. Under this circumstance, the Group would look to defer all non-essential capital expenditure and administrative costs in order to preserve cash. The directors believe that the Group's assumptions are neither overly aggressive or overly conservative and appropriate rigour and diligence has been performed by the directors in approving the assumptions. The directors believe all assumptions are prepared on a realistic basis using the best available information.Should the Group's small scale flotation plant not be commissioned on time or not achieve the forecast performance, the Group may not achieve sufficient cash generation to make repayment of all loan principal due in the first half of 2016. In these circumstances, the Group would look to establish credit lines either from commercial banks or its principal shareholder to cover any shortfall."I assume the current pog of $1140 is within the boundaries of a moderate movement.For 2016 and subsequent years, the key word is "comfortably".

[brasso3] 25/8/2015 19:40

That uncertainty is the reason you can buy at 5p (£5m mkt cap). When that uncertainty is removed at the interims in October you could be paying 10p+.

[cordwainer] 25/8/2015 19:33

Debt repayment plan = sell gold and copper, use proceeds to pay expenses and repay lenders ? :-(

[divmad] 25/8/2015 19:08

Hence my question about the company's debt repayment plan. Uncertainty on this issue doesn't help the valuation here.

[jbravo2] 25/8/2015 17:28

Not at all cordwainer.
This share price is being held down by only a few things.

To some degree Mr Bashirov doesn't help but he has under £250k of stock left to shift at this price.

More importantly it is debt and the ability to service that debt.
Once that picture starts to change, as it will over the next year, the balance sheet will start to look significantly different. That's when the share price will move. With or without Mr Bashirov

[cordwainer] 25/8/2015 16:54

Gold shares only seem correlated to price of gold on the downside.

[jbravo2] 25/8/2015 16:40

Not as far as I'm aware.

[divmad] 25/8/2015 16:38

Has management stated publicly the rate at which they will pay down debt from earnings after tax?

[jbravo2] 25/8/2015 16:29

Exactly mattjos.

The reason for the low valuation is currently the market isn't sure that we will make money. The loss for 2014 is what most people are working from.
A few people know that the results for this year... IF things continue as they currently predict... will be in the order of $15m profit.
More than twice its current valuation.

This share price will move steeply upwards over the 12 months that started a month ago.

[mattjos] 25/8/2015 15:41

simply as a quick exercise, compared AAZ to NMG.
NMG valued at £2m ... skint, not even drilled a hole in the ground as yet & seems to keep going by giving up on one prospect and then raising money chasing another one. Already a 1Bn shares in circulation.
No idea how this is managing to stay afloat.

AAZ valued at £5.5m. I wont bother to run through its profile as most should know well enough already.

[ilostthelot] 25/8/2015 00:07

When the debt cleared the last time in 2010 early 2011 the share price rocketed.

Its set up for same again though could well take another year or two of patience.. I'll start buying back in now after being out for a few years.

[mattjos] 24/8/2015 22:50

Good grief

[wigwammer] 24/8/2015 22:44

Ah, I see, mattjos. You own the shares you anticipate will remain invisible to the invested public.It's just been so enlightening ;)

[brasso3] 24/8/2015 22:06

cord

I was near the back!