Anglo Asian Mining Share Discussion Threads

[mattjos] 27/5/2016 00:08

agreed jbravo .. the IPO docs originally strongly suggested that flotation was the way to go.
Heap, SART & Agitation have been the necessary process & financial stepping stones to get to what was always indicated and envisaged.

[jbravo2] 26/5/2016 23:58

@zhockey: I have heard from a reliable source, and I posted on this previously, that for whatever reason there are several hundred kilos of gold dore in a vault. Why AIMROC didn't sell this, or couldn't, or where it was headed I don't know. This clearly can't have helped Chovdar pay its way. Whether it would have made the difference or not I don't know.
I do also wonder whether they got their mineralogy wrong. I think the case for AL plants seem borderline with the ore if it's similar to ours and perhaps flotation and heap leach is a better option. Of course I have no idea if they have the space for that. I know we're running out of space at Gedabek for more heap leach. We're upto 10 now.

@unionhall: it's undoubtedly been a learning experience for the company but the flotation plant, and it's eventual expansion, will prove to be the turnaround the company needed

[zhockey] 26/5/2016 23:51

UH was bidding at 7p, he's not bearish he's traded out and wants back in :)

[mattjos] 26/5/2016 23:48

unionhall .. I am not convinced that you entirely understand the company or the current dynamic, as best evidenced by your decision on 23rd April (at 6p) that there was no rush to invest as news was some way off.
The news that certain of us here have reason to believe is in the offing has actually been brewing for some years. That aside, the company is a significantly larger enterprise now than it was in 2010.

That said, I (& I trust others) wish the thread to be a balanced one and therefore negative/bearish views are welcomed as they all help investors reach their own conclusions.
I think Bill's recent interviews are perhaps best in combating such negative views coupled with the CEO's $4m loan to the company

[zhockey] 26/5/2016 23:42

UH,

My take is that the last few years have been awful and back in Jan this was priced to go bust. However the company have managed to overcome adversity and are on track to produce a record amount this year. This was a no brainer at 4p when I was buying, and I think fair value based on known reserves is about 30p with 1200 gold.

A lot of peeps on this thread are positive due to speculation about Chovdar involvement, personally I would wait for an RNS but there is upside on the current reserves through exploration, i.e. another Gadir?

And how many aim CEOs would loan the company just short of the market cap to keep things going?

I imagine you are wanting to pick up some more shares at a lower price, personally I think gold is going to 1160 and may take AAZ with it so you could get a chance.

[unionhall] 26/5/2016 23:27

"Aaz's proven track record in dealing with Azer ore is second to none..."


Perhaps there is no-one to be second to ?


Six years ago AAZ produced 19,000oz of gold in a quarter( to Sept 2010) and owed $37m or so. Share price was approx 40p and hit 80p briefly soon after.

They have gone backwards since. I don't quite understand all the positive vibes on this bulletin board in light of this non progress.

[zhockey] 26/5/2016 23:20

Does anyone have any technical detail as to why AIMROC could not make Chovdar work? As Jbravo points out, one can peruse linkedin and see that they were not short of geologists and engineers. Perhaps they faced some of the same metallurgical challenges that we have seen at Gedebek, and if so, did they lack the management and technical wherewithal to overcome these challenges? If this was the case then AAZ would be in a very strong position indeed.

[bleepy] 26/5/2016 22:52

Aimroc mention 5 development projects including Chovdar.

Would any or all of these be a suitable bolt on to aaz given agreeable timeline and terms.

Aaz's proven track record in dealing with Azer ore is second to none and places them in prime position to oversee all the projects.

[mattjos] 26/5/2016 22:18

Plenty more to AIMROC than just Chovdar

[celeritas] 26/5/2016 22:17

Makes you wonder why China is buying gold vaults in London. Makes it easier to take delivery, maybe the Chinese could put pressure on fractional reserve gold by demanding delivery in London.
On the other hand you have China playing down it's gold holdings which would probably see gold flying if the truth was known but I can also see why the Chinese would want it cheaper whilst still buying what they can..

Interesting read.

[bleepy] 26/5/2016 21:48

I'm sure Chovdar is as hot a topic in Azerbaijan as it is on the board and has been for some time.

I share views that its future has been under discussion and a resolution is to be announced.

If aaz are involved (as I strongly suspect they are) then such news before the agm would be opportune.

[bleepy] 26/5/2016 18:58

Extract from Chovdar mine in header...


In June 2005, Azerbaijan Minister of Ecology and Natural Resources Huseyn Baghirov announced that 30 new fields of precious metals, including four gold deposits, had been identified through survey work over the previous three years. One was of special importance: Chovdar in western Azerbaijan.

The media reported that the gold reserves in Chovdar dwarfed all of the other fields and Minister Baghirov announced that talks about developing Chovdar were underway with foreign companies.

Only one name was ever mentioned: RV Investment Group Services LLC, which told Trend News Agency in August 2005 that it was preparing a proposal to present the government for developing Chovdar. Company experts visited the field.

By the end of 2005, the price of gold had almost doubled to more than US$ 600 per ounce. RV Investment Group Services LLC begun to build facilities to extract 20 tons of gold at its Gedebey site, not far from Chovdar. Chovdar was not mentioned again.

[zhockey] 26/5/2016 17:12

Interesting theory, until we get an rns there is no knowing if AAZ are involved at all. In any case the aimroc sale could take months to resolve.

[mattjos] 26/5/2016 16:46

Around the table we have:

Reza & AAZ

The govt (through Azergold)
The banks
The current shareholders of AIMROC

In reality, this will all boil down to the only proven gold producer in the country negotiating with the president. Reza, we all know, is well regarded and advises the president on matters from time to time.
(Given that Russia is backing Armenia & EU?USA is backing Azerbaijan, I do not see the Az govt looking to do any deal with a Russian mining company).

Reza's objective is clear.

The President needs this Chovdar thing to 'go away' and go away in such a fashion that leaves him smelling of roses ie. the state of Az will now become a clear beneficiary of the Chovdar mine as a consequence of it being managed professionally under a proper PSA.

The deal to be done, is really between two parties only. Assuming there is a willingness to do such a deal then, I am quite sure it can be done in a way that gives both parties what they want.

If Reza is to fund it with equity then, I do not see him willing to do so at the current price. Far from it. That would be insane given the pitiful current valuation.
His challenge will be to see the share price nearer the IPO price (preferably higher) before he considers an equity funding route.
Debt is an option, particularly as the lender would likely be state owned/controlled.

Exciting times ahead, I am sure

[jbravo2] 26/5/2016 16:29

Of course. My post does say "re-assigning/selling".
Do you know how much was paid for it?

[zhockey] 26/5/2016 16:27

Jbravo, don't forget that AAZ were not gifted their current share of the PSA, it was purchased pre IPO.

[jbravo2] 26/5/2016 16:22

As mattjos says, all good news.
The bank want their money back and the state are best placed to pay that back :) Some of the banks will probably be at least partly state owned anyway.
All part of the process to clean everything up.
It seems as if the AIMROC PSA is to be cancelled.

Two options then exist to my mind.

a)
AzerGold becomes a fully functioning state run co. that employs miners and everything that goes with it. It is a long haul from nothing. It is far from guaranteed success. Indeed one could view that this has been tried once before and failed if one views the previous attempt as a state attempt. It could even go against some of the articles of Regulation for AzerGold, depending on how one wishes to interpret them.
e.g.
3.2.5. The development activities of the Society, to attract investments in order to ensure efficiency reliability and increased performance.

Consider the significant oil industry in Azerbaijan. Is it run by state companies? Clearly not. Indeed AAZ's existing PSA is simply taken from the oil industry.

Of course other articles do talk about production. It isn't just a one way street for AAZ, but we do sit as the only proven producer in the country.



b)
AzerGold looks for partners to start to develop the sites they start to identify. They avoid the need for a whole lot of recruitment and setting up a new business with the risks of failure only too well known.
That could also clear the way for a new PSA to be signed for the sites listed as the first to be taken under AzerGold. If that was the same as the existing AAZ PSA (49/51 in the states favour instead of 70/30 against them) then one might reasonably be able to say the state have gained from buying the assets and re-assigning/selling them.



This had to happen whatever the end outcome. I remain more than happy.

[zhockey] 26/5/2016 15:15

I guess it is not beyond the realm of possibility for aaz to borrow $40m to get what a 20% stake? This could be higher, or lower, depending on what aimroc is valued at.

Another thing to consider is that if aimroc couldnt make Chovdar economic, why would it be any better for AAZ?

[celeritas] 26/5/2016 13:44

Didn't China just launch a £10b fund last year just for gold miners on the silk route.

[zhockey] 26/5/2016 13:26

I agree Celeritas, so for me funding is the obstacle for any potential aquisition. Perhaps some form of earn in or operating overhead would be an option?

@Matt, afraid you've lost me, give us a clue :)

[celeritas] 26/5/2016 13:18

To fund such a deal it would have to be done on a completely different valuation to AAZ. I see exploration licenses with good drilling results worth a few hundred million but no mine.
AAZ is for some reason not seen as an investment by fund managers. You can't issue stock on aaz's current valuation, I'm sure Reza would also be against this.

[mattjos] 26/5/2016 13:16

zhockey ... try to think a little more creatively about the circumstances of the deal. There is more to it than simply $'s in this instance

[zhockey] 26/5/2016 13:09

Matt, to own an assetvyou have to purchase it, how would AAZ fund an aquistion?

[mattjos] 26/5/2016 12:45

zhockey .. if I were Reza I would be much more interested in owning the asset rather than simply managing it.

Surely the 'cleanest;' way to do this is for AAZ to 'own' the asset (as they do Gedabek) under their current PSA ... that way the arrangement is all above board & according to an existing government mandated PSA. Everyone comes out of this whole Chovdar mess, clean.
The state wins, the people get jobs and get paid, the president regains credibility. It's the proverbial 'win-win' solution.

Let's see how it is engineered in the coming weeks