|Good to see AAU presenting and drumming up interest at a prime time just prior to production start-up!
AAZ and SHG are indeed becoming turnaround stories, with net debt positions coming down considerably in last 2 Qs even with considerable Capex, which shows finally they are both making a lot of cash.
However although I myself did mention these and lay down the challenge, it pays to diverse your portfolio and AAU has many strengths that could surprise the market (maybe not surprise those already invested!) and in a Gold bull, AAU could see its share price increase greater than SHG and AAZ going forward, depending on news such as smooth production start-up, Salinbas, JORC resource update, Phase 2 drilling, lithium assets etc.
Crossfire is correct in sense AAZ production targets in past have not been consistent (2016 just been revised down), there is some lack of transparency in that AISC are not reported and rather than a royalty/ tax scheme, AAZ is in Production Sharing Agreement (PSA), which is standard for Oil & Gas but not Mining. For all intents and purposes it means AAZ is in a JV with the Government who will receive 51% of profits once Capex is repaid, so production and earnings have to be viewed in this context just like AAU's does in the JV.
SHG is my largest holding (then ASA and AAU) so I am biased, however again to look at potential risks/ negatives, Tanzanian Corporation & WHT are high, at least 30%. Tanzania operations such as Acacia's have suffered from high profile thefts & strikes etc. in past.
So all 3 companies when compared side by side, taking into account their attributes V market caps have pros and cons. I think all 3 are undervalued. AAU appears to be very well run and with capable management team - there is huge potential for 2017 just round the corner, so at moment I'm happy for it to be one of my top 3 share holdings by value.|
|Podcast - Drilling update from Brr Media
|Well done Lordgibil, I only wish I'd joined you. If we didn't make mistakes and own up to them, we'd be closing the door to learning.
If AAZ can continue to shave costs and increase profitability, once the gold price breaks through $1400 then $1500, the leverage will multiply earnings and you'll be sitting pretty. It's a tempter I must admit, but it's come so far this year that a breather is to be expected. Sorry to Aau regulars for discussing another share at some length, but I think it's good that we alert each other to potential opportunities. All the best and I hope AAZ continue to profit.|
|Crossfire, apologies accepted, it's refreshing for someone to admit they made a mistake on a BB! We all do it! You are right, this game is all about profits and cash as it's so easy to lose money on jam tomorrow shares.
Anyway I think I've learnt my lesson now and luckily I was in AAZ at 5p :-) I am sure AAU will do well in time as well.|
|BRR updateToday 17:14https://www.brrmedia.co.uk/broadcasts/5808b162909ec3505ed66234/ariana-resources-drilling-programme-update|
|Courtesy VanVan on LSESimilar views:Ariana presenting on 8th December at the Chesterfield Mayfair Hotel.By then we could well have some of the Phase Two drill results (Karakavak, Kizeltepe, Arzu Central) perhaps the delayed Forestry permit, the on site Lab. completed, Tailings Dam wall & drainage completed, all electrical & programme installations at Lab. completed, news on commissioning & first gold pour, option news from Salinbas ( outcome of the Eldorado studies), update on the Tavsan Scoping study progress.That has to be the most explosive build up of value enhancing news & yet few are currently getting their cheque books out. Wait much monger & it will cost you!Sorry sounds like a ramp.Just struggling to see why we are where we are with gold now also hardening.DYOR of course.|
|Thanks gersemi I would hope AAU would have some info on Salinbas by then and may be some bits of the phase 2 drilling.
Hope one of the London centric investors can get a breakdown on the money owed to AAU and when.|
|AAU presenting below at a pro------activ event
Dec 8th 2016, 6.00 pm - Chesterfield Mayfair Hotel, 35 Charles Street, Mayfair
The presentations will start at 6:00pm and finish at approx 8:00pm. After the presentations are complete the directors will also be available to take questions during a free canapé and wine reception. Details on the presenting companies can be found below.|
|Lordgibil and Redtrend, I stand corrected, apologies. I hadn't realised interims had been released. Mind you, that'll explain why they're a 4.5 bagger for the year.
A history of losses with a problematic heap leach system would help to explain the prior languishing share price. I owned shares in such an operation a few years ago, and watched it pour all of it's assets into the ground trying to get the heaps and vats to leach quicker, going bankrupt in the process. Having said that, AAZ would appear to have figured it out for the timebeing. I specifically invested in AAU because it's using CIP and variations to extract. Far more reliable.
Mind you, clearly, as demonstrated by AAZ the share price this year, profitability is indeed a game changer, and this should serve as a reminder of what could happen to AAU once they achieve profitability.
I haven't looked into AAZ's costs yet, but clearly in January they were a screaming buy. Congratulations to anyone that happened to buy at the start of the year.|
|AAZ isn't loss making. In the 6 months to June 2016 it made a profit of 3.5m dollars and paid off over 8m dollars of debt whilst still investing in it's infrastructure.|
|Redtrend, fair points, but I think it's important to note that both companies used for comparison are currently loss making enterprises. AAZ is a heap leach operation with a familiar sounding sob story of "less than expected, due to..." etc, etc, and SHG albeit more impressive in scale, is also currently unprofitable, no doubt partly due to its hedge book.
Granted, AAU have yet to produce anything, but projected profitability is no doubt a key factor in market cap.|
|Good post Redtrend|
|Whilst I think all good gold producers or about to become gold producers like AAU are undervalued at moment, for new investors looking at AAU, the key question for them and indeed us to stay invested is what makes AAU a better investment than other gold plays?
The only way I can justify investing some of my money here over others is:
a) Increasing RR JORC resources
b) Rapidly increasing production per year to 50K (I know we have to walk before we can run, but this is where value lies, it is key)
c) Salinbas - need progress, hard being non-operating partner but something has to happen.
d) Lithium assets - progressing and promoting these(agree with Soul, RNS is needed here). It is hard for new investors to understand AAU's lithium exposure. I still don't know if my understanding is correct that AAU have 8% equity in Dakota or is it more now?! Or is it less? If I use Panmure's figures I only get to 3%
e) Silver play - 100K Oz/yr +
When AAU becomes a producer, as we all know aim is for 20K Oz/ yr, 100K Oz/yr silver at AISC of ca. $750. Project Financing facility (debt) of JV is $33m. AAU is 50% part of JV.
In comparison you have:
AAZ is £20m Market Cap, 70K Oz/ yr, copper + silver, $40m net debt
SHG is £69m Market Cap, 85K Oz/ yr (rising to 100K Oz/ yr in 2H 2017), AISC ca. $725 & $38m net debt
So overall challenge is, why AAU with current cap of £13.8m? It's for Kerim et al to promote promote. With AAU's stake in RR being only 10K OZ/ yr, market cap growth lies beyond this initial production - it lies in expanding RR production and Salinbas, at least that's how I see it|
|With the current global monetary policy insanity Soulsauce, I'd say $2,000 is going to be a formality. When, not if. Very possibly as early as next year.|
|By the middle of next year inflation will be running at probably 2-3% so it would be nice to see at least a corresponding increase in the price of gold and silver. I see silver as the rocket fuel in the next leg of the bull market and I have made sure that the PM stocks I hold have a good ratio of silver to gold. Stocks like this...
Soul - your 1.6p is beckoning. Will you be considering a top-up at that level? Because this stock is news and sentiment driven I expect something juicy will materialise in the next 3 or 4 weeks to drive it up past 2p. If it doesn't I can see the price falling back to 1.2p at which point I will be a very keen buyer.|
|CSSF if we ever get a test back above that $2000 level I might start to believe ;-)|
|No doubt Soulsauce,... I agree. It's about attempting to separate the wheat from the chaff.
It's true however that there are more than a handful of multi-millionaire and billionaire investors (Jim Rickards included alwaysevolving) who see gold going to somewhere around that level and I for one wouldn't be asking them "if you're so smart, why aren't you rich?"|
|Jim Rickards also supports that theory. His book, 'The new case for gold' is an excellent read.|
|CSSF as much as I would hope that would happen, if I had a £ for every comment like that I have read on the gold and silver threads I wouldn't need to be investing :-/|
|I still find Ron Rosen's 'running flat correction' theory in gold fairly intriguing.
He certainly appears to have the courage of his convictions.
"Between now and June 2017 we should expect the precious metals market led by gold bullion to explode upward on a massive breakout to runaway all-time highs."
"There appears to be more than a reasonable probability that when gold tops...due in the year 2020 the ultimate high may at the very least be $10,500.00."
Interesting dude, with a pretty interesting theory and some compelling evidence behind it...|
|Fair points CSSF.
makday ask amazon woman if she holds now lol. She didn't get past the coup :-/|
|Amazon_Woman6 Jul '16 - 13:27 - 555863 of 560903 1 0
Wow is all I can say AAU
I'm on phone so excuse any blips
These markets require finding good stocks and holding tight rather than flip trading IMO
I can see 10 p plus there vvv easily possibly 20 p
Have a read some things are near term too
Forsterite 372 posts
RE: productionShare: AAU
The JORC-proven resources the company has are just the start... LOTS more ore not yet drill tested.
The Co has already proven 'Arzu North' and 'Arzu South'.... The bit in the middle ('Arzu Central') is very obviously a continuation along strike which connects the north and south sections... This has been demonstrated with some test drills, but it has not yet the full drill program required for JORC... This central section lies beneath a small hillock of ignimbrite so it is *marginally* harder to drill and so was left until last.... But it's BLATANTLY a continuation of the ore. You can see this in the 3D geological maps that the company has published.
... Arzu Central is going to be drilled in the next couple of months and the company has cash in the bank to pay for this (they have recently said explicitly there will be no dilution required and they are fully funded up until we start producing gold)........... So we are practically guaranteed amazing drilling results which will prove up a new resource area, coming in the next couple of months, before we reach production......... So LOTS of positives on the very near horizon and no dark clouds of dilution.
Furthermore, the Co has a JV in eastern Turkey which is largely overlooked... It's thought that Ariana's share in that resource alone is worth more than double the present MCap.
Ariana has its fingers in some lithium projects in Australia and Thailand.
.... And there is an insane amount of silver at Red Rabbit.... With silver spot already rising faster than gold spot, and looking to continue that trend, this could well be the ace in the company's sleeve.|
|Soulsauce, it surely can't be a short-term play,...nor can any gold share at this juncture. The gold bull is only entering its second phase having bottomed following a five year bull market correction, and AAU haven't even poured their first gold yet. This thing has realistically only just begun. The next few years is going to be nothing short of a once in a lifetime event for gold shares.
Yes, they could have entered production a couple of years ago, but we know that's not how things tend to work in the gold mining business. Also, in terms of timing, they're better off stating to mine now, as capital begins to return to the gold space and sentiment turns. The timing here now looks to be pretty damn perfect.
Clearly share prices don't go up in a straight line, and the entire market has corrected by around 30% over the past couple of months, but personally I'll take a 100%+ rise in a little over six months every time, which is what we have with AAU. If someone was to offer me that return every year for the next six, I'd bite their hand off as we'd be sitting at £1 and still be a small cap share, and I'd be retiring.
It's all about perspective,... and patience (granted, a lot of it)...|
|Some good posts appeared on the MARL site re Hot Maden and one on the STI site re mining in Turkey in general. Worth a read.|