Anglo Asian Mining Share Discussion Threads

[mattjos] 19/7/2017 09:10

well looks like the market here is going to completely flat-line until they give the Ugur update in the next week or so.
Then its September for the Interims and October for Q3 update & I imagine they will be aiming for Ugur starting by that date, if not before.
Getting projects completed on time and on budget is something the company has historically been good at.
Whether they kept Gedabek & gadir producing in Q2 because they felt they had to or, because they had got such a good start on Ugur they felt they had the slack to do so remains to be seen

[el_duderino_7885] 18/7/2017 22:56

Yep mining is an incredibly difficult and capital intensive industry.

FWIW I think he's done an amazing job to not only prevent bankruptcy but also return the company to profitability without the help of a big recovery in the price of gold.

Hoping for a re-rating for all holders sooner rather than later.

AAZ is a much leaner, meaner machine as a result with a fantastic team who deliver more often than not.

jaspoland - its a great board this one. Lot of excellent posts and thoughts/research shared and not always bullish which is always welcome.

[mattjos] 18/7/2017 22:15

I'd certainly agree with your 3rd para el_d ... if we can reliably grow the production across all 3 metals & begin to regularly deliver to forecast / beat them then, the company can finally get itself into a position whereby it is releasing 'Ahead' statements & that will fundamentally alter the way in which the market treats and values the entity. I believe that this is within reach ..... $1300+ Gold & $6,000+ Copper would be a great kicker

Folk might blame Reza for his eternal optimism but, he is the entrepreneur, the leader, the guy putting his all on the line in the quest to grow this company.
By & large he is doing just that. He can never be the one that turns up at work and bellyaches how it's so hard and he cant do it!
If this was easy, everyone would be doing it but, it ain't!

[jaspoland] 18/7/2017 22:13

Great to have you on the board el

[el_duderino_7885] 18/7/2017 21:54

Great summary that Matt and there should be plenty of support at these price levels.

Markets hate uncertainty and once some of these risks are removed and the path is cleared for a profitable mine with a decent life we'll see a higher capitalisation.

Companies that offer the greatest opportunities in bull markets are ones that are reopening mines and/or improving their resources and reserves.

Fascinating year ahead in both the gold market and AAZ and geopolitically.

[mattjos] 18/7/2017 21:37

Thread header updated with Brasso's chart .. thanks Brasso for keeping it going and sharing.
Really does help see the significant growth in Copper & Silver &, as jbravo emphasises, the poly-metallic make-up of AAZ's mining operations.

Q3 is usually a good quarter for Gold as the weather is in our favour & if they can continue with the growth trend on Copper & Silver at the same time, we should make further inroads to the debt reduction programme and keep on track for the FY guidance.
They used nothing like the quantity of the stockpiled Sulphide ore in Q2 that was anticipated as Gedabek & Gadir remained online to a degree so, we keep a very significant quantity of that stockpiled ore which will backstop the operation for at least 12 months during the operational re-balancing. Yes, all eyes here and there will remain on Ugur in the short-term but, reassuring to know we have stockpiled ore 'up our sleeve' still
The grid-connected electricity savings are of course still 'live' so to speak in the YonY figures, for the remainder of this year.
Should soon see some figures from the evaporator / water processing plant and the few oz that should give up .. see how long the pay back period will be for that investment.
9 trading sessions in which to update us on Ugur ... rest of the markets look asleep but, there'll be plenty keeping watch here I think.


For Ugur, I'd be quite happy to hear something like:

Known in-situ resource of 250k oz. 10 year initial mine plan
Resource remains Oxide rich & open at depth and along strike towards Gedabek West
Mine plan intended to deliver predictable minimum combined Q'ly production at:
17,500oz Gold
45,000oz Silver
700t Copper

Targeting AISC of no more than $700 / GE

In parallel a commitment to expend a minimum $nn per annum on exploration to help quantify the true size & make-up of the greater Gedabek area with a view to moving to a steady state Annual 100-120koz GE by 2020

Then a 2018/19 hitting or exceeding all predictions

[el_duderino_7885] 18/7/2017 21:21

I thought the update was pretty dam positive. All the issues are already priced in and progress on the pit optimisation, exploration, water treatment etc all going well.

I'm impressed they have continued to mine the open pit thus far too.

In terms of valuation, well AAZ only made £3 million last year and with lower production this year may only break even. This largely depends on the gold price and of course how their costs have been impacted by the operational changes recently.

Longer term, at current gold prices, and lower debt payments they might expect to make as much as £10 million a year net. With a proven life of mine of 5 years to begin with and applying a discount for the government share you can definitely make a case for a higher valuation but I wouldn't say we are much off fair value as things stand right now.

This company will be highly leveraged on the price of gold once it has a proven JORC and if you believe in the resource and a new bull gold market long term investors will be rewarded.

I'm happy on the sidelines for now.

Nice action in gold but still in that long term pennant so we watch and wait.

Silver's been more fun with a few leveraged trades put down!

[jbravo2] 18/7/2017 17:50

Just a gentle tease zh.
You were keen to remind el dud about his gold calls.
I do seem to remember you were calling for possible 800 gold a long time ago and certainly you called for 1050 back in Feb last year as it broke out.

Anyway, it's kinda all a bit of a guessing game and I'll be happy so long as the year avg is over 1200.


Anyway, onto lefrene.
How did they spend their money?
You do know it costs to dig up the stuff? Process it? Buy equipment? Service the debt? Pay the staff? Fly staff over for the AGM? Pay for the coffee and I biscuits I consumed?

It's all in the accounts. Go read, they're quite detailed for such a small company.

[zhockey] 18/7/2017 17:00

It was touching 1300, I called the double top.

I was not suggesting that it would fall to 1000 overnight, but the trend is down.

[redtrend] 18/7/2017 16:44

To be fair you called for gold sub 1000 in early May when gold price was around $1,250... It's now $1,242. Hardly 30%... Hardly 1%

[lefrene] 18/7/2017 16:34

Never mind the price of Gold, how have they disposed of the circa $63,500,000 that would come from the sale of 53,000 oz sold?

[zhockey] 18/7/2017 16:16

I still think gold is headed sub 1000 and to be fair I called this when gold was at 1300 a few months back so it has already gone 30% of the way. Why give me a hard time about that call?

Anyway I held AAZ for years waiting for the big pay day, I fear that may never happen as you allude to in your post JBravo.

[jbe81] 18/7/2017 16:08

🤣🤣🤣

[jbravo2] 18/7/2017 16:05

I can imagine the conversation now.

zh "oh thats not very much, 100k oz. that'll only last two years"
jb "its fine for now. it's just more ore to add to the mix for the plant. to add to the ore from gedabek and gadir"
zh "they've as good as admitted the mine isn't viable, in fact they shut the mine to make a road"
jb "no they haven't"
zh "yes they have and anyway here comes sub $1000 gold... no really this time it is"
jb "are you sure? i think you warned me about this before. like quite a few times"
zh "so my timing has been slightly out the last two years but really here it comes"
jb "ok thanks"

[zhockey] 18/7/2017 15:57

Let's wait for the Ugur reserves RNS and then discuss :)

[jbravo2] 18/7/2017 15:38

Mr hockey, you seem to have lost your marbles.
In the mire?
What aren't you understanding?
Have you read the last RNS?

[zhockey] 18/7/2017 15:21

Catsick,

100k is two years production then back in the mire just producing a bit of gold and 2000 tonnes of copper.

[catsick] 18/7/2017 14:54

Zhokey , 250k is 5 years of gold without any of the other sites producing, I think anything over 100k and I am a buyer at these prices, anything under 50k and I think we go sub 15p, however it does not sound like we will get a jorc report at this stage, of course I am hoping for 250k but I think that is a game changer if confirmed and I would buy up to 25p then and not sell out any until 50p if that was confirmed, at present I would lob a few out at close to 30p in the absence of any jorc confirmation...

[lefrene] 18/7/2017 14:32

Odd to see very good production and clear monthly figures and the sales price, but where is the balance sheet? Last years 53,000 ounces sold at circa $1200 an ounce is $63,600,000, so what has it been spent on? Yes paying down a bit of the debt, paying employee's etc, but where's the rest gone? Perhaps that's why the market cap is barely £6 million, instead of perhaps £150 million?

[wrighty46] 18/7/2017 08:33

Morning all, in for a few more just now and ready to buy if the update on ugar is good. I can't believe the market isn't giving this company any kind of future value at present, especially as the performance has been pretty good the last 24 months. The debt is no where near as off putting as once was. Hoping we will be out of this sideways movement soon and then perhaps the market will finally get it. GLA

[jbravo2] 18/7/2017 07:53

Yes, and of course it's virtually all capital now.
That'll leave only four payments and the two largest loans (currently standing at 12.2m) will be done.
Hey if we clear 6m debt in the worst half year of gold production, add in another 5m of free cash each half by this time next year!
:D

[mattjos] 18/7/2017 07:41

Agreed jbravo. I was pleased when they finally went to GE reporting. Folk are too hung up on just the gold element of the business.Brasso' charts help tell the real story here.Next $2.5m chunk is in August, is it not?

[jbravo2] 18/7/2017 07:26

Oh matt I think Reza knows exactly what they have to do and as you've just mentioned he's doing it.
Hey it was crazy that it was at 4p 18 months or so ago but even as the risk significantly decreased it still took a long time for people to catch on IMO.
It's now crazy this is below 20p but eventually something will finally give people confidence and they'll understand it. Hey a few that bought at 30p will even want to average down :)

We just had the lowest half of *gold* production since H1 13 but we still paid off 6m in debt, finished the water plant, and started paying for a new mine.
The difference is the concentrate contributed 10m this half as they continue to diversify revenue income. We move further and further to being a poly metallic mine. Flexing as the ore changes.
As others have said, if we get a strong H2 the debt will be well under 20m, combine that with the new resource etc, the ongoing exploration, and the future is very rosy.