Anglo Asian Mining Share Discussion Threads

[lefrene] 20/3/2018 12:02

The Azeri's seem to be on good terms with most in the region accept with the Armenians. Apart from trade agreements with Europe and Turkey only last week they signed a final twelve part trade deal with Iran, things rather seem to be on the 'up' on the old Silk Road.

[terropol] 20/3/2018 11:58

Celeritas, Not sure what is going on at Arergold but I am very confident we are producing plenty gold at our mines.
And assuming 200-250kg in february.

A big chunk of exploration cost going in equipment that will retain some value.
Our in house drilling will be extremely cost effective wile retaining flexibility on work program.

[celeritas] 20/3/2018 11:36

Ignore him Terropol, he was saying exploration looked expensive last week.

I also think production is looking good, I cant believe its all down to Azergold.

[terropol] 20/3/2018 11:20

Russman, why do you think that?

[russman] 20/3/2018 11:06

Political risk has risen.

[terropol] 20/3/2018 11:04

The market is playing games...wile the company is producing plenty gold and big chunks of money.
I bet in February we had a brilliant production month from the news flashed by WIMBLED above.
I am sticking with 24000oz first quarter.
Good morning all and do not let the low volume drop spook you.

[lefrene] 20/3/2018 10:12

An intriguing rapid fire series of round figure sales there, somebody trying to move things their way? Two 10,000 sells within 4 minutes and followed seven minutes later by five 1000 sells in 3 minutes, not normal trades in this stock.

"finished products" for AAZ would be cast assayed and certified (officially stamped) gold bars ready for shipment to the buyer.

[cannonfodd3r] 20/3/2018 10:02

What are "finished products"?

[wimbled] 20/3/2018 09:48

Looks as if AAZ had a good month in Feb.

hxxp://en.apa.az/azerbaijan_energy_and_industry/azerbaijan-increases-gold-production-by-7-5-fold.html

Appreciate this is shared production

[mattjos] 20/3/2018 09:30

yup, another month to wait before any news.

As good as the update was, I think many will have been left feeling distinctly underwhelmed with it. huge drilling commitment this year but, no details on drilling to date and the intent 'merely' to prove up 10 year LOM rather than prove up something transformational.
going underground at Gedabek will clearly increase cost of production but, we have no idea by how much or when.

Once again, we have been left with more questions than answers at this stage.

[gutterhead] 20/3/2018 09:05

Everyone being patient and quiet. Pretty frustrating but you have to endure these moments with all investments.

[jbravo2] 19/3/2018 09:02

Nice work FZ, thats a quiet day alright! ;)

There seems to be a bit of a lull in volume right now. Will volume spike just before end of tax year or has any adjustment already happened?
New tax year will see a steady inflow into ISA's. I know I'll be taking part again.

Can we get in before serious news on drilling and dividend appears. Probably one but not the other?

[2sporrans] 19/3/2018 02:33

Ahh yes Yas, there's always the POG as primary driver.
[And, I suspect, increasingly the POC as companion]

Are you expecting any big swing[s] next few months?

A key feature of the POG movements over recent months is the extent to which it has reflected a depreciating $ through 2017 and a counter-rally lately.

Select Eur/Yen/Renimbi/Rupee and a couple of timeframes - like 2 yr and 10 yr for the chart on this link:

hxxps://goldprice.org/spot-gold.html

The contrasts with the $POG since the end of 2016 [when the current $POG rally began] are worthy of note.
The bulk of global physical gold is being bought by China+India; Euro and Yen are major reserve currencies, subordinate to the $.

I haven't a POG priced in a weighted basket of global currencies to hand.....pity.
But worth looking at the $US v such a basket:

hxxps://fred.stlouisfed.org/series/DTWEXM

So, we have a 12% $-depreciation since end of 2016 to end Jan18 ; the concurrent rise in the $POG was ~20%; i.e. 60% explained by $US depreciation.
Will the counter-cyclical $ appreciation since 25Jan18 continue, acting as stiff $POG headwind....or will the post 2016 $ depreciation resume?

Methinks that currency forecasting is generally a mugs game [and over all FOREX is a a zero sum one], yet given the US has a chronic trade+C.Account deficit and Trumpite fiscal pol. set to exacerbate, resumed $ weakness will be unsurprising, regardless of whether Fed base rate jacks up 3,4 or 2 bp over 2018 etc etc.
On strength of that....cautiously optimistic for a gently rising $POG next few months.
Then again, 1 reason I like AAZ is it has a great fat margin over ~$600/oz AISC, so not fazed if the $POG drops $100/oz say.

Just reflecting on vicissitudes of currencies, while my missus completes her nocturnal trundling and returns to bed and me likewise....

I had a US Financials ETF play going all 2017, sold out Dec.17/Jan.18 with a 16% capital gain + 3% dividends.....but there was a strong counter-rally in £ v $ [weak $ mainly] that pared down my £-gain by ~10%. Something I hadn't expected to that extent early in 2017.
My faith in the $ for 2018 was found wanting as was my confidence that late cycle [rising rates good for banks] outperformance in financials was worth persevering with given the relatively and absolutely high valuations of US equities.
Wholly irrelevant to AAZ and the Manat.

Sleep now beckons.

[yasx] 18/3/2018 15:17

2sporrans17 Mar '18 - 12:00 - 12062 of 12073
Don't think this is going to impact much on the share price next few months, fundamental importance notwithstanding.
Expect that to be driven foremost by Q1 results and 2018 production-cashflow guidance and likely revise up the 2018 production target range towards 90k-mid-GE with AISC remaining ~$600/oz.

------------------------------

2Sporrans - broadly agree, save that you left out the most important potential driver: POG.

[mattjos] 18/3/2018 13:57

With regards a dividend .... I would expect many investors to use the dividend itself to buy more of the company shares which will also help lift the valuation

[mattjos] 18/3/2018 13:56

Since 2009, when I first came across AAZ, there have been some continual reasons why folk have been unwilling to afford the company a proper valuation:Inadequate processing types for complex ores present, High debt levels, insufficient length of mine life, Does not pay a dividend, Geo-political location, The PSAThe company is picking off as many of those concerns as it is able.Debt is perfectly manageable now, exploration programme to ensure 10yr LOM, processing capacity now optimised to match differing ore types & more capacity due imminently, dividend looks highly likely at some point this year.The valuation uplift will come

[crazycoops] 18/3/2018 09:50

Thanks for taking the time to do that Friendzarin, much appreciated. I fully agree about Stephen, arguably he is our most valuable asset at the moment.

[friendzarin] 18/3/2018 09:33

Thanks for the link crazycoops.Very useful.It's a lazy day here at Zarin towers and so I've had a listen and transcribed the content pretty much verbatim with the exception of the intro preliminaries.It's always useful for those of us without total recall to see these things in black and white and sometime the sound quality can be problematic.
The words speak for themselves. The only comment I would make is with regard to Stephen Westhead . AAZ will go on I hope to many successful finds of the mineral variety but without a doubt the best find made in 2016 was when Reza signed Stephen up.When I went to the AGM last year I was unsure of the new strategy that had been announced and whether it masked a greater problem of declining resources and yields ( my naivety I suppose )however Jb and I spoke with Stephen for 20 to 30 minutes after the meeting and from a position of going to the meeting with a view to decide how much to scale down my exposure to AAZ..I have since upped my holding by a further 70% from that level. Time will prove how right I was to do that but Stephen played a significant part in assuring me that AAZ had the resources,the vision and the people to make these come together in a successful way. Hope its a good read for all and particularly for any new or casual visitor to the board.





Anglo Asian Mining Plc’s (Lon:AAZ) Bill Morgan and Steve Westhead discuss with Proactive their three-year rolling programme of geological exploration of near mine ,brown field and greenfield areas on its ground in Azerbaijan. March 16 2018.

Presenter :The main focus on Gedabek is that correct ?

B M : Correct the main focus is on Gedabek. We are planning to do some very extensive geological investigations and quite a large amount of drilling but let’s not forget we will also be doing some work at Gadir and some work at Ordubad …so although it’s a programme focussed on ‘Gadir’ (sic) we are not forgetting any of our other operations.

P: Steve if you can tell me a bit more detail of what the objective of the programme here is ..what you are looking to achieve.

SW: Certainly, and the main objectives of the exploration programme are to…
.a) replace our mined ounces but to increase our company resource and reserve inventory with the objective of gaining a forecast mine life of 10 years plus.
In terms of the strategy overall based on that objective it’s important that we dovetail our exploration programmes with our production profiles and that’s where we are trying to ensure continued growth and sustained production for a long period of time ..with that in mind we’ve assessed our exploration activity and categorised them into three groups ..those groups being –
- Near mine exploration which would initially focus on the ounce replacement and extending life on our current operations
- Brown field exploration which is primarily at the Gedabek contract area where the brown field exploration is essentially defined where we have access to processing facilities and our processing facilities at Gedabek are varied enough to handle both oxide and sulphide and all types of mineralisation that we are likely to find at the Gedabek licence.
- but importantly for the longer term success and sustainability of the company is our green field exploration and the importance there is to ensure that as resources and reserves become depleted over time we have continued increase of new deposits coming into the production pipeline for the future and that aspect of the work .. the greenfield work is focussing on our other two contract areas at Gosha and Ordubad.

P: So very little work previous exploratory works been done at Gosha and Ordubad Steve ?

SW: There was reasonably extensive work under the Soviet exploration era for which we have a significant amount of information. I can reference our listeners to our original prospectus which summarised a lot of that information and highlighted a lot of the potential however recently what we have been doing is carrying out a lot more exploration work and validation work of that Soviet data and identified quite significant areas of alteration which could be indicative of further copper and gold style mineralisation that we intend to further evaluate over the coming years.

P: and so you’ll be looking at a mix of drilling ..you are looking at what. Around just 43 and a half thousand metres of service and underground drilling ..that what’s planned ?

SW: Yes, that’s correct. The majority of the drilling is near mine and brown field focussing on the Gedabek contract area obviously then to enhance our production profile and extend life of mine but importantly as demonstrated by the finding discovery and subsequent development of the Ugur deposit which we found in 2016 and brought into production within a year in 2017 that really demonstrates our ability to convert resources and reserves into production very quickly and within the Gedabek contract area there are many known mineral occurrences .So in addition to the drilling we are planning an airborne geophysical survey and that geophysical survey will help identify anomalies and that’s areas where there’s a contrast variation with the background rocks which could be then targets for future drilling programmes to help find further deposits for evaluation.

P: When are you planning to do that Steve ?

SW: We are planning to do that mid year this year ..that’s the airborne exploration programme and all being well we should have the results out during Q3 of that information. Subject to its validation because what we are going to do as well is we are going to be carrying out that type of geophysics survey over the Gedabek mine, the Gadir mine and the Ugur mine and identifying those signatures and using those signatures to try to identify similar type of deposits over the rest of the licence area. Then assuming that works well the plan would be to utilise a similar strategy at our other greenfield areas ..initially at Ordubad and then subsequently at Gosha.

P: So do you reckon we are talking 2019 before we start to drill here?

SW: Well we have some targets already that we would be happy to drill during 2018 in Ordubad would be surface mapping…next year then yes it will 2019 when we will then be doing the follow exploration survey by geophysical methods and follow up drilling at Ordubad.Yes.

P: What’s the current life of mine at Gedabek?

SW: It’s in the order of about 7 years so we are looking to obviously extend and increase our production profile and we’ve seen the significant benefit of the Ugur deposit on our inventory …its an oxide deposit, it’s easy to mine easy to process and it’s that style of mineralisation we are looking to try to find further resources and reserves thereof.

P: So that sounds as if you are pretty keen to crack on and getting going with this programme here ?

SW Absolutely ..yeah we are all very excited the programme that’s been put together and obviously given the successes of last year and the work that was carried out its formed a very good platform for this programme going forward. With regards to the Gedabek mine itself , last year we constructed a tunnel from our underground mine at Gadir into the underground portion underneath the Gedabek open pit and we’re planning to extend that tunnel this year to carry out further underground development so that we can then start to assess the timing for transition from open pit Gedabek mining into underground mining .So we have a significant programme of both open pit style mineralisation to assess as well as underground.

P:Bill let me bring you back in at this point . How much are we talking here in terms of cost to get this programme done ?

BM: we are talking $6 million for this years programme.

P: $6 million… that’s just for this year ..that’s not for the three year cost is it ?

BM: Correct no. We are planning to spend $6 million this year and that’s all coming from our internal resources.

P: Feels as though you are in a position here to really start moving forward here….quite a critical year ahead for you ?

BM: Well last year was a very critical year, obviously getting Ugur up and running and that happened very successfully so we are very proud of that .But yes you know we are now in a position both financially and technically to really start moving..we’ve got the money and people in place to do it.

P: Bill ,Steve good to speak to you thanks very much.

[jeanesy] 18/3/2018 09:21

You are correct Joey , the 'big news' was just a statement of fact and enough shareholders have told the company that, which is why i am fully expecting to hear more news next week .

[bleepy] 18/3/2018 09:19

Oh, a lot of us started buying when share price was at 4.5/5p and since, so not been so frustrating for us crowd.

This years result roll out, exploration proving up to 10yr life of mine, plant expansion in place to cater for production increase, excellent debt package and falling fast, prospects of divi announcement.

I’m sure those that have been here for years and recently joined us will be well rewarded going forward. There will always be buyers and sellers but this company has some way to go toward its true value of which I’m sure is on the horizon.

[bleepy] 18/3/2018 09:02

Joey, not for much longer me thinks.

Yes, patience has always been the key word here as they have met and overcome each and every challenge presented them. Change of geology, plant expansion funded without dilution, halving of debt in 2017, exceptional Q4/17, transformational Ugur, exploration throughout 2017 with 3yr aggressive roll out following on.

Yes, we and the market await up and coming results of production and exploration, at the same time you can not deny where we are heading.

Frustration perhaps but I’m sure it will be more than rewarded going forward this year and for years to follow.

[joey wilson] 18/3/2018 07:20

Bleepy you are confusing my statement of a share price below expectation with the virtues of a good business.Aaz has always been valued on the low side. 38.5p in March 2018. Who expected that ??? And after the release of the BIG news that was going to send the share price to a new re-rating level.I realise the fundamentals of a great business and yet the share price remains undervalued.The share price will not move until everyone gets proof of resource. Unfortunately that was not forthcoming in the last release and all we got was a statement of fact.I do believe Aaz is undervalued but it always has been. Do you think the Profit Sharing Agreement has a baring on the share price value because I believe this share price has always been valued on the LOW side. And still remains so.....

[bleepy] 18/3/2018 00:52

“this share it has always been undervalued based on fundamentals. I dont see the mould beong broken unless Aaz exceed expectation.”

I believe 2017 more than exceeded expectations moreso given the geological challenges thrown up, halved the debt, continued expanding plant optimisation and capabilities alongside bringing Ugur into production just 12mths prior to exploration. Extensive exploration and tunnelling achieved at Gadir and Gedabek open pit alongside a 600mtr tunnel from Gadir to beneath Gedabek open pit.
Aaz then negotiated a new finance arrangement reducing interest rate from 12% to 7% releasing capital to finance an aggressive 3yr exploration programme enabling purchase of new drill rigs(with in-house training of Aaz staff), underground plant and a 2nd crusher that facilitates a parallel production process alongside the AL plant. This year will also see a full airborne survey of the complete Gedabek acreage.

Talk of mould being broken and Aaz exceeding expectations, then just read and reread the last 15mths of aaz’s news release, admission documents, Reza committing $4ml loan of his own money, no dilution, Qtr/4 2017 results, new finance deal, 3yr aggressive exploration programme announcement, Aaz continued commitment to shareholder value speaks for itself. Qtr4/17 results were exceptional, given a mild winter with Gedabek open pit back in production this Qtr and the 2nd crusher online Qtr/2 facilitating a 2nd production line with flotation plant then this year should be as transformational as 2017. I expect a divi to be nailed on this year.

[joey wilson] 17/3/2018 18:50

I personally cant see this doing anything now until May. Then it depends if the production update exceeds expectations or not. If not I see it staying stale. Ever since I have owned this share it has always been undervalued based on fundamentals. I dont see the mould beong broken unless Aaz exceed expectation. I hope that 2018 forecast is a low-ball forecast as Aaz will continue to short fall of share price expectation. In my experience it has always valued at a 50% discount and always have put that down to PSA in place.Time will tell and before you know it so will May and then an idea of the way the next 12 months will evolve.JW

[jeanesy] 17/3/2018 12:40

I agree 2sporrans but we might just get some news before the the Q1 results which may hopefully give this a bit of a boost.