Anglo Asian Mining Share Discussion Threads

[sportbilly1976] 17/5/2019 14:20

Citi & Morgan also come out now with pretty much the same viewpoint

co's Equity value < debt

[wanobi] 17/5/2019 14:15

aha, that's the chaps Bumpa :-) Cheers Wan

[wanobi] 17/5/2019 14:11

if we're talking Thomas Cook Group I saw a news flash saying shares are worthless earlier today...… ooops, can't remember who said it, but I think it was one of the big US investment banks.... not good, a real shame,,,, cheers Wan

[bumpa33] 17/5/2019 14:02

TCG looking increasingly like yet another household name soon to bite the dust...

[sportbilly1976] 17/5/2019 14:01

as a distraction from the stalemate here today...been watching TCG

bond price (100 par) now sub 50 suggests there is a RI or D4E coming..enough to spook bondholders who generally are more cautious than shareholders (and who also rank higher in any admin too)

some odd posts and investment basis being posted - "I'm not selling based upon the body language of the Chairman in a recent interview!" :-0

[bumpa33] 17/5/2019 13:59

gold mineralisation, or someone handy with Photoshop oakey.

[wanobi] 17/5/2019 13:30

thanx brasso, thanx mj, explanation much appreciated and firmly taken on board, just making the point that I think the limited mine life is currently holding the valuation back... I now fully understand the reasoning behind it; but, non the less I stand by my conviction in terms of the share price ... I guess what I am saying is that I think the market would understand a simple number, ie mine life is now 10 years, rather than trying understand why its better for shareholders for it to be declared as much lower in terms of the companies finances and hence didvidends and so on... but, hey, that's just my novice opinion and if you guys say i am wrong I'm happy take that too :-) cheers Wan

[laurence llewelyn binliner] 17/5/2019 13:26

There will be lot of information trickling through various analysts keyboards now another FY results are in for their comparisons.., Spangles latest is a step forward but I still don't get some of their maths..!

Onward and upward, it's the share price that matters and the dividend even more so to me..

$0.08/0.09/share for FY2019
$0.09/0.10/share for FY2020

That's without POG taking off at all, just steady 1275/1300 and some YoY Ounce / Copper growth..

[king suarez] 17/5/2019 13:21

For EBITDA to drop $12.4m in 2019, whilst revenue increases by $5m, means SPA are forecasting an increase in either the cash cost of production of $17.4m, which is a near doubling of the current cash cost (see note 8 of the accounts - inventory expensed during the year of $19.3m) - which tells me they possibly expect an earthquake to happen - blowing up half the mining equipment and mine infrastructure, OR they anticipate a near quadrupling of employee salaries (admin expense)... lucky workers/directors.

AAZ quote AISC as the cost of producing gold ounces only, rather than total GEO ounces. Copper/silver revenues offset total production cost in this metric. SPA are forecasting an increase in AISC for gold ounces produced, whilst gold production is forecast to decrease by c5k ounces and copper production is forecast to double. So the more copper/silver we produce, relative to gold, should mean the AISC per gold ounce falls lower and lower.

I think the 'AISC per gold ounce' is becoming an outdated metric for AAZ as we transition towards more copper - you could conceivable reach a point where copper revenues are the predominant earner and the AISC for producing gold becomes zero or even negative, which would make it a worthless figure to quote.

I haven't (bother to) look at the 2020 forecast as the 2019 one doesn't make any sense to me!

[sportbilly1976] 17/5/2019 13:21

steady stream of small buys coming through....

re updates - just having a whinge with IG over their market analysis page still showing dividend per share £0.00 (& general results update lag)

[oakey1] 17/5/2019 13:03

One of you mining pros cast your eye over this picture and guesstimate if the yellow bits are gold please

[lefrene] 17/5/2019 13:02

Neither does ADVFN! :¬)

[leopoldalcox] 17/5/2019 12:50

Stockopedia don't appear to have realised that aaz had results!

[mattjos] 17/5/2019 12:27

mining valuations usually based on 10-year DCF method so, why expend money on exploration to prove up reserves beyond 10 years?
You are effectively spending to prove up what the market attributes no value to.
Different if you find a monster reserve and/or, you are needing to raise a bucket load of cash.

The PSA takes into account the life of mine in its calculations over what timeframe the company may depreciate its productive assets. Better to depreciate them over may 10 years at 10% per year and thereby help keep the govt take of production to 12.75% than to declare 50 year mine life and depreciate them at 2% per annum over 50 years.

Best for AAZ to target a 10 year mine-life aspiration but, if they actually only ever have a 5-year LOM at Gedabek, that is best for company and us as it enables the continued high level of depreciation allowable under the terms of the PSA.

[mattjos] 17/5/2019 11:49

Looking back at the SPA Flash Note for AAZ issued 21st Jun 2018, SPA forecast for FY18 was:

Revs: 91.7
EBITDA: 36.5
FCF: 22.8
EV/EBITDA 2.2
PER: 11.9
Net Debt: -4.7

Today their note shows final figs as:

Revs: 90.4
EBITDA: 49.8
FCF: 27.4
EV/EBITDA: 1.5
PER: 4.9
Net Debt: -6.1

So they were 30% out on EBITDA, 20% out on FCF, 60% out on the PER

They are being too conservative again, imo

I expect the company to come in slightly over 86kGEO this year (whole year of Ag & FL running in parallel) & a further improvement in the AISC as a consequence of further operational improvements (the new haul road will cut 20-30% off fuel costs & the new maintenance facility will reduce time and costs for plant repairs).

[lefrene] 17/5/2019 11:48

In the meantime anyone doing a bit of research would be amazed at the straight forward value here, it ticks every box and more with the hidden value in the tailings and what appear to be some very rich early discoveries waiting to be proved up. Add to that the proven ability of AAZ to bring mines on stream very swiftly.

[goodgrief] 17/5/2019 11:45

And if they do change broker, maybe it'll be a sign they're about to fundraise for exploration on targets outside Azerbaijan and the remit of friendly local bankers!?

[bleepy] 17/5/2019 11:42

“Other on-going geological work has identified further copper and gold mineralisation beneath, and extending from, the Gedabek open pit that has the potential to further increase its life of mine.”

Potential to further increase life of mine, does this infer jorc applied ratings to these areas.
Similarly to the recently announced new discovery within Gosha at the Asrikchay target area, Ordubad and other discoveries as they are identified.

Surely we must be looking at a declared +10yr lom minimum considering the extensive exploration programme and major new targets identified for follow up.

AAZ must be well aware of present broker limitations, part of their overall strategy no doubt as they progress toward a wider audience.

[brasso3] 17/5/2019 11:38

The gold is certainly in the ground.

The BoD are doing what is best for long term holders.

[mad foetus] 17/5/2019 11:21

From a brokers point of view AAZ are a terrible client as they never issue shares. It is the placing, where the broker charges 1-2% and gets to allow favourite clients in on the cheap, that is where the money is made. So while I think SPA are poor and AAZ have outgrown them, you have to be careful what you wish for

[mattjos] 17/5/2019 11:08

i would not worry about it sportbilly.
SPA Forecasts have been & continue to be way, way, way behind the curve for AAZ.

The covering analyst (Sergey Raevskiy) is extremely conservative.

SPA have been behind the curve here since 2013 … now 6 years on and they are still behind the curve in their analysis.

I and many others here, have had contact with John Meyer on many occasions & repeatedly advised how and why they are wrong but, it has never really had any influence/impact.

This company just gets on with it. They don't share strategy with SPA &, thankfully, they are not part of the cliquey London spiv-set.

[sportbilly1976] 17/5/2019 11:02

figure from the SPA note - divi cost

2018 $3.4mln, 3019 $8.0mln and 2020 $6.9mln

with 114.39mln shares in issue this is presupposing a payout of 7cents in 2019 (4c final just confirmed and 3c interim later this year). Just 6 cents in 2020

I'm confused with their numbers - forecasts are optimistic in terms of how they word the note, yet the EBIT they have reducing significantly from $26.8mln this year to $11.8 next (despite revenues up $90.4mln to $95.4)

[mattjos] 17/5/2019 10:55

"Anglo Asian Mining is an AIM listed precious and base metals producer running flagship Gedabek operations in western Azerbaijan including three producing mines and processing facilities. The Company targets 82-86koz GEOs in 2019 with low cost operations providing capital for organic growth opportunities within the highly prospective +1,000km2 land package, attractive targets outside Azerbaijan as well as 25% of FCF dividend programme.

I do not believe House Broker will state; …."attractive targets outside Azerbaijan..." without prior dialogue with company management.

[mattjos] 17/5/2019 10:48

proper broker note out from SPA today