Anglo Asian Mining Share Discussion Threads

[sportbilly1976] 24/5/2019 12:05

KS,

I think they would have have great difficulty justifying it to the Azer govt too re the PSA impact

the SPA report and comments since unravelling before our eyes today!

[king suarez] 24/5/2019 12:03

There you go then - £100m x 1.5% = £1.5m additional income, minimum, + extra depending on whether the assets under management increase in value or not.

Probably worth £20m to £30m on the market cap I would have thought?

[king suarez] 24/5/2019 12:00

If that is true about stripping costs being expense through P&L instead of capitalised in year, then that would probably explain the drop in profit after tax forecast.

BUT, it would be a change in accounting policy, which I am not sure AAZ would be likely to implement since the business model has not changed - i.e not sure how they would justify it to their auditors.

Would have no impact on cash flow, but would in the short-term reduce income tax paid as the P&L would be lower. The current method of capitalising the stripping costs has the same expense spread out over multiple years (life of mine) via the depreciation charge so there would be no difference long term.

I would be happy for AAZ to run at breakeven (i.e no tax payable) if possible - provided the cash generation (and thus dividends) grow!

[oakey1] 24/5/2019 11:56

“. The Fund has a management fee of 1.5% per annum and a [annual] performance fee calculated as 20% of all returns in excess of the hurdle rate of 7%”
Taken from the rns end of last month

[mattjos] 24/5/2019 11:52

My own personal opinion:

I am convinced that SPA have no more data to go on than we do. Nothing more than folk here have.

The dividend increase and FY figures caught them on the hop again &, if were a betting man, I'd say they were rushed into getting a note out as they knew that share price would sweep past their last target price.
The target price was determined by a look at the chart and the commentary & spreadsheets quickly done up to justify the target but, Sergey also wanted to try and cover himself as that is not how we would wish to produce a target price but, his 'bosses' simply told him to get one done.
We now have a situation where the 'informed' investor is seeing the 'holes' in the note where Sergey has effectively come up with a note to try and satisfy his boss and , at same time, remain conservative and cover his own back.
The results is a Horlicks of a note and I am quite sure that SPA know it.

[king suarez] 24/5/2019 11:50

Oakey1,

Depends on the fee they receive for managing those assets - has that been made public? The assets are still owned by the client

I'd expect a modest % annual fee say between 0.25% to 1% possibly of the value of the assets under management as a fee - look at the annual management fee charged on any funds you are interested in investing in. My old pension fund with L&G had a 0.5% annual management charge.

0.5% x £100m = £500k a year income

Give that an industry relevant p/e ratio and that should inform the likely increase in market cap and share price I would have thought...

[sportbilly1976] 24/5/2019 11:48

oakey,

not if they've taken on £100mln in debt to pay for it

Also AUM isn't a straight read across to value as they don't sit on the co balance sheet as a true 'asset'

there will be an increase, but I wouldn't expect it to be say >50% of the AUM acquired

[oakey1] 24/5/2019 11:44

Hi if a company has zero assets under management and then lands a client and has £100 million assets under management what would you expect the share price to do?... massive rerate or just a modest increase?...it’;s a new life insurance company I am invested in

[callmebwana] 24/5/2019 11:43

KS,I think they tried to sell it quite a while back,I think it was @ £5 Mil. My memory is not so good these days !! They did do drilling but if I remember the Gold content was nothing special.

[yasx] 24/5/2019 11:42

Is this just trading in the (rising) channel which started in April 19 - if so, we are now at the bottom of that channel waiting for the next leg up...needs to hold around here.

[sportbilly1976] 24/5/2019 11:36

Matt,

Thanks for following this up with a phone call - always comes across better than a raft of emails from investors :)

Interesting to note the ultra-conservative approach on the back of what seems a lack of information being shared by the co with the house broker which does appear rather unusual. Isn't that what the broker/NOMAD fees cover re publicity and providing forecasts etc with additional information that the Co has provided to them?

Here's to SPA releasing some form of comment and update explanation asap

[bleepy] 24/5/2019 11:33

Come on AAZ....what lies beneath Gedabek open pit complex, how many Gadirs(1,2,3,4?), Ugur2, new discovery at gosha(how many more awaiting discovery on this prospect),the jewel Ordubad and 20 other sites of interest revealed by heliborne survey.

Handsome divi coming up, debt all but gone, cash pile growing, another record production year in progress, the best team in the business.

Don’t let the side down, employ a broker that’s rated as highly as yourselves at the very least.

[mattjos] 24/5/2019 11:19

spoken with Sergey … seemingly nothing more than how SPA are treating stripping & underground development costs. Sergey being very conservative in how and where they are accounted for. Expensing them v capitalising them seems to be at the heart of it.

I'm sure that Bill will treat them in such a way that is as favourable as possible for the company when considering the PSA.

I believe this is all a complete red-herring & can be sorted with a follow up note to clarify.

I have suggested they issue some sort of clarification else they will be bombarded by investors asking same question & suggested they do so quickly else face what might prove to be an embarrassing situation at the AGM.

What folk need to understand is that the company does not pass to SPA all their books and plans .. the Analysts has to do his own work (as do we) & Sergey is very, very conservative in how models the future. He always has been.

[mad foetus] 24/5/2019 11:18

It will be interesting to see if people reinvest their dividends. Given that it will be over a 3% yield for the half year (if share price stays at current level), if half of the amount was to be reinvested we could be looking at the thick end of 2 million shares being bought. That is a huge amount for the market to supply. And the opportunity won't be far off the AGM, so the stars may be aligning around that time.

[lefrene] 24/5/2019 11:12

When you have found something as solid and well run as AAZ, the flowing and ebbing of the price provides opportunity with no serious downside risk. The income is going to grow and the resource is going to grow, and on days like today one gets a chance of picking up a bargain.

[goodgrief] 24/5/2019 10:57

There's a fair few here who have said they trade 10% of their holdings. They may ultimately be increasing the size of their shareholding long term, but short term they're still selling.

[fozzie] 24/5/2019 10:40

are folk really so easily shaken out of their shares?

I am afraid so Mattjos, it would seem that there are very few ltbh about these days, it really cheeses me off. The sellers and knicker wetters constantly scalping 0-20% makes the shares behave exactly like AAZ is at the moment, its happening on a lot of shares. You can take the view that it is enabling investors to buy more at cheaper prices but tbh i have bought mine at sub 50p, have more than enough and i want to see the share price start to better reflect its potential not continually get dragged back like this.

[king suarez] 24/5/2019 10:28

Wan,

Re ORM other projects I am just referencing this:

hxxp://ormondemining.com/projects/salamanca-and-zamora-gold/

Thinking these might be on the list to develop next once an income starts coming through from the tungsten project?

[sportbilly1976] 24/5/2019 10:22

Awaiting the SPA morning note..... :)

It will be interesting to see if they (ever) re-issue guidance, but to do so they'd have to hold their hands up on the mis-calculation/typo

[ptolemy] 24/5/2019 10:12

I think the issue mgt need to address is poor liquidity.

Most agree the results were good and the future bright, so it's not unreasonable to believe an institutional investor or two might like to build a stake.

They ask a MM, and unless AAZ management release/issue shares, the only option the MM has is to nudge Pi's into selling. So, they play with the price. The issue here is AAZ has such a committed following that any price drop is seen as an opportunity for Pi's to top up.

A real shock tactic by MM's to unnerve Pi's would be a severe price drop. The good news is that it ultimately results in higher prices as institutions get on board.

I think this is a plausible theory to explain the price movement.

[sportbilly1976] 24/5/2019 10:06

topped up - thank you :)

[mattjos] 24/5/2019 10:03

are folk really so easily shaken out of their shares?

[mad foetus] 24/5/2019 09:49

We all know the drill. They will probably drop it to 86/88 and not have any for sale at 88 next. What a shoddy market AIM is

[cinoib] 24/5/2019 09:49

See we're back in silly street again, never thought we'de see the 80's to buy again,ut hat after yesterday's route am not surprised. Hardly any stocks on my screen not in the red.