Anglo Asian Mining Share Discussion Threads

[jaspoland] 02/6/2019 08:34

I think we all believe that the Dow has peaked now. There's a guy by the name of Bo Polny in the US stating 2 market crashes in June followed by a bigger crash in July. Expects bitcoin, silver and gold to be at ATH's by end of 2019.

Some would argue he's been saying this for years but he's been very good with his predictions in the last 9 months.

We could be in for a wild ride in the months ahead.

[callmebwana] 01/6/2019 23:30

Wan, my view for what it is worth ! Japan used to hold the largest USA debit bonds
at onetime now it is China. All together the debit I think is over $22.02 Trillion total !!
Paper money !! The Yanks think they can print the $ as and when they like it but it ends up as useless paper in the end. The whole world will one day use some other means to deal this $ dominated currency to trade with . One day I think it will change.
To what I have no idea. Perhaps like a Bit Coin, a digital world currency !!
I will stick with Gold for the time being. AAZ for sure, as a safe haven. Gold on an uptrend I am happy to say.

[loafofbread] 01/6/2019 22:32

KS+LB

Plus add the $40M of gold in the pond!

[wanobi] 01/6/2019 22:10

yep MrR it does look like it,,,, TRUMP always wins, if he can't do it one way he'll do it another :-) LOL, cheers Wan

[laurence llewelyn binliner] 01/6/2019 21:38

Indeed #KS, so as the cash position builds (2020 estimates c +$40M) sooner or later the share price will have to re-rate won't it ..? theoretically we will be covered by cash alone in 2022 at this rate, and nothing attributed to forward earnings.., exciting times ahead with exploration adding to LOM's...!

[mr roper] 01/6/2019 21:13

There’ll be a couple of US rate cuts in h2, that’ll help

[wanobi] 01/6/2019 18:50

thanx Bumpa, I suppose what you are teaching me here is to trust my own judgement & instincts as whoever has a view on all this is no better or worse at predicting the future than you or I :-) LOL,,,,, agreed cheers Wan :-)

[king suarez] 01/6/2019 17:54

I guess it all goes through the P&L eventually, either as a direct 'cost of production/sales' or through depreciation over time - just has a timing effect on profits and taxation.

The cash flow statement is always of greater interest to me! And that $50m operational cash flow looks mighty sweet - keep that up for a few years and the market cap is covered by cash at bank.

[wanobi] 01/6/2019 13:54

thanx cmb, yes, very happy so far :-), also very pleased the charts do provide some insight into future movements, even if they are not foolproof:-) and mj certainly knows his charting which is helping me in my learning of the subject greatly :-) what a great bunch of people we interface with, truly inspiring :-) Cheers Wan :-)

[laurence llewelyn binliner] 01/6/2019 13:10

#KS, thanks for that, it’s puzzled me for a while, I wasn’t sure if this was standard mining industry practice, subject to different countries regulators and accounting standards.., or something set out from the starting point PSA with the Azeri Gov and unique to how we account...

The guidance does seem a little open to interpretation on what components constitute revenue adding or non revenue adding, which 'could' be advantageous in how it is applied to the numbers.. :o)

Fair play to Spangle for taking note of their feedback's tho'...

[king suarez] 01/6/2019 12:11

Actually, AAZ explain this in Note 4.16 of the accounts:

4.16) Deferred stripping costs

The removal of overburden and other mine waste materials is often necessary during the initial development of a mine site, in order to access the mineral ore deposit. The directly attributable cost of this activity is capitalised in full within mining properties and leases, until the point at which the mine is considered to be capable of commercial production. This is classified as expansionary capital expenditure, within investing cash flows.

The removal of waste material after the point at which a mine is capable of commercial production is referred to as production stripping.

When the waste removal activity improves access to ore extracted in the current period, the costs of production stripping are accounted for as part of the cost of producing those inventories.

Where production stripping activity both produces inventory and improves access to ore in future periods the associated costs of waste removal are allocated between the two elements. The portion which benefits future ore extraction is capitalised within stripping and development capital expenditure. If the amount to be capitalised cannot be specifically identified it is determined based on the volume of waste extracted compared with expected volume for the identified component of the orebody. Components are specific volumes of a mine's orebody that are determined by reference to the life of mine plan.

In certain instances significant levels of waste removal may occur during the production phase with little or no associated production.

All amounts capitalised in respect of waste removal are depreciated using the unit of production method based on the ore reserves of the component of the orebody to which they relate.

[king suarez] 01/6/2019 12:03

Hi LLB,

That question is not really in my area of 'expertise' as I work with financial instruments and government finances, but I have found the following guidance on the World Gold Council webiste:

hxxps://www.gold.org/about-gold/gold-supply/responsible-gold/all-in-costs

5. How should a company determine whether project costs should be categorised as sustaining vs. non-sustaining?[-]

Non-sustaining costs are defined in footnote 3 to the WGC Guidance Note on AISC and AIC as follows:

“Non-sustaining costs are primarily those costs incurred at ‘new operations’ and costs related to ‘major projects at existing operations’ where these projects will materially benefit the operation. A material benefit to an existing operation is considered to be at least a 10% increase in annual or life of mine production, net present value, or reserves compared to the remaining life of mine of the operation. Companies should publicly disclose the ‘new operations’ and ‘major projects at existing operations’ that are considered non-sustaining. ”

The determination of classification as sustaining or non-sustaining requires judgment by a company’s management. The facts and circumstances that lead to a decision may change over time and this may lead to a change in classification between the time the project is originally contemplated and when it is completed. Companies should disclose their assessment process to increase transparency.

And:

10. How should companies categorize production phase open pit capitalised stripping and underground mine development costs with respect to sustaining vs non-sustaining?[-]

Production phase open pit capitalised stripping and underground mine development would generally be sustaining capital (even if it may meet the definition of “a major project at an existing operation”). Extensions to existing underground footprints and further pushbacks of existing open pits should be considered sustaining, unless:

The stripping or underground mine development is expected to take at least 12 months; and
The ore production phase is expected to be more than 5 years.
It is expected that laybacks at existing open pit mines will be considered sustaining in nature unless they meet the criteria outlined above. Companies that report under US GAAP are not permitted to capitalise open pit stripping costs during the production phase of the mine under EITF 04-6. As a result, differences in reported AISC may arise for this type of expenditure when compared to companies that are permitted to capitalise stripping costs under IFRS.

So I guess the company has some flexibility in how whether deciding to capitalise stripping costs or not?

The key bit appears to be in the note 10 above. If they stripping process takes at least 12 months and the ore production phase is expected to be > 5 years then they can be capitalised, rather than expensed?

AAZ report under IFRS, which appears more flexible than US GAAP.

[jaspoland] 01/6/2019 11:08

Celertas, your point is very valid. Unfortunately we don't live in a world where we can believe everything we read.

The information shared on this board has been pretty much factual so we should all at least be grateful for that.

[callmebwana] 01/6/2019 11:05

Wan, I have just been looking at the Gold price. It is sitting @ $1305.50.
Now that should make you happy as the next target forecast is $1325.0 and on to
$1350.0 and possibly above that.. So we can see AAZ breaking above the £1 psychological resistance and hold above it next week.IMO.
We have good support at 50 day SMA and 200day SMA. The 50 day SMA is starting to slowly move up.
Mattjos chart was very good as he forecast this happening, before it took place on the main thread. :0)
Have a good weekend all.

[laurence llewelyn binliner] 01/6/2019 10:52

#KS, an accounting Q for you.., Expensing vs Capitalising I understand, and the impact of the depreciation number only dropping into costs as demonstrated here by Spangle's recent update..

But Capitalising stripping costs..? how can these really be classed as a capital cost for a non tangible asset here and then depreciated, where in reality it is more on an expense..?

Or is this something that was agreed in the early PSA / Azeri Gov deal rules that this was just how it was to be accounted for .. ?

[mad foetus] 01/6/2019 10:43

Key point is that AAZ is a £100m company and most sensible investors will look to filter out companies rather than filter in, so forecasting declining earnings will stop research at an early point. The upside is that at some point AAZ will get sensible, engaged coverage but until then we will be reliant upon the odd person getting informed and coming onboard. For 6-9 months POG has been fairly lacklustre as well: if it can break 1350 everyone will look at gold stocks. And before then, exploration updates: little and often please!

[celeritas] 01/6/2019 10:28

But it's not a just a bb poster. SPA are supposed to represent the company. People with little time or less understanding of Aaz will have taken SPA piece as correct.

[jaspoland] 01/6/2019 09:44

If people sell based on others information without checking the facts they can't blame anyone but themselves.

[celeritas] 01/6/2019 09:26

SP Angels error will have cost some investors. share price have to be accountable to anyone who sold based on their guidance. I bet quite a few sold out.

[fardels bear] 01/6/2019 09:17

Advice? I'd consider rephrasing that.

[laurence llewelyn binliner] 01/6/2019 09:11

Spot POG $1305, and we should see a continuation of the trend here, it would be great to see the $1365 number breached after trading mostly sideways for 5 years now at $1200 +/-100..

Won't be too long before we finally break through and close over 100p IMO .. :o)

[wanobi] 01/6/2019 09:00

many thanx tj, very glad I heeded your advice back then (thanx again), so far so good, all is going well and I hope the same for you....

At this stage in my development I am very, very conscious that I need to keep my feet firmly on the ground and not get carried away with it all,,, I am sure there are challenges ahead, not least of which will be turning the paper gains into real cash in the bank :-),,,, as Bumpa correctly pointed out a while back, so far nearly all my sells have been at a loss as I run the gainers and cut out the losers (although some have turned out NOT to have been losers :-) LOL

& one of my favourite sayings now; oh what a game this is,,,,,, we are more than often damned when we do and damned when we don't :-),,,, but, I've learned so much in the past 10 months & will be up and walking soon as my 1st investors birthday comes around....:-)

This is not a game of being right or wrong, this is a game of hundreds of right & wrong decisions which are of no importance at all provided they all add up to an increase in wealth.....:-)

All the rules I put in my header have generally turned out to be true and great guiding principles,,,,, I feel the most important ones so far, especially for any newbies looking in are;

12 - A loss will never trouble me after I take it. I will forget it overnight. But being wrong – not taking the loss will damage my soul.

13 - Always sell what shows you a loss and keep what shows you a profit.

so, so important not to get hung up on the mistakes we make, dwell on them or over analyse them,,, far better to just accept them, sell up and move on :-)

that said, I am holding some in the red, but I have my reasons and they may turn out to right reasons or wrong reasons yet,,,, but, overall if they are wrong they will not upset the balance of wealth gain too much so I'm waiting to see :-)

There's so much to ponder about this game :-)

I wish you the very best in life tj
Cheers
Wan :-)