Anglo Asian Mining Share Discussion Threads

[bumpa33] 21/5/2020 10:32

Mattjos - 575k bid in the auction and no one took it?? seller can’t be that bothered then, v odd...!

I’ll have a peek again next week.

[mattjos] 21/5/2020 10:26

Bumpa, thanks for you post 19875 re. STCM … pretty much exactly what i believed to be the case. Watching and waiting for some big volume. There was 575,000 Bid in yesterdays auctions at 21p but, no seller for it that way so, assume Cantor will keep up same pattern of selling for the forseeable

[baddeal] 21/5/2020 10:25

Talk of buy backs to help II get in is nonsense. Any investor can acquire shares if they choose to over time and build a position. They just have to be patient. It would be a complete mistake for the company to allocate funds to buying and holding shares when they have just laid out a 3-4 year exploration and exploitation programme.We need more liquidity and that will only really come if bod divest some of their holding or use institutional placing to raise more equity to provide additional funds to fast track new mines. I'm in favour of either as bod will still hold significant interest and any short term share price impact will be negated by longer term growth.On the rns, we haven't learnt much that we didn't know but we do now have some sort of a time line which is helpful.Talk of overseas opportunities is I hope just posturing, given what had been laid out in gedebek. We shouldn't be worrying about anything else. Beside team have been locked in for last three months so not sure how they will have done much overseas!Gla

[mattjos] 21/5/2020 10:22

With regards the share buyback suggestions .. let's first see how much of the dividend monies gets reinvested by shareholders over the course of this year. That could take up a pretty big chunk of AAZ shares in itself & will certainly drive the share price upwards

[bleepy] 21/5/2020 10:17

Gedabek is highly prospective with the potential to host a large porphyry system.

Ordubad, the current geological model being tested is that of the possibility of a large porphyry system.

This is supported by the presence of operating porphyry mines in adjacent countries hosted within the same mineral belt.

Anglo Asian Mining is assessing opportunities to further expand in both Azerbaijan and other countries. These projects are assessed together with the production capacity of the Company's existing mines and development options.


Expansion could involve extension of prospects crossing existing CA’s and or factoring azergold into the mix.


Extension of Current Mine Life
The Company is in a very strong position with significant exploration upside at all three of its Contract Areas. The exploration programmes are being designed to be rolled out to allow time for "dovetailing" exploration results into resources and ultimately reserves to extend the current life of mine. The Company is confident that the resources will yield extensions of operations to provide significant shareholder upside from the metal in the ground being converted to revenue.

This work is being planned to optimise the life of mine for each property within the current permitted activity timeline in the Production Sharing Agreement ("PSA"). Assuming the two available five-year extensions in the PSA are requested by AIMC for each property, the permitted production periods are as follows:


Mine - Year of submission of notice of discovery - Last year of permitted production

Gedabek 2008-2033
Gadir 2012-2037
Ugur 2016-2041
Gosha 2012-2037


Given this strategic update, aaz’s current position and track record then it surely qualifies for psa extensions as and when timely applications need to submitted (believe it’s some 12mths before expiration) so plenty of time for those submissions.

What value now on the psa agreements and is this the subject under discussion with the govt as psa extensions now seem a formality.
And new discoveries start with a prospective mine life of 15yrs under present psa agreement.

[donald pond] 21/5/2020 10:14

I've posted the following on the SCVR on Stockopedia. I understand that Paul Scott and Graham Neary don't regard themselves as resource specialists, but as Matt was posting recently, that's no excuse really. If any other stocko subscribers want to comment and suggest that many "value" investors are not just scrabbling around buying beaten up retailers but are looking at the wider picture, it might help change their inertia.

"I know that the SCVR doesn't do miners, but you perhaps need to start doing so. I am particularly thinking about Anglo Asian Mining (LON:AAZ), which gave a strategic announcement today. They are a gold and copper producer in Azerbaijan, and are profitable, debt free and cash rich. The share price has risen from 5p to 140p over the last 5 years, and in 2018/19, it paid a divi of 7c, which rose to 8c last year (as confirmed in results last week). In a world where many companies are cutting dividends, investors looking for value and dividends may have no choice but to cast their net wider than they are used to."

[1tarquin] 21/5/2020 10:08

Great update this morning and I look forward to seeing some more tangible data over the coming months and years.

Not sure how a share buyback will help with liquidity in the long term though (even if not cancelled). Company buys back a certain % of the equity and makes a nice return on that for giving it to a cornerstone institutional investor and the share price is strengthened in the short term - that's all good. But in the long term, haven't we have now just taken a % of equity out of the available liquidity pool (assuming the institutional investor is to hold for the long term). So in the long term we have just made the liquidity problem we are trying to solve worse as the shares of the company will be even tighter held? What am I missing?

[2sporrans] 21/5/2020 10:06

dp

I can see merit in your buy back suggestion [non cancellation version].
Haven't arrived at a clear pov on it yet.

Attracting institutional investors an unequivocal thumbs up of course.

In context of future expansion, I am wondering if AAZ will wish to consider issuing their own bond debt, rather than
raise additional finance via more loans.
Though they could obtain loan finance cheaper than before [7% pa over the final year of debt paydown], corporate debt could be raised very cheaply?
It could also be a/another way of getting institutional investors to participate.
Could consider an issue of convertibles?
Would some dilution be so henious in an expansionary scenario [post 2023] and a conversion price well above current?
Just thoughts.


When it comes to multiple mine developments and increased infrastructure
+ maybe some plant capacity [flotation?] over 2021-25, having loads of ready cash will be great; especially over 2021-23, before payback and its early arrival.
The first new mine [Avshancli 1 - open pit gold - a sort of Ugur-2] producing from mid 2022 hopefully].
Given the 5 development/production prospects and crucially the 2 big underground extensions of Gadir/main pit [2023 production] do deliver close to expectations, the cashflow return should replenish the cash reserve thereafter.

By 2023/4 the focus will be increasingly on the large porphyry deposit and bringing it into production; that's what Reza is intending.
This may be the stage where greater capitalisation will be required to match the desired scale of expansion.
Maybe that will be the time to opt for new share issuance and/or of bonds rather than bank loans as previously?

[spidertricks] 21/5/2020 10:05

Ive deleted my own question as it looks like 2023 is the focus for the porphyry

[jbravo2] 21/5/2020 10:02

Buying back shares to sell in one lump to an institutional investor doesn’t have a cash cost to the company other than a temporary reduction in the bank balance whilst the company is accumulating.
It doesn’t change the shares in issue. It saves paying out some dividend.
It should make money for the company in the current situation. They should be able to sell the shares at a large premium, if for example they sell the idea the cash is to fund a new mine etc. Admittedly we might need a capable broker to help. Suspect it’s a bit beyond SPA.
Reza’s shareholding isn’t an issue. I worked it out a few months ago and posted in here the company could buy something like 5m (from memory) before he breaches 30%. He would then revert to his original holding as they came out of treasury.

[mattjos] 21/5/2020 09:59

If we go back to the conceptual model image from the other day:




Ugur is soft free-digging ore & makes me think about this blue area on the model called "Sediment Hosted Replacement".

Now we know that Ugur goes deeper ie. its origin was from an upwelling underneath and not an alluvial deposit from an old waterway that washed the ore there.
Going deeper under the surface deposit looks a very favourable way of moving closer to Porphyry that is likely present below …. It's going to be a monster if its all the same Porphyry that is underneath the Gedbek open Pit and Gadir

[notaclue] 21/5/2020 09:55

I can understand the frustration felt when you think that the price of a company is not being rated fairly and is too cheap. Then again if you think that's the case then shouldn't you be hoovering shares up at your perceived ridiculous prices to sell on when they eventually re-rate to something more acceptable. I thought that's one of the big reasons for investing in a company in the first place. I'm not one for a company buying its shares back. I'd prefer that money to be invested in the company to build it up or returned to shareholders via a dividend if they cannot find a better use for it.

[mattjos] 21/5/2020 09:51

Tried to tweak the viewing angle to best show the topography and how the valley from Ugur naturally helps us access Ugur Deeps (circled in Blue).

Fz/Jb … little did we know it at the time but, we were stood right on top of Ugur Deeps when we looked at Ugur from the canteen road :-)

[goldrush] 21/5/2020 09:51

mf

You have expressed the buy back option well and a $5m facility to place onto an institution is quite logical and business savy and is worthy of consideration.

Overall great work by the Co and as Mattjos says keep doing the right things and we will eventually get there !!

[klosters65] 21/5/2020 09:50

I wasn't proposing dilution of equity. I would like to see a lower share price, which I believe would encourage more buying and thus an increasing share price

[goodgrief] 21/5/2020 09:49

Maybe, maybe not. I'll just be hanging onto twice as many shares as I did before.

[gold finger 1] 21/5/2020 09:44

Well there was the smallest of gaps on open that it seems has now been filled.

[bo doodak] 21/5/2020 09:44

Mattjos,

That's a profound point, easily overlooked. Maybe that is all it really is, the 'problem'. AIM doesn't really have 'investors' sadly

[wanobi] 21/5/2020 09:44

a lot of discussion around liquidity & spread,,,, think I've suggested this before,,, but here goes,,,,,,, 'Stock Split' ??? any good for AAZ ??? Cheers Wan :-)

A stock split is a corporate action in which a company divides its existing shares into multiple shares. Basically, companies choose to split their shares so they can lower the trading price of their stock to a range deemed comfortable by most investors and increase liquidity of the shares.

[swallowsflysouth] 21/5/2020 09:43

CMB, agree with you, something just not right.

[wanobi] 21/5/2020 09:41

yep, as per my post this morning Rb,,, 'patience, skill, faith and time' !!!!! :-) Cheers Wan :-)

[callmebwana] 21/5/2020 09:40

Fozzie, I like the idea from M/F..D/P.
The Co should start to buy their own shares and park them.
Or start a script scheme for current investors to have shares insted of the divi.

[riggerbeautz] 21/5/2020 09:37

Well I half thought it wouldn’t quite be the blockbuster everyone thought it would be, for two reasons. Firstly whilst mentions of mine plans is great news, it’s not an official black and white jorc report. Secondly I don’t expect anything to come out with regards to the Azeri government intentions, for AAZ to mention that in open RNS other than an actual bid or PSA extension, is like showing your hand as you sit down at a card table.

People have to learn to wait for these things or move on if it’s so frustrating them. It’s a fact many p.i’s are short term in outlook, everyone wants the share price to rocket to trade and move on; sometimes you have to accept markets don’t work like that

[mad foetus] 21/5/2020 09:37

Brasso I don't think you have understood the difference between buying back and cancelling to improve eps and buying back, holding in treasury and issuing to new cornerstone investors. The latter should be profitable, and will not reduce shares in issue. The former is a con