Anglo Asian Mining Share Discussion Threads

[11_percent] 10/6/2020 13:40

STCM

Their sales are, to some extent, reliant on the Oil Industry....which again is linked to the oil price.

[wanobi] 10/6/2020 13:34

aha, oh yes dd, so they are,,, that's welcome news, many thanx, cheers Wan :-)

[gutterhead] 10/6/2020 13:33

this could sadly be the next trigger for gold and for next DOW correction

[wanobi] 10/6/2020 13:32

many thanx mikro1, I shall take a look this evening for sure, cheers Wan :-)

[polaris] 10/6/2020 13:21

It is mostly a function of average volume.

If few want to trade then there is no market and the spread will be wide, unless the stock also has a direct market access via SETs. That costs money and requires a shift of market...costing more money. It is a circular argument too, as more would trade if the spread was narrower, which would naturally increase average volume and reduce the bid-offer spread.

Most of the other companies mentioned so far have a higher average volume than AAZ. The fact that a lot of shares are tightly held by PIs and the management work against the volume too.

On the question of selling to buy back into an ISA - get a decent broker. You shouldn't have to pay the full spread if all you are doing is a transfer. Any half decent broker will do it well inside the market spread.

[wanobi] 10/6/2020 13:17

many thanx KS, bought in again first thing :-), thought the numbers looked fine so I took the plunge :-) blue already, plus divi coming,,, very happy :-) Cheers Wan :-)

edit.... TO prospect, hmm, yes, could be KS,,, great spot and thanks for sharing,,,,, after all,, if people see we are headed into mass unemployment globally, perhaps govs will invest in infrastructure projects to get their countries running again,,,, hoover dam type things that use a lot of cement!!!!

[lefrene] 10/6/2020 13:16

Good to see gold and copper creeping up, although I suspect the FED will shortly have a go at pushing gold down again.

[11_percent] 10/6/2020 13:10

King Suarez,

Do have an opinion/take on when debt will paid down.

[mikro1] 10/6/2020 13:04

If anyone is looking for exposure to metals other than gold I would recommend looking at Jubilee metals (JLP). Their business is to buy the tailings from other producers and produces metals. They tend to do 1 to 2 large deals per year and as such they are expanding rapidly. In H1 (ended Dec 2019) they made approximately £5 million profit and in H2 (ending in 3 weeks) they are likely to make £10 - £15 million, despite losing 6-8 weeks due to the lockdown. They are likely therefore to have around £20-£25 million cash by the end of this month and be set up (at current metal prices - which is the main risk) to make around £30 million in the next 12 months. Current market cap is 80 million. So this is a play on metal prices not coming down (a big risk given the world recession). There is also the South Africa risk. They have big exposure to PGM metals, chrome and (as of 6 months ago) copper and are ramping up to process zinc, cobalt and vanadium over the next 12 months. I have built up a position over the past 2 weeks and this diversifies me well alongside my other shares which offer protection if the economy and metals crash due to covid19 (ALTN and AVCT)

[baddeal] 10/6/2020 12:57

If you don't like the spread don't trade the share. Go elsewhere.Personally I'm not the least bothered by it.Spread is purely a function of number of MMs, liquidity, free float nms etc plenty of other examples on the market where it is as bad or worse.

[mattjos] 10/6/2020 12:17

There is a major shareholder in TSG who is unloading and will be for years

[kickingking] 10/6/2020 12:14

OK just for you why AAZ with 114m shares has a spread of 8% and TSG with only 64m shares has a spread of 2%. There also less percentage of TSG shares in free float. Granny Smith and Golden Delicious. DP is correct this should be a question asked to management.

[skeptic1] 10/6/2020 12:14

I want to sell to rebuy in my ISA! Not to trade.

[goldrush] 10/6/2020 12:10

2sp

A great Summary of the Hardman Report....Many thanks from all of us.As I worked through the Report I came away with the warm feeling that it was conservative indeed .....IMHO

[gutterhead] 10/6/2020 12:07

If you think it is the highest priority, submit it for the Q and A at the AGM and email John Meyer at SPA.
Repetitive complaining on here isn't going to bring the spread down.

[mattjos] 10/6/2020 12:06

Agreed, it has got worse & eg. CANTOR have reduced their indicated size to 7,500 now … all symptomatic of the free-float continuing to reduce, imo .. as investors continue to accumulate for the long term & this is why, i remain persuaded that as/when the necessary news stimulus arrives, this will power through the £2 mark in quick order

[donald pond] 10/6/2020 12:02

I think it has definitely got worse recently though. In my memory it was usually about 5p a year ago, and was never 10p. Now its usually 5/7p and often 10p.

[mattjos] 10/6/2020 12:00

i guess I've just accepted it a long time ago … some may find it a frustration but, i see it simply as a consequence of the limited free float & for that we should all be thankful to Mr. Vaziri back in 2015. Had the company been forced to dilute at 5p to plug the funding gap on the debt repayments, there'd be 300-400m shares in issue by now. Thankfully, that is not the case and so we are receiving (this year) 10c+ / share dividend

[donald pond] 10/6/2020 11:56

That's true Matt, but AAZ has a market cap 3 times the size, so the value of the free float at AAZ is much bigger. A wide spread benefits nobody other than MMs. I can't think of a bigger priority than getting it down. If the spread now was 125/127 I suspect many of us would be buying more.

[mattjos] 10/6/2020 11:48

there are 5 times as many shares in issue at EML as there are for AAZ + much reduced 'insider' share ownership in EML as compared to AAZ & therefore a larger free-float in EML.
Little point in comparing apples with tyres … they may both be circular but that's about as far as the comparison goes.

[2sporrans] 10/6/2020 11:41

Thomas

"...there are far too many unknowns about the future of AAZ in terms of strategy to become a mid tier player to be able to forecast profits until 2030."

Agreed.
And you could also say e.g. say the range of plausible POG [and POC] scenarios over the
coming decade render any forecast increasingly tenous the more years into the future
one's forecast goes.

Yet, what Hardman have done here is to try and present a conservative scenario, in terms of resource, production and AISC as a baseline case for valuing aAZ.
Conservative, in as far as the resource they are valuing is only the already
assessed proven+probable + 50% of the Measured and indicated on top.
This is for the already known ore bearing stratum at the main pit [the great majority of it] Gadir, Ugur [not much more than 1 year left] and tiddly Gosha.
They are saying that this lot alone can provide current levels of gold production, right out until 2032.
Indeed they think that rather more gold can be produced after 2025 than before.
Note they are forecasting gold production when they state "gold", not Gold Equivalent; there's nothing there for copper/silver.

There is nothing in this Hardman NPV-valuation for:
Main pit underground or new flank developments
Gadir extensions beyond what is within the stated P+P+M&I resource
Gosha extension
Nowt for any of the 5 new mine prospects, though they make reference to them.
Zilch for Ordubad.
Nothing whatsoever for any deep porphyry zone.

Also, briefly to touch upon costs.
The development costs for the resoures they have based their NPV upon ought
not to be eye watering.
Accepted, the AISC may well go a fair bit higher than now as they go deeper and deeper.

However.
There is no need for CAPEX on plant expansion, though they may beef up the
flotation train i guess, for those somewhat higher volumes of ore they forecast post
2025, which are likely to be ever more copper rich and sulphide.
And the underground developments, they will be progessive extensions, just like
are ongoing for Gadir and have been a few years now.
A lot of the development work is done in the JORC exploration phase.
Like e.g. the past year all that work with the 2nd leg of main access tunnel under
the main pit, the vent shaft, the side passages [to fan drill from] will enable
JORC firstly, then starting point to extract the first stopes in production phase.
No huge new infrastructure needed.
A new tailings dam i suppose but then that will enable the $20mn+ copper/gold/silver in the current one to be processed/sold.

Further.
Regards the 5 new mine prospects.
As someone else here wrote a few weeks ago, AAZ are going for the "low hanging fruit".
Avslanchi, Gilar
These are at or reasonably close to surface, max. 10km from plant.
We are looking at open pit prospects, Ugur [1] models.
Ugur
Horizontal passage access to the ores through side of hill [not precipitous]
Maybe only 4 months work.
3km from plant
Gosha
extend to the new, lower ores from existing passageway.
High grade ores.
Zeffer
This one is pretty deeep to be fair but it's bang next to the plant.

So, providing the hoped for ores are revealed, the costs for developing these
won't be a huge concern and some may be at an even lower AISC than current.

Bearing all the above [and more] in mind, what Hardman have provided
is a base level resource-production forecast from now until 2032, on top of which
all the various prospects NOT included can be added into, as and when they become known.
Putting an NPV valuation upon that, as it evolves, is as for any valuation forecast
only as good as the assumptions made, like for POG/POC, AISC and more.....as one can throw in PSA [extensions] stuff, context of raising new capital [debt - interest and/or share - dilution], mine production voids [Covid or remodel or]....blah blah.

Even without the NPV valuation, I find the PHYSICAL assessment and forecast very compelling as a base projection for 12 years + of production, based on an already identified resource, even if about 1/2 is probable or merely indicated/inferred at this time.

Hasn't that been a major gripe here.....to put to bed the idea that the ores are going to be exhausted come 2024, 2025 or whatever.....simplistically because there isn't a JORCed assessment beyond then.?

[donald pond] 10/6/2020 11:39

Look at EML. It is a start up miner with a market cap of around £40m. Its spread is 5.2/5.3. There is absolutely no reason why any share of a company above £20m market cap should be more than 2%, unless the MMs are offering real liquidity and demand that as a premium. The reason why they have the huge spread here is simple: because AAZ and share price Angel do not hold them to account.
This has nothing to do with trading or investing. It is a matter of whether is is justifiable to have the MMs take a 5% cut off every trade in AAZ. And it isn't. It's a disgrace.

[gold finger 1] 10/6/2020 11:35

If you want to trade and are not happy with the spread here, go and trade another share. You don't have to hold here and trade. This is not a trading share, you can see that by the spread. Lets face it its spread betters that don't like the spread,you can't buy or sell inside the spread. Again why would you even think about
trading AAZ with a spread bet?
My days of using any sort of spread bet has finished.They even have to show you what your chances of winning are 75% lose.I have been one of those 75% to many times,over the years.

[king suarez] 10/6/2020 11:28

Wan, don't know if you are still invested in STCM, but I would urge you to read the Chairman's statement as it is v well written and highlights the undervaluation and all of the competitive advantages STCM have over others in the region:

This snippet is interesting:

""As an ongoing concern, a meaningful economic value would be closer to USD250-300 million."

I wonder if they have/had a buyer(s) sniffing around? Unusual to have such an explicit statement of valuation?

The results are very good and quite similar to 2018, but slightly better (profits and cash generation slightly increased). The balance sheet is in a better position at end 2019 than 2018 with higher cash balance and lower debt - and this after paying a $8.4m dividend in year.

In year $19.8m of cash generation (after tax paid), of which $1.6m spent paying down debt, $8.4m spent paying the 3p dividend (maintained for this year), $2.6m on CAPEX, $2.0m of interest payments, $1.9m of lease costs resulting in an increase in cash at bank of $3.3m.

Once the debt is fully paid down they will have headroom to increase the dividend to 5p or more imo based on these results.

[droyden] 10/6/2020 11:28

Link Fund now out of DDDD from over 11%