Anglo Asian Mining Share Discussion Threads

[zhockey] 26/5/2016 16:27

Jbravo, don't forget that AAZ were not gifted their current share of the PSA, it was purchased pre IPO.

[jbravo2] 26/5/2016 16:22

As mattjos says, all good news.
The bank want their money back and the state are best placed to pay that back :) Some of the banks will probably be at least partly state owned anyway.
All part of the process to clean everything up.
It seems as if the AIMROC PSA is to be cancelled.

Two options then exist to my mind.

a)
AzerGold becomes a fully functioning state run co. that employs miners and everything that goes with it. It is a long haul from nothing. It is far from guaranteed success. Indeed one could view that this has been tried once before and failed if one views the previous attempt as a state attempt. It could even go against some of the articles of Regulation for AzerGold, depending on how one wishes to interpret them.
e.g.
3.2.5. The development activities of the Society, to attract investments in order to ensure efficiency reliability and increased performance.

Consider the significant oil industry in Azerbaijan. Is it run by state companies? Clearly not. Indeed AAZ's existing PSA is simply taken from the oil industry.

Of course other articles do talk about production. It isn't just a one way street for AAZ, but we do sit as the only proven producer in the country.



b)
AzerGold looks for partners to start to develop the sites they start to identify. They avoid the need for a whole lot of recruitment and setting up a new business with the risks of failure only too well known.
That could also clear the way for a new PSA to be signed for the sites listed as the first to be taken under AzerGold. If that was the same as the existing AAZ PSA (49/51 in the states favour instead of 70/30 against them) then one might reasonably be able to say the state have gained from buying the assets and re-assigning/selling them.



This had to happen whatever the end outcome. I remain more than happy.

[zhockey] 26/5/2016 15:15

I guess it is not beyond the realm of possibility for aaz to borrow $40m to get what a 20% stake? This could be higher, or lower, depending on what aimroc is valued at.

Another thing to consider is that if aimroc couldnt make Chovdar economic, why would it be any better for AAZ?

[celeritas] 26/5/2016 13:44

Didn't China just launch a £10b fund last year just for gold miners on the silk route.

[zhockey] 26/5/2016 13:26

I agree Celeritas, so for me funding is the obstacle for any potential aquisition. Perhaps some form of earn in or operating overhead would be an option?

@Matt, afraid you've lost me, give us a clue :)

[celeritas] 26/5/2016 13:18

To fund such a deal it would have to be done on a completely different valuation to AAZ. I see exploration licenses with good drilling results worth a few hundred million but no mine.
AAZ is for some reason not seen as an investment by fund managers. You can't issue stock on aaz's current valuation, I'm sure Reza would also be against this.

[mattjos] 26/5/2016 13:16

zhockey ... try to think a little more creatively about the circumstances of the deal. There is more to it than simply $'s in this instance

[zhockey] 26/5/2016 13:09

Matt, to own an assetvyou have to purchase it, how would AAZ fund an aquistion?

[mattjos] 26/5/2016 12:45

zhockey .. if I were Reza I would be much more interested in owning the asset rather than simply managing it.

Surely the 'cleanest;' way to do this is for AAZ to 'own' the asset (as they do Gedabek) under their current PSA ... that way the arrangement is all above board & according to an existing government mandated PSA. Everyone comes out of this whole Chovdar mess, clean.
The state wins, the people get jobs and get paid, the president regains credibility. It's the proverbial 'win-win' solution.

Let's see how it is engineered in the coming weeks

[celeritas] 26/5/2016 12:41

Who knows until a deal is done. You are only going to do a deal that is financialy beneficial. For all we know aaz could be doing a deal to be part owners.

[zhockey] 26/5/2016 12:33

Celeritas,

But on what terms and how would this affect AAZ's bottomline?

[celeritas] 26/5/2016 12:25

I'd be amazed if AAZ hasn't already been asked. Reza is very quiet so you never know. Just need someone to get a whiff of a meeting.

This would be a huge deal for AAZ and should make big investors sit up and notice them.

[andrewsr] 26/5/2016 12:18

The plant is already there at Chovdar isn't it?

[celeritas] 26/5/2016 12:18

Chovdar already has a mine with plant, just needs the know how of a operator already in the region to run the mine. AAZ have years of running different ores through different processes, learning all the way.
Chovdar is in the process of being tidied up regarding ownership so I expect the government are keen to get it running again probably with an established gold miner never mind in the region but the only one in the whole country.

Capex should be minimum. Chovdar is already on a 70/30 split, hardly fair when aaz is 49/51.

[zhockey] 26/5/2016 12:11

So if AAZ are tasked with managing Chodar as you speculate, what share would they be given do you think under a new PSA?

[celeritas] 26/5/2016 12:10

Yeah it was, Ankang plant.
Whats the distance to the Chovdar mine, obviously flat conveyors are much quicker to build.

[mattjos] 26/5/2016 12:04

thanks Cel.

It was a very mountainous region where they built the conveyor as I recall.

Just wondering if conveying materials from Chovdar to Gedabek is feasible

[zhockey] 26/5/2016 11:45

Gedebek is hilly, not a flat plane.

Interesting Azergold news but they state two months so nothing immenent?

[celeritas] 26/5/2016 11:45

Ok found it from Oct 09, it was 7.8km

[celeritas] 26/5/2016 11:37

I'll have to look through emails, I know it was to save a 15km journey.

[mattjos] 26/5/2016 10:46

Cel .. can you remember how long the conveyor was that WCC built in China for one of their cement plants?

[unionhall] 26/5/2016 09:35

Yes zhockey - exactly the calculation we did previously....

[ferries5] 26/5/2016 09:27

Mattjos

If you are correct it could be a reason for the upgrade to the sag mill and flotation plant. Azerbaijan have tried and failed to entice the Russian gold miners to invest there. Aimroc cannot make it pay. So there is only aaz there at the moment.

[celeritas] 26/5/2016 09:17

Looks like the government are getting their act together regarding Chovdar.
AAZ must be in the running to do a deal now loose ends are being tied up.

[mattjos] 26/5/2016 09:10

Terrific news!Knowing he/they are under scrutiny now, the president is taking Chovdar back into state ownership & not wasting any time in the process!It's being openly reported at each step also now to show they are 'doing it right'.These surely are the preparatory moves to have Chovdar run correctly ASAP .... We must be in pole position, particularly as the earlier press reports have repeatedly highlighted AAZ as the 'model' operation when compared to AIMROC.Looks to me like this will now quickly take shape