Anglo Asian Mining Share Discussion Threads

[celeritas] 29/9/2016 11:08

Good idea Mattjos, I don't think people have an idea of the scale.

[mattjos] 29/9/2016 11:04

have put into header satellite map link on Google maps to the Gedabek mine ... zoom in/out and you get a sense of just how small an area they are currently concentrated on relative to the size of the property

[celeritas] 29/9/2016 10:55

If aaz get a big licence then I expect the share price will go on a mad rush with stock very hard to get hold of.

[zhockey] 29/9/2016 10:45

Sorry JB I should pay more attention, only read the last paragraph in haste.

Another point, if AAZ are looking to build more mines and associated plant we could be looking at significant capex in the next few years, $100 to $200m? Therefore I see the psa potentially staying at 87% out to 2022 at least.

[celeritas] 29/9/2016 10:04

Yep, drilling must be close to completion for the year, I expect the data is already being worked on. Bear in mind this still only covers a fraction of the Gedabey.
Drilling isnt the only way to add to resources, hopefully we can gain one or more of those licenses. Plenty of news to come I'd say.

[mattjos] 29/9/2016 09:55

9 trading days until Q3 update, assuming it is delivered same time as previous years.

Weather still ok for HL and also for exploration drilling ..... am sure the new Geology Director is itching to get his teeth into new data from the area :-)

[jbravo2] 28/9/2016 19:06

ermmmmm, yeah, its in that post already...

[zhockey] 28/9/2016 18:01

And future CapEx of course, like the elec plant and tailings reclaimation.

[jbravo2] 28/9/2016 16:07

@cannon...

well sort of and sort of not.
We are allowed to claim all the costs of the plant and production from the govt share of production (upto a maximum rate of 75% of production).
So... clearly say for example a shiny new plant costs us $50m we can claim that $50m (plus its interest) back from the govt via their share. However if we say used that money to buy iced lollies instead of paying the debt then once we have claimed back the $50m all we would then be allowed to claim back would be the ongoing interest. And of course we would still have a $50m debt... (and a lot of ice lollies, in this example but nothing say if it had been given away in dividends)

So the kick in of the PSA isn't anything to do with "is there any of the debt left" more is there anything left we haven't claimed for.

Currently that is forecast to be 2018 as c_n_s states, however this has moved back year on year. I don't expect it to kick in in 2018. By then we will create new claims via new capex spend. Be that, our new water plant, new SAG mill, new electricity supply, expanded flotation etc etc.
Of course at some point it will be in our interest to stop capex spend but whilst the new investments will pay for themselves for years to come we can clearly expect capex to be topped up with plant improvements.

And even when capex does stop (and historically run out to claim back) of course the split will never reach 49/51 as we will still be claiming the opex from the govt share each year.

[cast_no_shadow] 28/9/2016 14:35

I loved this post CfDr.

It's a very interesting point. Why lose all the money in royalties when, if possible, you can spend more money on investing in the mine and exploration therefore increasing future cash flows?

Your point is you have two choices:

I) pay off the capex and then pay the huge royalty
II) defer paying the royally as much as possible by using that money instead to invest in the company

I think you're right although with a caveat. The company is currently geared too highly so maybe the focus should be on reducing the debt to more manageable levels - say under $20 million?

It's a balancing act between reducing risk and onerous debt repayments and keeping ahead of the PSA.

Doesn't the company state they expect to pay the additional PSA by 2018 so I'm not sure they see it this way although if they did they probably wouldn't come out and say it officially.

[cannonfodd3r] 28/9/2016 13:47

Gents, i tend to watch from the sidelines here as i cant stand the way this forumn works from a technical perspective but the chat is great.

However, there seems to be a massive error with folks perception of the debt as a negative. While it is costing them to have the debt that is an issue, however paying off the debt as far as i am aware is not in the interests of AIMC at all as the PSA will then kick in taking royalties from 12.5% to 50%. Now please feel free to correct me if im wrong however i feel there is a huge holding back of the price due to the debt which is massively incorrectly interpreted.

Ill leave this one with you, Matt, expect you can confirm

[zhockey] 27/9/2016 17:59

Jeanesy, gold has been weak since the fomc, yes the price has gone up but very tentitively. The gravitational pull of mean revertion is unavoidable. Look at where AAZ's 200SMA is.

Cast no Shadow, I get what you are saying but as there's nothing we can do about it what is the point of fretting. We just have to play the hand we are dealt, and I would not try to trade gold.

[zhockey] 27/9/2016 17:53

That was kinda my point :)

[jeanesy] 27/9/2016 17:20

Seems to me that any day that POG is weak then we move down and yet barely move up on good POG days. Will we go sub 15p as that seems to be the bottom recently.

[cast_no_shadow] 27/9/2016 17:18

Precisely.
Regardless of terminology it is what it is. If you can't understand why unlimited naked shorting of something doesn't restrict prices and ultimately destroy sentiment if used as a long terms stategy then I can't help you friend.

[crazycoops] 27/9/2016 16:53

Rem, surely a new economic paradigm, by definition, doesn't have a precedent, n'est pas?

[zhockey] 27/9/2016 16:42

Why should gold be higher? If this is a new economic paradigm then where is the precident?

[celeritas] 27/9/2016 15:53

The world is swimming in paper currency to the like we have never seen before, these are unprecedented times. Negative yielding bonds seem to be a norm now which is quite weird.
A world awash with huge debt which will need inflation to wash it away when we are in a world of deflation.
Gold should be way higher so I agree with cns it is being manipulated as letting gold run to where it should be will show the cracks in this have to have it now world.

[cast_no_shadow] 27/9/2016 15:41

Right like I said they've been forced in to a managed retreat.

Gold was down from $1920 to what $1050 ish? It was below the cost of production for many miners.

It got to a stage where the fundamentals were simply too strong and negative interest rates are the single strongest fundamental we now have in gold.

Also per my previous posts, one of the main inputs for hedge fund speculative zombie computer buying is the dollar yen. Once that reversed gold reversed along with it and it's now testing key support at around 100 having been as high as 125 in October last year.

Without these paper manipulation gold would be up a lot more given the fundamentals and collapse of the USDJPY IMO. Don't believe me? Go chart the USDJPY inverse on top of the gold price over the last five years. Almost identical. What a sham!!!

[zhockey] 27/9/2016 15:11

But hang on a minute, gold is up $200 this year?

[cast_no_shadow] 27/9/2016 14:52

Yes Celeritas, my thoughts exactly although I didn't do the math.

[celeritas] 27/9/2016 14:48

As debt lowers so will the interest paid which in turn will speed up debt repayments. This should really be adding circa 1p per month to the mkt cap.

[cast_no_shadow] 27/9/2016 14:48

Yes speculators take the long side in the rising market. And what's wrong with that?

I have no problem with naked, unallocated shorting but there has to be rules/limits. Imagine if AAZ had some good news about production but the price never went up because a bank was allowed to "print" as many naked AAZ shares short until they soaked up all the longs and then bought back later on as the speculators gave up.

We'd all be furious wouldn't we?

This is exactly what happens day in day out in the gold market.

[cast_no_shadow] 27/9/2016 14:43

Thanks for that ODR.
Although I'm not a big fan of Turk. He's made outrageous price predictions for years now and gold bugs like him haven't helped the overall cause IMO.

I just don't understand why producers don't get together, especially in this day and age of seemless communication.

They could effectively create their own unofficial "cartel" and manage prices by preventing these massive naked short positions from accumulating or st least discouraging them.

[zhockey] 27/9/2016 14:40

But large speculators are net long?