Anglo Asian Mining Share Discussion Threads

[jbravo2] 25/4/2017 13:13

As matt has already pointed out...
The size of Ugur has been indirectly hinted at by the amount of earth they are preparing to move.
Ugur is an oxide ore with low to no copper that will match or possibly even surpass the size of Gedabek.
Until then we'll use the 1.1m of already mined sulphide ore.

The AL plant will be very useful Jan-Feb, come the cold months and all the new oxide ore ready to be dug and treated.


I stick to my prediction of doubling recent share price highs THIS year.

[mattjos] 25/4/2017 13:13

Yes, I do!!
Are you going a bit do-lally zhockey?

[zhockey] 25/4/2017 13:01

I was only responding to TPs comment on management. How is that deramping?

Does anyone here genuinely think that the AL plant was a good investment?

[bleepy] 25/4/2017 12:11

Totally agree Mattjos.

Just take a look at zhockey's past posts, he clearly ramps and deramps to suit his trading style. It's easily spotted when he is in and when he is out. He attempts to disguise it with eloquence, bit like a used car salesman.


As Mattjos pointed out the team at Aaz have outlined their strategy in fine detail. They will as always have short,medium and long term plans in place and strategise those to optimise results going forward.
1-2yr, 5yr and 10yr planning is an ongoing process in a well run company.

[mattjos] 25/4/2017 11:16

You can look at it that way zhockey or, you can now see that they have what looks like will be a large oxide resource 3km away at Ugur to feed the AL plant.

They have 6 quarters worth of Sulphide ore stacked at Gedabek to keep the Flotation plant busy and in parallel can do what's necessary to open up Gedabek open-pit for further mining after that.

Given the variation in ore types around the Gedabek complex, it seems entirely sensible to have the options for Heap, Agitation, Flotation & SART.

The challenge is to plan ahead (based on exploration and drilling) to ensure the ores are pre-selected and taken through the correct processing route in order to maximise extraction rates and minimise production costs.

If it was easy, everyone would be doing it. The company continues to gain knowledge & operational experience in-country which puts it far ahead of any other miners & that is an asset that no one seems to put any value on ... just now!

Whilst we will have to wait for the exploration updates over coming months, I do not see that the financial footing of the company is at any more risk now than it was 12 months ago. Arguably it is stronger with debt reductions already achieved.

The whole Chovdar opportunity is still there ... The tendering process is the method by which the asset is being 'cleaned up' to ensure future production is saleable. This is absolutely in-line with what the Directors said was their intention at the AGM last year.

[zhockey] 25/4/2017 10:23

Terropol,

I don't doubt their integrity but they made a big error with the AL plant. They misunderstood the resource and invested heavily in an oxide processing plant. If they are going to produce any significant amount of copper then they'll likely need to invest another $50m in a floatation plant.

JBE, yes you are right, one could argue that AAZ are in a worse position now than they were in early 2016. Hence I think they could revisit that low if gold sells off.

[deanroberthunt] 25/4/2017 08:31

some people seem emotionally attached to something that's simply an entity in companies house.

[terropol] 24/4/2017 22:16

ZHOCKEY, very sorry to see you sell out.
I hope you keep a close eye and get back in on better news.
I have been invested here for about 12 years, have no intention of selling out.
I trust both the ability and honesty of the management, that is the main reason why I hold a considerable amount of equity.
The total valuation here with debt is at about £40m, Just think how much money is been invested here over the years.... £1 per share remains my target and will stick at it.

The company is evaluating the Gold reserves, But we know for sure that we have a large amount of copper, The cash will keep flowing in and service the debt.

Look forward to further developments.

[el_duderino_7885] 24/4/2017 19:54

Zhockey remember the gold price is mainly determined by the dollar/yen.

A gold price under $1,000?? You think the dollar is going to apreciste vs the Yen by over 20%? From a dollar index of almost 100?? Really?

I'm very much in the weak dollar camp. Have you seen the dollar chart? It made a generational high over 100 and failed to extend and has now dropped back under 100. This is one of the strongest charting signals you can ever see. It implies a drop now of maybe as much as 20% over the next few years.

No chance of gold dropping back that low. I think it's much more likely the dollar/yen will continue to trend back towards 100 and the price of gold back towards $1,400 by year end.

I'm very tempted to buy back in here, valuation is beginning to look silly. Approaching explorer valuation if it wasn't for the debt!

[jeanesy] 24/4/2017 19:29

I see that 15p nearly breached today. POG is sharply lower which was the only positive recently. Company needs to put out some positive news soon !!

[unionhall] 24/4/2017 16:41

The copper and silver credits surely only apply to the pure Gold output.


If they are applied to the Gold Equivalent Onces then the Copper and silver is being double counted imho.

[jbe81] 24/4/2017 16:36

AAZ going bust, gold below $1000, zhockey have you bumped your head and woken up in 2016?

[jbravo2] 24/4/2017 14:08

It does indeed stand to reason that a reducing grade should see AISC going up.
Lower overall production also means AISC should be higher.

Working in the opposite direction are the exchange rate which is still slightly better than last years average (and certainly higher than H1 average last year - the last (and first)time AISC was disclosed.)
Also the electricity plant is a big reduction this year.

I guess the next figure we'll get for this will be as a result of the full years figures in the results. The move to GEO should be neutral for the figure as you rightly say it was accounted for as a by product credit.

[redtrend] 24/4/2017 13:57

Would be good to see an updated calculation of AISC as part of the next presentation, based on the revised reporting to "Gold Equivalent Ounces" (GEO). That would remove more uncertainty

The last AISC reported was in Nov 2016 presentation at $703/oz. That took into account Copper & Silver as "by-product" (i.e. credit reducing AISC).

So no doubt AISC will now increase per GEO, but even if it did, lets say to $850, with Gold at $1,250 that would still be $25.6m - $28.8m per year (based AAZ's new conservative production target of 64-72K GEOs).

[jbravo2] 24/4/2017 13:49

I too am baffled people are talking of going bust.
Simply not on the cards anymore. That passed a year ago.

We have enough ore above ground NOW to see us to the end of the payment schedule for the ATB and Gazprom loans in 16 months. The IBA loan is due for repayment a couple of months before that. They're the main three loans.

Granted I don't think we'll be quite debt free by then but it'll be c.$10m.

There is still lots of gold at Gedabek open pit but it is going to be lower grade than up til now. They are still trying to prioritise higher grades whilst we are paying down debt. Once our finance costs are lower we can look again at lower grades.

As for zh selling out now, baffling frankly, but I wish him well. I guess he was Mr £2500 man the last few days last week

[crazycoops] 24/4/2017 13:09

I had the chance of a large top up today due to new funds becoming available. I pondered all weekend and decided to stick with my current AAZ holding (which is now one of three losing positions in my portfolio) but not top up at this stage. There is too much uncertainty for me, both company specific and PoG. This aside, it did look like someone was accumulating last week in size but the share price is currently saying otherwise.

[mattjos] 24/4/2017 12:53

all this talk of going bust, why?

The CEO has $3.8m of his own money on the line here in addition to his significant equity stake!

No one can argue that his interests are not completely aligned with shareholders interests.

[ferries5] 24/4/2017 12:03

According to Mattjos figures, this company has $25 million in tax losses to utilise which equates very roughly to 22 cents or 16p per share.
Not sure who owns the plant AAZ or the government, but the land reverts to the government when mining ceases so not sure what value can be placed on that or if there be any decommissioning costs.
The licences,AZZ have access to have just under five years left to run, they must submit an application, and economic plan in under four years to retain licences. Gedabay, Gosha,Orubad.


1 Worst case They go bust.

2 They manage to pay down there debt in 3 years . But produce for five years If they do there 72000 (Hopefully) Gold equivalent oz. forecast this year it will or should make a big dent in there debt. Relinquish the licences and return cash to shareholders which should be a lot more than the present share price. =tax losses+ 2 years of 49% profit (sale of plant)????

3 . Everything comes up roses, more resources found at Gedabay Gadir,Uger,Bittibulag, mine life expanded. Maybe a tad over optimistic . But it is all about risk reward.

[jbravo2] 24/4/2017 11:15

Cant work out how to post this stuff. Also can't work out how to mark a map accurately but this'll do for most who've never looked into the area.

This is a rough map of the contract area. Also marked is the mine, the plant and tailings and the Ugur area.

The area is large. I'll bet that Gedabek isn't the only viable resource in there.
It virtually joins the Qaradag licence owned by AG above.

[zhockey] 24/4/2017 10:39

JBE, I stand by all my recent comments. Just not willing to be against the market at this point in time.

Another factor is that I am not very bullish on gold, I think it may finally break down below 1000 this year.

[2sporrans] 24/4/2017 10:28

Thanks for clarifying Zh.

I can see where you are coming from.
Why sweat out while the share price sinks to single digits awaiting some certitude wrt reserves, if you were able to sell out at a decent profit?
Taking a risk on re-entry [the cavalry arrives and you are out] is easier to live with than the downside risks of holding.

My gut feel is that AAZ are short cutting with this switch to Ugur. They think there is enough to go on with the drilling results they have already released, which were very encouraging for an open cast pit.
So, rather than delay and spend more time/£ assessing the Urgur resource while running down stockpiles [+ maybe keeping the main pit going as configured with ever diminishing returns], they are going full tilt into Urgur while the stockpile fed production option is open and supportive.
I don't get that they haven't/don't have enough time to drill but accept they may want to save cash burn and concentrate this in the Main Pit and Gadir this year.

In a sense, the risk is that the market is pricing in a resource downgrade overall, while the new approach to the main pit + Gadir is being assessed through 2017.
How much? is the question.
If meanwhile the POG tanks and the debt paydowns cease, I guess you'll have to be brave to be a buyer here even at derisory valuations.
However, if production keeps in kilter with the new targets and the POG at least stays above $1,200/oz and due debt repayments continue, this ought to settle nerves.
If cash permits, might AAZ surprise to upside from drilling in Bitibulag?

[jbravo2] 24/4/2017 10:28

We have six quarters of sulphide ore in the stockpile. I should imagine they'll find a little more gold before that runs out
:D

[andrewsr] 24/4/2017 10:24

From the last drilling up-date in December:

“We look forward to continuing to evaluate this deposit (sic. Ugur) with a view to adding gold reserves in advance of mining as we aim to enhance our entire production profile for the Gedabek Licence.”
“The Phase II core drilling programme designed on a grid for resource estimation will continue over the winter.”

In their recent update it was stated that mining would start at Ugur in Q4. So presumably they will provide a resource upgrade before Q4. As drilling will have continued through the winter, maybe a resource update will happen quite soon.

[mattjos] 24/4/2017 09:49

Been taking advantage of this ridiculous valuation this morning ... I do not for one minute believe that Reza & Stephen & the BOD would have determined this course of action unless they were very confident about the Ugur resource.