Anglo Asian Mining Share Discussion Threads

[jbe81] 15/9/2017 15:48

Surprised there is not more buying this afternoon. Could well get interims on Monday am

[friendzarin] 15/9/2017 15:43

Excellent posts Matt and JB and thanks for taking the time to give the board the whole perspective.I am in total agreement with your points Matt and appreciate the opportunities you outline JB that are potentially available...there is no but...from me in this discussion.

[jbravo2] 15/9/2017 15:23

Hey FZ.
Its not as clear cut as people often paint it.
Matt is, as usual, 100% right!
The PSA is double edged. It's great whilst your building, developing, spending.
It lets you recover 100% of the costs involved. You can't get better than that. (AIMROC's PSA was marginally better. It also allowed 100% recovery of costs but their RATE of recovery wasn't limited to 75% of revenue like AAZ, they had 100% rate. Of course it is doubtful we could get that kind of deal for obvious reasons, and indeed I don't think it really matters about the extra RATE, the total is the important part.)
Whilst there is still a chance of spending more on plant (e.g. if we do expand flotation) then I'm in favour of leaving it as is.

I'm sure the company would look at it longer term, or indeed now if they needed to but I'm not sure they do need to yet.
Of course all this would assume the govt wants to renegotiate at some point.
What's in it for them?
Why would the govt give us a better deal?
They can point to the fact that AAZ have made the current deal work. AAZ could in turn point to the fact that they almost didn't make it!

I guess its more likely that terms could be altered if things in the country alter. If AAZ were to get involved in other projects perhaps that could provide the impetus. Perhaps they'd look at standardising deals then? Or perhaps they'd just look to change new deals?

I feel AAZ must be looking for their next opportunity now. They are on the cusp of proving the success of Gedabek. They are in a strong position. In country, AzerGold has tendered for work to understand if Chovdar's sulphide ore is economic. It could easily be economic if they use a plant 30m away. They also have other properties, they are not going to be able to develop them all.
Out of country there has been recent press activity about the gold mines in the west of Iran and various people saying the entrepreneurs in Azerbaijan should look to partner with Iran.

And then AAZ sit still on their loans. I'm surprised they've not been consolidated. I would have thought some new financing would have been sorted by now. Perhaps it is inconvenient to do with other stuff happening.

And best of all, all this would simply be a bonus (albeit a MASSIVE bonus) to the existing case which still sees us undervalued, under reported, little known and simply off most investors radar.

[mattjos] 15/9/2017 15:16

I fully accept that many people will not touch this with a bargepole on passing inspection:

1. Geographical Location .. ie. It's a 'Stan' as far as many are concerned

2. Many investors, peculiarly imo, don't like the CEO having such a large stake

3. Still some debt on the books

4. It's a miner and therefore always raising equity and never delivering

5. Not understanding the PSA & I like many other struggled to understand for a while.

I would counter with:

1. There are simply not Gold/Copper/Silver mining investment opportunities in Godalming so, get used to the fact that big reserves tend to be in some far-flung places.

2. I prefer to see the the CEO/founder/owner-manager having a large chunk of the equity. Who better knows the value of that than the guy who started and runs the business? Such a person is going to be much more highly motivated than someone only owning 5% of a business.

3. I don't mind manageable debt if it clearly there for the purposes of growing the business and once it's been used to achieve that, it is quickly paid down. What I don't particularly like to see if a high debt loading that is always rolled over whilst the company also pays dividends. That is non-sensical to me and leads me to believe the divi is there for window-dressing / artificially propping up the share price in order for mgmnt to reap incentive bonuses in some way.

4. This company has consistently delivered on its growth plans & has never diluted the equity since IPO

5. As the first mining company in Azerbaijan, neither party had a template for how to structure such a deal so, the govt simply used the existing PSA that was in place for the more established O&G industry. It's not 'perfect' I agree but, what is?? I am sure there will come a time when the govt formally reviews it in conjunction with AAZ - particularly if would-be external mining companies, wanting to mine in AZ raise it as a barrier to entry & echo what I believe Reza has already fed back to the government.

[friendzarin] 15/9/2017 14:29

Thats good Mattjos and I appreciate this will be a more relevant discussion in the future if exploration and resource upgrades mean AAZ is potentially able to make a step up in market cap etc. That would be significant progress so it may be the case that the timing of renegotiations with the government to produce a win / win outcome ( i e an overall boosting tax revenues in any event )will be very important.So it can be parked up against future developments for now. The thought of a 2p dividend sounds attractive and istm although a relative newcomer to AAZ that it may sound even more appealing to Reza with his holding .( also my brief observation of John Sununu leads me to believe he would certainly be up for this ;))

[mattjos] 15/9/2017 13:15

PSA is a double-edged sword .. in the current circumstances ie. with debt and carry forward tax losses and the advantageous terms of depn. on capital items, the PSA is a real boon for the company so, we don't want to be in any particular hurry to change that right now.

Once the debt is paid off and we are better off by $11m per annum (cap & int payments, there should easily be the cash available to pay a modest dividend. 2p per share would only cost them $3.5m per annum.

[friendzarin] 15/9/2017 12:59

Good post JB and I'm 100% with you.The one ongoing niggle that constantly seems to reappear is the unfavourable terms of the PSA in comparison to what might otherwise be available.In fact the Nomad even mentioned it as potentially holding the price back after the AGM. Catsick also posted some very salient points on this just recently.What leverage can be brought to bear by Reza and the board to reposition more favourable terms with the government and is that likely to happen do you think ?

[bleepy] 15/9/2017 12:32

Surface and Gedabek Open Pit Exploration will allow the Company to assess the extent of the higher-grade gold mineralisation below the Gedabek open pit as found in exploration drill holes.

Ore production has been reduced from the Gadir underground mine (from February 2017 until September 2017) to allow for development and exploration drilling.


Will have to wait and see what the interims reveal of the above alongside other pending news.

[jbravo2] 15/9/2017 11:31

On the back of your post of upcoming news mr sporrans and bobbieblock posting a few highlights it is just worth running through a couple of points for our newer posters. This share genuinely is unique. I've never had an answer to my challenge of find me a share like this elsewhere.
Please.
I'd be buying it if I knew of it.



These are a few of the reasons this share is so exciting. A few of the reasons why this is my largest holding. A few of the reasons why I know the holders of 10m shares. A few of the reasons why I'm so confident.


- The company is currently valued at what, about £35m?
- Revenue this year will be $80m at least.
- Revenue next year will be closer to $100m.
- The main debt (the one used to construct the AL plant) is paid off in 11 months. That will free up $2.5/qtr
- The new resource is sooooo ridiculously cheap to mine and process. It just has to be dug up. The strip ratio is LESS THAN ONE. i.e. there is more ore than waste.
- The number of shares here is small. 113m. The board own over 40%. The CEO owns c.30%. That means he isn't keen on raising cash by issuing shares. He has NEVER done it. The rest of AIM sees CEO's not owning the shares, just collecting their wage and frankly not giving a stuff about the shareholders. Of course they say they care, what else can they say? But their actions tell the opposite story. Not so here.
- We have plant worth >$100m
- We have completed a huge amount of depreciation on that plant by keeping the resource low (plant is depreciated on a mined oz/reserve oz basis)
- We have tax losses to use.
- We are polymetallic and have the plant to treat virtually any economic ore found



Jeez the list goes on and on.
If you're here reading this, well done. You're in early and before a crowd arrive. Still only a few dozen trades each day. It won't last long.
Results this year will be ok but 2018 results will be stratospheric. If you can wait for them you'll do very well.
If you can't wait that long go find an oil explorer drilling wildcat wells. It'll be more "exciting" than here.



Can anyone think of a reason why the share price will be lower this time next year? Basically it comes down to earthquake and war.
Other than that.

Up, up, up.

[bleepy] 15/9/2017 10:28

2sporrans

Excellent appraisal containing much awaited news items, certainly warrant a few well timed rns' over coming days and weeks.

AAZ are as always on top and ahead of the game, well done is putting it mildly.

[sportbilly1976] 15/9/2017 10:04

On BBC Business live page:

"The Renault-Nisssan alliance of automobile manufacturers is to produce 14 pure electric cars and to launch a fleet of self-driving taxis by 2022.

The alliance, which includes Mitsubishi, Daimler, Russian car maker Lada and luxury brand Infiniti, aims to save €10bn (£8.8bn) a year by 2022 by working together to reduce duplicating business functions."

[terropol] 15/9/2017 09:53

Bobbieblock, Zhokey keeps popping in and out....the rest of us are all here!
I hope you have still got a position here....
We are looking to a £1 target in not to distant future.

[2sporrans] 15/9/2017 09:52

Looking ahead:

Interims out next week.
Probably few surprises and pretty much baked into the price cake though.

Mid October q3 production and Ops update.
Obviously critical info.

But before this update we may well receive important updates on:

1. Gadir exploration-development - basically completion of the tunnel [see below].

2. Recommenced production from Gadir.
3. Recommenced production from Gosha.

4. Update on exploration+re-modelling of the main pit; drilling etc equipment, men will already have been redeployed from Ugur to accelerate this ongoing activity.

5. Bittibulag exploration update [Though my guess is AAZ may well release with the Q3 ops update.]

6. Water plant [final commissioning / commence operating ] update.

on 1. above note from 24Jul news report [edit]:

"Tunnelling from the Gadir underground mine to the down dip extension of the Gedabek open pit mineralisation has commenced. 215 metres of the planned 465 metres have been completed to date. It is expected that the tunnel [Phase 1] will be completed by the end of August/early September 2017. This will allow the Company to assess the extent of the higher-grade gold mineralisation below the Gedabek open pit as found in exploration drill holes. The future project plan is to construct a tunnel [Phase 2] following the mineralisation under the Gedabek open pit and to carry out underground fan drilling to assess the future underground mining potential. This work will also provide geotechnical data for assessing the rock characteristics for underground stability that would be used in mine design work. Data collected will be utilised to evaluate the future open pit to underground transition. The fan drilling work is planned for 2018."

Obviously, completion of the phase 1 tunnel will be most revealing but it is also a necessary condition [if not quite sufficient] to be fulfilled for full production to be recommenced at Gadir; see 2. above.

I'm especially focusing upon items 1+2 as it seems to me that 1 could be completing and 2 recommencing any day now.
This will be price shifting news imho; probably more so than the [largely discounted] interims.
The resource implications will surely be as much for the [deeper] main pit extension as for Gadir.

Note on 4. above:
" [Main pit]...The exploration and optimisation drilling commenced in June 2017 with two core drill-holes completed with a total of 357 metres and assay results are awaited. On completion of the condemnation drilling work at Ugur, an additional two core drill rigs and one reverse circulation drill rig will be redeployed to the Gedabek open pit area. "

[bobbieblock] 15/9/2017 09:40

Hello folks, is ZHockey still around? I was here back in 2008. No surprise they got the new pit up and running, they've always been quick and getting a mine going. 212 oz a day + copper? On the gold alone revenues on an annual basis with gold at 1270 - 85 mil, that's not including copper. Looking forward to lower AISC with higher grade, cheaper electricity and stable dollar. I presume PSA still 87.5%? Good luck all. Lo

[bleepy] 15/9/2017 09:16

Another major motor company laying out production plans for EV's...


The Japanese automaker Honda plans to start production of electric cars in Turkey, Takuya Tsumura, head of Honda’s subsidiary in Turkey, said, the country’s media reported Sept. 14.

Tsumura noted that Turkey has great potential for the production of cars with electric engines.

At the initial stage, Honda CR-V crossover will be produced, he said.

Currently, the company produces Honda Civic cars in Turkey.

[stealive] 15/9/2017 09:10

Just need a few more buys

[mattjos] 15/9/2017 08:34

Could do with another MM joining the fray here

[ilostthelot] 15/9/2017 08:22

Could see a large % move up if we breakout over 34p today.

[bleepy] 15/9/2017 00:16

North Korea has fired a missile eastwards from its capital, Pyongyang, towards Japan, the South Korean and Japanese governments say.

​Japanese citizens in several prefectures were warned to find shelter following reports that a missile was airborne, NHK reports, adding that the missile probably cruised over the Japanese island of Hokkaido.

Gold and silver have responded accordingly

[bleepy] 14/9/2017 23:30

-- Significantly increased average daily gold production from Ugur - average daily gold doré production for first 10 days of September has more than doubled compared to the average daily production of the previous eight months


Daily gold dore has more than doubled as Ugur is being ramped up. Let's not forget that gold from both Gosha and Gadir will be added to daily production in Q4/17. Not forgetting Ugur has a significant silver deposit that will feed through to bottom line also as gold equivalent as will other metals from Gadir and water treatment recovery.

Q1/18 will see Gedabek open pit come back on stream. I'm more than curious as to the findings of the fan drilling exploring beneath Gedabek open pit.

Looking forward to interims and ops production update a few weeks later.
Combined with rapidly reducing debt levels, plant innovation findings(producing huge savings), ongoing exploration (awaiting Bittibulag) and increasing metal prices I expect the share price to rapidly go north.

[el_duderino_7885] 14/9/2017 20:21

Nice action here. I admit to taking a little off the table today @ 32.5 but will be happy if it continues higher. If I get a chance to buy them back around 30p I will.

The expected retrace in Gold may have ended although I expected a retest closer to $1,300. If it has made a short term bottom the next leg up should take us to $1,400!

What woukd Aaz be valued at when we get there??

[redtrend] 14/9/2017 18:47

My understanding is that China aren't trying to, they have. Oil futures priced in yuan. Think Matt posted a link to the Zerohedge article the other day?

With the USA then threatening the likes of China with blocking them from the international SWIFT payment system if they break the UN sanctions against N.Korea, even with the threat they really are digging their own grave and hastening the decline of the USD as a reserve currency. Slowly slowly

[celeritas] 14/9/2017 16:33

Didn't Iraq try to do that Matt



Aren't China trying to do the same with Saudi.