Anglo Asian Mining Share Discussion Threads

[yasx] 21/6/2018 10:32

I purchased a few more this week on this pullback.

I am firmly of the view that the 2p potential dividend alluded to by share price Angel is not merely deduced by comparison with other juniors but likely a guide emanating from the Co itself - thus, it is not unreasonable to assume a figure around 2p to be proposed fairly shortly.

The income will attract a different set of investors, which is welcome.

[celeritas] 21/6/2018 10:19

Sp Angel have finally woken up.

[gutterhead] 21/6/2018 10:05

the cynic in me says that share price angel obv got a whiff of some dissatisfaction coming at AGM next week :-)

2p dividend would be nice as would 72p for starters

lets see what happens with Share price over next few days

good news

[bleepy] 21/6/2018 09:37

That will have to do for starters with production numbers, exploration news and expected dividend announcement likely to accelerate their 72p estimate.

[jbravo2] 21/6/2018 09:30

He he he. Good things are coming to the patient amongst us

[goodgrief] 21/6/2018 09:23

SP Angel have finally produced something that might hook a few institutional buyers.

[goodgrief] 21/6/2018 09:21

Excellent!

[mattjos] 21/6/2018 09:19

Note here:

[mattjos] 21/6/2018 09:15

".... Speculating on a potential amount of a maiden dividend, we estimate that matching an average of 4.1% dividend yield among other precious metals dividend paying miners implies around 2p per share dividend or c.$3m, equivalent to only 8% of forecast EBITDA18. There are currently ten names in the space of the precious metals mining sector in London offering a dividend with an average yield for the group of 4.3%1 and a range of 1.4% for Hochschild to 6.3% for Polyus Gold. The Board is planning to make an announcement regarding details of the amount and timing “no later than the end of Q3/18”.

[mattjos] 21/6/2018 09:09

new coverage out this am from share price Angel with 72p Price Target.

MINING FLASH NOTE

Anglo Asian Mining* (AAZ LN) 44p, Mkt cap £50m - On course for a maiden dividend
BUY, Target price 72p

• Anglo Asian Mining has recently announced the intention to set a dividend plan which reflects current strong FCF generation at Gedabek operations and also signals management confidence in the production performance outlook. We have updated our earnings and CF estimates covering why we think the Company has ample capacity to accommodate a dividend programme while offering further valuation upside when compared to peers;
• Flexible processing facilities in place including tank leaching, flotation, SART and heap leaching, with the benefit of catering for various types of ores sourced from open pit and underground operations over the production license;
• Good infrastructure on site including access to regional power grid, roads connecting the mines of Gedabek, Gadir and Ugur, improved water availability, expanded waste dam capacity and productive local labour all improve sustainability of low cost operations;
• Experienced management with established relations with local communities;
• Exploration potential remains with Gedabek orebody having yet not been delineated, adjacent Gadir extending down dip with the latest drill core returning wide high grade intersections as well as a number of regional prospective targets warranting follow-up exploration work. The Company is spending $16m over 2018-2020 on a comprehensive exploration programme to leverage off established processing infrastructure;
• 9-17% production growth forecast in FY18 based on management guidance for 78-84koz GE (2017: 71koz GE) followed by a further increase in FY19 (SPAe: 96koz GE) led by stronger production from the flotation circuit;
• AISC for 2018 (inc. PSA) $681/oz is in the bottom quartile among gold producers allowing to earn $36m in EBITDA in FY18 and, with capital investments in processing and supporting infrastructure now behind, to generate $23m in levered FCF, equivalent to 33% FCF yield on the current share price of 45.5p.
• Strong balance sheet with Net Debt rapidly coming down and standing at $10.4m as of Q1/18 (ND/EBITDA18 0.3x) versus $18.1m as of YE17.
• The Company is forecast to be Net Cash positive by year end, generate nearly its current market cap in the next three years ($62m) and its enterprise value in four ($80m) driven by low operating costs, strong output and robust commodity prices;

• We value AAZ on an EV/EBITDA basis using multiples for comparable junior/medium sized producers arriving at target EV and NAV of $125m and $115m, respectively; this implies a BUY recommendation with a 72p target price

[celeritas] 20/6/2018 15:37

Gold averaging circa 1316 for the first 6 months.

[mattjos] 20/6/2018 14:16

warm weather, world cup, thin and quiet market .. the boredom is getting the better of a few and they are surrendering to the sell button ... manna for the MM's

[conundrum] 20/6/2018 14:13

I also had a small topup at 43.9p

Was already over my target holding quantity for AAZ, but at that price couldn't resist a few more

I rarely post as have nothing to add

[2sporrans] 20/6/2018 14:04

Buying kicking in at 43.9p.....including mine.

Typical drift-between-news AIM market.

Ironically, AAZ has never been busier, nor more productive.

[2sporrans] 20/6/2018 09:39

With the crusher and enhanced flotation plant about to commence copper concentrate production - in the few weeks, thought it might be worth a refresh reading this, the research article published Aug17, detailing the efficiencies of the various plant configurations at Gegdabek:



Starting at page 7, the guts of what approximates to the copper concentrate production process is detailed on page 8; table 2 is useful.

We have to dissociate the co-running of the agitation leach plant with the flotation which will of course now be running standalone, with the AL plant dedicated to the gold or gold-silver ore, with minimal copper content processing from Ugur and some Gadir.
So, with Flotation leading AL the % of copper extracted by flotation was 62%, when the ore feed was freshly mined, average 0.5% copper - if i'm reading the paper right.
Pretty decent methinks. Also, of course, there will be some silver and a trace of gold in the copper concentrate, adding to its value.
The ore coming out from the main pit, through the new crusher ought to be very similar.
A further 31% of the remaining copper came out of the residual flotation tailings fed into the AL plant back in the Feb. 2017 operation [74% overall copper recovery] but this won't happen for the 2018 production.

Guess that we can look at figure 3 on page 7 as a guide to the actual flotation centered process.
So, if we can take that flow chart and simply eliminate the "Agitation Leach plant" and associated process boxes.....this leaves us with this process for the copper rich ores coming out of the main pit [+ maybe some from stockpile]:

Mining Extraction and transit to

The new crusher. which feeds

The newly expanded grindings thickener plant, feeding

The main flotation plant and hopefully 62%+ copper extraction thereof [+some silver and a tad gold].

The flotation tailings then, I guess go directly into the "BLS Pond".

Suppose they won't/can't be further processed via the SART plant because that requires them to go through the AL process first [add cyanide, leach, residual [copper rich] resin then gets thickened and then put through SART].

Figure 3 does indicate the BLS pond tailings might go through heap leaching for further metal extraction.
Not sure how that works or if the copper can come out along with the silver and any trace of gold left in the tailings.
There's an extended feedback loop into the AL process shown [via PLS pond box] but can't see that happening; not while the AL plant is so busy with processing freshly mined, high grade ores.

Anyway, there is is: hopefully a useful summary of how well over 2,000 tons of copper is going to be produced through H2.

[return_of_the_apeman] 19/6/2018 18:28

Centamin paid out its entire cash flow generated in 2017 as dividends

Imagine that for aaz!

Could easily be dismissed as pure fantasy at the moment, however if mine life can be extended to 20yrs like cey then this could be the norm. I think current mine life is c. 7yrs.

Interesting to see how strong a signal management want to send to the market when the terms of the divi are annouced

Hoping for a progressive policy based on FCF

25p per yr in divis would be nice someday

We shall see :-)

[2sporrans] 19/6/2018 16:55

Robo

Matt's right; it's mostly down to strong $.

Keep this link; it's very handy:



Well explained.
Look at various time frames for the $ v Basket of non-$ currency POG comparisons.

Like the 5 year one is notable for the remarkably closely matched POG price movements for all the currencies from June 2013 until Autumn 2014; after then the divergence is marked.
So, if the $ had retained parity with the basket, the POG would now be v. close to $1,500/oz.



Looking like we'll be in for more strong $ coming weeks:
Various drivers, mostly favour this.

Think of it like this:
All the $ that AAZ is earning, buy ever more Manats to spend on plant, wages etc etc - yet lower AISC; the £<>$ rate is tending down too.

[celeritas] 19/6/2018 14:55

I'm expecting 1250 to 1260 bottom but I also expect circa 1400 by the end of the year.

[lefrene] 19/6/2018 13:34

It's fairly neutral for AAZ, although the gold gets less dollars, the dollars buy more Pounds.

[mattjos] 19/6/2018 12:45

strength of US$ at mo

[robo21] 19/6/2018 12:21

Does anyone have a theory on why gold is so weak?

[lefrene] 18/6/2018 14:12

Patience has paid off here for a good many, a bit more patience and we might see a fair valuation here? In the meantime the business continues to be very well run, and there is the prospect of a divi this year. It's the old conundrum, if I take money out of this to risk it elsewhere, could I get back in here in meaningful size when the next leg up begins?

[mattjos] 18/6/2018 12:08

Tying to bore holders into selling here by the looks of it.

[lefrene] 18/6/2018 12:05

This is the AAZ board Brasso3, you do what you want with your own money.

[brasso3] 18/6/2018 06:37

O/T to Lefrene

Goldmoney in the USA have a similar product that is inferior to Goldbloc. Their market cap. is around $400m from memory. I think calling it 'a Ponzi scheme' is unfounded. It is a new idea and time will tell whether there is a market for it. I am will to see how it progresses in 2018/19.