Anglo Asian Mining Share Discussion Threads

[mattjos] 16/7/2018 17:46

largest buy of the day at highest price of the day, just before the bell .. 35k at 45.845p

Is the tu'penny dividend intent finally getting noticed?

[lefrene] 16/7/2018 13:48

That seller will be along shortly! :¬)

[jbe81] 16/7/2018 13:42

Nice rise, mid 50s this week.

[brasso3] 16/7/2018 13:29

How predictable. 45p now. :)

[celeritas] 16/7/2018 12:28

Most people invested in aam for a long time will be aware of the huge potential here in converting old Russian data to Jorc standards. Yeah its taking a long time but only now have aam had the resources and manpower to actually get on with it. A fraction of what was found and converted will do very nicely.

[lefrene] 16/7/2018 12:25

I wouldn't mind seeing those results.

[the_debt_collector] 16/7/2018 09:35

SP Angel

Follow

21st June 2018 08:12

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

[the_debt_collector] 16/7/2018 09:16

I notice that John Meyer of share price Angel ilk has become very positive regarding this company, usually one would not take notice of such commentators but Meyer is a class above the rest.

On that basis one must take note of the recent share price Angel target price of 72p and compare to the current 43p

If you are seeking income with capital appreciation where better to look.

[mattjos] 14/7/2018 20:11

Some of the points I raised are likely the main reasons we do not YET have institutional investors on the shareholders register.AIM mining community is riddled with scam artists, liars and crooks & the 'professional advisers' latch on to them for the fees associated with fundings. Couple that with our Geographical location .. 'Nah, it's in one of the Stans' .. & that is why most insti's will pass it over without even bothering to do the due diligence. Any that get that far will then exit when they try to understand the PSA .. they simply have not kept a close enough read on how it works and how, now, the company has learnt how it can be best utilised to our advantage ... why do folk think the exploration is centred on Gedabek?However, I am confident the advent of a dividend will change these ignorant misconceptions

[terropol] 14/7/2018 17:48

Thomas11, 2-3 milion Dollars in dividends is nothing to oil rich Azerbaijan...
And we are an independent company.
Waiting for that check with a smile on my face.

[cflather2000] 14/7/2018 17:38

240,000g? Or 240,000oz? They are expecting 60,000oz, right? That is 1,680,000g

[jbravo2] 14/7/2018 16:36

Well, there’s open for you.
So I’ll go on record to say Matt has it spot on. Those last two posts of his should be voted up by anyone with a brain.
I’m sat here with all my shares. In the sun. Here’s to AAZ, all those working for AAZ and the next few years.
Life changing :)

[thomas11] 14/7/2018 15:53

Mattjos - thanks for your response, looking forward to the exploration results with increased intrigue

[thomas11] 14/7/2018 13:57

Mattjos - come on stop teasing, where is the information that Ottoman Mining is referring to surely all the info must have been in the IPO document

The IPO document focussed on Ordubad with an expectation of 240,000g per year output within 2 years of IPO

How have they lived up to this expectation ! Everyone here is saying what a well run company this is, yet they completely mislead all investors at the time of the IPO

I arrived here after the share price collapse and when reality set in, still in recovery mode in my view, with potential still to double in a year.

Biggest risk as I see it is old fashion resource nationalism, will the dictator like money leaving in terms of a divi ?.

[mattjos] 14/7/2018 11:41

From the document:

"The Group generated cash from operations for the years ended 31 December 2016 and 2017 of $29.6 million and $29.8 million respectively."

So for FY16 & FY17 combined, cash generated was $29.6 + $29.8 = US$59.4m

Current Mkt Cap is £48.5m. At GBPUSD of 1.33 that equals US$64.5m

So the previous two years cash generation = 92% of the current market capitalisation of the company.

The company has 1,062sqkm spread over Gedabek, Gosha & Ordubad. The main current area of interest and production being Gedabek at 300sqkm



Let's assume the worst case scenario, for a buyer at today's prices:

The current three year exploration initiatives do not find any further resources whatsoever. That the company will simply pack up shop when Gedabek open pit become uneconomic in 4 years time & they do not bother to switch over the underground mining there.
& over that timeframe, they generate just $20m cash for each of the four years.
That would be $80m cash. Knock of $10m for debt repayment & it would leave $70m cash. They would not even recover all the outstanding monies under the terms of the PSA and so this period would all be run on a 87.5/12.5% split with the state of Azerbaijan.
At the end of that period they sell all the plant & equipment for 10c on the $ and realise $10m for it all.

They could return say, 50% of the $70m cash generated to the shareholders ... equating to 31c / share or 23p/share & then divi up the $10m garage sale proceeds giving a final 8c or 6.5p closing down divi

Near as damn it 30p / share return to investors.

I see that as the possible downside right now (barring war, plague, pestilence, earthquakes, volcanoes, end of worlds scenario).

So, you're paying a 10p premium for equity in an extremely well-run business that is just embarking on the first really proper, modern, detailed exploration on 30% of its total estate. The company has never done exploration like this before, nor have the preceding Azeris, the Russians or the Siemens brothers.

Whilst it would be hugely exciting to find millions of new economic ounces of Gold/Copper/Silver, the reality is that we do not NEED to find such quantities.
Reza has incentivised the exploration teams with an additional month's salary for every 100koz they discover .... that is a very persuasive incentive to the workforce & one can easily imagine the teams are going to bust a gut to get their hands on as much of that as they possibly can. Staff attendance & work rates are going to be sky-high + the word will be out for any/all local titbits of info as to where more may be found .. each employee will have family & friends as excited at the prospect as they are (don't forget how the success of Gedabek has transformed the locality over recent years and given jobs and financial security where none existed before. Everyone will want to see that continue well into the future.)

I am quite confident that the 10p premium one is paying now, over and above the 'mined out' scenario is a very small risk.

for those in possession of the September 2004 "Ottoman Mining Ltd. Overview" document, you will know that there is still at least one very exciting known area to explore on Gedabek .. this area was explored in 1998 only to a depth of 5.8m by auger hole & trench sampling whereas the mineralisation is known to extend to at least 150m.
That work on 1998 concluded 755,000t at 2.3 Au g/t & 0.041% Cu. "Being reasonably conservative and assuming that the depth can be proven to a depth of 75m, the resource would increase to 9,762,000 tonnes."

Same document also advocated an magnetometer and induced polarisation survey ... we're just now going to be getting on with the aerial survey this year.

It's not the case that there is no more resources in/around Gedabek ... its simply the case that we have not yet done a proper detailed sustained programme of exploration to accurately identify exactly what we have, where we have it & start to flesh out a detailed mine plan beyond that which is already known.

since we are now to be rewarded with a progressive dividend policy, whilst we wait for the results of this very significant 3-year exploration initiative ... I for one am more than happy to sit tight and keep adding more cheap shares offered either as a result of boredom or forced-selling by others & that is what I believe the majority of the long term PI's here will/have concluded to do.

[homebrewruss] 14/7/2018 06:43

It's not 75% of all shareholdings though it's 75% of people that turn up to the meeting plus any proxy votes sent. Each shareholder gets 1 vote if they attend or send a form.

Should be fine but proxy votes do help

[catsick] 14/7/2018 01:25

Looks like the resolution gives them headroom to pay out a total of 10p in divs from now on, obviously that number increases over time by the profits made but should make any reasonable div policy work, I am guessing maiden div of 1-2p will be announced once we clear the vote which nobody is going to vote against.. but still need to clear 75% so I will do my bit and vote my shares ...

[celeritas] 13/7/2018 17:17

Can someone post the proxy form link up.

[brasso3] 13/7/2018 16:50

With such a large percentage held by management that will not be a problem. I will download it anyway as every little helps.

[mattjos] 13/7/2018 16:33

doubt they will struggle to get the necessary 75% Terropol :-)

[terropol] 13/7/2018 16:32

Shareholders should download the proxy vote form and vote by the 26th of July.
We need 75% of yes votes to get the dividends facility available.