Anglo Asian Mining Share Discussion Threads

[2sporrans] 21/6/2019 03:10

$1400/oz spot POG.....yaaaayyh.

Been over 6 years since last this high.

[doc_oj] 21/6/2019 00:50

thanks everyone for feeding back from the AGM, much appreciated as always!

[callmebwana] 21/6/2019 00:49

Past your bed time Wan :0)
Tomorrow is another day in the life of the Market. LOL.

[doc_oj] 21/6/2019 00:49

@lurker: As you stated, you clearly missed out and if you were invested you would be selling now only to buy back much lower, what is the 'lower' target you would be looking at? and how do you justify that?

And btw what stocks would you recommend instead of AAZ which you think are undervalued or have potential?

Looking at some of your posts you seem to present a very learned opinion everywhere, I am just curious what your portfolio looks like.

Many thanks.

[henwii] 20/6/2019 22:53

Mattjos, nice to put a face to the name next year, work allowing I shall thank you personally.

[goodgrief] 20/6/2019 22:52

Rb, early on Stephen mentioned that they are examining how to extract whatever gold might be contained in the pyrite ore that lies beneath Ugur.

[bleepy] 20/6/2019 22:38

Good to hear Stephen’s team expanding as the identified 31 targets alongside Gedabek’s 3 mines, Gosha and Ordubad will keep them busy.

Also picked up on following prospective targets crossing some of aaz’s boundaries and associated permissions to explore, so, busy busy times indeed.

[bleepy] 20/6/2019 22:24

The para seem to reflect the present AAZ that has declared jorc to 2025, whereas in reality there’s probably decades and decades of jorcable resource lying in wait.

[wanobi] 20/6/2019 22:22

welcome to the thread Looobydoo, cheers Wan :-)

[wanobi] 20/6/2019 22:14

many thanx RB, (apologies our long posts crossed:-), what a day you've had,, one I am sure you will look back on with a large smile when you finally sober up and placate the missus with all the money to be made etc etc :-) (fwiw,,,that would be my approach to the problem:-)

very interesting to hear from you and mj about the Russian methodology in reporting reserves/resource and by the sounds of it,,, we are sitting on a better prospect than even the most knowledgeable guys thought :-),,,, if that's a correct interpretation (factor of 10x!!??), obviously that's rather good I'd suggest :-) LOL,,, :-)

greatly appreciate the extended commentary you've posted this evening & must admit to thinking you'd be staggering around town right now signing 'if I were a rich man' and reporting back tomorrow LOL :-)

sleep well Rb
Cheers
Wan :-)

[mattjos] 20/6/2019 22:08

There are some other points I noted but, I want to check a few other thing out before sharing here.

Stephen's new addition to the team, Catherine, is a very bright & competent young lady. She was bubbling with enthusiasm & ideas. I liked her a lot.
They are really building up a terrific team here

[looobydoo] 20/6/2019 22:08

Thank you rb very much for the post, hope you manage to get home at some point!

[mattjos] 20/6/2019 22:06

:-) nail on head bleepy! Well done for digging that para out from the document

[bleepy] 20/6/2019 22:05

Also makes one wholly appreciative and fortunate to have Stephen Westhead on board.

[bleepy] 20/6/2019 21:58

Mattjos, excellent read and this extract caught my attention...

“For this reason, there are always constant discussions between the western experts and the local Russian teams for the amount of reserves available from the mine sites. This can be especially important when some deposits have huge amounts of balance reserves which could be extracted. For example, a “reserve”; classified under the Russia/CIS system may have a mine plan covering the next two hundred years, but an assessment under JORC code on the same resource classifies the reserve within realistically foreseeable economical projections under a business plan covering only about a 20 to 30 year period.
This, i.e. minimising the evaluation period to 20-30 years, can sometimes be a difficult concept for the Russian experts to grasp and it can be a monumental task to convince the clients that their resources/reserves did not disappear, but the reserves assessed under the international system covers only for the reliable business plan period; and at the end of this period, further resources will be converted into reserves.”

[wanobi] 20/6/2019 21:54

Gold - really interesting read, cheers Wan :-)

The Effect of Fed Fund Rate Hikes on Gold, By J.B. Maverick Updated Oct 16, 2018

While popular opinion is that interest rate hikes have a bearish effect on gold prices, the effect that an interest rate increase has on gold, if any, is unknown since there is actually little solid correlation between interest rates and gold prices. Rising interest rates may even have a bullish effect on gold prices.

Popular Belief About Interest Rates and Gold
As the Federal Reserve continues to slowly normalize interest rates, many investors believe that higher interest rates will pressure gold prices downward. Many investors and market analysts believe that, as rising interest rates make bonds and other fixed-income investments more attractive, money will flow into higher-yielding investments, such as bonds and money market funds, and out of gold, which offers no yield at all.

The Historical Truth
Despite the widespread popular belief of a strong negative correlation between interest rates and the price of gold, a long-term review of the respective paths and trends of interest rates and gold prices reveals that no such relationship actually exists. The correlation between interest rates and the price of gold over the past half-century, from 1970 to present, has only been about 28%, which is not considered to be much of a significant correlation at all.

A study of the massive bull market in gold that occurred during the 1970s reveals that gold's run-up to its all-time high price of the 20th century happened right when interest rates were high and rapidly rising. Short-term interest rates, as reflected by one-year Treasury bills (T-bills), bottomed out at 3.5% in 1971. By 1980, that same interest rate had more than quadrupled, rising as high as 16%. Over that same time span, the price of gold mushroomed from $50 an ounce to a previously unimaginable price of $850 an ounce. Overall during that time period, gold prices actually had a strong positive correlation with interest rates, rising right in concert with them.

A more detailed examination only supports the at least temporary positive correlation during that time period further. Gold made the initial part of its steep move up in 1973 and 1974, a time when the federal funds rate was rising quickly. Gold prices fell off a bit in 1975 and 1976, right along with falling interest rates, only to begin soaring higher again in 1978 when interest rates began another sharp climb upward.

The protracted bear market in gold that followed, beginning in the 1980s, occurred during a time span when interest rates were steadily declining.

During the most recent bull market in gold in the 2000s, interest rates declined significantly overall as gold prices rose. However, there is still little evidence of a direct, sustained correlation between rising rates and falling gold prices or declining rates and rising gold prices, because gold prices peaked well in advance of the most severe decline in interest rates.

While interest rates have been kept pressed to nearly zero, the price of gold has corrected downward. By the conventional market theory on gold and interest rates, gold prices should have continued to soar since the 2008 financial crisis. Also, even when the federal funds rate climbed from 1 to 5% between 2004 and 2006, gold continued to advance, increasing in value an impressive 49%.

What Really Drives Gold Prices
The price of gold is ultimately not a function of interest rates. Like most basic commodities, it is a function of supply and demand in the long run. Between the two, demand is the stronger component. The level of gold supply only changes slowly, since it takes 10 years or more for a discovered gold deposit to be converted into a producing mine. Rising and higher interest rates may, in fact, be bullish for gold prices, simply because they are typically bearish for stocks.

It is the stock market rather than the gold market that typically suffers the largest outflow of investment capital when rising interest rates make fixed-income investments more attractive. Rising interest rates nearly always lead investors to rebalance their investment portfolios more in favor of bonds and less in favor of stocks. Higher bond yields also tend to make investors less willing to buy into stocks that may have significantly overvalued multiples. Higher interest rates mean increased financing expenses for companies, an expense that usually has a direct negative impact on net profit margins. That fact only makes it more likely that rising rates will result in devaluations of stocks.

With stock indexes are making all-time highs, they are always susceptible a significant downside correction. Whenever the stock market declines significantly, one of the first alternative investments that investors consider transferring money into is gold. Gold prices increased by more than 150% during 1973 and 1974, at a time when interest rates were rising and the S&P 500 Index dropped by more than 40%.

Given the historical tendencies of the actual reactions of stock market prices and gold prices to interest rate increases, the likelihood is greater that stock prices will be negatively impacted by rising interest rates and that gold may, in fact, benefit as an alternative investment to equities.

So while rising interest rates may increase the U.S. dollar, pushing gold prices lower (gold prices are denominated in USD), factors such as equity prices and volatility coupled with general supply and demand are the real drivers of the price of gold.

[spidertricks] 20/6/2019 21:44

Interesting YouTube article here not about AAZ but pretty much confirms the musings of others on here hxxps://youtu.be/sjrSvG2oV-I

[mattjos] 20/6/2019 21:10

sorry not to have been bale to say hello henwii .. yes, that was me

[mattjos] 20/6/2019 21:04

don't worry, mf. no offence taken. These forums inevitably bring out differences of opinion on a wide variety of related & unrelated subjects :-)

Am very pleased to read your latest post … this was the strong & over-riding conclusion I came to about Reza & John & the whole BOD at the first AGM i attended.
I run my own business and like to think I have some degree of competency but, does not take long in the company of the AAZ BOD to conclude i would be daft not to entrust some of my wealth into their hands on the basis that they are far more capable than I am.

Non-attendees probably think we've all been brainwashed in some way but, this is not the case … AAZ is run by very competent business people who weigh the facts and act appropriately. They take very seriously their fiduciary duties & their interest are wholly, wholly aligned with ours (as co-shareholders) … sadly this set of collective abilities and personal attributes is an extreme rarity on the AIM market. The company deserves a premium valuation, way above the rest of the dregs out there.

[mad foetus] 20/6/2019 20:55

John Sunanu said a couple of times at the AGM that he knew little about mining and I take a lot of comfort from that. As a sometime NED myself, I know how important it is to tie the enthusiasm of the executive to tangible results. Reza commented on how reluctant he was to approve the spend on the helicopter survey but how it turned out to be one of the best investments he has made. Remember, we have really only seen the first results from that survey. So those comments indicate to me that much more is to come. But I can imagine John and Reza all the time making sure that every penny the company spends has a clear goal and benefit. They struck me very much as wealthy businessmen trying to make money and create a legacy rather than the AIM norm of geologists trying to get options, prove up and sell on. It is a totally different model. But Reza's words and John's humour suggested to me that both have open minds. While I have no doubt they grill Stephen thoroughly, I also get the strong impression that they will be led by the data, rather than any other agenda. I think about bias a lot, to the extent that I sometimes wonder whether it is worth going to AGMs, as there is a risk that they reinforce your views rather than forcing you to question them. But on reflection, I left thinking that this is a very different board to any I have seen before. Reza and John are global figures: they have access to presidents. Why did they stick with AAZ when the shares were 5p and market cap £6m? They are imo extremely confident about things we only suspect and hope. I think the Hardman report yesterday was the first time I have seen those beliefs articulated: the deposits to date are like the tips of two antlers, but below lies the skull, a deposit so large that it will be a legend in the Caucuses. That's my dream after a bottle tonight anyway! Hic!

[mattjos] 20/6/2019 20:51

Several things i made note of during the meeting.

1. In response to a Q from the floor with regards the Russian exploration data in-hand and it is comparing to the data AAZ are gathering from their on efforts, Stephen Westhead revealed that the Russian classification system tended to be skewed by tax implications and resulted in Resources being increased and Reserves being decreased.
This was a new piece of data for me and so have done a big of digging this evening.

Resource and Reserve Valuation Practices in CIS Countries



It is actually a quite fascinating read - believe me.
Authored by a Hakan Arden & Andrey Tverdov from International Mining Consultants (HQ in Notts).
Assuming you can get two side-by-side screens/devices then, suggest you have the Behre Dolbear report open on one and this document open on the to the other one.

It is an eye-opening exercise :-)

The 'long-termism' of the Russian state approach to mining is in stark contrast to modern short-termism .. a mindset still prevalent today at state level, i would suggest

[wanobi] 20/6/2019 20:37

no problem Shabirm, cheers Wan :-)