Anglo Asian Mining Share Discussion Threads

[iambv] 13/5/2020 16:35

Good afternoon everyone,

Thank you for all the excellent posts today, especially those with analytical detail regarding these great results. There are times when I wish that I could give more than one vote to some of the posters! As for Bill and the rest of the BOD, I would give them 10/10 in these troubling times.

BV

[goldrush] 13/5/2020 16:34

jbravo2

Thanks for highlighting the new credit facility is at 4.5% and the positive relationship with Pasha Bank etc. This facility is for 3 years and of course is for Covid 19 backup.However it also really shows how we can easily finance expansion going forward. Thus we could easily finance a $50 expansion this year from our funds and this $15 facility. What an incredibly good financial position to be in.

As Mattjos has summarised there are not too many companies who are so financially strong like us on the market.

[maxplus2] 13/5/2020 16:31

Where in today's results say about interest received on cash?

[bozzy_s] 13/5/2020 16:23

Thanks for those snippets of information KS, Matt, and JB.

So AAZ's currently receiving 1.5 - 2.2 per cent interest on cash balances. And would pay 4.5 per cent on any borrowings. Again, try to find better on AIM. It seems every AIM miner I look at borrows at >10% pa.

[ilostthelot] 13/5/2020 16:08

Thanks for the excellent posts above again Matt and King S.

Gold finger- I have reduced and I certainly don't think what I say will drive the price any where up or down. You're post suggesting that is quite frankly cheeky and rude.


Aaz was 90% of my portfolio. I have held here on and off since 2008 where I bought at 16p rode them up to 85p then back to 4p and now all the way back up, so if I decide to reduce that is my buisness.

You should welcome all comments both bearish and bullish.

[mattjos] 13/5/2020 16:07

what i like about the Protection that the PSA affords AAZ is the methodology of valuing the business in any such situation.

Such a valuation was covered quite well in the IPO Docs by Behre Dolbear.

Suggest folk do those sums again using today's exchange rates and metals prices & the track record that AAZ has established in Operating Costs.

I do not believe it is worth the aggro for the Az state to go down that route for the quantum involved to them - direct & indirect.

They'd be better off offering further PSA lots to AAZ in-country to get cracking on with and telling AZERGOLD that AAZ is the performance yardstick that they need to benchmark themselves against else, they'll turn the whole lot over to AAZ.

Anyway, the world is slowly re-emerging from lockdown, the sun is shining Azerbaijan & we can really get stuck in to drilling and exploration.
Gold continues to hold over $1,700 & looks like it wants to go a helluva lot higher on the slightest excuse & AAZ sharers are being gobbled up in the background by someone.
Bring on the next newsitem

[mr roper] 13/5/2020 16:04

Tils flying today

[jbravo2] 13/5/2020 15:54

Thanks KS.
A nice summary of some of the finer points.

Thanks Matt. A good reminder of the basics (still suspect many have never read the PSA) and for those banging on about underhand dealings in a high gold price environment. (even though no such activity happened in oil with high oil prices a few years back, with situations worth thousands of times more than one small to medium gold mine)
You’d also think if such a thing came to pass (it won’t though) AAZ would be able to present evidence of any offers received so far. Imagine if the offers were higher than the current share price.

Also nice to note in the results that the new credit facility if it ever gets used will be at 4.5%. Again from Pasha Bank. Another sign of the ever closer and appreciative relationship of the state and the tax paying entity we have become.

[jbe81] 13/5/2020 15:53

Nice bounce on Odx, May well go down tomorrow am, but looks very tradeable from morning lows and also think it could go a 100 percent any day the RNS lands, don’t believe they are ramping up capacity and recruiting for no reason and government backed.

[bumpa33] 13/5/2020 15:51

Market feels to me like it wants to roll over, though as Druckenmiller observed yesterday, you’ve always got the Fed wildcard to contend with.

Rather than saving the world, they’re propping it up.

[bumpa33] 13/5/2020 15:48

Closed MPH and took the loss. Think it’s got potential but poorly timed and executed trade - shoulda bought the ADR’s instead for starters. Not to mention the shareholder list!

[gold finger 1] 13/5/2020 15:46

ilostthelot13 May '20 - 11:04 - 34974 of 35007
0 1 0
Gold finger- I have no idea how much gold they will add when they release the Jorc in Q3.
It is conjecture.

I asked the question to this board. Jbravo replied he thought 2 years jorc would be extended. I agree. It is a guess!

What is your opinion of how much jorc compliant gold will be added?
-------------------------------------------

Well you see ilostthelot I could say 10 years, but it would be a guess and meaningless.
Unlike you who sold a part of your holding and was in my opinion only looking to scribble comments that you hoped would throw more uncertainty on a falling share price that
i believe you were hoping for, to buy back the shares you sold at a lower price.
Only you know the truth,but your negative spin this morning was as clear as it could have been.

[mattjos] 13/5/2020 15:36

There is an entire section 21 entitled "Applicable Law, Economic Stabilization and Arbitration"


"This Agreement shall be governed and interpreted in accordance with principles of law common to the law of the Azerbaijan Republic and English law, and to the extent that no common principles exist in relation to any matter, then in accordance with the principles of the common law of Ontario, Canada. This Agreement shall also be subject to the international legal principle of pacta sunt servanda(agreements must be observed). Upon approval by the Parliament of the Azerbaijan Republic of this Agreement, this Agreement shall constitute a law of the Azerbaijan Republic and shall take precedence over any other current or future law, decree or administrative order (or part thereof) of the Azerbaijan Republic which is inconsistent with or conflicts with this Agreement except as specifically otherwise provided in this Agreement."

[mattjos] 13/5/2020 15:31

folk worried about the whole expropriation risk should read the PSA again, specifically:

1. The Government hereby guarantees:

(e) that none of Contractor’s rights, interests or property shall be expropriated, nationalized or otherwise taken by reason of any act of any authority of the Azerbaijan Republic. In the event, however, that, notwithstanding the provisions of this Guarantee and Undertaking (Guarantee), any such expropriation, nationalization or other taking of any of Contractors rights, interests or
property (including undeveloped reserves) occurs, the Government shall provide full and prompt compensation in US Dollars at the full market value determined on the basis of a going concern utilizing the discounted cash flow method, assuming a willing buyer and a willing seller in a non-hostile environment and disregarding the unfavourable circumstances under which or following which such Contractor has been deprived of its rights, interests or property. The Government shall submit itself to the jurisdiction of the arbitration panel as provided in Article 21 below and the arbitration panel shall select an investment bank of good international reputation for the purpose of appraising the full market value of said rights, interests and property of such Contractor on the principles stated herein;

[gold finger 1] 13/5/2020 15:31

KS

Great info,that should shut up the na sayers that seem to want to find any point to try and find a negative to scribble about here.

[bozzy_s] 13/5/2020 15:30

Great results - which we already knew. Decent dividend - increased payout when most are cancelling / cutting. I had hoped for 5c but can't complain at 4.5c.

Exceptional cash flow. Exceptionally low costs (AISC under $600/oz is utterly brilliant). Outstanding balance sheet. Net current assets $55.5m. Net tangible assets $90m. Try to find better on AIM. Actually, try to find better on the main market!

Two upcoming broker notes, one of which should be great. And Proactive presentation. Both should help the short-term share price.

Then hopefully some meat on the bones regarding future expansion. Again the company highlighted its ambition to grow. Time for some action.

[mattjos] 13/5/2020 15:17

Excellent comments KS … a simple 'say so' by the BOD will unlikely have, in isolation, satisfied the Auditors.
The Accts will also have been finalised in conjunction with the AZ state dept who oversees the PSA with AAZ so, I assume there is also a tacit agreement from them on this point

[wanobi] 13/5/2020 15:14

Great find that KS, well done,,, super sleuth, many thanx, cheers Wan :-)

copied it here :-)

2) This bit is an interesting tidbit:

"vi) Renewal of Production Sharing Agreement ("PSA") (note 30)

The Group operates its mines and processing facilities on contract areas licenced under a PSA with the Government of Azerbaijan. The majority of the Group's fixed assets, including its processing facilities and its main producing mines, are located on the Gedabek contract area which has a mining licence expiring in March 2022. The Group depreciates each tangible fixed asset over its estimated useful life regardless of whether or not the end of its useful life is later than March 2022. There is an option to extend the Gedabek licence for a further ten years conditional upon satisfaction of certain requirements stipulated in the PSA. The directors have judged that the requirements to renew the licence for a further 10 years will be satisfied and therefore it is valid to depreciate assets over useful lives which end later than the end date of the current Gedabek licence."

That assumption/judgement will have required some degree of 'evidence' to the auditors in order to make it into the accounts without qualification (otherwise it would have been caveated).

[goldrush] 13/5/2020 15:14

KS

That is a very good point in 2) regarding the PSA and the Auditors. Great analysis.

[king suarez] 13/5/2020 15:09

Afternoon all,

Good results as expected.

1) I was initally alarmed to read a quoted increase in cash costs from $40.5m to $48.0m, however after looking through the notes I think this is all muddled by the huge increase in inventory and the expense applied to that in year (due to stripping costs that were capitalised in 2018 being expensed in 2019?) In reality, $2m increase in revenue has been more than slightly offset by an inrease in costs like reagents and the floatation plant etc and some other expenses (inc forex, wages) are down on prior year leaving operating cash flow pretty neutral. Then we have an increase in tax paid bringing 'free cash flow' down on the year, although still v healthy as expected.

There's also $5.1m of cash in transit referenced in the accounts.

2) This bit is an interesting tidbit:

"vi) Renewal of Production Sharing Agreement ("PSA") (note 30)

The Group operates its mines and processing facilities on contract areas licenced under a PSA with the Government of Azerbaijan. The majority of the Group's fixed assets, including its processing facilities and its main producing mines, are located on the Gedabek contract area which has a mining licence expiring in March 2022. The Group depreciates each tangible fixed asset over its estimated useful life regardless of whether or not the end of its useful life is later than March 2022. There is an option to extend the Gedabek licence for a further ten years conditional upon satisfaction of certain requirements stipulated in the PSA. The directors have judged that the requirements to renew the licence for a further 10 years will be satisfied and therefore it is valid to depreciate assets over useful lives which end later than the end date of the current Gedabek licence."

That assumption/judgement will have required some degree of 'evidence' to the auditors in order to make it into the accounts without qualification (otherwise it would have been caveated).

[riggerbeautz] 13/5/2020 14:52

Remember Superman is American like all good super heroes lol

[bumpa33] 13/5/2020 14:45

And all those days of gaps provided by overnight Es_f tampering filled in just one short speech.

[bumpa33] 13/5/2020 14:42

Powell is - I quote - “saving the world”

apparently.

Sycophantic bloody yanks.

Excuse my French.

[mattjos] 13/5/2020 14:38

Bid is actually up 2p on where we were for most of yesterday.
It was only yesterday's daft closing auction UT that caused the price to close at 127p
That's a good result for an AAZ results day. Lets see how many other AIM companies get their results out on time & INCREASE their dividend! That will not be a long list this year.

Hat's off to the all at AAZ .. a terrific 2019 & going great guns under heavy-fire in 2020

[fozzie] 13/5/2020 14:35

Just in from a fairly brisk 8k walk, one thing I am not feeling is fizzy lol