Anglo Asian Mining Share Discussion Threads

[e43] 17/5/2020 18:42

My apoligies ,looking back it was another new poster who mentioned HUM,ps built AAZ up to a core conviction holding in my portfolio over the last couple of months, in profit and feeling comfortable with it.

[waterloo01] 17/5/2020 18:30

Thanks, but I've not suggested any other stocks. The article refers to HUM but I've no idea about it.

[2sporrans] 17/5/2020 18:30

Here's my attempt to summarise the chronology of forthcoming
renewal/extension dates, both for the PSA and for mine life:

Firstly:
The PSA applies to each Contract Area seperately, hence Gedabek CA, Gosha and Ordubad
will have their own, staggered dates for renewal/extension.
As for mine life, it's really an issue of mine lives - as so well explained by JBravo.

So, here's an attempt at a tiered structure of the above, focusing on the most imminent dates for renewal/extension:

1. PSA for Gedabek CA.
Covers exploration and mining rights for 15 years.
The expiry date is 26Feb22.
Potential 10 year extension.

2. The mines:
Contractual lives:
Current lives, with potential 5 year extensions [*2 ultimately, so 10 yr max]:

Main Pit
From the June 2007 interims:
"The Company submitted a 'Notice of Discovery and its Commerciality' for the
Gedabek property to the Azerbaijan Ministry of Ecology and Natural Resources at
the end of February 2007. This notice initiated the fifteen year Development and
Production Period, with the potential for two five year extensions. Subsequent
approvals of the Work Plan and Production and Development Programme enable the
Company to proceed to construction."

The main pit development and production period will therefore expire at the end of February 2022.

Gadir
until 2027 [at least!]

For both the above, see JB's comments about whether the sequence of
developments may quality for kicking off a fresh 15 year intial life.
+ could debate whether the main pit underground, currently being explored in
detail, is actually and extension to the Gadir mine.
Afer all, the access is from Gadir and the Low Sulphidisation morphology arguably
contiguous with it, rather than the HS stratum the bulk of the open pit is comprised of.

Ugur
The current workings - the gold rich open pit
have until 2031 before renewal date.
Academic as will be exhausted this year or next, depending on
AAZ's preferences for plant feed etc.
There is the consideration of potential deeper [underground] mining there,
the immediate resource being copper/silver rich; gold is there too
but off into a down dip below 700m from surface.

3. Mine lives:
Physical. JORCed.

AAZ have advised us in the FY RNS that the plural mine lives for the
Gedabek CA extend until at least end of 2024.
This will be the JORCED reserves, essentially for main pit and Gadir [see Ugur comment above].
Unsure as to whether this includes for what has been analysed to JORC standards since
Summer 2018 for main pit and since Spring 2019 for Gadir.

We haven't heard anything lately about AAZ's voiced intention to JORC to establsih a 10 year "mine life".
Maybe, as Matt has written above today, there has been a rethink.
There's not only the expense of doing this but as, effectively, will essentially
comprise extensions to Gadir Underground and the new main pit UG mine [or is it an extension?]....well that's a huge ammount of development work to do and well in advance of any extraction.
Going to have to extend those access tunnels and passageways a long way to be able to
drill out to JORC requirements.
If there's any doubts/issues pertaining to the PSA renewal/extensions, this will
obviously inhibit any such exploration/development commitment.

I think we must accept that AAZ are implementing a commercially optimised approach
to progressive underground mine extensions and therefore their stated lives.

4. Mine Lives
Physical potential

Well, this is where we need to have some fresh guidance methinks.
Hopefully something will emerge come the 21May presentation.

We know there's a lot more down there beyond what has been JORCED and reported as such to date; that's just in main pit + Gadir.

When the most recent Ugur deposits were revealed, the DD drilling went very deep; certainly low as 800m; i think 1,000m was attained without checking.
With this reach from the surface, a lot could be revealed relatively cheaply in the main pit and Gadir underground stratums.

We also know that SW and team are hoping that Avshancli Gilar will live up to early promise and provide news mines of substance, production to commence some time in 2022, if not a little earlier.
And not forgetting the potential UG extension to the Gosha mine [in the Gosha CA] + other possible developments in all 3 of the CAs.
Potential for heap leached production, in advance of plant enlargement or even an additional plant [Ordubad?] a few years hence.

Again, hopefully more good news coming soon.

We don't know to what extent the potential of "4." has been under-reported over recent months, a 'cards close to chest' during discussion/negociations with the
Azerzi Government.
Hopefully, something will be revealed about this also; just knowing there has indeed been a hold of sorts will be helpful.

[2sporrans] 17/5/2020 17:32

Thanks for the Geological insights Matt and for insightful comments Bleepy.

I'd like to reply and also wish to post updated graphs, such as "Cash Cow", in line with the FY results.
However, I'm going to devote my scarce time to responding to the comments about mine life.
An excellent explanation from JBravo.

Put into separate post below.

[jbravo2] 17/5/2020 17:23

Well that’s fair enough.
Yes I think it’s one of the main reasons, I suspect there are a host of reasons though.
The stellar climb of the last few years is probably another. ie there are plenty sat on fat capital gains and no doubt some want to crystallise them. Buys get sold into and so a stand off materialises. Clearly there’s little appetite to sell down at this level though, as the volume has shown recently.
Perhaps even COVID is playing its part. It could be people are nervous of being in a one site producer so hold off buying til Covid is resolved, or perhaps with an increased number of people home all day they want to “play” more active COVID stocks. (I’ve certainly “dabbled”; and had a great time)

It’s a complicated picture that naturally you can’t assign a single reason to. What is certain is that with each passing day we move ever close to some kind of news and we have reason to believe we get news of some kind before Thursday.

[wanobi] 17/5/2020 17:21

Gold -

1900-1950 on this breakout :-)


free stock charts from uk.advfn.com

personally and I have NO right to say this, I get the feeling gold might just run up exponentially now to 3000+ LOL,,,, please ignore me though and make up your own minds,,,, but to me this looks nailed on with all the recent QE,,,,, we shall see,,, but,,, I'm betting my future on it :-)


free stock charts from uk.advfn.com


might be very soon, or might be a little while in the oven :-) LOL

Cheers
Wan :-)

[the stigologist] 17/5/2020 17:06

Am sure adults can tske a bit of banter and badinage. As i understand it this thread came about because some couldn't.

[waterloo01] 17/5/2020 16:54

jbravo2, well the lease and LOM have not put me off, but it does mean I'm unlikely to go in much heavier until there is clarity. As current investors 'need' new blood to see a rising SP, It's a problem, at least on that level, even if it makes little short term difference to the company's profitability.

Edit: I started posting both because I had a few questions and secondly posters were wondering why the share price hasn't risen further. It seems the reason is as above.

[jbravo2] 17/5/2020 15:47

Agree plenty of investors see it as an issue Waterloo.
From my point of view it’s a poor article, it’s been posted previously. But then I would say that as I don’t think LOM and the PSA is an issue other than it is currently putting off some investors.
It doesn’t affect how much money AAZ makes or the dividend paid out.
Sooner or later the issues will be resolved one way or the other and we’ll know who was right.
Waiting til all becomes clear is the safe course of action if you’re doubtful.

[graylyn1] 17/5/2020 15:28

Get Ready For Unthinkable Levels For Gold & Silver



Alasdair Macleod

interesting re Copper

[inaminute] 17/5/2020 15:03

Wondered when your smutty little character would show its true colours on this board when someone disagreed with you. I've seen it emerge across numerous others and quickly descend into obscenities when someone has the temerity to voice their own opinion.You're on one of the best boards on ADVFN for debate, respect it please.

[waterloo01] 17/5/2020 14:58

Seems this perspective would agree re the lease extension and LOM being an issue. Not sure it takes into account recent drilling.

[gold finger 1] 17/5/2020 14:45

iamBV

I don't think people are worried about the LOM.
Its more that they want it extended as its the only thing that is holding the share price back.Its very annoying watching the price of gold go up.The price of almost every over gold miner going up,profits at record highs, DIVI rising. Yet we seem to be stagnant, going nowhere.
I did a dummy sell late friday and was offered 1.32 for the lot. I turn the computer
off and looked yesterday morning only to find that for no reason they had dropped the share price back to almost level for the day.
So we do need some news other than profit,profit,profit,because that is doing nothing. Lets hope we get some news this week that will shake us out of this slumber we seem to have been in for almost a year.

This company and its shareholder are not getting the rewards it should be.

[iambv] 17/5/2020 13:09

For all those who are particularly nervous about LOM, why not just chill out and see what news comes out in the coming weeks/months. If Stephen Westhead was that worried he would not have shelled out for those shares he bought last year. He, in my opinion, is irreplaceable and I would suspect that the Azer Government agree.

BV

[the stigologist] 17/5/2020 11:59

LOL peak arrogance for you working for some third rate City shop talking dismissively about 'retail' PMSL

Anyway the reason you presumably trade stocks is you think the market is inefficient and will become less inefficient due to investors researching, analysing and responding to market inefficiency and mispricing ?

Maybe the 'shareholder base' will change if it gets bought out ?

That's the major thrust of my comments. M&A potential could trigger a re-rating.

[bumpa33] 17/5/2020 11:30

“One of the problems PYC Physiomics has had getting the respect/valuation it deserves has been the lack of a decent...”


shareholder base. All you get with a retail nominee dominated shareholder list is a yearly pump and dump.

[jbravo2] 17/5/2020 11:29

You’re absolutely right mf
It all stems from the post Matt made (post 35174) re business men etc.
The mine was started with, comparably, very little drill data behind it. Far less than is undertaken in most modern cases. Years were cut out of the typical development schedule.
It now means we are often digging up the results of any exploration within a few years. It is quite hard to get ahead of the game, combined with the fact it suits the company not to do it in some senses.

[goldrush] 17/5/2020 11:27

Ladies and Gents

For your Sunday research please spend 20 mins listening to the latest from Alasdair Macleod on Kingworld News .com....bit of everything for chartists,fundamentalists and COMEX reporting data....all good for gold, silver, copper and AAZ IMHO.

[mad foetus] 17/5/2020 11:22

Ninety one global gold fund (used to be Investec) up 81% over 12 months. Really, AAZ has to be able to beat that, as the fund is diversified and focussed on bigger miners in a wider spread of jurisdictions. That's my benchmark.I'm going to put it out there: I will be disappointed if the share price isn't above £2 by the time of the AGM

[the stigologist] 17/5/2020 11:10

One of the problems PYC Physiomics has had getting the respect/valuation it deserves has been the lack of a decent UK quoted comparitor to help analysts and investors gain a better understanding of the market it operates in, the industry dynamics and the appropriate valuation benchmark

Although there still remains no viable UK comparitor in recent months an interesting US comparitor has emerged which may help Investors understanding and appreciation of PYC

What is interesting is that this is no ordinary comparitor. This Company has been described by Citron Research as a 'Tesla type' industry disruptor, the most important IPO in the last 5 years and has Bill Gates and D.E.Shaw as major cornerstone investors (together owning c.50%). Citron Research are mainly known as a specialist 'Bear' research house often debunking 'hot' stocks so it's interesting that they are so positive on this particular concept stock.

The stock in question is SDGR Schrodinger a Company founded in 1990, the current CEO joined in c.2002. It has taken them up now to IPO (February 2020) since when the stock has tripled ! ($17 to $55) and the Company is currently valued at over 30x (yes THIRTY times!) Revenue (2019 revenue $86m ; Mkt Cap $2.7bn)

The underlying story of Schrodinger is that of applying computer modelling techniques to drug discovery. Global Pharma/Biotech spends c.$180bn a year on R&D. So SDGR has a potentially huge market still left to penetrate.

Faced with a US tech comparitor the usual response from UK cuck analysts/Fund Managers is 'well US equity investors apply higher ratings to US stocks that's just the way it is'

However there is very good reason to make the case that Physiomics should not only be valued at 30x revenue but could deserve a premium!

SDGR is valued at 30x Revenue because US investors believe it has a wide open growth opportunity to eat into the $180bn Global Pharma R&D market opportunity

If US investors are prepared to pay so much for future growth how much would PYC be worth as a 'growth option' acquisition for either SDGR or a peer such as Private Equity roll-up Certara ?

- PYC would give SDGR access to computer based modelling and simulation expertise in the Drug Development part of the R&D cycle rather then just Drug Discovery
- PYC would give SDGR access to European geography
- PYC would give SDGR access to customers SDGR might not otherwise have access to (Merck, Bicycle Therapeutics)

Applying a 30x valuation to PYC's trailing 12 month revenues would imply a valuation of £23m (compared to the current £2.9m) a share price of 32.5p versus current 4p

NB : That valuation applied to Physiomics 'bread and butter' modelling and simulation business which is analagous to Schrodinger.
Physiomics also have a 'blue sky' story in utilising their Virtual Tumour cancer modelling expertise to offer a 'Business to Consumer' Universal Cancer Decision Support System through NHS/Clinicians which could be worth... well name your price. UK unicorns in AI/ML pharma/bio space are valued at Billions on zero revenue.

[mad foetus] 17/5/2020 10:58

I think the depreciation point is important. Others have been here longer, but I'm sure I recall Bill saying something along the lines that the LOM has been 3-4 years for over a decade. Every year they produce some more and find a bit more. No reason to think that will change suddenly, unless the terms of the PSA do.

[waterloo01] 17/5/2020 10:51

Thanks you for the reply's. I take the points on-board. I was trying to understand the lack of share price appreciation and suspected the lease extension is primarily the reason, but do take some comfort that the relationships are good.

I guess for me, until that's proven in writing, I'd keep my investment 'right sized' but happy to have a decent starter position.

Again appreciate the reply's and insight.

[goodgrief] 17/5/2020 10:11

Someone pass my specs... hope AAZ slingshots higher very very soon!

[riggerbeautz] 17/5/2020 09:49

Sorrento gained 158% Friday with their antibody drug claims, as part of a Covid “shield” plan. Plenty going on in the states.