Anglo Asian Mining Share Discussion Threads

[inaminute] 23/9/2020 12:33

I topped up on recent weakness because fundamentally this is a well managed cash cow of a company. Not easy to find alternatives. Looking forward already to the special divi :)

[mattjos] 23/9/2020 12:30

some really very keen buying in CGNR today, may suggest the finalised JV is imminent

[bonio10000] 23/9/2020 12:17

Just move to the New Forest or Devon.

No need to bother with the hassle of NZ.

A lot of people seem to think that when they are fed up of London then Australia/NZ or Canada must the the only alternative.

Bizarre.

[lefrene] 23/9/2020 12:11

Cinoib, I have a daughter in NZ on the South Island, she has been there about 15 years now and is an NZ citizen, I have visited several times for up to three months at a time. NZ is not the place it's cracked up to be, rife with nepotism. Land is very tightly held within the long established farming families, those farming families also tend to hold much of the better commercial property too. Housing can be expensive, which is mad in such a thinly populated country.

Policing can be heavy handed, officials seem to have right of entry without warrants. Some dog wardens barged into my daughters house uttering threats about no dog license. The dog had been put down three months earlier, and the death registered by the vet. But there was no preamble with letters or phone call enquiring why there was no license, just three 'heavies' barging straight into the house at 8am! I could go on, NZ while it has certain charms, isn't the place it appears to be from afar. I feel Portugal is probably more civilised.

Anyway, I hope AAZ has now turned the proverbial corner in terms of the market cap, and we can look forward a recognition of the solid value being created by the Board.

[baddeal] 23/9/2020 12:04

New Zealand, Scotland, Portugal, Why not azzer apparently there is gold in that land!

[king suarez] 23/9/2020 11:59

Fab post, thanks POF..

[pantsonfire] 23/9/2020 11:44

Discussion yesterday between King Suarez and our own Emperor Wan on TXP. This concerned the value of oil, and the comment by the King “Someone mentioned something about the associated liquids with the current Cascadura gas discovery being worth more than Brent price due to it being 'liquids rich gas'”. Wan invited an “expert” to comment.

Roll of drums. Your expert has arrived.

Let me take you through a little of the science. Maybe too much detail, but it may help to understand the whole picture. Crude Oil and Natural Gas consist of a blend of hydrocarbons, of increasingly large molecules. Starting from the top we have methane, ethane, propane, butane, etc, which have respective1y 1 then 2 then 3 then 4 carbon atoms in each molecule, eg butane is C4. Then we run into more complex molecules, and it becomes too complicated to talk of number of carbon molecules, so we talk about boiling ranges, ie the temperature at which the components boil off under laboratory test conditions. Gasoline has an approximate range of C4 to 210 Deg C. Diesel will be approximately 170 Deg C to 360 Deg C. Kerosene and Jet fuel will be in the middle. These ranges can change according to seasons (you don’t want too many light products in summer, or too heavy in winter). Beneath diesel you have a number of other heavier products, known as gas oils, which have lower value, and the lowest of the lot is “residue”;, which is what’s left after everything else has been taken out. That’s a vertical look. Now let’s look sideways. In almost all natural gas and crude oil you get undesirable components, such as sulphur, salt, heavy metals, etc. Above all sulphur has a major impact on price, and whilst you can get sulphur in lighter crude oils, it is more often (but not always) found in heavy ones. Another property with impact on price is the paraffin and wax content. Too high, and the wax makes the oil too difficult to recover and pump. But if you can recover it, the quality is generally very high and this oil can command a premium. The price is also influenced by the end market, whether for use in transport, or for petrochemicals.

In terms of marketing and value. Gasoline, diesel, jet fuel, and kerosene are relatively easy to refine (always depending on contaminants, of course, plus some other properties), and command a large premium, whilst the heavier products (eg residue) are often sold below the price of crude oil.

Back to your specific point. Natural Gas can and almost always does contain some liquids. It depends on several factors if this is an advantage or not, as light liquids are a nightmare to transport. Generally, LPG (liquid petroleum gas, which is typically propane and butane), can have good value if it can be easily recovered to market. But better value is from “Gas Condensate”, which is generally in the gasoline range, and even diesel, which is much easier to refine and sell, and its price is not depressed as it does not contain the heavy products. So, yes, if the gas field is also producing some associated liquids, this may well be beneficial, as the liquid is easier to refine, and convert into higher valued products.

Please remember that the above has been very simplified. I hope this helps. Please let me know of any questions.

[bleepy] 23/9/2020 11:31

Gedabek Undergound
• Portal opened and decline under construction
• Ore extraction in Q4 2020 gold grades of ~ 2.5 g/t

The size of the portal opened certainly has more than 2way traffic in mind, maybe exploiting high grade ore along its length.

Hoping Q3’s will give more detail on this portal and decline.

[avsome1968] 23/9/2020 11:23

Amgo of the blocks this morning vote maybe already known?

[wanobi] 23/9/2020 11:21

oh to be 40 again KS,,, make the most of it :-) LOL,,,, aha, yes, the mists are clearing thanx, cheers Wan :-) LOL

[mattjos] 23/9/2020 11:15

From SPA Morning digest:

Anglo Asian Mining (AAZ LN) 135p, Mkt Cap £154m – Dividend up ~30% on robust FCF with a potential for a special dividend in Q1/21 on expected strong H2/20

BUY

• Revenue totalled $45.8m (H1/19: $43.3m) with 24.0koz in bullion gold sales at $1,649/oz (H1/19: 26.6koz at $1,319/oz) and $6.2m generated from the sale of 6.3kt copper/precious metals concentrate (H1/19: $8.1m for 4.3kt).
• H1/20 production amounted to 32.5koz GEO (H1/19: 39.9koz GEO) including 27.9koz gold and 1.2kt copper (H1/19: 34.3koz and 1.0kt).
• FY20 guidance is reiterated at 75-80koz GEO (using budgeted metal prices as of Jan/20) including 67koz gold and 2.2-2.4kt copper.
• This implies stronger production in H2/20 which together with higher gold and copper prices is expected to deliver >$100m in turnover in FY20.
• AISC averaged $743/oz (H1/19: $603/oz) reflecting lower production.
• EBITDA was $21.5m (H1/19: $24.0m) implying strong 47% EBITDA margins.
• PAT and EPS was $8.6m and 7.49c (H1/19: $6.6m and 5.81c).
• Net CFO (ex interest) came in at $21.4m (H1/19: $15.0m) after $5.7 in tax payments (H1/19: $5.2m).
• FCF (ex interest) amounted to $13.4m (H1/19: $10.0m) after accounting for $5.6m in sustaining capex (H1/19: $3.0m) including tailings $2.1m damn wall raise (final 6m raise providing space for another six years’ worth of production) among deferred stripping of $1.5m other things as well as $2.4m in exploration and evaluation expenditures (H1/19: $2.0m).
• Cash balance closed at $29.2m with no debt (excluding $3.1m in outstanding leases) as at 30 Jun/20 (Dec/19: $17.8m in cash (excluding cash in transit) and 1$1.7m in debt); the Company has an $18mm stand-by credit facility that is currently unused.
• The Company declared 4.5c interim dividend (H1/19: 3.5c) with ex-dividend date of 8 October 2020.
• Additionally, the Board will consider a special dividend in Q1/21 given on-going strong cash generation.
• Exploration works progress at the five new discoveries (Avshancli 1 and 3, Gilar, Ugur Deep and Zefer) aiming to fast-track deposits into production and extend the life of mine at Gedabek that is currently estimated to run to at least 2024.
• First ore from newly discovered deposits is expected to be supplied to the processing plant in 2022.
• Updated mineral resources and reserves statement at the existing operations are to be announced shortly.
• The team is in the process of agreeing the first 5y of the 10y permitted extension to the PSA at Gedabek that currently runs to Mar/22 as well as in disucssions with authorities over new exploration areas in the country.
• The Company agreed heads of terms for a JV with Conroy Gold and Natural Resources agreed to further develop the Clontibret licence area and other gold properties in Ireland, marking the first venture outside Azerbaijan.
• The Company reported no C-19 cases on site reflecting implemented effective health and safety measures while since early August, the government is reported to have also started easing restrictions helping human, equipment and gold logistics.
• The Company remains unhedged offering 100% exposure to commodity prices upside.

Conclusion: The Company reported good earnings results with the Board declaring a 4.5c interim dividend, up on 3.5c in H1/19, on the back of strong FCF generation. H2/20 is expected to yield stronger results on higher production and gold/copper prices with the Board considering a potential special dividend to be announced in Q1/20. Balance sheet is in a strong condition with no bank debt and nearly $30m in the bank. The team progressing with an active exploration programme aiming to extend the life of mine at Gedabek as well as building a pipeline of organic growth projects. Updated Gedabek mineral resources/reserves statement is expected to be released shortly.

[mattjos] 23/9/2020 11:12

Finally now, the tide is starting to turn and investors now have several news items that give good reason to look forward with greater degree of excitement than has been the case for the last 12 months.
It's this which is most likely to drive the share price higher by virtue of folk no longer selling out their holdings and newer investors seeing some value accretion catalysts finally now on the near-term horizon … as if the underlying financial metrics & dividend yield were not already enough.

During an exceptionally challenging period, AAZ has performed superbly and is not 'sitting still' either.

I do now believe we will see selling pressure abate going forward from here

[king suarez] 23/9/2020 11:11

Morning Wan,

1) Not sure I can be classed as young anymore at 40? :')

2) GEOs is just a simplistic, quick, benchmark measure for comparing year on year overall production results, and that is the sole purpose - it is meaningless in terms of a comparison for revenues etc. This is in additional to reporting overall production numbers for each commodity i.e gold down, copper up, silver up, overall = ? oh yeah, per GEOs overall is up/down.

3) Each year AAZ assume a budget gold, copper and silver price (so that ratio is set on day one) then all production is converted into a gold equivalent ounce as a metric. For example, say the budget is $1,500 for gold and $6,000 per tonne for copper - then every tonne of copper produced is classified as 4 GEOs, regardless of what the spot price of copper/gold is at the time of sale - make sense?

Will now digest the results :)

[cinoib] 23/9/2020 11:09

Lefrene, on the money. Have been nervous for the last few years and don't worry about divis and special divis here or elsewhere as is only a bonus if you happen to be in it at the time. Far more important to me is capital growth and sadly here there has been none for the last 10 months. I take what I can get and pile it into land. Am currently investigating land in N.Z. as is about the safest place to be when, not if, all hell breaks loose, as it is coming. You only have to watch the news and there is always something that tells me we are not long from a disaster. So make as much as you can and spend it wisely on a pad in the sticks where you can ride out the coming storm. If you want my insight write to me via advfm personal mail. As a few on here think I'm in a world of my own, before this decade ends at lot will be. If you like to trade a little then CEY at .2p spread is worth a few bob also BOO is in the mood when the market rises. Fres is not a bad bet when the market is in 2 moods as you can get a large movement in it so nice profit.

[riggerbeautz] 23/9/2020 10:58

Double LOL right been distracted enough today, weather breaking, things to do.

[wanobi] 23/9/2020 10:56

grrr, keeps doing it,,, grrrr LOL Cheers Wan :-)

off to reboot!!!!

[wanobi] 23/9/2020 10:56

oops sorry about that chaps,,,, yes, Rb, the more I look the better it seems to be,,,,, not unhappy today :-) LOL,,, well done all, cheers Wan :-)

[riggerbeautz] 23/9/2020 10:55

Worth saying it twice :)

Like I said at first glance, so much to digest. Good point by mf on main thread about special dividend.

As for all the other mining snippets, there really isn’t anything to like, all good for me.

[wanobi] 23/9/2020 10:53

Cheers
Wan :-)

[wanobi] 23/9/2020 10:52

Cheers
Wan :-)

[mattjos] 23/9/2020 10:49

+ we are now advised the company is considering alternative (secondary) treatment of its existing tailings facility. Presumably a 'downhill' new tailings facility will be created and treatment of the existing tailings can be introduced during its movement to new tailings facility.
I wonder if they will consider a 'dry' tailings methodology?
Depending on the underground mining methodology at Gedabek, there may be a requirement to backfill the voids & this can be done with dry tailings

[riggerbeautz] 23/9/2020 10:47

Yeah I noticed that, no doubt inspired a few buyers this morning.

[mattjos] 23/9/2020 10:45

Gadir Grades of 2.55g/t + Gedbek Underground Grades of circa 2.5g/t + Gosha Grades of 2.50g/t

This looks incredibly bullish going forward from Q4 this year

[gutterhead] 23/9/2020 10:44

Just remember Jbravo, there are some people who don't invest for a divi though 🤣

Its tremendous news and will attract new investor demand

I can't help feeling there will be additional news very soon

[katsy] 23/9/2020 10:36

Not long to wait for the next dividend payment and since the summer I've more than doubled my holding since the last dividend. Even if the price trends side wards I'm still yielding on this one.