Anglo Asian Mining Share Discussion Threads

[odsjp] 27/11/2020 13:00

The above article is very interesting.
It shows that Armenia accept that half of the mine is in Azerbaijan and the other half in Armenia. Clearly google maps show more like 80% of the ore in Az with the processing in Armenia. This will be a game changer in terms of upping the production very quickly and then we will be cheaper then chips at the current price.

I must admit to be losing the plot a bit with all the opportunities that AAZ currently have in front of them. I mentioned before that what I see missing is a roadmap. I was thinking that if I get time this weekend I will draft something and post it on this board for review/comment.

I do not have the background that the three amigos have and some of the other more experienced posters so would appreciate some input when I have created it.

[terropol] 27/11/2020 12:58

Meanwile COPPER in marching North...More dollars coming to the companies bank.

LEFRENE, RE: the stupid girl comment.... We must be in a global warming...Rememebr she told mr. Trunp to "Chill"!! LOL

[jbravo2] 27/11/2020 12:33

Entirely right e43.
Many of the Armenian mining companies are like that.
Eg Vallex which owns Kashen. They’ve had a lot of financial trouble too in some of their subsidiaries. Had processing plants etc taken over by banks for non payment of loans.

[odsjp] 27/11/2020 12:32

hxxps://hetq.am/en/article/124778

Seda Ghukasyan
8:05 PM, 26 Nov 2020
Half of Sotk Gold Mine Now in Azerbaijan, Says Armenian Military Official
Deputy Chief of the General Staff of the Armenian Armed Forces Tiran Khachatryan denied reports that Azerbaijani military troops had crossed the border into Armenia from their portion of the Sotk gold mine.

Khachatryan, at a Yerevan press conference late last night, said Azerbaijani troops had, as stipulated by the November 9 truce agreement, entered the Karvatchar region of Artsakh, but had not entered Armenia.

He said that given the new border, half of the mine is in Armenia and the other half in Azerbaijan.

GeoProMining Gold LLC, which runs the mine, is 96% owned by Russian billionaire businessman Roman Trotsensko.

Khachatryan said that Azerbaijani troops had complained about company security guards stationed at the mine and that negotiations are underway to resolve the matter.

The Armenian military official said he had no information about the future operation of the mine, adding that he did not know what agreements had been reached between the company and Azerbaijan

[e43] 27/11/2020 12:25

Ultimate ownership of GPM looks suitably murky,and possibility goes high up to Russian establishment

[jbravo2] 27/11/2020 12:20

Anything is possible.
From what I’ve read there are no processing facilities near Lake Sevan allowed. Presumably fears of cyanide mixing with an important source of water for Armenia.
Quite why it is so far away though is baffling. I’ve got a feeling the processing predates the mine, but can’t remember if I read that for sure.

[e43] 27/11/2020 12:17

Quite a good article about GPM by Kristine Aghaleryan on hetq.am(The owners of Armenia's gold straddling three offshore zones and Russia)

[king suarez] 27/11/2020 12:10

Morning Wan,

Just skim read through that article - new news to me. My summary:

1) NGC supply gas to TTEC (Trinidad Elec company).
2) TTEC is having cash flow issues, so unable to pay NGC for gas supplied (owing something like $3.5bn!)
3) NGC has converted cash owed (receivables) from TTEC into a 'loan' at 6% interest to give TTEC more time to cough up (over a 10 year period).
4) NGC is trying to get the government to guarantee the loan to TTEC
5) TTEC is state owned, so presumably unlikely to default on this loan repayment schedule?
6) NGC has sufficient cash to keep going another couple of years, but unless TTEC can start making repayments will be unable to invest in infrastructure etc and will need to stop paying dividends to conserve cash.
7) Suggestions NGC needs to change business model (diversify?) a bit, through doing JVs (joint ventures) in the oil/gas to enhance profitability and cash flows.

I think this could be a bit of a negative for TXP as it suggests NGC may start to have issues paying TXP for supply if TTEC is struggling to pay them - so TXP may want to look at other opportunities for exporting (some of?) the gas, however it may strengthen TXPs hand on pricing terms? TXP may be able to negotiate more staggered payment terms at a better price?

I don't know. Food for thought and I guess we will have to see what the NGC contract terms are. Hopefully PB is fully aware of the situation.

[thistimemaybe] 27/11/2020 11:54

Is it conceivable that the Russian built part of his facilities across the country as a hedge against things going wrong at Sotk?

[jbravo2] 27/11/2020 11:41

I just don’t see how AAZ are going to be given anything in Armenia. The loss of face for the Armenian politicians would be too great. Can’t see how that kind of deal would be sanctioned. The only route I could see would be some kind of joint venture but I think that is, currently at least, unlikely.

Maybe GPM will be able to extract enough from their side of the border, and perhaps toll process other Armenian mines ores to cover their plant capacity.
All of those will be looked at by GPM first I’d guess.

[donald pond] 27/11/2020 11:32

So actually, the obvious solution is for the Russian to allow AAZ to take over the mine in return for some sort of royalty (say 30% of production for first x years). That way the output is maximised, everyone saves face etc. Not easy to get there though.

[thistimemaybe] 27/11/2020 11:31

Goldrush

Absolutely bang on - it's stating the obvious but I did find it helpful to check how much it cost AAZ to set up their first mine... and it's just nice to put those numbers together for us all to see!

Edit: On the little mine at Zangilan people on the thread have already asked whether Azerbaijan would be willing for part of the processing works to be done at Kapan, but if AAZ/ Azerbaijan is going to negotiate the sharing of facilities with a Russian it's probably helpful to be able to say we don't need anything from him as we can just go off and buy everything we need ourselves!

[lefrene] 27/11/2020 11:27

They're probably saying, "Global warming! what global warming? Get that stupid girl up here, then let her talk global warming!" :¬)

[donald pond] 27/11/2020 11:24

The Russian is screwed. He knew the deal when he started out, and he has lost anything that's on the wrong side of the border. Whether that leads to the border moving is another issue, but if it stays as it is, AZ should end up with 16 of the 23 key areas. At which point the Russian may want some sort of deal, because all the plant on his side isn't much use if he only has a third of the mine (assuming that the mine covers all of the strike zones. I imagine it doesn't and some aren't explored at all)

[jbravo2] 27/11/2020 11:17

Agree there’s nothing for the company to say really.

Hand all the mine over? In our dreams. No, that’s not going to happen
I’d love to be in on that conversation. Pashinyan asking a Russian to give up their mine to cover Armenia’s obligations.

:D

[jbravo2] 27/11/2020 11:13

New video of the process at the mine. Only uploaded 40 mins ago. Going to be pushing for every metre it seems.
Can tell it’s today as the sky is clear, yesterdays videos showed heavy cloud, fog, snow flurries at the mine etc.

If anyone can translate the conversation for me that would be interesting I guess.

[donald pond] 27/11/2020 11:06

To be fair, there's no a huge amount the company can say until the territory is mapped out (or more precisely, the map is territoried out) and they get some feet on the ground to apprise what's there. But the degree of speculation does mean that they probably ought to RNS something as soon as they are able. I would have thought an obvious compromise would be for the entire mine to be handed over in working order in full or part settlement for the damages that AZ would otherwise seek (but never be able to get anyway)

[donald pond] 27/11/2020 11:01

The wiki link on the mine I posted last night said that the Russians fiddled the data on the mine, and that 16 of the 23 key strike zones were within Azerbaijan. Of course Wiki could be untrustworthy, but it is very likely that 2/3rds of the gold is on the Azerbaijan side of the border

[goldrush] 27/11/2020 11:00

TTM

Exactly why AAZ is indeed in a great position....cash generative every day....I don't think any of us would have any problems if they said they are going to spend $25m and we are going to add 60k oz p.a. to production within 6 months......double the share price overnight.....ԅ12;😀

[jbravo2] 27/11/2020 10:55

There’s currently all kinds of chatter on Arm telegram channels, trying to point out how they’ll get to keep all of Sotk. Eg producing a world bank report from 2016 which says it’s in Armenia.
Some deputy or other has said the Az military has pulled back and the mine is back at work.
Frankly I don’t believe a word of that, that’s all the usual bluster and disinformation that accompanies most of the Armenian channels. Perhaps the deputy meant to say at the parts inside Armenia?

Pashinyan has just given a press conference covering many areas but he did touch on Sotk. He’s admitted it lies in both countries. He’s said the military are working with Az military, using GPS, to exactly demarcate the boundary. They’ve got Russians with them to keep it all calm it seems. It will apparently be drawn on old Soviet definitions of Armenia and Azerbaijan.
Pashinyan had to address the lack of trust in Arm govt due to their misinformation. He denied they’d ever lied. Said they’d always admitted to fighting in Hadrut, Shusha etc. Said people needed to pay attention and in effect to read between the lines. He’s kind of got a point on that. You can’t go talking down your side during a conflict.

However, just yesterday, the defence ministry was denying any Az presence at the mine altogether, just as video and phone calls were becoming public proving Az was there. Disinformation is clearly a norm in their state apparatus and to deny it just reinforces the problem.

[thistimemaybe] 27/11/2020 10:46

Note 15 of the AAZ 2019 accounts say that AAZ has plant and equipment and motor vehicles of USD25m. I think that is the total purchase cost. Note 16 says they're leasing plant, equipment and motor vehicles in the value of $4m. The Q3 overview gives AAZ as having cash of $21.4 million and unsold gold inventory of $12.1 million at 30 September 2020 (so treating gold as currency, cash reserves of $33.3m).

Comparing Sotk and the assets around Gedabek might be like comparing oranges and apples (is it?) - and AAZ probably won't struggle to get a loan - but (1) it's nice that AAZ is debt free; and(2) if it wants to, AAZ can just go to the shops tomorrow and buy everything it needs for an entire new mine.

[wanobi] 27/11/2020 10:43

“They may have to do some JV’s (joint ventures) so that they create value at different levels outside of the supply to enhance profitability for the group.”

Interesting......

TXP - KS, what do your expert eyes and brain make of this please, thanks.

Cheers
Wan :-)

[11_percent] 27/11/2020 10:06

LOOP......down 40%.....on what ammounts to a profit warning.

[odsjp] 27/11/2020 09:42

Picture from JB's link.
Just going our for a short run and will then look to see if there are any other interesting images and if so, will post. This does seem to be a big game changer.