Anglo Asian Mining Share Discussion Threads

[cyberbub] 25/9/2015 15:45

Webshares, I agree that a fair value here is about 10p (for now), taking a balance of the risks. Just my view anyway, I have put my money where my mouth is but I don't have a crystal ball by any means... GLA

[jbe81] 25/9/2015 15:23

I believe this might be Mattjos's main reason for including the IPO in the header

[jbe81] 25/9/2015 15:21

Hawk vision the current gedabek site will keep aaz in gold for years, they have barely explored it.

[hawkivision] 25/9/2015 15:15

Good response - thanks, I didn't consider the outlay on the plant.

I hope they can start paying down significant levels of the debt in the next year or so. That would then allow more free cash to be spent on future projects.

With regard to other sites - what is the background/issue with the three exploratory sites that are considered not viable/usable at the moment? Soutely etc.

[jbe81] 25/9/2015 15:14

Hopefully traders will disappear in the next couple of days and the share price can establish itself north of 10p in the next couple of weeks before q3 results. any extras in there apart from excellent production figures could see a significant rise.

[cyberbub] 25/9/2015 14:56

Brasso yes that's a key point. Capex is about to reduce substantially once the flotation plant is completed, and if they have any sense then they will immediately start paying down a lot more debt... especially the 1-year debt as Hawkivision points out... If they can clear most or all of that within 12 months then they will be sitting pretty...I assume that the Amsterdam debt is being paid down faster because either it has a shorter date, or some covenant or whatever... and it may be that there is a some sort of political intention to continue to pay a bit more interest to the host country's banks... you know how it works in these places...NAI

[webshares] 25/9/2015 14:55

Who sold 1208. C'mon what's the point

[brasso3] 25/9/2015 14:41

Hawkivision

Bare in mind that they reduced debt in H1 2015 from $52.5m to $48m while spending $9M on CAPEX. Q1 production is always the worst quarter for AAZ due to the weather in Azerbaijan too.

[hawkivision] 25/9/2015 14:22

Ok thanks - I'm just looking at the trend and although this box isn't particularly conducive to formatting, for net debt I see:

Dec 13 - current (2)m, long term (49)m, cash 5.5m - net debt (45.5)m
Jun 14 - (9)m, (42)m, 5m - net (46)m
Dec 14 - (17)m, (36)m, 0.5m - net (52.5)m
Jun 15 - (20)m, (30)m, 2m - net (48)m

There has certainly been an improvement in H1 15, but will be interesting to see where it gets to at year end and if the trend continues. Has there been any mention of a debt restructuring at any stage? The amount due within one year seems to be continuing to grow - 20m is quite significant. Also find it odd that they have been choosing to pay down the ATB loan @ c.9% interest as opposed to the Azerbaijan bank 13m @ 12% interest, however, am not privy to/haven't checked the agreements if they were announced.

[bumpa33] 25/9/2015 13:47

the market has known for a long time there's been a large seller, this has constantly weighed on the stock price (if you were cynical you might suspect some front running of that too) plus of course the problems the company faced the last couple of years. It has only been confirmed today that the large (and in terms of free float, actually huge) overhang has cleared. Maybe some traders were expecting a massive push north in under 10 seconds(!) and have inevitably shot their bolt - but i reckon it will take a little time to filter through that the overhang has gone and that the company is on the right track. Some stocks it makes sense to flip for a quick 10-15%, others are worth hanging on for the real percentages.


edit: in real terms of course it hasn't been confirmed yet, until it's RNS'd

[webshares] 25/9/2015 13:42

I agree, the market doesn't at the moment

[cyberbub] 25/9/2015 13:32

Hawkivision there is indeed a relatively high debt, but it seems to be getting paid down fairly rapidly now. The location is slightly ropey, but it didn't seem to have much impact when the market cap was many times higher than today... Azer is obviously more risky than Europe, but it's better than some even ropier locations for miners and tiddler explorers which have higher market caps... Yes the debt means that the EV is substantially higher, but that balance between debt and equity should start rebalancing in the coming months as debt is paid down...If we were at 20p now I might be a bit twitchy, but at 5p with gold and copper being churned out at a good margin and without any apparent geopolitical issues, it seems like a no-brainer to me...Just my view of course...NAI

[webshares] 25/9/2015 13:28

I guess when you have a couple of years of share suppression by the constant selling then interest would wane. Once these remaining shares are redistributed the market should return to normal where buying pressure will actually make the share go up and stay up. Results in a couple of weeks will help

[hawkivision] 25/9/2015 13:24

Thanks - that's interesting - so repaying the loan can be offset against the govt royalty in effect?

The company is very heavily incentivised to reinvest in its activities which is a definite positive at this stage. Cash flow looks healthy.

What do you think is dragging the valuation down? I think it may be a combination of the significant debt, the location of the activities and a lack of understanding/knowledge that the business may be on the right track now. I know a large seller has been mentioned but if there was nothing else investors would be buying in their droves.

[brasso3] 25/9/2015 12:20

I think it helped clear Bashirov out over the last 3 days.

[cyberbub] 25/9/2015 12:12

What sort of frenzy? I can't see anything on my mobile app...

[catsick] 25/9/2015 11:41

As far as the mine life goes They seem pretty good at replacing reserves as fast as they mine them, ie they have more reserves now than when the mine first started producing, over time it may mean that they need to truck in ore from further afield but as long as it is decent grade of over 1g per tonne this will be financially justifiable, and the 5-10g a tonne stuff they are underground mining is worth trucking 1000 kms if needed ! As far as profit goes , cash cost is a more important metric as amortisation and depreciation are not so relevant, they have a while to go before the gov take increases and that wont happen until all the loans are repaid as all relates to capex, They arecurrently paying royalties of more than the market cap each year !

[hawkivision] 25/9/2015 11:26

Hi all - I have had a look at the various presentations and followed this one for a while. It does generate large revenues vs. m/cap, although I find the operating p/l a little disappointing.

I have two main questions which wonder if anyone can add to:

1. I read that the life expectancy of the main mine, Gedabek, is 2018. Is that correct? How do people see the company being able to cover this material decrease in production and revenue? I am concerned that they may still be carrying significant debt at this point as will require ongoing capital expenditure to explore other sites.

2. Why is the cost of sales so high? I appreciate the gold price has dropped significantly but I would still expect a healthy profit to be showing when the government is only charging 12.75% as a royalty on top of other costs. I can't help but think the profit may always be quite limited as the government will start charging 51% royalty once all costs are recovered?

Interested to hear thoughts from those that know more than I.
Thanks

[mattjos] 25/9/2015 11:01

MM's know the herd are here ... They'll play on their impatience for a quick gain and see them off in the coming days

[cyberbub] 25/9/2015 10:43

Hmm. .. more odd share price behaviour... There must be another seller as I suspected, or somehow Bashirov still has a few to sell... no matter.LSE reports that the apparent 2x250k trades are actually 'cancelled' trades from yesterday, so irrelevant...NAI

[jbe81] 25/9/2015 10:08

Good volume again today, will make the shares very tightly held in the build up to q3 results

[webshares] 25/9/2015 09:55

I must admit it didn't feel like a free market, residual shares from bash I believe. Almost clear now

[cyberbub] 25/9/2015 09:36

Some very odd trading today, a small 10k trade has gone through way below the bid... I think there might be another seller, albeit nowhere near as big as Bashirov... We did get a 400k sell at 5p yesterday... anyway, patience will pay off here IMO...GLA