Anglo Asian Mining Share Discussion Threads

[mattjos] 23/11/2015 09:04

i don't believe any of this news is of the sort that warrants a mandatory RNS so, why incur the costs?
What it does enable committed investors to do is keep abreast of the relevant news ahead of the market so, I'm quite happy ... just so long as the newsflow continues and we are able to keep tabs on it one way or another

[jbe81] 23/11/2015 08:55

Would much prefer to see an rns, and wont be surprised to see one to clarify things. Would also prefer to see the "known resource" at Gedabek increased first.

[mattjos] 23/11/2015 08:22

Great news. That should ensure Gold production extends into 2019/2020 and plug the gap from the known resource at Gedabek for gold.We may not be getting this in RNS form but the company does now look to be going onto the front foot in terms of PR & news flow .. At least this way does not cost anything in terms of RNS costs.

[slavy] 23/11/2015 07:44

Mining company eyes finding gold at new field in Azerbaijan

The Anglo-Asian Mining PLC company (AAM) is completing exploration work on the new Agyurt field in Ordubad district of Azerbaijan, the company’s director general Reza Vaziri told Trend.

“Currently, we are exploring a new field in Ordubad district and hope to complete the work before the snow,” he said. “The deposit itself is located in the area with difficult terrain and is very hard to develop, so if we don’t have enough time to complete the exploration [before the snow], the work will be postponed till late March 2016.”

Vaziri said he hoped to get good results on the new field.

However, he went on to add that according to the primary data, the approximate gold reserves at this field account for 200,000 ounces.

The 462 square kilometer Ordubad contract area is in the Nakhchivan district and contains numerous targets including Shakardara, Piyazbashi, Misdag, Agyurt, Shalala and Diakchay, which are all located within a 5 kilometer radius.

The company produced 54,103 ounces of gold, 634 tons of copper and 10,916 ounces of silver in Jan.-Sept. 2015.

ААМ; plans to produce 74,000-75,000 ounces of gold by late 2015.

Based on the production sharing agreement signed with Azerbaijani government in August 1997, Anglo Asian Mining PLC has the right to develop six fields in south-west of Azerbaijan: ‘Gadabay’, ‘Ordubad’, ‘Gosha Bulag’, ‘Gizil Bulag’, ‘Vejnali’ and ‘Soyutlu’.

AAM and Swiss Industrial Minerals SA signed an agreement in May 2014 on selling cooper concentrate produced at Gadabay field.

The contract signed for the period of three years envisages the purchase of copper concentrate by the Swiss company.

Industrial Minerals will purchase both dry and wet copper concentrate.

The gold produced at the fields is sent to Switzerland for purification. The ingots are delivered to Azerbaijan and stored in the government’s account.

[cyberbub] 23/11/2015 06:51

Nice to see you Chipperfrd. Hope you had a good holiday.Why do you suggest gold production of 57,967 oz next year, when the company is guiding 75k ish, and October's production was indeed 6700 oz?

[chipperfrd] 23/11/2015 02:23

I have modelled the schedule as detailed by CAE (Nov 2014). It gets a bit lengthy to repeat in detail here, but basically the model computes the expected tonnage, grade & recovery for the 3 plants (ie ALP, Flotation & Heap).

For 2016 the estimated ore tonnages are:
Heap ~ 1,000,000t
ALP ~ 350,000t
Flotation ~ 800,000t
ie a total of 2,150,000t ore from 6,887,110t mined.

The 3 plants have different recovery rates for the 3 metals, ie
Heap: Au = 70%, Cu = 30%, Ag = 7%
Flotation: Au = 70%, Cu = 90%, Ag = 80%
ALP: Au = 80%, Cu = 30%, Ag = 7%

Using those recovery rates for the in-situ metals contained in the ore to all 3 plants results in the following target production levels:
Gold ~ 57,967 oz
Copper ~ 6,961 tonnes (which is 19.07t/day)
Silver ~ 149,781 oz

There are no figures quoted for TC/RC costs (usually what I would expect for copper concentrate!) but they do provide figures for NSR (net smelter return) for the 3 plants:
Heap: Au = 99.5%, Ag = 81%, Cu = 81%
ALP: Au = 99.5%, Ag = 81%, Cu = 81%
Flotation: Au = 84%, Ag = 84%, Cu = 84%

Applying these NSR's to the above production figures and using current metal prices I get the following estimates for 2016 revenues:
Gold ~ $61.072m
Copper ~ $26.671m
Silver ~ $1.778m
for total revenue of c. $89.522m

Dividing that by $1,100 to get a figure for AuEq production = 81,384 oz
AAZ attributable revenue would be c. $78.332m

Costs are as follows:
G&A/t ore = $5.56
ALP/t processed = $32.84
Heap/t processed = $1.15
SART/t processed = $2.88
Flotation/t processed = $17.36
Mining/t = $1.92 (this is total rock mined inc waste)

On my model that comes to a total of $55.597m (or $683/AuEq oz) of cash costs.
OPCF = $22.734m.

A bit more difficult is sustaining costs. I am using $15m pa.

That would imply FCF (free cash flow) of c. $7.734m and an estimated AISC of $867/AuEq oz.

Applying the same methodology for 2017 and for 2018 (at current prices) I get:
2017: Production of 99,711 AuEq, FCF of $14.623m and AISC of $816/AuEq oz
2018: Production of 103,960 AuEq, FCF of $33.511m and AISC of $778/AuEq oz

However, the above is predicated on mining and processing rates meeting the mining schedule; grades being as estimated, recovery rates meeting target levels, and metal prices remaining flat at current levels. In other words - there are plenty of variables in play!

But I thought it might act as a "straw man" for discussion.
Kind regards
Chip

[mattjos] 22/11/2015 21:49

assuming the concentrate gives circa 50% of spot copper, I have Cu revs at approx. 7t/day from 1/1/16 onwards.
The 'known' Cu at Gedabek will keep them going for the next 7 years and the gold for another 2 years at current run rates.
That is time enough to pay off the debt completely and either identify further reserves at Gedabek and/or bring on an additional property from their portfolio.

The company seems to be right at the cutting edge of production methodologies. Their SART plant was a world first and now the 3-way processing methodology also now a world-first.

Current share price remains pretty daft but, I don't see that persisting much beyond mid-December

[cyberbub] 22/11/2015 21:28

Yes I know that's not 20 tons of pure copper per day, it's the concentrate... still encouraging though!Maybe we will need to wait for the Jan quarterly figures to find out the production cost?

[wimbled] 22/11/2015 21:24

anyone know the current price of copper concentrate per tonnes. Please do not use copper per tonnes price as this not what AAZ are producing.

[cyberbub] 22/11/2015 20:41

Copper is currently about $4500/t sale price but I don't think it can feasibly go much lower IMO. Not medium term anyway.Can anyone remind me of the likely production cost (cash cost) of copper from AAZ's flotation plant? I don't particularly recall seeing it anywhere, though I may have missed it... I think I "couldn't see the copper for the gold" to paraphrase the old proverb!

[brasso3] 22/11/2015 19:16

Cyber

It is not a typo:-

"It was earlier reported that AAM plans to produce 5,000 ounces of gold and 1,200 tons of copper at the new flotation plant in 2015."

1200t in Q4 was expected from the Flotation plant during initial ramp up.

1200 / 90 = 13.33t per day.

Current copper production is 2.1t per day.

Gross Copper should easily be 15t+ a day.

[umd] 22/11/2015 19:07

Mattjos - Vaziri mentions 2016 PBT of $16m which to my mind takes no account of copper profits to reflect 20t per day for 2016. 80k gold at $300 say margin gives $24m gross profits. After overheads this gives c$16m mentioned. Do you see it differently? Is he being ultra conservative?

[cyberbub] 22/11/2015 19:05

Holy sh*t - 20 tons a day? Surely that must be a typo from 2 tons? If it was 20 tons of copper per day, and 70koz gold.p.a., then even at current low prices the share price should be at 50p double-quick??

[brasso3] 22/11/2015 14:53

Also look like they are expecting 13000 - 14000 oz of gold (Nov + Dec) to close the year out. Time to start looking forward now with this one to 2016. If gold and copper prices improve this looks ridiculously cheap now over a 12 month period.

[mattjos] 22/11/2015 14:25

At last! Public admission that Gedabek is predominantly a copper deposit with gold by-product & a simply huge increase in production now targeted for next year. 20t / day!October's production was from a plant not yet fully operational .. Not due to become fully operational for another 20-25 days. I am assuming that means by mid-December the crushers will be switched on in the new plant & that suggests they have proven up the circuit now

[mattjos] 22/11/2015 14:16

Baku, Azerbaijan, Nov.22By Azad Hasanli – Trend:Anglo-Asian Mining PLC (???) company plans to produce 80,000 ounces of gold in Azerbaijan in 2016, the company's director general Reza Vaziri told Trend.Based on the production sharing agreement signed with Azerbaijani government in August 1997, Anglo Asian Mining PLC has the right to develop six fields in south-west of Azerbaijan: 'Gadabay', 'Ordubad', 'Gosha Bulag', 'Gizil Bulag', 'Vejnali' and 'Soyutlu'.Vaziri noted that the company plans to produce around 74,000-75,000 ounces of gold in 2015.??? doesn't expect to produce more than the abovementioned volume in 2015, as the development of Gadabay field is quite difficult, he added.Meanwhile, Vaziri said that if the gold production remains at the previous level by late 2015 and its price on the global market doesn't change, the company expects to get $2-$2.5 million worth profit in 2015."Otherwise we can end this year with losses," he said. "But if there are no serious changes, we expect to get $16 million worth net profit in 2016."AAM's revenues in the first half of 2015 stood at $41.8 million, or 27.8 percent more than in the same period of 2014.During the reporting period, its gross profit totaled $1.9 million, whereas the company suffered $0.8 million worth loss in Jan.-June 2014.The company produced 54,103 ounces of gold, 634 tons of copper with SART method and 10,916 ounces of silver in Jan.-Sept. 2015.AAM and Swiss Industrial Minerals SA signed an agreement in May 2014 on selling cooper concentrate produced at Gadabay field.The contract signed for the period of three years envisages the purchase of copper concentrate by the Swiss company.Industrial Minerals will purchase both dry and wet copper concentrate.The gold produced at the fields is sent to Switzerland for purification. The ingots are delivered to Azerbaijan and stored in the government's account.TAGS:Anglo-Asian MiningReza Vaziri

[mattjos] 22/11/2015 14:14

Baku, Azerbaijan, Nov.22By Azad Hasanli – Trend:Anglo-Asian Mining PLC (???) plans to produce 20 tons of copper per day at the new flotation plant, the company's director general Reza Vaziri told Trend.He noted that the plant will start working at full capacity in 20-25 days.Based on the production sharing agreement signed with Azerbaijani government in August 1997, Anglo Asian Mining PLC has the right to develop six fields in south-west of Azerbaijan: 'Gadabay', 'Ordubad', 'Gosha Bulag', 'Gizil Bulag', 'Vejnali' and 'Soyutlu'."Gadabay field is one of the most complex fields in terms of development," said Vaziri."Previously, we thought that it is a gold mine, but now we realize that it is primarily a copper deposit with a high gold content."The process of separating gold from copper is very difficult, he said.Moreover, this is the first field in the world, where their separation from the ore requires three different plants, according to Vaziri.It was earlier reported that AAM plans to produce 5,000 ounces of gold and 1,200 tons of copper at the new flotation plant in 2015.The new flotation plant will allow to increase the copper production.The company produced 54,103 ounces of gold, 634 tons of copper with SART method and 10,916 ounces of silver in Jan.-Sept. 2015.??? plans to produce 74,000-75,000 ounces of gold by late 2015.AAM and Swiss Industrial Minerals SA signed an agreement in May 2014 on selling cooper concentrate produced at Gadabay field.The contract signed for the period of three years envisages the purchase of copper concentrate by the Swiss company.Industrial Minerals will purchase both dry and wet copper concentrate.The gold produced at the fields is sent to Switzerland for purification. The ingots are delivered to Azerbaijan and stored in the government's account.

[mattjos] 22/11/2015 14:11

Am downloading now

[on target] 22/11/2015 13:48

Costs about £1.20 per article. Any volunteers?

[brasso3] 22/11/2015 13:13

In 2015 we should average above 2 tonnes of copper per day. I would be surprised if we could reach 20 tonnes a day from the floatation plant. This article should find its way into the public domain soon.

[on target] 22/11/2015 12:53

About $35M worth of copper per annum then at today's very low price.

[ferries5] 22/11/2015 12:21

There are 2 articles on Trend but both subscription only.

Copper production to increase in Azerbaijan
Trend News Agency
Anglo-Asian Mining PLC (ААi2;) plans to produce 20 tons of copper per day at the new flotation plant, the company's director general Reza Vaziri told ...


Next year's plan for gold production in Azerbaijan revealed - Trend News Agency

hxxp://en.trend.az/business/economy/2459197.html

[cyberbub] 20/11/2015 16:28

Can't sell any at the moment....Real buy prices are 5.05p for 50k, 5.25p for 100k, 5.5p for 150k.Have a good weekend all.

[cordwainer] 19/11/2015 14:07

Looking forward on gold price, arguably supportive global risks going forward for at least a few months are Syria/Iraq, ongoing terrorism alert status, UK referendum / Brexit; beyond that global supply has started to plateau or shrink.

Dollar strength and expected fed and uk interest lift off balance these forces even though they aren't happening just yet.

hxxp://www.gold.org/supply-and-demand/gold-demand-trends

Talk of $800 gold seems premature. For example, I'd not be brave enough to short pog below about $1020 right now, if at all. Meanwhile the likes of Goldman Sachs often say one thing about gold and do the opposite.