Anglo Asian Mining Share Discussion Threads

[jbe81] 13/1/2016 16:30

Yes but it is not like they decided to roll over the loan on that particular day, or maybe they did and am giving management too much credit.

Somebody took 3million shares around 4p last year, so could understand them selling, but thought that last year when there was persistent selling. All will become clear. Tiny amount of sales for todays fall, great buying opportunity.

[mattjos] 13/1/2016 16:19

Don't forget that Reza is not always in Azerbaijan .. he has family and a house in USA so, if he is in USA on a day that news is due for release, it may be that they need to get him to ok it before release to the market.

We can only guess where the stock is coming from but, it would not be the first time stocks drop just before news .... its AIM and scheduled news releases are sometimes seen as each way bets by some people.
On balance, it remains Cantor who are the seller of stock though.

Scheduled news in the next couple of days and then the monthly production update in the Az press next week.

$8m mkt cap now!

[jbe81] 13/1/2016 16:00

JBravo are you still here and holding?

[jbe81] 13/1/2016 16:00

Some interesting points, only thing I am very critical off AAZ is there PR. What are peoples thoughts on timings of RNS s released by AAZ, for me they release far too many after 7am. How many people saw the last one? (Did the company consider it bad news and want to hide it?)
Gold moving up again and consider AAZ today to be an absolute bargain. Matt can't understand the supply of cheap shares, hopefully cantor are short. Cant see it last big volume on the next RNS, and if the company could come up with some other big news could be very interesting.

[ferries5] 13/1/2016 15:57

looks like someone wants out before the update.???

[ferries5] 13/1/2016 09:49

Proactive Investors. share price Angels View of the last RNS



Anglo Asian Mining* (AAZ LN) 5.0p, Mkt Cap £6.1m – CEO and major shareholder extends the loan to the Company
• Reza Vaziri, AAZ CEO and major shareholder (29%), agreed to extend the US$4.0m loan to the Company.
• The Company drew US$3.9 under the loan agreement.
• According to former loan terms repayment date was 08 Jan/16.
• New maturity of the loan is currently being renegotiated.

Conclusion: We see the provision of the loan and its respective extension by the CEO as a vote of confidence of top management and major shareholder in the Company.
Cash generation at Gedabek is expected to significantly benefit from by-product revenues from the recently commissioned flotation plant designed to re-process agitation leaching plant tailings and a respective c.50% depreciation in the USDAZN exchange rate last year (26% in Feb/15 and 32% in Dec/15).
*SP Angel act as Nomad and Broker to Anglo Asian Mining

[ilostthelot] 12/1/2016 21:15

I'd say it's more
1 - debt
2 - POG
3 - price of copper
4 - risk off and poor sentiment to the PM sector.



With every $5/10 M the debt reduces we should see an increase of slightly below that in the market cap Imo. With any luck the company will continue to hit it's production targets. POG improves, with that sentiment to the sector will improve and Aaz goes to the moon in a big shiny rocket!!

[cyberbub] 12/1/2016 21:01

Fair points zhockey, but surely even given those points we should be well over 10p? Sigh... Mr Market...

[zhockey] 12/1/2016 20:28

Low share price IMO is due to in order of descending importance:

1. Gold price
2. Copper price
3. Debt
4. General sector risk off

I would take heart from the CEO putting in not far off the m'cap in a loan and deferring repayment. So many aim companies seem to exist simply to cycle shareholder capital to the directors in teh form of high salaries, that is not the case here and teh board genuinely seem to believe in teh companies prospects.

With regards to and unknown factor, I would say that any risk is to the upside.

[mattjos] 12/1/2016 19:27

Cyber .. Bashirov's stock is still around. I'm convinced he bailed out to an city firm and not direct to the market cos he must have been up sh1t street. That buyer likely offered him 4p or less and is still dribbling them out to the market. They don't give a monkeys about the company or anything else other than getting out with a profit for themselves. You can be absolutely sure that they would not declare if they had a notifiable holding .. It's AIM and they consider themselves far above the regulations & no chance of being discovered or punished.They'll be finished at some point. Now seemingly selling in 50k lots may suggest they are getting near the end. The value will come through here at some point this year

[drdre] 12/1/2016 18:49

Very interesting posts Mattjos - thanks :)

[cyberbub] 12/1/2016 18:49

These points about the PSA are all important for the long term. What I want to know is why, today, the company is languishing on a p/e which is almost certainly less than 1?

Is it:

1. High debt
2. Fear over gold price
3. Perceived dodgy location
4. Concern about management / track record
5. Wider markets risk-off
6. Low profile / poor PR
7. Several or all of the above?
8. None of the above - we are about to rocket.
9. Something we don't know about.

Discuss.

[mattjos] 12/1/2016 18:42

It's that last point which I believe Reza has not been successful on ... Arguably the company and the state has had to go through first an up leg and then a down leg before both parties fully appreciate both the positive and negative effects of the PSA .. It's duality as I have referred to it in the past.Now, if I were Reza and had my eye on Chovdar (for example) .. And the existing ownership structure of AIMROC prevented an operator such as AAZ getting in on the equity .... I might try and say;"Look, we can have a crack at Chovdar, on your behalf as the current owners BUT, at the very least, if we can't get a piece of equity then, change our current PSA on AAZ such that it is more favourable to us. This would be a clear win/win for all, with little downside to the state. Of course, if they change the PSA for a gold miner then, that altered PSA would have to apply to other gold miners (AIMROC) ... Surely worth a punt, Reza

[mattjos] 12/1/2016 18:30

From this point here onwards, as a consequence of the company bringing down its costs and increasing production, the market valuation should now trend upwards towards the balance sheet value of the company as free cash flow rapidly pays down debt.This should culminate in a period thereafter whereby profit & cash burst upwards once the debt is gone.One of the challenges, as I see it, is how they can then maintain this momentum before the PSA kicks in more fully (favouring the state more so than now) & might result in the company once again acting in a way that seeks to reduce profits and thereby deter equity holders from staying onboard.Given the history and how the PSA was applied (in the absence of anything else more suitable or practised on mining in Az)m I think the company should have a good case to plead its case to the state. They remain the only productive gold miner in the country & so it shouldn't be too hard to do, before there are other such miners

[mattjos] 12/1/2016 18:22

To me, it is clear that there are times whereby one should be rewarded, as a shareholder, for being invested and times when you will not be rewarded. Now that might deter the long term buy & hold approach but, is that really any different nowadays to any other listed share?What I have suggested to the company is that were it possible to renegotiate the PSA in any way, they should try to do so such that some element of the company production is free of PSA contract .. Such that the company is able & enthused to have some revenue stream to itself.This would help strengthen the company in the long term & reduce the profit/loss swings that the PSA would appear to exaggerate over certain periods of the business cycle.If they can achieve that, it would then be a win/win relationship, for the long term for the state, the company, the employees and the shareholders.

[mattjos] 12/1/2016 18:15

No problem.The PSA is kind of ... All the time you are mining we (the government) are going to get our slice of the gold. Fair enough.In exchange we are going not apply any import taxes on things you bring in to the country for the purposes of mining and we're going let you offset pretty much everything you incur by way of costs and losses against the 75% before arriving at a figure on which you might pay taxes.Like so many things in business (as a consequence of the business and it's activities being governed by legal documents), it's a marriage in effect and arguably more difficult to get out of than it is to get into.You would expect that the Az state wants AAZ to be a long lived and successful company as the state is a beneficiary of that success. When times are hard (losses for example), the state is willing to let those be carried forward to offset against future success.

[drdre] 12/1/2016 17:56

Thanks Mattjos - re-reading the PSA it is Article 11 I was more interested in with regards to Production sharing rather than taxation, which in itself is obviously very relevant. So it is up to a max of 75% of the total quantity of commercial product that the company can recover costs against as set within the PSA. That meets my recollection - I therefore assume cost of repaying and servicing debt falls under an allowable cost but I am not accountant, apologies in advance for the ignorance of my question.

[jbe81] 12/1/2016 17:23

It means psa isn't changing anytime soon. I would also expect AAZ to renegotiate it when it comes close to the point when it is due to change.

[cyberbub] 12/1/2016 17:04

Can anyone put that in plain English?

[mattjos] 12/1/2016 16:53

follow the link to the Original PSA Document in the Header. It's all there in detail.

16.2 Profit Tax
16.3 Calculation of Taxable Profit/(Loss) Sub-section (a) - Simple formula shows Interest Costs as being deductible from Sales Income for the purposes of arriving at a Taxable profit figure.

Given the $24,888,000 Of Unutilised Tax Losses at 31.12.14 (FY Accounts), it is worth reading Section 16.3, sub-section (k)

"Each Contractor Party may carry forward, without limitation or restriction, all Balance Losses arising in any Calendar Year. Such losses may be carried forward to the following Calendar Year and to subsequent Calendar Years, one at a time in chronological order and shall offset such Contractor Party's Profit in full without limitation or restriction in such Calendar Year(s) until such time as the loss is wholly offset against Contractor Party's Balance Profit."

[ilostthelot] 12/1/2016 15:27

That's my understanding Dr dre.

[drdre] 12/1/2016 08:07

Apologies as I am recalling from a few years back - as part of the PSA, my vague recollection is that whilst the company is repaying debt the PSA is not 51-49 or whatever the Az. Gov share would be. Is that still applicable given we have around $50m in debt? I always thought we would maintain a debt position to avoid the PSA reverting but like I say, this is from old old memory :)

Thanks in advance :)

[brasso3] 11/1/2016 23:49

I think they should be able to comfortably reduce debt by $1m a month now going forward.