Anglo Asian Mining Share Discussion Threads

[mattjos] 18/1/2016 00:18

Zhockey, the reserves is something that I believe exploration will continue to add to. The acreage they have. They've barely scratched the surface of it really.So many reports of the state being minded to diversify the economy away from oil. These guys are the only gold mining company in the country. Wont be long before they are awarded something else. The experience, knowledge & human resources that Reza has assembled to date in the company are valuable

[philo124] 17/1/2016 22:46

Surely the enterprise value will increase.

[cyberbub] 17/1/2016 21:56

There are still several years worth of reserves left, and they are opening the Gadir underground mine further, with its very high grades. Almost 8g/t is high in any terms.DYOR

[zhockey] 17/1/2016 21:38

Mattjos,

When you equate paying down of debt with a Mcap increase due to I assume the enterprise value remaining the same, how do you factor in the consumption of the reserves?

[mattjos] 17/1/2016 17:34

Jeanesy, absent a near-term big run in gold, I suspect most will be deciding to keep their powder dry now.AAZ is now extremely well set to make significant in-roads into the debt this year. 25% at least .. Circa $12m.That is £8m at least that we should see added to the mkt cap of the company ... More than doubling where we stand now.As the debt is reduced so the market confidence in the company should increase and then valuation metrics such as NAV wil become more likely ... That's more like 20p/share.The new plant is clearly already having a very positive impact on both rate of production & cost of production.Metal prices generally are under pressure & may not be exactly what the company may have anticipated 18 months ago but, to level that up, we have the depreciation of the Manat .. The net effect is same as higher metal prices.I'd suggest we're under starters orders right now & the firing pistol likely to be the first financial evidence of debt reduction occuring

[jeanesy] 17/1/2016 16:43

I wonder when we will get the update about the cost savings due to the depreciation in manat? Perhaps then we will see some sort of positive response in the share price. Yes we are in difficult times and yes gold producers are totally unloved but surely these are seriously undervalued in anyone's book... unless i am missing something?? if i am can someone please tell me.

[philo124] 16/1/2016 18:26

Sure, but they have had a lot on their plate and the results will be what they will be, historic. Would rather see their 2016 budget and cash flow forecast.

[cyberbub] 16/1/2016 09:29

I see that a lot of the major-scale producers have been ticking up in recent days. Let's hope we start to feel that effect soon too! $8M market cap is ridiculous, even considering the substantial debt.I hope also that they get the results out faster than last year, late May is poor. There seems no reason for them to take 5 months to prepare.NAI

[zhockey] 15/1/2016 20:50

In that interview he says that AAZ is already a mid tier producer.

[philo124] 15/1/2016 20:49

Gold up $1, bit of icing on today's posts.

[cyberbub] 15/1/2016 19:54

On Target, it's just a phrase, I don't think there is a scientific definition as such. Personally if we start heading towards 100k gold plus all our silver and copper, zinc etc, which count as 'gold equivalent' then I would not be surprised to see us being at an equivalent of 150k oz within a couple of years. That would be pretty good even if it's more towards the lower end of 'mid tier'.

[mattjos] 15/1/2016 19:05

It's a cracking interview. Solid & conservative.The drip, drip, drip message will start to percolate eventually

[on target] 15/1/2016 18:55

According to this article mid-tiers produce between 200koz and 1moz per annum..http://www.thebull.com.au/articles_detail.php?id=2605

[cyberbub] 15/1/2016 18:47

Mattjos your post 1095. You suggest $39M gross profit. Have you knocked off the Govt's share of the gold, and the sustaining capex?

[brasso3] 15/1/2016 18:45

"2016 costs will be significantly below $736"

"In Q4 some contribution from the flotation plant"

"In 2016 with the flotation plant coming onstream significant cash cost reduction"

"$9 - $10m in capital expenditure in 2015"

"comfortable with servicing that level of debt"

"looking at re-financing at a lower interest rate"

[mattjos] 15/1/2016 18:35

There was a HELLUVA lot more intimated at and not revealed in the interview than the casual observer might take in.It's hard not to warm to Bill. He projects a conservative yet, quietly confident persona that is sure of his numbers.Reza & the company have done really very well to attract and recruit him .. & that goes for many of their key personnel.That's a reflection on Reza himself, in my opinion ... I tip my hat to the chap. Much harder to achieve than most people might believe.I listened to that and it merely reinforced my belief there is something big afoot that is not yet in the domain of the market

[brasso3] 15/1/2016 18:35

£250 - £500m market cap.
£50m+ revenue.
P/E 10.
2 - 5m oz gold reserves

If you take away the debt and increase the reserves AAZ would be in that region.

[on target] 15/1/2016 18:22

Definition of mid-tier gold producer anyone?

[wrighty46] 15/1/2016 17:02

Yup one of the best bb's on advfn, cheers all.

[philo124] 15/1/2016 16:20

Great posts , thanks a lot.

[mattjos] 15/1/2016 16:13

header updated with the new production chart & link. Thanks Brasso

[brasso3] 15/1/2016 16:13

If they managed 18,000oz silver for a quarter with the flotation plant starting up with teething problems and only reaching 80% of capcity I would expect more. I think 25,000oz per quarter could be possible going forward.

[mattjos] 15/1/2016 16:05

Going back to my post 5/10/15:

Mattjos - 03 Oct 2015 - 23:43:50 - 264 of 1095
H1 produced 35,938oz Au, spread over 181 days = 198oz/day ave.

From the HY results: Production 1/1/15 - 13/9/15 was 50,779oz
50,779-35,938 = 14,841oz produced 1/7/15 to 13/9/15
That also equates to 198oz Au per day over the 75 days so, that seems a reasonable average daily run rate to presume for the remainder of the year.

14/9/15 to 31/12/15 = 109 days
109 x 198oz = 21,582oz
50,779 + 21,582 = 72,361oz for the FY

Pro-Rata, for Q3 it looks like it will be circa: ((14,841+(17*198))= 18,207oz

So, I don't think they will quite beat their previous record as flotation is not due to start until after the Q end.

Yes, I appreciate the Heaps will drop off once the weather closes in thus affecting Q4 but, we'll have the Flotation plant to help offset that.
It seems they first plan to run the flotation plant solely on the tailings from the Agitation plant. This should increase the overall Au recovery rate and significantly increase the Cu production. By starting it up this way they can ensure the process is working correctly without incurring any additional costs of having to run the grinding mills.
At what point they start processing the stacked sulphide ore remains to be confirmed .. presumably once they are happy with the performance of the circuit from the conditioning tanks onwards.

Flotation is supposed to help them increase the recovery rate of the Au & also the Cu.
They have said they are targeting an additional 5,000oz from the flotation for the FY. Spread over the 92 days of 1/10/15 to 31/12/15 that would be 54oz per day .. a 27% increase giving ave. daily combined output of 198+54=252oz / day.

If that is achieved & can be maintained across a FY, that gives a FY production target of 91,980oz Au with Copper concentrate in the region of 5,500t

Knock off 10% for holidays and down time & FY 2016 should be 83koz Au + 5,000t Cu concentrate.

83,000 * (1,100-750) = $29m
5,000 * $2,000 = $10m

(There is one factor though that we cannot yet predict ... if Flotation increases recoveries of Au & Cu from the Agitation Plant then, to what extent will it reduce output from the SART plant? The SART plant did run before Agitation was introduced so I assume it still has a role to play using the liquids from the Heap leaches but, from memory, I believe the SART plant had a capacity greater than the heap leaches alone could supply).

I've made no allowance for the silver and (we believe) future Zn and/or Mo output or, for any exploration / expansion upside.

Although this is operational in an emerging market, it has a natural currency hedge with local input costs in AZN and output in US$.
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FY15 came in 72,032 oz ... .so they fractionally missed my projection by 329oz - probably due to temperatures in Q4.

It looks safe to assume average 200oz Au per day average for FY16, giving 73,000oz Au this year as a minimum.

The big growth looks to be coming from the Copper & Silver, if Q4 is anything to go by. They could be doing 70k+oz in Silver this year.

Debt should drop by 25-30% this year .. possibly more, subject to what impact the Manat devaluation will have.