Anglo Asian Mining Share Discussion Threads

[zhockey] 25/5/2016 22:39

A really good summary of the PSA in the results I notice. Unionhall are you still here?

Production Sharing Agreement ("PSA")

Under the terms of the PSA in place with the Government of Azerbaijan, the Group and the Government of Azerbaijan share commercial products of each mine. Until the time the Group has recovered all its carried forward, unrecovered costs, the Government of Azerbaijan effectively takes 12.75 per cent. of commercial products of each mine, with the Group taking 87.25 per cent. (being 75 per cent. for capital and operating costs plus 49 per cent. of the remaining 25 per cent. balance). The Group will not have recovered all its costs incurred by the end of 2016 and the ratio of sharing commercial products for the Gedabek mine of 87.25 per cent. for the Group and 12.75 per cent. for the Government of Azerbaijan will continue throughout 2016.

Once all prior year costs are recovered, the Group can continue with cost recovery of up to 75 per cent. of the value of commercial products, before the remaining product revenues are shared between the Company and the Government of Azerbaijan in a 49 per cent. to 51 per cent. ratio. The Group can recover the following costs:

-- all direct operating expenses of the Gedabek mine;
-- all exploration expenses incurred on the Gedabek contract area;
-- all capital expenditure incurred on the Gedabek mine;
-- an allocation of corporate overheads - currently, overheads are apportioned to Gedabek according to the ratio of direct capital and operating expenditure at the Gedabek contract area compared with direct capital and operational expenditure at the Gosha and Ordubad contract areas; and

-- an imputed interest rate of US dollar LIBOR + 4 per cent. per annum on any unrecovered

[mattjos] 25/5/2016 21:57

Good man Bill. Steady, assured, not at all over excitable. He is repeatedly proving himself as pretty unflappable & trustworthy in his commentary. He's running interference for Reza also at this stage.Reza has bigger fish to try while Bill is handling the numbers & the interviews.I take my hat off to Reza & the team he has gathered around him in the company. It is genuinely a terrific achievement & much removed from the usual 'I've just had a pony' AIM-listed RNS brigade.Not forgetting the $4m of Reza's own money on the line here in addition to his already significant shareholding.A blind man can see the obvious correlation between the CEO/major shareholder/founding entrepreneur & the stockholders.

[ferries5] 25/5/2016 21:40

aaz on stock tube

[jeanesy] 25/5/2016 20:56

what good news is that jbe81 ?

[mattjos] 25/5/2016 19:55

Do what I can Brasso but, swamped at work right now. Might be a week or so as off travelling abroad on sales trips from tomorrow.

[hedgehog33] 25/5/2016 19:44

Have to admit I added a few more cheeky one's today....

[brasso3] 25/5/2016 18:27

Matt

Your gold and silver charts are not working?

[zhockey] 25/5/2016 15:26

For me there are two sceanarios that would give a fair valuation at this level.

1. The current level of production cannot be sustained.
2. There will be a significant drop in metal prices

Should either of these prove to be wrong then the share price can only go up IMO.

[mattjos] 25/5/2016 15:13

Yup, its insane isn't it!!

[zhockey] 25/5/2016 14:52

That cost saving is not far off the market cap of AAZ!

[celeritas] 25/5/2016 14:48

We estimate that the combined effect of the recent devaluation and the previous devaluation in February 2015 will reduce our operating costs by approximately $13 million in the 2016 financial year at the current US Dollar to Azerbaijan Manat exchange rate of approximately $1 equals AZN1.5

[ferries5] 25/5/2016 14:25

Bleepy

The new company that has been incorporated, Azergold will be the only state run gold company in Azerbaijan. Also it will be responsible for the development of all precious metal discoveries, not just Gedabey or Chovdar. It is to have 2 million shares and a management appointed by the president as he is taking a personal interest in it.
What this means for AAZ I am not sure, directly or indirectly. But I think it will be good.

[jbe81] 25/5/2016 13:31

Thinks looking good, good buying opportunity, will start to tick up now a few sellers have cleared. Expect good news to come from the company shortly too.

[zhockey] 25/5/2016 13:29

Yeah but that is not news is it?

[bleepy] 25/5/2016 13:21

Gedabek site

The main exploration activities in the year have been at the Gadir mine and surrounding area at Gedabek and at the Ordubud site.

We are also planning for further exploration at Gosha.

[bleepy] 25/5/2016 13:11

Principal activities

The principal activity of Anglo Asian Mining PLC is that of a holding company and a provider of support and management services to its main operating subsidiary R.V. Investment Group Services LLC. The Company, together with its subsidiaries (the "Group"), owns and operates gold, silver and copper producing assets in the Republic of Azerbaijan ("Azerbaijan"). It also explores for and develops other potential gold and copper projects in Azerbaijan.


"other potential gold and copper projects in Azerbaijan" ... hmmm, Chovdar !!!!

[zhockey] 25/5/2016 13:06

Why? In a polymetallic mine bp revenue is key to the economics.

[tailor1] 25/5/2016 13:03

Does anyone know what the net cost is to produce the gold. The gross cost does not matter, it is all about how much net profit per oz there making.

[zhockey] 25/5/2016 11:44

A lack of news on exploration which I find disapointing. They do however say in the opening that they have established a long term production profile.

The future of AAZ requires resource growth IMO.

[mattjos] 25/5/2016 10:38

the, as yet unused, smaller flotation plant is also there to help extract the Zinc from the Copper concentrate and therefore remove the 'impurity' penalty form the refiner of the Copper.
A lot going on in the company right now over & above the ongoing debt repayment

[jbravo2] 25/5/2016 09:54

Solid performance.
The MM's liked the results and raised the share price initially, but dropped the share price again on paper thin selling volume. Guess some punters are yet to be convinced!
As mattjos says, surprising when our mkt cap is less than our operating cashflow :D
I guess we get to accumulate more over the coming months.

Great to see the substantial decrease in costs. Two main drivers. The increase in gold production and of course the first (and smaller) manat devaluation. If gold production comes in as last yr (its currently forecast to modestly increase but lets be conservative as I think 72koz is more realistic) the second manat devaluation and the increased by-product credits for copper and silver should see cash operating costs running at below $600 for 2016.

Good to see acknowledgement that the second SAG mill starts to set us up for the expansion of the flotation. The water detoxification plant also does the same. Ithink this will probably cost $3m. I think we'll also look to move away from our diesel generators and onto the electricity grid.

Interesting to see the mention of a consideration given to the hedging of both gold prices and currency. Of course at the moment a gold hedge might look wise but only 2 weeks ago we'd have been saying the opposite. It's a difficult call.

This year sees a large portion of the debt disappear. Interesting Pasha bank is due for total payment this year. As I said before I can't see us paying off Reza as well as the scheduled ATB payments, Pasha, and the scheduled and extra payments to IBA from last year. Thats plenty to manage.

Very happy with the situation and looking forward to the AGM.
:)

[mattjos] 25/5/2016 09:35

well, if those sells were someone hoping to buy them back cheaper, I don't see the MM's playing ball with them at all.
How any times have we seen AAZ sell off on the day of results and then, as the market digests the results over the following day or so watch them rise back? It's becoming a familiar pattern but, this year and next I don't think there'll be the sell on results action any more

[mattjos] 25/5/2016 08:51

The mkt cap remains even below last year's operating cashflow!More to buy in the coming days and weeks

[wrighty46] 25/5/2016 08:31

Don't get me wrong matt not fussed at all. Looking very good moving forward. Sellers on results regardless of what they are I still find amusing. Anyway GLA.