Anglo Asian Mining Share Discussion Threads

[zhockey] 29/9/2016 15:39

But with those hirings that JB mentioned and the recent tenders, it would seem that Azergold are gearing up to run the mine independently.

I mean if you are going to outsource then HR and Medical would be top of the list.

[cannonfodd3r] 29/9/2016 14:56

I think you are reading too much into the difference between state ran and presidents company personally. They need it "producing" again so they can offload the unsold gold to recoup costs but where it goes from there is anyone's guess!

[jbravo2] 29/9/2016 14:17

I think you're a bit behind the times cannon.
The owners of AIMROC (presumed to have been largely the president and family) have had their money. AIMROC's assets were bought by AzerGold (a state company) using the states money for an undisclosed sum.
AzerGold now own Chovdar.
AAZ stated at the AGM they would be interested in helping with Chovdar but yes of course they wouldn't take on the debt to get access to it. That bit of course you're correct about. It was suggested perhaps we could help mine on a fee/oz or a % royalty. We would in effect be contractors on that model. Time will tell.
You're right on another point though, don't count on it til we're signed up as we tried to get in on Chovdar years ago and were passed over for AIMROC. Now we know much of what its ownership structure was thats no great surprise.

[zhockey] 29/9/2016 14:13

Significant = 100k or 1M oz?

[mattjos] 29/9/2016 14:01

Added research link to header:
Mineral resources of Azerbaijan.

Worth a read

[cannonfodd3r] 29/9/2016 13:51

There is no point factoring in Chovdar at this stage. Chovdar was run in such a dodgy way they never managed to sell the gold which they produced which I don't need to go back into. Focus has to be getting the mine back up and running legitimately so that they can sell this gold to recoup some of the set up costs. The setup costs were huge though and I'm almost certain that AIMC have spoken to azergold about taking it on but not agreed terms. There is no way they will take on the debt and I'm sure the president wants all his money back so it's at stake mate. I'd be more concerned if they did jump in on it!

What might come is running it for a management fee or a reduction of PSA, or additional resource which the govt hold and I'm sure AIMC WOULD LOVE TO GET HOLD OF.

The only certain is that Reza isn't stupid and the country is skint! Make of that what you will!

[mattjos] 29/9/2016 13:49

they said at the AGM that they were well on with data analysis from Bittibulag & felt it had significant potential.

[jbravo2] 29/9/2016 12:14

The silence from AzerGold is deafening.

The thing they will want above all else is to get Chovdar up and running again asap. Clearly that is how they can then pay to develop the rest of their properties. I'm surprised we haven't heard anything but am not unduly worried because of two things.


1. As zhockey says relying on anything from here is foolish. It's a reality only when RNS'ed. There is enough here to justify a higher price without anything more than is owned already.
2. There are signs of activity at AzerGold. AzerGold have been busy appointing. They have a head of legal, deputy of legal, head of procurement, head of HR, head of project management, head of geology, head of finance. All of these people started in July and August. It is entirely sensible that any negotiations can only happen in earnest once these people were appointed. So far no-one appointed that makes me think they are definitely going to run Chovdar themselves. It is of course a clear possibility but we employ most of the experts in the country, logic says they'd have to nick a fair few of our employees. I'm comfortable we're still in the game to be involved.

That meeting with the president just keeps cropping up in my mind. He asked for that meeting. He didn't want to know where dunkin' donuts was.

[zhockey] 29/9/2016 11:51

That has all been based on aimroc speculation, I have always had the view that we should believe this when we see an RNS.

Looking at the share price I would think there is zero pricing in of additional licences, and zero pricing in of exploration prospects.

[jbe81] 29/9/2016 11:42

IF we do get such a license I would expect a massive rise here, but a few people here have been convinced we would get such a license for over a year and nothing yet. Even without it AAZ is extremely undervalued

[celeritas] 29/9/2016 11:08

Good idea Mattjos, I don't think people have an idea of the scale.

[mattjos] 29/9/2016 11:04

have put into header satellite map link on Google maps to the Gedabek mine ... zoom in/out and you get a sense of just how small an area they are currently concentrated on relative to the size of the property

[celeritas] 29/9/2016 10:55

If aaz get a big licence then I expect the share price will go on a mad rush with stock very hard to get hold of.

[zhockey] 29/9/2016 10:45

Sorry JB I should pay more attention, only read the last paragraph in haste.

Another point, if AAZ are looking to build more mines and associated plant we could be looking at significant capex in the next few years, $100 to $200m? Therefore I see the psa potentially staying at 87% out to 2022 at least.

[celeritas] 29/9/2016 10:04

Yep, drilling must be close to completion for the year, I expect the data is already being worked on. Bear in mind this still only covers a fraction of the Gedabey.
Drilling isnt the only way to add to resources, hopefully we can gain one or more of those licenses. Plenty of news to come I'd say.

[mattjos] 29/9/2016 09:55

9 trading days until Q3 update, assuming it is delivered same time as previous years.

Weather still ok for HL and also for exploration drilling ..... am sure the new Geology Director is itching to get his teeth into new data from the area :-)

[jbravo2] 28/9/2016 19:06

ermmmmm, yeah, its in that post already...

[zhockey] 28/9/2016 18:01

And future CapEx of course, like the elec plant and tailings reclaimation.

[jbravo2] 28/9/2016 16:07

@cannon...

well sort of and sort of not.
We are allowed to claim all the costs of the plant and production from the govt share of production (upto a maximum rate of 75% of production).
So... clearly say for example a shiny new plant costs us $50m we can claim that $50m (plus its interest) back from the govt via their share. However if we say used that money to buy iced lollies instead of paying the debt then once we have claimed back the $50m all we would then be allowed to claim back would be the ongoing interest. And of course we would still have a $50m debt... (and a lot of ice lollies, in this example but nothing say if it had been given away in dividends)

So the kick in of the PSA isn't anything to do with "is there any of the debt left" more is there anything left we haven't claimed for.

Currently that is forecast to be 2018 as c_n_s states, however this has moved back year on year. I don't expect it to kick in in 2018. By then we will create new claims via new capex spend. Be that, our new water plant, new SAG mill, new electricity supply, expanded flotation etc etc.
Of course at some point it will be in our interest to stop capex spend but whilst the new investments will pay for themselves for years to come we can clearly expect capex to be topped up with plant improvements.

And even when capex does stop (and historically run out to claim back) of course the split will never reach 49/51 as we will still be claiming the opex from the govt share each year.

[cast_no_shadow] 28/9/2016 14:35

I loved this post CfDr.

It's a very interesting point. Why lose all the money in royalties when, if possible, you can spend more money on investing in the mine and exploration therefore increasing future cash flows?

Your point is you have two choices:

I) pay off the capex and then pay the huge royalty
II) defer paying the royally as much as possible by using that money instead to invest in the company

I think you're right although with a caveat. The company is currently geared too highly so maybe the focus should be on reducing the debt to more manageable levels - say under $20 million?

It's a balancing act between reducing risk and onerous debt repayments and keeping ahead of the PSA.

Doesn't the company state they expect to pay the additional PSA by 2018 so I'm not sure they see it this way although if they did they probably wouldn't come out and say it officially.

[cannonfodd3r] 28/9/2016 13:47

Gents, i tend to watch from the sidelines here as i cant stand the way this forumn works from a technical perspective but the chat is great.

However, there seems to be a massive error with folks perception of the debt as a negative. While it is costing them to have the debt that is an issue, however paying off the debt as far as i am aware is not in the interests of AIMC at all as the PSA will then kick in taking royalties from 12.5% to 50%. Now please feel free to correct me if im wrong however i feel there is a huge holding back of the price due to the debt which is massively incorrectly interpreted.

Ill leave this one with you, Matt, expect you can confirm

[zhockey] 27/9/2016 17:59

Jeanesy, gold has been weak since the fomc, yes the price has gone up but very tentitively. The gravitational pull of mean revertion is unavoidable. Look at where AAZ's 200SMA is.

Cast no Shadow, I get what you are saying but as there's nothing we can do about it what is the point of fretting. We just have to play the hand we are dealt, and I would not try to trade gold.

[zhockey] 27/9/2016 17:53

That was kinda my point :)

[jeanesy] 27/9/2016 17:20

Seems to me that any day that POG is weak then we move down and yet barely move up on good POG days. Will we go sub 15p as that seems to be the bottom recently.