Ariana Resources Share Discussion Threads

[dixi] 23/8/2019 17:23

Makes me think Kevin is having fun winding us all up with his oh so conservative releases. Even the multi-million holders here must be feeling a little envy with other missed opportunities by now?

[charles clore] 23/8/2019 17:19

It's getting quite ridiculous isn't it? Something needs to be done to address this undervaluation. We all know the COMPANY is making money hand over fist. But what about the owners of the company (its SHAREHOLDERS)?

[1candc] 23/8/2019 16:59

A new analyst report from Panmure Gordon wouldn't go amiss right now, for reference here's the Proactive report from last year



Ariana Resources PLC (LON:AAU) remains the only small-cap gold mining company that carries a Panmure Gordon ‘buy’ recommendation, a status reiterated by the broker following the firm’s recent upbeat production report.

The City firm also raised its target price for Ariana shares to 2.82p, up from 2.75p previously, with the stock currently trading at 1.35p.
READ: Ariana Resources on track to beat production target

On November 12, Ariana revealed that it is on track to exceed this year’s target for gold production from its Kiziltepe mine in Turkey after another record quarter.

The group said income for the three months to September was US$10.1mln with 7,588 ounces of gold produced, a rise of 6% compared to the previous quarter.

In a note to clients, Panmure Gordon’s analysts noted that Ariana’s third-quarter update continued the trend of above plan production, with its full-year 2018 guidance of 20,00 ounces almost reached in nine months.
WATCH: Ariana Resources sets new production records at Kiziltepe

Kiziltepe is part of the group’s Red Rabbit Joint Venture with Proccea Construction Co. and is 50% owned by Ariana through its shareholding in Zenit Madencilik San. ve Tic. A.S.

The analysts pointed that Ariana’s income for the joint venture during the third quarter was US$10.12mln, at a revenue per gold ounce of $1,334 - due to silver credits.
Cash costs low

They added Ariana’s operating cash costs for the quarter were estimated at US$330 an ounce, largely due to a big 28% decline in the Turkish Lira during the period.

Importantly, the analysts said, capital loan repayments by Zenit to Turkiye Finans Katilim Bankasi A.S. have been made on their scheduled basis and reached US$13.2mln at the end of September 2018, with US$19.8mln outstanding.

They also noted that monthly intercompany loan repayments from the JV to Ariana’s wholly-owned subsidiary, Galata Madencilik San. ve Tic. Ltd. in the year to date have now reached around US$1.6mln.
Discount excessive

Having undertaken a review of Ariana’s portfolio, after applying its new commodity forecasts, and using a 10% discount rate, the Panmure Gordon analysts’ estimate that Ariana is currently trading on a price/net asset value (P/NAV) of 0.5x.

They said: “In our view, this discount is excessive given the low-cost and profitable nature of the operations at Kiziltepe.”

The analysts added that further supporting their view is that, at their 10% cost of capital estimate, the long-term price of gold to justify the current equity valuation is below US$1,000 an ounce, whereas the yellow metal is currently valued at US$1,222 an ounce.
Exciting opportunity for investors

The Panmure Gordon analysts have, therefore, concluded that “Ariana offers an exciting opportunity for investors to gain exposure to a new and profitable gold producer, for which the benefits of a weaker host currency (Turkish Lira) have left the operation as one of the lowest cost operations globally.

“We believe the partnership with Proccea and the existing finance arrangements offers investors the confidence that future development projects will also be managed professionally with a lower risk of delays, additional capital costs, and equity dilution.”

They said: “The company’s shares, despite the wider revaluation of gold miners, remain, in our view undervalued.”

Adding that their new target price of 2.82p “offers significant upside to investors as Ariana continues to increase its production from Kiziltepe and develop its longer-term portfolio of assets.”

[soulsauce] 23/8/2019 16:47

gs888 if Kerim isn't scratching his head tonight and thinking he must change the way he does things or how he can garner interest in this share then there is little hope for us in my view.

[goldenshare888] 23/8/2019 16:41

Ditto, spot on soul. There are much better opportunities out there, that's also a problem here.

Gold UP AAU DOWN - unsurprising though in my view for all the reasons we ALL know, and probably some we don't!

[soulsauce] 23/8/2019 16:36

I really don't know Charles but something ain't right.

Good job I don't hold the amount of shares I used to or I would be spitting venom today at this performance.

[charles clore] 23/8/2019 16:29

soul - what could be more sinister than gold and silver up by integer percentages and this down by 3%

[soulsauce] 23/8/2019 16:17

And further down.

PIs jumping ship for greener pastures or something more sinister?

[mcmather] 23/8/2019 16:15

JC, factual reporting will do me. Yesterday's RNS should have included reference to their still targeting an additional 2.7m ozs in NE Turkey, in addition to the 50k ozs per year alluded to in the RNS.

That they did not mention this just crestes some doubt / concern, which was avoidable.

From a shareholders perspective, the previous 2 RNSs weren't spectacular; yesterday was an opportunity for AAU just to reiterate and highlight that their aims and plans remain ambitious. Why not just add a couple more lines to the RNS re the 2.7m ozs?? It would have taken the author 30 minutes max to get the wording spot on.

[soulsauce] 23/8/2019 16:05

Gold and silver going bonkers this afternoon. AAU down, says it all really.

[jc2706] 23/8/2019 16:01

It does seem to be the dividend payers that are the principle beneficiaries of the share price rises amongst the gold miners. I recall that AAZ was around 40p when it announced its intention to pay a dividend. It hasn't looked back.

[dixi] 23/8/2019 15:55

So if AAZ had similar number of shares to AAU in issue their price currently would be around 15p. That would work for me with AAU. Dream on!!

[dixi] 23/8/2019 15:52

AAZ is currently around 9x the market cap of Ariana.

[thanksamillion] 23/8/2019 15:51

Gold up 1.3%, AAU down 3%, 300k sell triggers drop, 335k of buys triggers zilch.

You couldn't make it up.

One day Rodders.

[jc2706] 23/8/2019 15:12

'Optimistic' reporting tends only to have a short term positive effect and then it becomes a negative as people begin to think that the BoDs are over egging the pudding. I much prefer conservative statements that result in over delivery.

That said, I think that there was a lot of enthusiasm around Salinbas in the hope that it is another Hot Maden. So far that doesn't appear to be the case which has resulted in disappointment. However, the Salinbas story is by no means over and this will continue to develop over the years. It is worthwhile remembering that even now AAU has a comparable amount of gold in the ground to AAZ.

[soulsauce] 23/8/2019 14:25

Charles may be.

dixi I think we all think this ought to be trading at 3p plus given the current gold and silver price and may be 3 to 4p once the loan is paid off if they can maintain production.

I was hoping for a factor of 10 with Salinbas but that has been quashed by the recent rns.

Optimism is not out there at the minute imo. This conservative reporting s not going to win it back either. Been saying for long enough something had to change.

If in the spring someone had said this is going to be trading at 2p with gold at $1500 they would have been laughed off the BB and rightly so, yet here we are.

[charles clore] 23/8/2019 14:19

dixi - I think most of us here would have sold if we thought AAZ was going to perform the way it has whereas in reality I invested here because I believed (and still do) that AAU could copy AAZ. You pays your money and takes your choice, as the saying goes.

[dixi] 23/8/2019 14:16

So if AAU was perceived as being more of a worthwhile investment, any consideration as to what price this ought to be trading at? Any thoughts on possible future pricing, can AAU increase by a factor of 10. Or is the too much of a challenge? Is the optimism still out there?I note that AAZ is still doing the right thing for investors. Shame I sold that a while ago and moved the proceeds to here! More the fool me!

[charles clore] 23/8/2019 14:15

So, we are back to the question of a dividend (hopefully to be announced in the near future). A small share of profits going to ordinary shareholders would, imho, perform 2 functions: a) provide a reward to long term holders and stop the terrible disillusionment exodus that plagues our shareholder base and b) align the bod and shareholder objectives to the same paradigm i.e. to have a profitable company that serves its shareholders as well as its operations.

[soulsauce] 23/8/2019 14:03

At the end of the day JC interest and volume has to come from somewhere if we are going to progress to levels we all think it should be.
That interest at the moment is only coming from PIs but unfortunately it is a slow drip in the opposite direction as more and more come to the conclusion their money may do better elsewhere.
The style of rns we are seeing from the company currently is not going to redress that.

[soulsauce] 23/8/2019 13:32

You mean like PIs have here.

[jc2706] 23/8/2019 13:26

I would further add on the institutional support point that the BBs for some miners that I am invested in are wishing they didn't have them as they are the ones that have trashed the share price. Be careful what you wish for.....

[swallowsflysouth] 23/8/2019 13:14

On the positive side there is a very old saying 'no news is good news', which basically means if there was bad news we would have heard about it by now. I think it originates in James I times.

[jc2706] 23/8/2019 12:22

I confess that I am not looking for institutional investors. This is a small gold miner. Most institutions wouldn't go anywhere near it. There are many bigger miners that have virtually no institutional base and I don't see it as particularly a constraining factor. There are many examples of share prices rising 10, 20, 30 times with no institutional support.