Ariana Resources Share Discussion Threads

[2tyke] 28/8/2019 09:45

George

You could but remember that most investors get influenced by peer views, especially when they all seem to be in one direction as they are now.
I'll be going leveraged short gold when I believe the top is in. The big losers will be leveraged gold longs.

Biggles
No, not an economist. They are hopeless with stock markets. They always project current data linearly into the future. A bit like fundamental investors do.

[georgethefourth] 28/8/2019 09:26

2tyke - it wouldn't be that hard if you were sure of the 10 year trend was up. Pop into a high street jewellers and load up on sovereigns then sell in ten years. You'd have made 800% doing just that last time, and if you used leverage and bought calls and miners...

[backmarker] 28/8/2019 09:22

whether or not there is a big seller who has now finished or not, daily trade volumes have been low for some days and which in itself would explain the twitchy share price movements.

even though AAU IS a producing mine it is clear to me that AAU will be a much more attractive proposition next year when the debt has been paid off and free cash flow increases rapidly. however as events tend to be discounted months in advance I would expect the market to start recognising this as we approach nearer April 2020.

based on a good track record of meeting targets, etc., the current core of the company must be regarded as relatively non-speculative, which should mean no real surprises and hence no frenetic share price movements.

however AAU has several exciting prospects (Salinbas, etc.), but it would seem that little value is bein attached to these at present.

so what I see in AAU is a company with few downside risks (Turkish political situation notwithstanding) and plenty of upside potential.

I wouldn't go so far as to call it a "safe bet", but compared with its peers it certainly looks like one.

keep calm, drink a nice malt whisky, and wait.....for this company to have its "crazy moment"

[bigglesbingham] 28/8/2019 09:12

Your not an economist are you? Make up a theory then base future theories on a made up one?

[bigglesbingham] 28/8/2019 09:10

We will see but I'd be surprised if less than $1700 personally. Think next quarterly will start to see sharp rerate to the value fundamentals dictate and that's without kizilcuker, tarsvan, salinbas, new investment rnss.

[2tyke] 28/8/2019 09:08

JC
The bull/bear secular cycles are well established. It's the same with most commodities but with differing lengths of bull/bear. Golds is rather precise and I could go further back in time with the gold standard in place, and the same cycles. There is no sampling problem.

George

It's hard to make a killing in gold even if you know the cycles. Gold is very volatile and has many counter - trend movements. Timing is difficult.

Bond rates and interest will be rising going forward. We are towards the end of a downward cycle in rates. There are no shortage of buyers in low or negative yielding bonds. Both fear and greed drives investors into mistakes.

[bigglesbingham] 28/8/2019 09:05

Broker note flash out stating they believe the debt repayment becoming zero will be the catalyst. They also state inter company loan repayments continuing and nearly $3m now. It would have been nice for this snippet to be included in the rns I didn't see it but haven't had chance to digest it yet.

[soulsauce] 28/8/2019 09:02

May be biggles but I was taking an average bearing in mind the PoG has been in the $1400s for most of the current quarter.

[ironstorm] 28/8/2019 09:01

HG has hit the nail on the head. PE of around 5 should be expected.

It will gravitate to that in time. Just don’t hold your breath.

PE of 5 = 5p. Minimum target without further developments.

[soulsauce] 28/8/2019 09:00

JD sounds about right.

bigglesbingham yes plenty of cash, need to do something with it.

[bigglesbingham] 28/8/2019 08:58

I'd have a bet on nearer $1750 soul

[bigglesbingham] 28/8/2019 08:57

Makes sense underpromise over deliver no one likes a target not to be reached. Having said that plenty of cash at these rates.

[jaynesdad] 28/8/2019 08:49

Hi Soul, I'm making no predictions about production next quarter. To an extent the management can choose (within limits) the result they want from various grades stockpiled. The target of 25000 oz this year came as a shock to some after the 2018 result (27000, including a very low 2018 Q1 result?) but it struck me as deliberate and I suspect the 2019 result will be closer to this target than some expected. I guess that means 6500 oz per quarter average. I say that because AS was known to be the highest grades as far as is known, and in fact turned out better than expected. The management has to manage the expectation gong forward, it would be hard to sell 30000+ oz this year followed by, say, 24000 oz next. I therefore expect there is some 'smoothing' going on. This is obviously pure & total supposition on my part, so cant defend it to those who disagree!

[charles clore] 28/8/2019 08:31

HG - what's not to like?

Note to self - factor the state right in to AISC for future years.

Looks like the seller has gone.

[georgethefourth] 28/8/2019 08:30

2tyke - with respect that all sounds a bit simplistic. Up for ten years then down for 20. If it were that easy everyone would make a killing. Besides, you've also got to take into account whatever the commodity is priced in. In sterling, gold has broken out to the upside already. In dollar terms, it went from 100 to 800 in the 1970s, then spent the next 20 years forming a base around 400. It never got anywhere near its former lows.

You could look at golds pricing in three different ways that I can see:
1. In and of itself. As you seem to.
2. Assume gold is stable and any price movements are really currency movements
3. A mixture of the two

I'd be more inclined to go with the last of those. Monetary policy is unsustainable. The global debt levels are unsustainable. The concept of negative interest rates are unsustainable (Denmark recently launched a fixed rate residential mortgage at negative rate! The bank paying customer to borrow... Insane). The pension funds cannot survive at these low interest rates and are unsustainable. The bond markets rely on governments buying up the issues, since few people want to be locked into long term products at marginal or negative rates - except spivs who just want to sell them on straight away. It can't last. Gold will though and people know this

[soulsauce] 28/8/2019 08:25

Nothing in Kerim's statement gives me confidence that we will be back in 7000oz territory next quarter but at least with the silver credit we will be getting nearly $1600 per oz.

No dixi I don't either.

[dixi] 28/8/2019 08:21

Is the reasoning for the increased costs for this quarter something that has been flagged up previously? I don't remember any previous references?

[highly geared] 28/8/2019 08:18

Simple maths on AAU in current environment:

12,500 net oz
$12.5 million profit after AISC
£10million net profit
Market cap gives PE around 2
Other assets
Good but prudent management
Simplistic yes but big picture suggests this should be valued higher than the current share price

[jc2706] 28/8/2019 08:16

As a mathematician I have to point out the flaw in this argument. We have the concept in mathematics of a valid sample i.e. sufficient data on which to base analysis. To say that gold has 10 and 20 year bull/bear cycles based on data since 1971 (a point in time when the price of gold bore no resemblance to any fundamental information and certainly wasn't able to move freely based on sentiment) is not sufficiently supported by the evidence available. That is not to say it is not true, it is just that the inference is not supported by a sufficient base of data.

[highly geared] 28/8/2019 08:15

Is $15 Trillion global QE and $13 trillion negative yielding govt debt ‘normal cycle’ stuff? The world has changed (not for the better) so I wouldn’t judge gold on previous cycles alone...

[2tyke] 28/8/2019 08:06

George

The alternative path you suggest for gold isn't really likely.

Gold undergoes secular bull markets of 10 years, followed by secular bear markets of around 20 years. As does most commodities.
Thus a bull run from 1971 to 1981, followed by a secular bear market from 1981 until 2001. The ensuing bull market was again a decade finishing in 2011 at $1921.
A bear market lasting only 4 or 5 years since 2011 is, I think you'd agree, unlikely.

Combine the above with the proportion of bulls currently being similar to in 2011, even though price is way lower, and the conclusion seems obvious.
I don't even have to start on the chart.

[gaddy88] 28/8/2019 08:00

Did you expect anything more?

[soulsauce] 28/8/2019 07:47

All pretty much as expected. That about sums it up Temujiin.

[temujiin] 28/8/2019 07:15

All pretty much as expected and still on ''track
to achieve annual production guidance of 25,000 ounces of gold''.

KIZILTEPE QUARTERLY OPERATIONAL UPDATE

Operational Highlights*:

· Gross income for the quarter is US$9.69 million at the average
realised gold price of US$1,307 per ounce, against an average revenue per gold
ounce of US$1,496 (due to silver credit).

· Production of 6,438 ounces of gold during the quarter ending 30
June 2019.

· Gold production at H1 2019 totals 13,734 ounces of gold; on track
to achieve annual production guidance of 25,000 ounces of gold.

· Operating cash costs for the quarter are estimated at US$589 per
ounce(#), inclusive of the annual State Right for 2018 paid during the
quarter.

· Operational mill availability running at 99.2% and utilisation at
95.8% for the period.

· 48,132 tonnes ore milled during the period ending 30 June 2019 at
an average head grade of 4.18 g/t Au.

· Process recoveries of gold remain high at 95.2% at the end of the
quarter.

· 69% of the US$33 million capital loan for Kiziltepe has been repaid
as at quarter ending 30 June 2019; on track to fully repay loan by April 2020.

* All figures are given gross with respect to the JV.

[alwaysevolving] 28/8/2019 00:32

Agree CC, that chart looks lovely for a reversal. Bring it.