Ariana Resources Share Discussion Threads

[soulsauce] 14/7/2020 18:14

Not bad from shareprophets for a change but no mention of Cyprus. It certainly will be interesting to see how much cash we have even before the $30m.

[bigglesbingham] 14/7/2020 17:50

Readers will know that I have gradually been top slicing my holding in AIM-listed Turkish gold miner Ariana Resources(AAU) – not because it was no longer cheap, but because having seen the shares roofing it over the past couple of years my holding had simply become far too big. It has been an awkward time as a ShareProphets writer as we have very strict rules about disclosure and selling tipped stocks, and whilst I have always retained my bullish view I have wanted to offload a few along the way. But I have a dirty little secret.On July 1 Ariana delivered on its promise of a proposed corporate action which would see it reduce its ownership of the Red Rabbit project, including the Kiziltepe processing plant, and Salinbas on the other side of the country to 23.5% in return for $30 million in cold, hard cash. My thinking previous to this was that at around 3.5p a share, Ariana was probably pretty fairly priced for what it was already producing (but that does not take account of what could come from further mines at Salinbas and Tavsan, nor other assets awaiting development). So when 3.5p came and went, and we had not had definite news on the proposed corporate action, it was time to snip a little more from my holding and I suggested that those who wished to could do the same.But now, subject to a General Meeting, this deal looks nailed on to go through: the proposed partner has signed up and this is, in my view, a game-changer. In addition, the gold price has headed up to around $1800 and meanwhile the shares have slipped back to 3.85p, giving the outfit a market capitalisation of £40.8 million.If we strip out the incoming (almost certainly) $30 million – about £24 million – that leaves the company valued at cash plus £16.8 million. Ariana will be producing, via its joint venture, around 20,000 oz gold-equivalent this year, with a new mine coming into production in around 18 months to double output and a further mine at Salinbas with a 50,000 oz ticket in the not so distant future and 23.5% of that comes to around 21,000 oz a year. Kiziltepe has cash costs of around $500 per oz so even if they rise to $800 that would still surely make Ariana look very cheap indeed. And as I understand it there is to be a special dividend too!I suggested on 1 July that following the corporate action news, purchasing at up to 4.5p would see you being well rewarded with an immediate target of 5p, and a few days later suggested at 3.95p that then was as good a time to buy as any. Now the shares are just 3.85p and despite my over-sized holding I am taking my own medicine: I have gone and bought some more.I do not plan to be holding these additional shares for long and at 5p I'll be looking to sell them again for an easy 25% gain, as I am still overloaded with Ariana shares. But right now they seem a complete gimme, so despite my concern at having far too much exposure, I've piled in for a quick side-portion.Ariana has its full year results due out in July – a little delayed by the Coronavirus restrictions – and it will be fascinating to see how much cash Ariana actually has, bearing in mind it took a £1.6 million dividend from its subsidiary in March, and one wonders how much of the loans to the JV have now been repaid as well. I also expect news on what special dividend might be proposed upon completion of the corporate action which will see $30 million arrive in cash.So I have put my money where my mouth is and suggest you consider doing the same for an immediate target of 5p per share. Of course, longer term, I have no idea just how high the gold price will go but I am certain we are nowhere near the top yet. As gold head upwards, gold companies shares will head north and eventually the trickle-down effect will reach even the smallest producer.As such, I would not be surprised to see Ariana double from here on a 12-18 month view, and maybe more, given the rising production profile on offer.So my stance is buy, especially for those not exposed, or not exposed enough.

[risa5] 14/7/2020 17:42

Can anybody post this article...

[mattjos] 14/7/2020 16:24

that's the brief re-rest over with now, thank you :-)

Upwards from here, imo

[xow98] 14/7/2020 16:21

Shareprophets thinks it a buy again, short term hold, sell at 5.

[someuwin] 14/7/2020 16:13

Positive AAU piece on ShareProphets.

[jaf1948] 14/7/2020 16:01

Donald,

I hope you're right and I'm wrong.

[donald pond] 14/7/2020 15:23

I disagree. I think the lack of results makes the company uninvestable for all but diehard gold fans. It doesn't matter how good they are, the fact is at the moment if you are looking at what to invest in your first port of call will be the last set of results, the ones here are for a period ending 18 months ago, which was a lifetime in terms of the gold market, and so you will stop looking.
I think AAU is well undervalued, but it needs up to date results, from which it can generate some interest and new buyers. It's simple as that. I can't understand why they can't issue them now: auditing is just a matter of looking at paperwork, it doesn't entail traipsing around the mines themselves.

[jaf1948] 14/7/2020 15:19

I agree. The results are already widely expected to be good so a lot of that is therefore already built into the price. I would not expect any great increase in the share price from them.

[charles clore] 14/7/2020 15:02

Before August soul? Only just over another 2 weeks to go then.

[bigglesbingham] 14/7/2020 14:09

Think your being optimistic there

[soulsauce] 14/7/2020 13:51

Hope are right Charles regarding the share price but I would hope they are out before August.

[1candc] 14/7/2020 13:46

I'm sure the results delay is not helping, I'm expecting bumper results courtesy of the high POG which will surely bring a much needed fillip to the share price (ever the optimist)

[charles clore] 14/7/2020 13:42

Soul, the day those results are released I predict at least a 2p rise in the share price. And what's the betting we get the deal details about the same time?

[soulsauce] 14/7/2020 13:37

May be the delayed results isn't helping, surely they can't be far away now?

[charles clore] 14/7/2020 13:33

Aye soul. I can't believe it's still at this level with all the good stuff going on in the company and a flawless performance from the management, but nevertheless very happy to take advantage of the apathetic demeanor of some shareholders.

[soulsauce] 14/7/2020 13:26

Nicely Charles, another nice chunk of special divvy when it comes.

[charles clore] 14/7/2020 13:14

Another nice 400k addition to my sipp at 3.86p. That means in total the persistent seller has helped me complete another 1.5m at under 4p

[soulsauce] 14/7/2020 12:54

Seems ridiculous to me that the Altn mkt cap now outweighs this by some margin.
I fail to understand why this never lives up to its true value.
Those against the JV should take that in to account.

[charles clore] 14/7/2020 12:06

It's a good job large holders like biggles don't trade like some so called long termers otherwise this would be uninvestable.

[charles clore] 14/7/2020 10:36

You are a canny old trader alright kirbs

[kirbs4] 14/7/2020 10:13

Ive said this before, but selling doesnt necessarily signify people jumping ship completely. I still believe in the long term here but a couple of months ago saw it as having immediate and significant upside. As a result i was probably over exposed here, the delays basically switched my impression and i saw better opportunities for immediate upside elsewhere, CHF, PUR to name a couple. I top sliced around 20/25% and moved it across, its already doing way better than it wouldve done here but my plan is to bring at least some of that profit back here in a month or two when there is again immediate potential upside as we near the delayed results and MOU announcements. It may not work out that way of course but i retain 75/80% of my previous holding so wont be missing any boats either way.

[charles clore] 14/7/2020 09:38

Let's be realistic now. If they're selling at 4p they will also be selling at 5,6,7,etc. Someone doesn't believe the story period.

[1candc] 14/7/2020 08:50

As per usual the 3.9/4.0 bid selling brigade are out, I can't imagine how that exit point price would signal a sell sign to me taking full account of the prospects that lie ahead, hopefully some news could drive us past this price range and its monotonous predictability

[plasybryn] 14/7/2020 08:18

I believe Mattjos you believe the long term Gold bowl formation is playing out to a T and the next target once $1800/$1900 is broken is circa $2550. AAU has always been very sensitive to the gold price, so that is great, but I'm aware its own news (fundamentals) is likely to be so accretive that it will move north on its own steam. Is there any chance you could share with us your AAU chart? Cheers