Anglo Asian Mining: Q3 update

Originally published on Tuesday 15th October

 

Anglo Asian Mining (AIM All-Share, Market capitalisation: ÂŁ158m, 137.5p and 5.3% of JIC Portfolio and 13.4% of JIC Top 10):
Q3 production update. 

Conclusion: A good Q3 with robust production, with revenue benefiting from the higher gold price. The share price is up 53% on my average purchase price in May but is down some 20% from August’s high. Today’s update should steady the ship although movements in the gold price are likely to determine short term movements in the share price. Another strong rally requires news from the company on future mine development.  That should be forthcoming, but patience may be required. In the meantime, the shares are on a prospective dividend yield of 4.6% and the company is highly cash generative. I have the stock as Medium Risk/High Return and am happy to stick with that rating. For me, that suggests a target weighting of 5.0%. With my 5.3%, I remain a Happy Holder!

Q3 production was up 3% on the q-o-q to 20,227 GEOs, (Gold Equivalent Ounces). It generated cash of $8.5m so that year to date it has generated $17.6m. Cash on 30th September stood at $19.1m, up from $15.2m on 30th June. It achieved an average price of $1,513 per oz, up from H1’s $1,319.

It maintains its current guidance at the lower end of 82,000-86,000 GEO’s for 2019. As previously explained the reason for production guidance being at the lower end is due to the decrease in the copper price relative to the gold price this year.

Anglo Asian CEO Reza Vaziri commented:

“We are delighted to report another successful quarter for the Company with production increasing compared to the previous quarter and strong cash generation helped by the recent increase in the gold price. Production guidance is maintained at the lower end of 82,000 to 86,000 gold equivalent ounces due to the decrease in copper price in relation to the increase in gold price since the start of 2019.”

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