Anglo Asian Mining: Strategic Update

Anglo Asian Mining (AIM All-Share, Market capitalisation: £163m, 140p and 5.0% of JIC Portfolio and 12.8% of JIC Top 10):

Strategic update:

Conclusion: No numbers in terms of what this might mean for future production although it said it is working on an update on resources and reserves for all three existing producing mines at Gebadek. That should be completed in Q3 2020.  Mega-bulls of AAZ would say it has an embarrassment of riches and that the problem has been settling on which ones to develop. In that context today’s news is good. Others, like me, will be a little frustrated at the lack of numbers. More patience will be needed. In the meantime, the gold price has been robust, and it will be generating plenty of cash. At 140p, it is on a 2019 dividend yield of 4.7%. It is not unreasonable to expect a 10.0% dividend increase for 2020, taking the yield up to 5.1%. I have it as Medium Risk/High Reward pointing to a 4.0% position. I reduced to 5.0% yesterday and hope to be able to reduce further, towards the 4.0% target, if the share price approaches previous highs. Happy Holder!

It lays out its plans for the development of new discoveries and extension of existing mines:

The main points: 

It is focused on five discoveries which it is fast-tracking into production. The first of which will commence production in mid- 2022.

It plans to extend Gebadek with news by 2024 with the potential to extend its life well into the mid-2030s.

It believes Gosha and Ordubad have significant potential for future production.

Anticipated time to bring new discoveries into production

The anticipated time to bring these new discoveries into production is as follows:

Discovery Year
2020 2021 2022 2023 2024 2025
Avshancli 1 ///////////////////// >>>>>>> >> Production commences Q2/Q3 2022
Avshancli 3 ///////////////////// >>>>>>> >> Production commences Q3 2022
Gilar //////////////////////////// >>>>>>>>>  Production commences Q1 2023
Ugur Deeps /////////////////////////////////// >>>  Production commences Q1 2023
Zefer Cell 9 ////////////////////////////////////////////////////////// >>>>>>>>>>>  Production

 

//////////// Exploration
>>>>>>>>>>> Mine Construction

Extending life of existing mines through near mine development
Current near-mine exploration has identified further mineable extensions to our existing mines. The anticipated time to bring these discoveries into production is as follows:

Mine extension Year
2020 2021 2022 2023
Gadir extensions //////// //////// >>>>>>>> Production commences Q1
Gadabek Underground //////// //////// >>>>>>>> Production commences Q1
Gosha “Zone 5″ //////// //////// >>>>>>>> Production commences Q1

 

//////////// Exploration
>>>>>>>>>>> Mine Construction

Reza Vaziri, CEO, commented:¬†“I am delighted to present this strategic update detailing our exploration and growth strategy, which clearly demonstrates the considerable potential for extending mine life and increasing production from our existing assets.

“The five new exploration discoveries now prioritised for development have the potential to significantly increase the production and mine life of the Company. Each project has gold and copper mineralisation at, or near, surface. We have developed extensive work programmes for each of these projects and this work will be a key focus for the Company in the near to medium term.

“Gedabek also has exceptional potential to host a porphyry system which, if proven, could provide tens of millions of tonnes of ore and increase mine life through to the mid-2030s and beyond. This is something we intend to focus on from 2021 onwards.
“This current plan demonstrates our confidence in the abundant resource base of the Company, which we believe will continue to generate significant shareholder value.”