Member Info for adamsmithfreethi

Whilst I am a great fan of AAZ but would point out the fall is not quite so illogical even after screening out the panic. This is due to the fact that around 25% of their revenue (more or less) comes from copper the price of which has fallen, unlike gold.
Also I'm not sure whether their recent exploration news is good or not. To my untrained eye the best finds are in the disputed territories and not closer to their existing facilities. Does anyone else have a view on this?
Finally, and perhaps most importantly, AAZ now have no debt. In a world of anxiety banks cut credit lines and cash is king. Whereas they would have been in danger of going under in these circumstances even a year ago they can sit pretty watching the money come in. In short they have optionality which is more than most of their other peers struggling to finance nascent projects.
I'm sticking...

https://www.investegate.co.uk/amerisur-resources/amer/exercise-of-options/201912201300056974X/?fe=1&utm_source=FE%20Investegate%20Alerts&utm_medium=Email&utm_content=Announcement%20Alert%20Mail&utm_campaign=Amerisur%20Resources%20Alert

Yes I would add my comments to those posters some of which I met today who added genuine insight into the forum and thanks to their willingness to share and trade views and facts made investing in this dog a much more pleasurable experience than it ever deserved to be.
The Board and the FM should hang their heads in shame but of course by now those same heads are probably half way down a champagne bucket.
I look forward to seeing those outstanding unfettered options being cashed in during the next 2 working days since by a curious coincidence a large number of them are due for expiry by 23/12 at strike prices of 11-15p.
The lord provides in mysterious ways and since we are on that subject Happy Xmas to all!!

Nobody has a clue as to what is going on. For me the only straws in the wind are:

- the management are undoubtedly competent. I've invested and followed them for maybe 4 years and attended 3 AGMs where I've been able to extensively quiz them about their business
- their interests are well aligned to the shareholders. To date they have no paid themselves vast salaries but instead do have lots of options
- whilst in the last AGM I attended they were careful of promising new reserves they couldn't yet prove they were very very bullish about what they had discovered so far and in the generally favourable geology in their zone
- I don't believe this new development is at their behest. I'm sure their plans are more long term that that. They do have good contacts with the government (basically a one man show) and are rather think the government now wants a bigger piece of the action than hitherto particularly if it has privileged access to likely new reserves that they don't.
- because the management are fully invested via options I can't see how they can be cheaply bought off. But maybe there is a way.
- Azerbaijan is a petro state so has the money if it wants to diversify out of oil into gold and coppyer rather than forcing us to sell cheaply.

We'll see!

No idea. Based on just the 5 years or so of the existing operations and the low all in cost 150p is a good price. However, in terms of what is out there this probably undervalues the company. I think a leisurely pace is best. That way is still get the divis and the identified prospects become firmer.
Anyway from the wording I'm not sure the entire company is up for sale. A little more explanation would have been helpful

During the AGM I had a very interesting conversation with the Chairman. He said that during his rounds institutional investors he had received at least 5 demands for a senior executive to resign.

That senior executive was not him by the CEO. The guy who is the brains and driving force behind the operations!

I was flabbergasted but he absolutely looked like he was telling the truth. With this level of knee jerk short termism what chance the IIs hold out for a decent deal?

None I reckon...

Having been to a couple of AGMs and spoken to their operations director they seem to be going about the business of mining their deposits in a very systematic way trying always to extract the maximum possible margins from the deposits they have. I agree JORC is important but there's no point mining new deposits just for the sake of it.
I care about my capital being carefully deployed and am happy to wait for a careful & profitable approach to extracting any new discoveries.
Right now they are throwing off cash and I'm keen that doesn't just get buried underground on a new eldorado

Well as least I got one buy right - yesterday at 10.1p. As for the rest of my purchases, I'd rather not think about it.

Sometimes, like yesterday you just have to put your sanity on the line. There are 3 possibilities for an unexplained movement down. One, Mr Market is living in a parallel universe. Two - you are. Three - there is some unholy mess (think Paterisie V) which the well connected folk know but you don't.

I am happy to report that, so far, Mr Market was awol but might, just might be edging back to logical universe I inhabit.

Fingers crossed...

I was told yesterday at the AGM by the company secretary (who should know!) that RH has sold down 5% of his 10% holding. Also I'm not keen on just spending cash on drilling willy nilly. The one thing this company has recently been good at is spending money when others are desperate to cash out and being ruthless on cutting back it production does not generate cash. If drilling costs are now going up I not keen on coughing up. If they have been smart enough to lock in a programme of drilling at recession era costs then all when and good. We all know how drilling costs get inflated in the good times and how hard earn cash leaks out of a company in the sands - never to return. It's all about internal rate of return not finding oil at any cost

Thanks - very helpful

I'm looking to do a bit of analysis comparing AMER with their peers in terms of options/share based payments etc. I note that for part of the latest goodies to be given out they will be matching their share price to that of a group of peers. Does anybody know whether they have explicitly stated who these peers are? It would save me contacting the company if anybody out there knows...

I'm rather concerned that 50% x 30% of the awards are given if the share price just matches those of selected peers. Could anybody tell me what those peers are. The reason is that I'd like to do some analysis of the cumulative cost of these awards (yes they are in the accounts - but buried) but its always better to compare the results rather than quotes absolutes. Happy to share my analysis before the AGM - particularly if it proves damming

Firstly I am not a de-ramper just a long term sufferer. Firstly, in accounting terms the company is barely profitable at an operational level. Yes profitable at the bottom line but that's thanks to a big tax refund. However, we're in the business of petroleum engineering not financial engineering. So look at cash flow - basically neutral. So is this cash flow financing a replacement ratio of over 100%? No - quite the opposite! Whether all the mooted activity results in increased reserves is a pure punt. I want more certainty. After all the boasts about operating margins of $50 this is a joke. Why have admin costs jumped nearly 50%? After all the hype, dilution of shares holes drilled in the ground, this for me is a big disappointment. The BOD has extracted all the rents from this business and are sitting pretty. I'm really in two minds as to whether to sell out. Maybe I'll go to the AGM and look into the whites of their eyes before I decide.

Blimey - paid off early! I an only assume cash is in plentiful supply even allowing for the costs of exploration and a 2nd ore crusher. Also saving on the interest rate. Roll out the barrel....

Looking at the previous resource reports I thought they already had 10 years worth of estimated reserves. Is this programme designed to narrow down the location of previously inferred resource or to find entirely new sources?

Thanks for the info on HUM - interesting. I thought they had terminated the earn in on Kobada - there was an RNS on it just before Xmas I think.

Visitor you are right in that cash flow is all that counts, not least for a company as financially stretched as AAZ was until recently. The debt level is the one thing I've been watching like a hawk. Now that we are getting down to below US$20m the circle turns from vicious to virtuous. Bankers who would only lend at 10% whilst holding their noses start to get very friendly offering to refinance. Reduced interest payments could add significantly to cash flow. I note your concern on reserves but unless things have changed markedly since 2014 the main open pit reserves measured and indicated were put at 1,449,537 gold ounces. Since then an additional 200k higher grade gold reserves have been added. Unless I've got something wrong that should indicate around 15 years worth of production. If things have changed then the company need to fez up. As far as the comparison with HUM is concerned each concession is unique. Hummingbird may own 80% of the mine but that doesn't necessarily mean they escape paying the government a royalty. If may even be higher than the AAZ arrangement and could vary abruptly as per Acacia. I don't think HUM's reserves are any higher than AAZ and they operate in a more remote area needing expensive generators to power the operation unlike AAZ that takes its power from the grid. Granted there is a river nearby for HUM to extract water though.

Visitor - not sure that completely works. Obviously the residue of the cash flow namely US$7m includes operational costs within the AISC but it will also include investment. I'm assuming the AISC doesn't just take investment costs as incurred but rather uses some form of depreciation instead to smooth them out. But in any case the difference between your figure and the published figure is huge!

Gold5 does have half a point. The royalties go up once all admissible capital expenditure has been recovered. Worth noting when trying to work out future royalties

I'm surprised that there are not more posts here. Firstly, assuming the gold price doesn't dive the company is on course to be debt free by the end of 2018. Sure the new crusher will cost but talking to the production manager/chief geologist last year he was saying that not only was a new crusher the best way of increasing throughput but also they could (at that time) be got very cheaply 2nd hand from Oz because of the downturn in the mining industry there. This should mean a meaningful increase in production for 2018 and the water processing plant is removing another bottleneck. It'll be interesting to see the new targets for 2018. Does anybody know when they'll come out?