Stefan Bernstein explains how the EU/Greenland critical raw materials partnership benefits GreenRoc. Watch the full video here.
Given an (ex) shareholder with a fairly high social media following got out & announced it at a similar time it’s very possible their sale + followers doing likewise was responsible for the increase in volume of sales.
Whilst I’m all for IR interacting on public forums to update shareholders, it would be beneficial if this was done in a positive manner with the intent of assuaging Such fears & not in a negative manner that could be construed as an attempt to shut down free debate and allowing complete transparency.
This normally trades well within the advertised spread, I do agree it will drift … unless further progress on Gilar arrives which should be the near term catalyst. If not that more news/time scales on the tailings dam should be too far away. If you’re a trader this is not the best time to get in but still incredibly cheap as a long term buy & hold with the company likely producing from multiple mines over the next 5 years.
The acquisitions are on the books by virtue of the resources allocated to them thus far (time/money). I agree Accugas is our crown jewell and whilst I believe it justifies the current share price(& more) I don't see that the market will see it it that way when holders assess the progress that has been made elsewhere ... hopefully we will not have to find out and resisting will be on the back of good news (even if that isn't the SS assets).
Think there are other factors to add over pre June 2021. The entire region seems to be even less stable, particularly Niger, the deals that we have tried to do have bloated the size of the company for seemingly no additional revenue, the legal bills must be through the roof and money seems to be promised left, right and centre to renewable deals on the basis that hydro carbon revenues are going to go through the roof. In addition, we are further diluted as there was a fund raise for Chad.
Accugas debt looked like it would refinanced but that has also been a constant thorn in the side.
This share is clearly high risk and anyone invested will hopefully have realised that anyway but the reality is Chad may or may not get sorted in a favourable way, Niger may or may not start producing and be caused problems by the ongoing political issues and SS may or may not go through (if it does it may or may not be impacted by issues with Sudan). The likely outcome of a relist with the company no further on than before is horrendous for existing holders as there will be little patience for positive resolutions of all these ongoing opportunities/threats.
It even happens with stopped clocks at least twice day so no need to be too smug ;-)
BT you are an example here of being right for the wrong reasons. The catalyst for the sell off is clear, it has been happening since the local protests. The company sign posted falling near term production, conversion towards a focus on copper, new mines to deal with falling production, a thought out strategy including ensuring finance was in place to the transition and with excellent grades from drilling meaning Gilar would address the number 1 issue of near term production they were well on track with their plan. They MAY have mismanaged the environmental situation or even communication with the powers that be in terms of planning consents etc (personally I think that's unlikely) but people are selling due to the perceived risk of the president transferring licensed areas to Azergold or imposing heavy fines/other sanctions. Investors familiar with the company will have known about falling production and were investing as there was a plan for growth in the long term ... that part hasn't changed & frankly if people were selling for you reasons they weren't the brightest of investors to be holding anyway.
There is plenty of risk here, but the thing causing the sell off is statements made by the president of the country following protests by villagers. There is a dividend to be paid next week (unless it’s extraordinarily cancelled) which will likely be re invested by many but this is a share that doesn’t trade in massive volumes but people are headed for the door in numbers.
If the president makes more positive statements and people buy back in plus divi reinvestment then the bounce will be equally as sharp but right now that’s a lot of ifs.
Without wishing to be dramatic, over the next month this could be trading in single digit pence or triple, dependent on news flow.
If everything gets back to normal then BT’s concerns about falling production are addressed by two new mines … they are worthless without a vote of confidence from the government in addressing environmental concerns.
Cash was always going too reduce, as was production. The company has been criticised in the past for not putting the cash to work, or pay more dividends and now it commits to continuing the dividend through the growth (thus meaning debt will be required to fund the new mines) people get the jitters about that too.
Gilar/Zafar will need to be partly funded with debt, which is in place & more will undoubtedly be available as yet company is well thought of by banks in Azerbaijan, Gilar/Zafar will in then in turn keep the divi flowing, service the debt taken on and contribute towards the other new territories.
There are plenty of explores out there that require less capital, but don't have the infrastructure, know how, experience, reputation and government support that AAZ has, not to mention the expansive portfolio of producing, near production and exploration assets that is on offer here. I'm sure the next 12 months will provide higher and lower share prices than today but as I've said before, I believe the real money to be made here is a long term view, so I guess t is personal trading styles that will determine if people want in or not.
I think Tony is arguably correct if you apply zero value to exploration targets/mines not yet under construction but in development. You can look around over the years at companies that have had markets caps that were hugely elevated on the back of potential but it was clear they would need to dilute to nothing to eventually get to the position of being a profitable producer.
If the board here can use the cash flow of the existing mines to get Gilar/Zafar going and in turn use the cash flow to feed into Xarxar/Garadag whilst paying a dividend and exploring the 50 or so addition exploration targets that they have (not mention the already identified potential of the likes of Demerli/VEjnali where there are already previously functioning facilities) then it would seem that there is the potential for the company to grow far more than the 4 times they are targeting by 2028 and without dilution, as it has been proven credit facilities are available to them.
The global need for copper over the short to medium term backs up the plan to transition the business but I would be surprised if gold deposits were not found in exploration. I think Tony maybe a slightly different style of investor to me, my view is that if you identify a company that is ran well, in a sector that there is a growing need, they have an abundance of opportunity to grow and has a proven track record then it is worth riding out the short and even medium term fluctuations shorter term traders will inflict on a less liquid share. Further, it is probably worth using the downwards fluctuations to fill your boots for the coming rise. I'm sure trading in and out and looking at AAZ in relative value terms to peers based on more short term signals/comparisons could also be profitable but I think the money will be made here with good old fashioned patience.
Tony, I think you are are missing several tricks with AAZ. Zafar & Gilar are near term wins which will start to boost production in 2024 but as well as the existing mines the company has a gold mine (Vejnali) that was due to start up but were put on the back burner to concentrate on other areas. Xarxar and Garadag are two large copper opportunities and recent RNS's look like within a few year 30-35k tonnes of copper will be produced annually just from them.
Libero is a little unwelcome distraction but I'd be unsurprised if it one of its mines ends up owned by AAZ as it likely to be pocket change in the grand scheme of things.
I've barely skimmed the surface of the full suite of concessions available to explore (some of which the mines are already under construction). The production for this year may be slightly disappointing and follow the trajectory of the last few years but this has been communicated and the company has cash reserves & access to credit to continue to pay a dividend from as well as invest into the new mines. I like Shanta & WK could be a company changer but AAZ has a way better track record from management has multiple areas to explore and a nice mix of assets in terms of mature mine, ones coming into production and initial finds that can fairly soon be brought into production.
The board have promised a Q1 update that will outline a more detailed plan for the business going forwards (presumable this will give us all the key metrics on timescales and targets for production and some idea of the capital that will be required) and in my view that plan should be the start of the actual re rate. My first purchase here was sub 20p many years ago (in small scale sadly) but I think it is a much better company in which to invest now.
The analogy doesn’t quite work as they are using company cash to buy the shares, thus lowering the assets of the company. IMV buy backs are only worthwhile if shares are severely undervalued AND there is nothing better to invest the money in. Defo undervalued here but I’d happily see buybacks cease in favour of none North Sea assets at the right price.
I don't think it is quite as simple as none listed = BPR qualifying. The most irritating bit about it is there is no definitive list of companies that qualify or even clear criteria. In the past I've read miners don't qualify, nor do oil explorers and if most of business is outside the UK that may cause problems. If anyone can find clear rules on this please post a link!
If you look at the companies that offer Inheritance tax portfolio's then you generally see the same companies detailed, oil companies do not tend to appear.
I wouldn't be against an issue of equity in the right circumstances & I trust the board would only do so if it was in the shareholders best interests (i.e. to fast track a much bigger prospect than the ones they are currently working on). However, credit lines are open to AAZ as they are well thought of in the country and they have a good track record financially. I suspect despite the abundance of opportunity they will prefer to take it a few steps at a time (rather than need to raise capital and go after everything available immediately) and therefore be able to roll over profits from Gilar/Zafar into other new mines.
Todays RNS may well be a big beneficiary of the money that starts to roll in and really push the profile of the company much higher up into the spotlight and finally start attracting large institutional investors. Whilst, as a private investor, there is always risk in small caps & especially in countries that you are not familiar, the track record of AAZ & their management, their current finance, standing in the country and the opportunities that they have to explore, not to mention the need for copper in todays world, creates a massive opportunity to but into a company where its market cap is a fraction of where it looks to be heading in the next 3 to 5 years.
The new mines are underground. Gilar is very much gold and copper but the company is certainly transitioning to copper production (again the details of this is better explained in the coming month by the company itself).
The company has a track record of not issuing equity to fund growth and I would be astounded if it changed course at the current low share price. Maybe if we were 2 or 3 times where its at now and the opportunity was there to go big on one of the concessions that they were awarded last year (which will likely require much higher levels of funding than Gilar & Zafar) then funding may happen but the board own a lot of the company and will not wish to dilute their own holdings.
I believe it is a good RNS, the company have had declining production for a few years but have a ridiculous number of opportunity within new territories they have been awarded by the government. The company has a great relationship with the government and started to identify the areas it feels have the most potential for them to produce from in the shortest amount of time. There is a further update due by the end of March that will put meat on the bones in terms of medium term growth but the GIlar mine in particular (where work is well underway) looks like a fast track opportunity to ramp up production, that and Zafar are close to the existing facilities. The funds will help enable the company to fast track these mines into production and will hopefully mean the existing cash pile (plus existing mines production) can mean the dividend is stable for this year and next. After that, the new mines will hopefully be supporting the dividend, repaying the new borrowings but also expanding into the several other concessions that the company has. This share has been one for the future for a while but that future is rapidly approaching and I wouldn't be surprised if we are starting to see a rerate that could go a lot further than where the share price is now.
It has been a frustration waiting on news but just maybe the pieces are falling into place ... it would be nice to have a slight move up in oil prices through the next 3-6 months to really capitalise on things but I'd settle for where it is now if the SS deal closes. Accugas seems to be ticking over nicely (the often forgotten but important piece of the business) and Niger finally looks like it could get going in the foreseeable future, hopefully we will be looking forward to much happier days soon.