Member Info for Daisan

Omega3, I suspect that in the short term this will not make much of a difference. Whilst this will help physical demand in the longer term, the price of gold is currently gripped by futures trading which can sell vastly more gold than people can buy physical gold as they never have to settle with the physical metal. Gold is also one of the most technically driven markets I know so completion of technical movements tends to be key. We could be looking at a double bottom around $1000-1050/oz which would be extremely bullish. However, whilst that may not seem much of a drop from here, the reality is that this could have a very severe impact as people capitulate, particularly in US quoted miners which have risen more, tend to be equally technically driven and look like they may be ready for a big fall. In the longer term this reassessment of gold from a Sharia perspective can only be good for physical demand as it opens up a whole new market. But I suspect that they will interpret the current volatility and hold off until such a time as they can see the market bottoming.

A bit more than just drilling cookiecrew. This is the underground mine development and shows that we are making progress. It would, however, be interesting to understand if this was ahead of schedule as this would be reassuring in terms of ultimate timescales. I know they say that they are on course for Q2 but at this stage I would expect them to say that even if they were a little behind owing to contingency in the plan. Exciting times but, unfortunately, likely to be overshadowed by the gold price in the short/medium term.

Some good widths in there with decent grades as well so looks like it could be a good deposit. This should be supportive of the share price in the normal course of events but all eyes are on the dollar and gold at the moment. I think the probability is that the damage has been done to gold now and we will unfortunately move down towards the start of year lows or a little below. Whilst AAZ is a different beast to what it was at the start of the year there is no doubt that this will put pressure on the share price although I wouldn't expect it to go anywhere near the year low.

Further to this, the GDX is currently down 5% after being down 5% yesterday and is now decisively below the 19.5 level. Will need a smart turnaround to shift the sentiment otherwise the GDX could well be heading below 10 which is a rather scary and, at the same time, tempting prospect!

I don't disagree in terms of the undervaluation or the debt situation. But the price of gold miners will necessarily be impacted by gold if it does break down from these levels and that will include the undervalued ones (I honestly think that a lot of the producers in particular are undervalued). It is difficult to make a case for investment when sentiment is poor. The clarification of the AISC was interesting and the original statements around this did have me wondering. Longer term this should be an excellent investment but I wouldn't bet against weakness in the short term should the gold price threaten the lows of Dec 15/Jan 16. Changing the topic somewhat, given the size of the resource here and the potential for ramping up to 100k+ oz in the not too distant future, it is interesting how quiet this board is. The same could be said for SHG and AAZ, also gold producers. It is strange how some companies seem to capture the imaginations of contributors to these boards and others don't. For me, this is usually a good sign as the most followed companies tend to be the ones whose prices have got ahead of themselves.

Gold has now breached all of the support levels that I am aware of. There has been mention of the low $1100s providing some support and $1100 itself has 'round number' support. However, given the current trading on the gold market, the strength of the dollar (although not exactly correlated it does present a headwind to gold), the fact that gold doesn't seem to be reacting much even when the dollar falls and that speculative positions in gold futures are still not overly bullish, it does look like we may now retest the lows of Dec 15/Jan 16. Of slight hope or concern (take your pick) is the fact that gold miners on the north american markets (and to some extent here) have held up quite strongly relative to gold. This is usually a relatively bullish signal but the market itself doesn't look bullish to me currently which could mean that the miners will snap. They have showed signs of that in the US overnight and on the market today. The critical level on the GDX is about 19.5. Unfortunately in pre-market it is currently standing at this point. If that goes and stays under for the rest of the week, I think that the miners will decisively breakdown in the US and we will not be immune on the UK market. Despite this, I still rate SHG as a company highly but it is difficult for new investors to buy into a company when the thing that the company produces is under considerable price pressure and when it seems that this price pressure is going to continue for at least a while. In the long term I am convinced that this will fly but in the short term the price is going to remain under pressure and will be blown by the winds of the gold price. Note: posted similar on the AAZ board, the two miners I rate most highly.

Which is somewhat odd considering gold looks like it is breaking down!

Gold has now breached all of the support levels that I am aware of. There has been mention of the low $1100s providing some support and $1100 itself has 'round number' support. However, given the current trading on the gold market, the strength of the dollar (although not exactly correlated it does present a headwind to gold), the fact that gold doesn't seem to be reacting much even when the dollar falls and that speculative positions in gold futures are still not overly bullish, it does look like we may now retest the lows of Dec 15/Jan 16. Of slight hope or concern (take your pick) is the fact that gold miners on the north american markets (and to some extent here) have held up quite strongly relative to gold. This is usually a relatively bullish signal but the market itself doesn't look bullish to me currently which could mean that the miners will snap. They have showed signs of that in the US overnight and on the market today. The critical level on the GDX is about 19.5. Unfortunately in pre-market it is currently standing at this point. If that goes and stays under for the rest of the week, I think that the miners will decisively breakdown in the US and we will not be immune on the UK market. Despite this, I still rate AAZ as a company highly but it is difficult for new investors to buy into a company when the thing that the company produces is under considerable price pressure and when it seems that this price pressure is going to continue for at least a while. In the long term I am convinced that this will fly but in the short term the price is going to remain under pressure and will be blown by the winds of the gold price.

Hmmm. Not as good as I had hoped but then we were expecting an impact from both a lower grade than anticipated from Gadir and as a result of switching over to the national grid. The real question is how much for each. If it is primarily due to the switch over then this is a one off and you just take it on the chin. However, if it is significantly related to Gadir then this is somewhat more problematic, as it could be an ongoing issue, and it would be good to understand their expectations in this regard.

Apologies. I have only just seen these posts, hence the delay in responding. Zanthrus, you flatter me but keep it up! adamsmithfreethi, could you clarify what you are referring to in terms of 'audited reserves'? Mention of reserves did make me go back and look at resource/reserve updates in previous years and we did have one in the second hald of 2010, 2012 and 2014 so on this basis we are probably due one. Whether they would want to wait to see what comes of the promising discovery at Ugur I do not know. This area is scheduled for more drilling in 2017. I also revisited the interim/final results and noticed that there has been a variety of exploration works that we have received no information regarding. For example, Ordubad was stated in the final results as an area of focus and the interim report indicated that some work had gone on there which indicated the presence of mineralization and yet I do not recall seeing any results. You could speculate that this means the level of mineralization was insufficient to warrant further investigation but I prefer to deal with solid information provided so it would be interested to get an update on this. I think I will drop them a line to see if there is anything concrete that they can release.

Hmmm. Most of the feasibility study is very positive and bodes well for an actual mining operation. The only problem I have is with the valuation. They use a discount rate of 5% which in my opinion is too low. I understand that this is a very stable location and there is access to very affordable funding but even so this is at the lower end of what I would prefer. I would have been happier with 7.5%. Of course, the other issue is the NPV (and IRR) even at such a low discount rate is not huge and doesn't give much support to the current market capitalisation. Fortunately there is a stack of upside to come on the reserve front such that this NPV, despite the discount rate, is actually cautious. Given the limited number of options for exposure to gold mining on the market with such limited geopolitical risk, despite the relatively high valuation, this still represents a buy given a supportive gold price environment.

Well, I can see that he is not the flavour of the day over on the TLOU board (although I would point out he seems to have made about 30% profit based on his own statements) but he has never done the same here despite having ample opportunity to sell out for a substantial profit as far as I can see. Zanthrus, I looked back at your posting history and see that you bought at least once late August which I reckon must have been about 17p suggesting that you had the option of cashing out for just short of a 100% gain. Not stalking I promise but if somebody points a finger it is at least worth checking out the background! As with any bulletin board, posts should only act as a basis for stimulating research to determine the accuracy of the statements made but it is useful to determine just how reliable the basic information is. On the basis of this, I see no reason to give Zanthrus any more or less benefit of the doubt than I would any other nameless/faceless contributor to a bulletin board. And I would expect exactly the same in return!

Yes, I saw this story on Share Prophets. The conclusions make sense so you would expect some pressure on certain shares that Odey has a presence in. However, I tend to agree to some extent that selling is most likely to be directed towards larger, more liquid companies within the portfolio although this is certainly not guaranteed. They certainly have sufficient shares to cause a great deal of instability should they decide to ditch them and I certainly have no faith that they will keep the market fully up to date if they start reducing their stake, particularly as they use CFDs. KEFI is a somewhat different beast as it was relatively overvalued compared to the likes of SHG and AAZ and has experienced problems which have pressured the share price. I haven't seen indications that the weakness is due to Odey selling but then again they have used a great deal of CFDs on KEFI. I tend to view CFDs as an indication of a short term position so it could be that they are reducing by cutting back on their CFDs. Anyway, not really something that we can influence. All the company can do is perform to the best of their ability and attract investors. Longer term the bigger influence will be the price of gold and sentiment in gold miners generally. SHG have managed their exposure to gold price movements effectively but they are not in a position to singlehandedly alter market sentiment.

zanthrus, Do you have the original article that this is refuting? I can't seem to see it on abc.az.

Thanks. I have had a look at the thread and realise that it dates back quite a while so it is the same one. You've got to admire the effort.

Thanks for pointing to the articles. Very interesting. I have posted on the DCP board which is a currently producing diamond mine. Well, sort of. Barring inconvenient acts of God of which it has suffered many recently.

The article was mainly indicative of sentiment rather than suggestive of a transaction. However, whilst Rio may be an elephant hunter, diamond assets are becoming an endangered species to the point at which even an elephant hunter may consider the odd rabbit. Apologies for rather overstretching that metaphor!

I suspect that the AISC costs will come in under the $690/oz lower limit guidelines. But looking at it another way, the cash generated before capex, etc. on cash costs of $387/oz (as reported in Q3 report) is about $68m based on $1170/oz gold and a production of 87k oz. Which puts the company on a projected market cap. of just over 1 x cash generation and an EV of 1.5 x cash generation. All of which is absurd.

This is becoming ridiculously sensitive to the gold price. Draghi makes his speach, the market misinterprets it (as usual) then the market realises its mistake, the dollar soars, gold goes down a bit and AAZ drops 5%. All within the space of about 10 minutes. Come on AAZ investors! Use the other brain cell occasionally. :-)

My experience of large companies is that 'fairness' is not at the top of their agendas. They would pay the minimum that they could get away with and currently DCP are not in the greatest negotiating position.