Member Info for Daisan

Jaf1948, Well, it doesn't hurt to make sure that they know! To be honest, given their stated interest in buying more diamond mines, they would be mad not to be interested in DCP.

This is excellent. I have seen something like it a few years ago and was wondering whether it was the same guy. To be greatly commended for the effort that has gone into it. Needless to say, we all have our ways of ranking these companies and mine differs from this order. For a start, I actually consider price/earnings ratios for these companies to be, if not irrelevant, then misleading and yet the 'score' is highly influenced by this. The EV/EBITDA is a good one as is the PCF which is why I like AAZ and SHG (perhaps even more). A number of these I haven't looked at for a while and will do so now but there are also a number on there that are valued lowly for very good reasons (e.g. MML)! There are also a few errors I note so it is worth checking the figures posted but this is a great starter resource for anyone looking to invest in gold miners. My complements to the person who has pulled this together.

jaf1948, Apologies for the delay in responding. Yes I have forwarded it to Paul. I suspect that this isn't in any way news to him and I also suspect that Rio are very aware of Diamondcorp and the situation. It is a small industry. However, it doesn't hurt to ensure that the information is shared.

Well, someone might be interested: https://www.bloomberg.com/news/articles/2016-12-06/diamonds-are-forever-for-rio-tinto-as-ceo-seeks-mines-not-sales

Just the gold price showing some signs of life. The $1170 area has been a bit of a battlefield recently and the price has managed to pull up to $1178. Hence, people seem more inclined to buy.

Yesterday's movement was quite anomalous for the sector. Most gold miners did little as a result of the lack of conviction in the gold price currently. Which makes the sharp movement higher here all the more interesting and suggests that it will remain volatile for some time to come. Gold price remains at a key level of support. Given the recent moves in the price here, there doesn't seem to be any middle ground. A break higher in the gold price will see this move up strongly whilst a break lower will see it move down strongly. Stability seems to be some time away!

Not the most enthusiastic advocate. I also found the reason for the soft grade at Gadir somewhat uncomfortable listening. Makes it sound like a bit of a punt rather than an underground mine. Admittedly, it is a somewhat unorthodox approach but still!

Brasso3, You cannot think of the production in isolation. This is a gold producer that gets significant copper and silver credits. It will remain very sensitive to gold price movements. As an example, if AAZ produce 20k oz of gold in a quarter with cash costs of $600/oz (the cash costs being that low as they take into account credits from copper and silver production) and a gold price of $1300/oz, they will generate $14m cash in the quarter. If the gold price was $1000 then they would generate $8m, a significant difference and one that would, and should, be reflected in the share price. In addition to this, gold producers are valued according to the reserves and resources they have. If the gold price goes down the in-ground value of these will reduce. As the debt profile goes down, the market will continue to associate AAZ with a lower risk profile and a higher rating accordingly. But it will still be sensitive to the gold price, just at a higher rating. It is really great to see AAZ quickly reducing its debt. Even if gold goes down to $1000-1050/oz the company will be generating cash and is in a much better financial position than when gold was last at that level. So whilst the share price would certainly be hit in such a scenario, there is every reason to believe that it will remain above the levels that the share price was at the start of the year.

A similar story I expect. Unfortunately the offspring of dictators in these newly independent countries seem to tend towards excess whilst the general populace struggle. From what I can see Gulnara Karimova has not been seen for a while and has been reported as poisoned. You couldn't make it up, could you?

Chovdar. Is that the place with the dodgy link to the Azerbaijan president? This has been discussed somewhat before. Was it you that brought it up previously zanthrus? I seem to recall at the time on the one hand thinking that it would be an interesting opportunity and on the other that I wouldn't want anything to do with it! A murky world.

''Meanwhile our production continues as per our guidance which is 82,000-87,000 ounces per year. We expect to hit the top end of that and we produce gold at a very low cost of $690-740 an ounce which is our guidance for this year. We expect to hit the favourable end of that as well'' I wouldn't be surprised if they beat both. Good to see the focus beginning to shift towards Singida now as well. An awful lot to go for there and should be the key to turn this from a small producer to a mid-tier operation. Let's hope that they use their "surplus cash flows" wisely. The outlook here is very bright. Unfortunately whilst gold is under pressure the share price will remain under some pressure. Given yourself a 2-5 year time horizon though and I believe that the share price will be multiples of this.

NicotineNelly, I am far from an expert on these things but tend to follow technical analysts as they appear to be as good as anyone when describing gold's movements. The Italian referendum will be interesting but, whilst many commentators seem to be writing Renzi off, I am not convinced. There are a lot of undecideds still and the lead in the last poll was only 5 percent I believe. Still, if Renzi does lose then it could throw a spanner in the works with the potential for a chain reaction within the euro zone (and everywhere else if it is bad enough). Whether the result alone will be enough to move gold forwards consistently rather than a brief rally (as we saw with a Trump victory) I don't know. Sentiment seems to be against it currently and it may need that leg lower to finally flush out the bulls.

Well, without getting too technical, $1172 is still strong support. 1180-1200 are the main areas of support but 1172 is a Fibonacci retracement level 61.8% retracement of the move higher this year. For gold this retracement has traditionally been a line in the sand. If that breaks then there is only minor support at 1150 I believe before a potential drop towards the lows you mention or even a brief dip below 1000. For support to break it has to remain under for at least a couple of closes and, preferably, a weekly close. Dipping under and going back above is actually reasonably bullish.

Well, let's hope that they don't equalise production through reducing gold output.

Zanthrus, Do you mean several times? Several orders of magnitude would be at least a thousand times!

On the one hand, they have delivered on time the connection to the national grid in Azerbaijan. This will enable them to save $2.3m per annum and further reduce cash costs and AISC. In terms of margin, it is a bit like adding 4-5000oz of gold production. Great news and payback on the capital costs within a year. On the other hand, the bad news of a revised production target for the year (down of course) owing to lower grade of material from Gadir. Disappointing. Generally speaking this is why it is great to have a stockpile of material for processing to provide more consistent grade and production.

Visitor, If I am understanding your post correctly then 'yes'. The AISC will already include revenue from the copper and silver. By products are generally considered in calculating cash costs and AISC. Not sure I would then consider the revenue associated with copper as operating margin in this case but that may just be semantics.

Assuming you are right, and I suspect that you aren't, then what a rising copper price will do is reduce the cost of producing the gold. AAZ are not going to produce enough copper to be considered a copper producer. The target for this year is 1700 - 2100 tonnes. That said, if copper does rise dramatically then the current market cap. is probably not that demanding for the copper production alone!

Why just the copper?

You tend to find that companies that run up the most when a sector is popular tend to fall the most when sentiment turns against the sector. I believe that AAZ did rise the most out of the producers and, hence, it is unsurprising that it is hit the most as people protect their profits. The chart is a picture postcard head and shoulders pattern. Almost too good. It would suggest a target of around 19p I believe so there should be significant support at that sort of level. It needs to consolidate for a while as it went up too far, too fast to be sustainable. Yes, AAZ are still generating significant cash at these price levels and they even has something of a hedge in operation. But sentiment will always trump fundamentals in the short term. Any bounce in gold and change in sentiment should see this rise quickly again.