RE: Anglo Asian Mining: a low cost and highly cash-generative gold miner18 Jul 2020 15:45
Anglo Asian Mining are on a all-in cost of $591/oz (FY 19 Annual Report) putting it in the first quartile of the gold mining cost curve. With Gold price as we stand currently on $1,800, the operating margin is certainly impressive and one that will contribute considerably to the bottom line. In the recently reported Q2 (June end) update, gold sales achieved on average a price of $1,713 per ounce, which compared very favourably on a like for like basis to Q2 2019 where an average of $1,332 per ounce was achieved. Now as we enter Q3, and the gold price up again, the operating margin is looking very good indeed. Commenting on the gold price the CEO said:
"The gold price continues to perform favourably and, in Q2 2020, we received an increase of approximately $400 per ounce for gold bullion sales compared to the same period last year. With prices expected to remain at these levels, this bodes well for the future financial performance of the Company”
The company had a cash position on 30 June of $29.2 million and had no bank debt, the dividend policy is maintained, and a payment is actually going to holders this month, with the next dividend declaration announcement expected in September. With the levels of cash generated by the company and the gold price outlook, there is every chance this will not only continue but also grow, which is one huge benefit to income investors and potentially funds during a time when dividends are being cut by many listed companies.
Updating the market Reza Vaziri CEO commented "I look forward to a more productive second half of the year as we remain on track to meet our FY 2020 production guidance of 75,000 GEOs to 80,000 GEOs and revenue guidance of over $100 million"
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