Member Info for highlandmatt

Couldn't resist a cheeky top up this morning at 1.725p. Well done those that got some on Mon at 1.6 something. SP and MC is lower than the minimum contracted income from Ruvuma would generate.

Monday morning News:

Front page of BBC Scotland news - "Major Gas Discovery", off Shetland. Half the size of ours. Puts it in perspective.
https://www.bbc.co.uk/news/scotland

Am I correct in thinking that ASO's AISC is <$1000/oz. So even at $1200/oz, it is making $200 on every ounce. Multiply that by 240k oz and you get $48m EBITDA, which is enough to cover the financing ($15m)?

Majedie disposing of 1% won't have helped the share price.

Good point, well made, Cap. Still, more than half our costs met by our 'secondary' product, can't be bad.
As has been said before, 1m tons of Ilmenite at $180/ton = $180m.
Taken together, equals $260m, versus costs of $140ish.
Should clear $100m EBITDA.

Absolutely agree Greeno. $1500/ton times 70k tons = $105m.
Every $100/ton increase adds $7m to the bottom line.

25% of Ntorya running at 100+mcfs is reckoned to be worth $30m a year to AEX. Minimal costs might mean this is mostly net profit. Call it £20m GBP. You could argue that should give a mcap of 200m =5p+. Other assets, KN 1 fixed, drilling excitement, liquids, can all add to that.

Feelinglucky - agreed. As part of the 'up to $35m costs of developing Ruvuma'. Drewky and I were merely conversing on whether they should feature in the excellent blog analysis or not.

Drewky - you did, and it doesn't change the overall picture one iota, so it's not worth disagreeing over. Your analysis has achieved it's objectives - demonstrating that the deal AEX is proposing will take it from a stuttering 1 well operation, with no licences and on the brink of running out of cash; to a free carry of 25% share of a large field and a guaranteed future. Not as much as we hoped for, but before NT2 if you had said we would have a 0.5TCF field fully developed and paid for in to production, I would have taken that as a success. It is only because NT2 was such a success that our sights have been raised.

Thanks for the blog analysis, Drewky. I would make one minor observation - you forgot the cost of the 3D seismics ($6m?). That reduces our 'costs rebate' by $1.5m. For arguments sake can we assume that the AEX share of profit will be min $10m and if the costs come in as low as expected, then we can expect another $5m per annum on top in cost rebate (25% of ARA's $20m profit). For not having to do very much, that's not a bad income allow to progression of other projects in a couple of years time.

http://www.valuethemarkets.com/index.php/2018/07/11/aminex-bags-crucial-tanzania-farm-accelerate-ntorya-gas-development-aex/

FAO Drewky. That is my thinking also - the deal is worth more than the upfront cash value - the value of the future income strem will be significant, and could be very significant. I was going to run some numbers tonight as well. But using KN1 as a guide, we were taking $1m a month from 15scuffs? So a very rough guide could be a minimum of $1m/month for our share, which really should be straight to EBITDA? That alone is worth more than $100m, even if it only lasts for 10years?

I'm torn on this proposed deal. On the face of it - $40m in cash for 50% of the asset is a lot less than what we wanted. However, if the estimate of $140m required for development is accurate, that would have been a massive ask for Aminex ($105m) before any payback. So what have we got? Some cash to keep the lights on and rework KN1, possibly drill KS1? The main value is the promise of at least $10m of income a year once Ruvuma is developed. How high will it be? And for how long? What the value of that income will be is the great unknown. Plus, if ARA do the drills for less than anticipated, then there may be a cash bonus to come. Was our team capable of a development that size? Who knows. One thing for certain, SOLO don't have that kind of development cash...

You forgot a 100 year life of mine and low debt.

Well that would explain the downward pressure on the SP.

Don't tell 'em, Pike.

Fair points Pete. Maybe LeBlanc is held up by approvals? Cassidy at least got the compliant licence apps in (Jay forgot the CPR?), and was held up from procurement by the engineers arguing over the rig spec? Jay does strike me as an engineer type rather than a CEO type. Maybe that is what attracted the Zubairs?

Which is why we needed all those extra management staff - Aaron LeBlanc to sort Kiliwani North and South and drill NT3/CH1, Brian Cassidy to get the licence paperwork done and a rig contract, Thierry Murcia and Prosper Victus (great name!) to smooze Tanz Gov, leaving Jay to smooze the Zubs and manage the strategic direction. Exploration and development in sub-saharan africa was never going to be quick or easy.

Depends on the price!

Good results and I am pleased by progress, but are the headlines just a question of accountancy and legal entities? Remember that we bought this increase in production, so is it that spectacular? See previous RNS 19 Dec- "I am delighted to announce the completion of the acquisition of Youga and Balogo Gold Mines from Avesoro Jersey Limited. Youga and Balogo will strengthen and diversify our portfolio within West Africa and will be highly complementary to our existing New Liberty Mine. This has been a significant year for the Company and one of transition. New Liberty has been stabilised and now stands to produce between 70,000 - 80,000 ounces this year, alongside the 110,000 ounces to be produced during 2017 at Youga and Balogo, with further production growth expected next year"