Member Info for jointhedots

I took a look at the JV proposal and the potential there and it really is a massive opportunity for a gold province. Richard Konroy any his team have been at this for donkey's years and reading a little about him probably tough to deal with (set in his ways) One of the sticking points to the JV was who runs it, IMO we should not let Konroy run it as AAZ know how to bring projects to implementation fast.

I don't want to appear ageist, but the guy is 88 years old and will not want to hang about on this (precious time is slipping away Richard, you know you're only king for a day, to paraphrase a Van Morrison song). He's already had an attempted coup by shareholder in his Diamond venture. Whatever Conroy say about options, AAZ where the can-do company they identified and I reckon time and patience are on our side - in one of their recent interviews our directors were very much resigned to letting it take it's course.

Also, the announcement never mentioned that AAZ would get a share of whatever other metals are discovered on the licence areas or involvement in prospecting for them - A read there is potential for various other elements including Antimony which is apparently in short supply. I suppose in AAZ did confirm a feasible gold mine they could simple buy out Conroy who are not exactly flush with cash.

I always look for a company's strategy (and associated plans) when considering an investment - a company with no strategy is simply winging it and enjoying their good fortune until disaster strikes. But is is amazing how many companies don't have a coherent strategy and some not even a sensible top level plan, at least one that they care to communicate to shareholders - often just jam tomorrow projections, a bigger whopper each year) to shut everyone up each time they fail ( anyone investing for any time will have fallen for the BS on occasion).

So it is pleasing to see that AAZ did actually communicated a strategy in May last year, very brave when C19 was starting to turn the world upside down, what's more they have achieved some significant progress against it, notably with the Konroy Gold prospect, drilling campaign including new discovery and potentially the newly restored contract areas

" The Company's strategy is focused on three key objectives:

1 Prioritising discoveries identified by current exploration to increase production and mine life
2 Long term upside potential of existing concessions
3 Evaluating other opportunities, both within and outside Azerbaijan"

They go no to list what they have done and what they intend, of course the pandemic and other events have slowed things and blown the company off course slightly as with many other mining companies, they they had a good year nevertheless. But perhaps the most interesting statement is about the long term goal and confidence in extending the mine life at Gedabek on top of what they are already doing because that means new ventures add to production not simple substitute for it.
"Gedabek also has exceptional potential to host a porphyry system which, if proven, could provide tens of millions of tonnes of ore and increase mine life through to the mid 2030s and beyond. This is something we intend to focus on from 2021 onwards.

"This current plan demonstrates our confidence in the abundant resource base of the Company, which we believe will continue to generate significant shareholder value."

The linked vidio describes the situation at ZOD at the end of Jan, interviews with locals, some upset, but apparently still working (on the Armenian side I guess). Looks like the mine is secured with troops from all sides on the border, I guess they now have to wait for politicians to agree the exact coordinates of the border.

As I said previously, the Azeri's and AAZ should look after the mining personnel and innocent locals, it's in everyone's interest - else there will be great resentment

https://www.youtube.com/watch?v=xf6soqjzSVA

Play - believe what you like, you accuse me of criticising before conducting research, that is not true as I read you posts on Sunday, and started investigating, though I was aware of the TV reports.

You came back twice with additional negative comments after initially highlighting the potential issue with a negative header "Next Hurdle" and finishing your final post with " Additional risk, I'd expect additional discount."

I was prepared to leave it alone on Sunday, but on seeing your follow up comments that IMO suggest you wanted to spread concern I decided to respond with the way I saw it.

It is no more than a potential issue at the moment, like a long list of other things that could derail plans , it's not the "Next Hurdle" as you say, one thing we can agree on is the potential impact is high as it is a real nasty so lets hope they get it under control quickly.

No one is ignoring it, I have checked it out today and have long invested, even worked in frontier countries (had one guy die of Malaria on his way to site) - but you over-egged it at this stage, if the situation deteriorates then that is the time to worry - at the moment it sits well below other issues the company is dealing with - you were scaremongering suggesting a massive issue, so I took a robust alternative view. If you want to post something controversial on BBs, you need to be thick skinned and defend you viewpoint - so don't quit, learn to take criticism, as I have.

youonly - nothing is up, it's just a waiting game; many investors bought in on the recent good news making all sorts of positive noises on the way up and them making predictions of a SP retrace upon selling. Their action often makes what they suggest self fulfilling as the grouping sell, so AAZ has held up well IMO.

That is par for the course for those that look to make money on herd mentality, a read of the BB since the news broke will demonstrate this - some will be back singing the company's praises again on the next leg up (many will have this on watch), only to rubbish it again after taking a profit again - I can't knock their logic as it works for them, however, shareholders committed to the business proposition need to be wary of them when making a judgement.

There are actually BB's for rampers, identifying candidates and targeting them - piles of chancers pushing their ideas.

AAZ have a great business, massive opportunities, profitable, loads going on and news flows likely - so IMO the SP is fine, it can change completely in a day, I've bought more having researched the newly restored assets as I base investment on facts, the risk of course remains that they may never get their hands on the assets - when that risk is removed the SP will rerate IMO.

The existing business more than justifies the current SP, the assets are worth hundreds of $millions, both GPM and Vallex (the 2 main operators) both had/have bonds for hundreds of $millions secured against the assets, for which AAZ will not be liable(debt free on entry to sites) - so what are they worth???

All I can advise is use your own judgement, as I am doing

Im all for holding the company to account for failing and facing real issues - but where on earth are you translate an ebola outbreak as a crisis for HUM - it's a small outbreak that has been identified and hopefully contained in a continent rife with disease.

Lets keep things in perspective and focus on real issues, it's not comparable to C19 and can be stopped relatively easily, it show symptoms when is contagious and there is a vaccine, even when the worst outbreak spread worldwide and reached the US it was isolated and stopped - 11000 people died worldwide but they know how to deal with it now, in comparison annual deaths through diseases like for instance Malaria every year are over 200,000 and there are countless other diseases that kill millions. I just checked the most dangerous animal, and surprisingly the hippopotamus kills around 500/year in Africa.

I think the management should provide a proper/clearer explanation of the root cause of their disappointing performance and actions they are taking (I called for management changes on this BB like many others have) as they have been somewhere between poor and abysmal.

However, unpopular though it may be, I'm sorry to rain on your parade wrt the investor group, it is wrong that a pressure group received answers for their personal consumption, new/key information should be provided to all and at the same time- do you realise what you are suggesting (demanding information not in the public domain). If it's not new/key and therefore in the public domain then why are you bothering to ask - do some research.

Are you proposing to share anything you discover to all in real time?

Furthermore have you any clear objective apart from "we want answers"? The only questions I've seen are from a poster who freely admits he's not a shareholder. It's a shorters dream for shareholders to take this course when there are other options, a great opportunity to drain shareholder confidence as the blood letting continues - how do you know they (shorters and trolls) are not amongst your number simply winding you up?

I suspect what you really need to know, are agonising about, is in the RNS's/interviews, though they avoid spelling it out, you just need to read them critically in the context of what the company does. - they have failed to keep up with development and temporarily (they say) have had to work lower grade/harder to mine ore until they access new areas later in 2021 that is it. I don't know the root cause, but in the absence of a confession of some undisclosed event, it all boils down to "POOR MANAGEMENT", which is what many shareholders are suggesting.

I realise this will be a highly unpopular post but you need to think carefully about your goals and implications.

Who knows, but hopefully the Azeri government are working hard to make the the area safe; to underline the problem reports suggest a number of people have been injured by land mines, 5 soldiers only yesterday I believe; they are also meeting tomorrow to discuss environmental issues and how to kick start the region with the department responsible for resources including mining .

"Azerbaijani parliament to hold meeting on ecological situation in liberated lands"
"The issues related to the environmental situation in the liberated territories and the development of these zones will be considered during the meeting."

https://www.azernews.az/nation/175981.html

Link has video, map and image of Zod.

https://hetq.am/en/article/124762

Soder - good for you, best move on , we'll miss you.

It was one of Warren Buffett's many saying that you should only invest in things you understand, there's your mistake.

Confirmed trading position outlook to the extent they could advice was provided in the last update, IT and similar service companies work like all other companies to the extent that they need a minimum revenue to cover fixed costs then start making money. However that's where the clear comparison becomes fuzzy as they don't produce anything the operational costs can in some cases be miniscule (no materials to buy and once software is developed every sale is highly profitable). The reason for the comment is that the company generated an extra £7.7m revenue and converted that into an EBITDA of £8.9m - simply cost reduction or something else?

So the increased profit is not simply down to volume of sales, the new business they are doing appears to be very profitable, if there are no other factors at play(I haven't analysed the numbers), is it also an indication they have perhaps reached an inflection point on turnover where additional revenue is highly profitable and legacy business having less impact. It leads to the possibility that the $82m of opportunities and anything else they can generate outsized profits.


"In line with the trading statement of 27 November 2020, the Group can now confirm that it expects revenue for year ended 31 December 2020 to be approximately £50.2 million (FY2019: £42.5 million) and EBITDA to be approximately £15.3 million (FY2019: £6.4 million)."

Recent video's of the setup at Vejnali Gold Mine.Looks a very tidy setup.https://www.azerbaycan24.com/en/azerbaijan-s-liberated-vejnali-gold-mine-video/https://twitter.com/Caucasuswar/status/1322678013742489610

This is a very slow burner, slow progress but progress non the less.

When it eventually moves it should move very fast, all about the outlook in the next RNS - should have improved with the lockdowns

expart - I'm not sure anyone could give you a meaningful answer, the companies that have developed the sites are very opaque, it's difficult to even find out who owns them, I certainly couldn't without doing a lot of research and even then it would most likely be a guess. So it's a no from me, sorry mate.

I'm not sure why you are concerned as it is a small proportion of reserves by value, Gold quantity and grade will dictate future success and secondary boost to revenue from Copper and other metals including silver.

To illustrate my statement above, if we look at the Tenghout mine, this was printed in Dec 2018:

"Vallex Group shut the Teghout mine last January citing the need for “planned prophylactic repairs” of the mine’s waste disposal facilities. The mine was taken over by Russian commercial bank VTB when Vallex Group failed to pay hundreds of millions of dollars in debt.

Press reports said that VTB Bank had reached an agreement with Russian Copper Company and Russian-Armenian businessman Norayr Petrosyan (top photo) to relaunch the Teghout mine.
At a recent meeting with local residents, Petrosyan said that the mine would have to repay VTB $380 million owed to it before posting any profit. He also said that Teghout ore reserves weren’t sufficient to pay off the debt. Nonetheless, Petrosyan said the mine should be relaunched.

So VBT, RCC and " Norayr Petrosyan" are in partnership and I believe did eventually reopen the mine, even though they believed it will never make a profit - do they think everyone is stupid, they may never declare a profit or pay taxes and not give to locals any benefit but that is a different story.

But it appears all roads lead to Vlad as with Zod, VTB are a Russian state controlled bank with close links to the government, allegedly Russian Copper Company limited is 99.7% owned by Tilia Holdings Limited, registered in Cyprus, according to the Russian Corporate Register. Tilia Holdings is wholly-owned by Russia Copper Company Ltd., registered in the Virgin Islands. Igor Altushkin, Chairman of the Board of Directors and founder and principal owner of RCC, is a close friend of Russian President Vladimir Putin. So who owns what, all of the above is taken from an article, other articles may cite other owners.

The point is it's hard to find out even who owns any of the companies, so there is no chance of knowing what the mines really contain in terms of secondary reserves, needless to say, if it's worth well connected Russians being involved then it's very valuable.

It all boils down to poor management, they admitted their lack of control in the 2nd Dec, with a formal site visit - why? Because the wheels where falling off operationally ( development of new high grade areas) and IMO they lost (have lost) control, including effective communication and planning.

They said 2nd Dec:
" Reviewing managerial changes made last quarter to improve group operational performance, reporting lines and efficiencies. The review of managerial roles and accountabilities is ongoing, however the Company is confident that tangible improvements have been made and will continue to be made under the recently internally promoted General Manager ("GM"), Edrich Welthagen".

Isn't that an admission of the serious problems and continuing issues!!! They promoted an internal candidate to GM, surely he's part of the failed management structure and too close to the mistakes. They should have brought in tip top outsiders to shake thing up and clean up the operational problems (starting with a replacement for DB).

The damage is done and it will recover, but this is surely the time to deal with problems - not say they're pleased to deliver bad news.

There's a saying " Possession is 9/10th of the law". With Zod the Azeri's now have the leverage of possession.

However, from what our directors told us the other known operating mine owned by Vallex is in territory not captured and controlled by the Azeri's and is under control of Russian peacekeepers, and future uncertain.

Well it doesn't look quite so simple, the Azeri's may have leverage, according to the linked article the Azeri's actually captured the pumping station and the mine can't operate without it. It was also the biggest taxpayer in the district and I assume major employer.

So things look a little better wrt negotiating with that leverage - it looks like they need to cut a deal.

https://hetq.am/en/article/125270

They transport about 1.5 million tonnes of ore 269km by rail to a processing plant at Ararat.

The impoverished Armenians will not want to lose that business, the freight is apparently 55% of the rail company's total.

apro - I'm thinking along the same lines, if there's a lucrative deal to be done, why not.

Have issued a new rating for the operator of Zod, GeoProMining, they keep their B+ rating but with a negative outlook on the basis they might lose part of Zod.

Loads of good information about what's going on at Zod, they reckon they are still operating on the Armenian side with all the equipment and will maintain production even if they lose part of the mine. They also reckon that they will retain operatorship and are negotiating with the Azeri's (they would say that); they also cite the view that no one else could run it as a reason for retaining it(they would say that).

We can also gat a feel for the financials for the mine:

For 2019, "GPM's small operations generated USD154 million of EBITDA and 172,000 oz of gold in 2019. (more than I thought)
Whilst it looks like it was a 150,000oz ish producer in Covid stricken 2020 based on this statement of future capability:

"Lower Gold Output in 2021: The Nagorno-Karabakh conflict had no material impact on GPM's operations in 2020. However, Fitch expects GPM's gold production to be impeded in 2021 by at least 20%, with an output of 125,000 oz due to uncertainty on grades achieved in the Armenian part of the mine. We assume that from 2022 onwards gold output would average 147,000 oz."

Suffice to say it works out at an EBITDA $895/oz in 2019 when the gold price was significantly lower than the $1800/oz you guys are concerned over today.

If AAZ get their hands on this asset, as they believe they will, I reckon they'll match the current operator on profitability (they're no mugs) and it looks like a very low cost operation.

Even if the operator does get to keep it then there will be very significant compensation to be paid IMO, the Azeri's will want large compensation payments and we have a partnership agreement that entitles us to a share.

https://www.fitchratings.com/research/corporate-finance/fitch-revises-geopromining-outlook-to-negative-affirms-idr-at-b-04-02-2021