Member Info for M20ASH

Hi John, for what it’s worth, it means that all finance for development will be by way of loans to the JV to be repaid by the JV. Can’t see Ozaltin putting their hands in their pockets for anything other than the initial purchase and any repayable loans required.
Cheers, Ash

P.S. I forgot to mention Cyprus with prospects for Gold and Copper. Watch this space...
Cheers, Ash

Hi Libero, please ignore my rather obscure postings this evening - the problem with lock downs is that it removes the ability to engage in pointless banter in a social context so a BB becomes the obvious forum.
Moving on, Ariana is still awaiting the conclusion of a JV agreement with Ozaltin, a Turkish construction company and Proccea, it's current JV partner, to form a new JV to principally develop the Salinbas project, which has now been dragging on for 12 months since it was first announced. The 'rewards' will be the fast track of the Salinbas project, given the expertise and resources of Ozaltin in having the local clout and financing expertise to bring the project forward, which Ariana would not be able to do on it's own given that finance costs alone would be very substantial and the hoops it will have to jump through to get everything agreed with the Turkish authorities.
In addition, the proceeds will allow an as yet undisclosed special dividend, which we are lead to believe will be a significant percentage of the current share price. On the downside, Ariana will have to sacrifice a considerable percentage of it's share of the output from both Kiziltepe, Tavsan and Salinbas. Kiziltepe is currently on target to produce c. 18k oz and Ariana's share will drop from 50% to 23.5% i.e. 4k oz pa.
Having said that, the company is looking to expand the current capacity of the operation at Kiziltepe to allow an increase in throughput approximately double the current capacity to compensate for the reduction in grades, now that operations have moved from the exhausted Arzu South pit, which contained higher grades, to the Arzu North & Derya pits. What is not clear is how long this will take, but my understanding is that, under Turkish mining law, any increase in capacity will require an additional EIA, which may or may not require further 12 month base line studies.
They have also found good grades in the hanging wall of the Arzu South pit, which will require underground development and this could form part of a significant underground development between Arzu South and Arzu North below the cap or tepe (hill) in between.
Ariana is also looking to develop the Tavsan project and I understand that financing talks are in progress to allow construction to commence next year with first gold likely in H2 2022. Whilst this is also lower grade with less silver than Kiziltepe, it should add considerable value to the project in terms of output - c. 30k oz per annum - 7k oz to Ariana.
So there you have it. I think it depends on your timelines, but for the majority of investors with deep pockets and long term objectives, it pretty much fits the bill. I have reduced my holding only because I can see a dip next year in terms of development (not that it means the sp will necessarily fall), but I have diversified into other shares that will potentially see a greater increase in 2021.
An honest appraisal. Take from it what you wish.
Cheers, Ash

Expect there'll be thousands wearing one. I'd wear mine, but it shrank in the wash!

We’ve got regular raves about 5 miles away in Yate (pronounced Yah-Tay). Only costs about 200,000 AAU shares to afford the fine! See you there....

Wear the fox hat, just so I recognise you!

Hi Paul, still around, but I’ve realised my ‘clubbing’ days are over now!
Cheers, Ash

Hi APR, given how things may unfold over the last quarter and without trying to get ahead of ourselves, double the current market cap doesn’t seem unreasonable at some point in H1 next year, but it’s a funny old world right now so who knows....
Cheers, Ash

Hi Iain, in the money. Nice post. Cheers, Ash

Hi APR, as I mentioned in one of my earlier posts, the total costs in Q3 were less than Q2, but when you divide by the ounces sold, you get a much higher AISC in Q3 because the sales were under 24k oz compared to 31.5k oz sold in Q2.
The higher AISC is nothing to do with costs being out of control, it is just a simple metric of the lower sales.
Confusing, eh?
Cheers, Ash

Hi APR, no one's saying it is a measure of sales. It's the all in sustaining cost per oz sold, not per oz produced, so if your costs remain the same, but you sell less, your AISC increases and vice versa.
Cheers, Ash

Hi Jammer, you're welcome. I'm not entirely sure that the Company should spell it out every quarter. To an extent, it is up to us as investors to understand what AISC means and invest accordingly. That's why it was created as a measure in the first place - to provide a consistent comparable measure. However, when sales and production are out of kilter as they were in the first two quarters it would have possibly helped to have been given a little more insight.
I think I'm right in saying that in one or both of the recent interviews that Dan has given, he does state that the increase in AISC reflected the lower level of sales, but he does not explain exactly why and not everyone will have listened to the interviews, but all should have read the RNS update where clarification would be better when required.
Cheers, Ash

Hi Juxtapose, everything I have read this morning to confirm my understanding, points to AISC as a measure of gold sold - WGC, etc. HUM actually produced more gold in Q3 than Q2 at a lower overall cost, but the variance in sales - 23,794 oz in Q3 vs 31,520 oz in Q2 has resulted in a 30% jump in AISC whereas the reality in terms of production cost per oz is a drop.
The big jump was actually in Q2, but masked by the higher sales relative to Q1 and if you think about it, that makes sense given the incidence of COVID and inventory stocking followed by the commencement of drilling. This is then followed by the coup issues and wet season resulting in production costs remaining high and you are quite right to state that certain costs remain relatively fixed irrespective of the amount produced. A drop in Q4 AISC will depend on higher sales, which will require higher production and this should be achievable.
Somewhat misleading/confusing and I think a lot of investors have sold on the basis of the reported jump in AISC without understanding the underlying figures. Having read up, I am happy with my understanding and the progress being made and have added 200k shares today at 34p and under. Seems like an opportunity to me.
Cheers, Ash

Morning all, I don't post much these days, but have a bit of time on my hands so...to the best of my knowledge AISC is a measure of the cost of gold sold and not gold produced. Whilst the jump from $983 to $1283 is a 30% increase the absolute costs for Q1, Q2 and Q3 are $21.5m, $31m and $30.5m so if Q4 comes in at around 30k oz at an AISC of c. $1k per oz, you're looking at around $113m for 110k oz, which is an overall AISC of $1,027 - not far off guidance.
If you factor in everything that I believe is included in AISC, including sustaining exploration costs c. $5m, costs of COVID, closure of the borders as a result of the coup and the exceptionally wet Q3, which prevented accessing higher grade ore at the base of the pit, I don't think that's a bad result at all given the higher sales price being achieved.
Feel free to shoot me down, if I've got it wrong!
Cheers, Ash

Hi BH, sorry I have no idea. I just know where to look to see the trades. Mine go through both - I use HL and have no idea on which market it will be executed at the time it is placed, but they always seem to fall within the standard spread you see on here. My understanding of the spread is that it is based on average of the brokers bid and ask prices, but this can sometimes narrow when a big order is being filled - on occasion the quoted buy price I get offered is slightly less than the quoted sell price on a dummy trade - probably 2 different brokers, one of which has a large order to fulfil.
Hope that helps a bit, although I am certainly no expert!
Cheers, Ash

Hi BH, if you type HUM into the share price search box at top left and select HUM.GB.PL rather than HUM, then look at the trades, you will see your trade, which went through the NEX exchange.
Cheers, Ash

Hi John, yes, I think you have raised some very relevant points. I was also a little disconcerted to read in the interims that the dividend paid back from Turkey was subject to withholding tax as I didn’t think this would be the case. It would be interesting to know the rate as any withholding tax on remitting of dividends back to AAU in order to pay the special dividend to shareholders could see a substantial chunk taken out of the available funds.
Not even sure there would be any double taxation relief, where there are no taxable profits due to b/fwd tax losses. Hopefully, they have this all worked out.
Cheers, Ash

Hi Paul, having their own source of oil and gas is pretty key. The depreciating lira has meant pump petrol prices, whilst cheap to us as a result of lower duties, have increased 50% in a matter of years.
This then has an inevitable knock on effect, hence the problem with rising prices.
There has also been a reduction in foreign investment, tourism, another source of foreign currency has taken a massive hit this year. So many places we visit may not be around next year.
Lastly, as we know, USD reserves have been drastically reduced to prop up the ailing lira, hence the restrictions on Turks holding foreign currency, particularly USD.
All in all, Turkey is not in a great place right now.
Cheers, Ash

Hi CK, it is definitely paid for in TL and then immediately exchanged for USD. The reasons why the price achieved is close to USD spot prices is because 1) the spot price in TL closely reflects the USD/TL FX rate and 2) the buying/selling spreads are very narrow here in Turkey, unlike the rip-off rates in the U.K.
GBP/TL FX today when I checked is 9.99 and if I were to change up sterling in our local jewellers or the hardware shop next door, I would get 9.9-9.95. Compare that to U.K. high street rates. Banks here offer similar rates.
Cheers, Ash

Hi Dubbs, I think it just means that the new JV borrows the money without any partner having to put in any further capital. Interest costs will come out of the JV profit.
Cheers, Ash