************* Just Now !11 Aug 2020 12:05
Returning after a previous profitable recommendation of shares in Anglo Asian Mining (AAZ), in July with the shares at 140p we noted current mines potential but also a geological exploration programme continuing with success. Now an “H1 2020 Geological Exploration Activities” update…
In the Gedabek Contract Area, the company emphasises “13 surface core drill holes and 25 reverse circulation drill holes with a total length of 1,473 metres completed at the Avshancli mineral district… Initial drill programme started at Gilar… Both Avshancli and Gilar will be explored by ground-based induced polarisation and magnetic geophysics in the second half of the year”, “substantial drilling completed at the Gadir and Gedabek underground mines… give increased geological confidence” and “new mineralised area identified between the Gedabek open pit and the Ugur open pit – Zafer”.
Also in Azerbaijan, there is the Gosha Contract Area “2,980 metres of core drilling completed confirming the extension of mineralisation with significant gold grades of up to 15 grammes per tonne… A new geological map of the Gosha contract area was completed… 15 porphyry and 13 gold/lead/zinc mineralisation targets identified” and the Ordubad Contract Area, where COVID-19 related restrictions hindered but a trenching programme continued and the company is now prioritising locations for resource drilling which is planned in the current half year.
The company’s Director of Geology & Mining, Stephen Westhead noted “look forward to expediting the work in the second half of the year to deliver further positive progress” and this is with also a recent provisional agreement for a “first enterprise outside of Azerbaijan” and current Azerbaijan production for which full-year guidance is for 75,000-80,000 gold equivalent ounces.
As noted on re-recommendation, even a $750 margin on 75,000 ounces is more than $56 million. Although there are some current production challenges, there has also been gold price upside since then and we continue to look for a 200p+ share price (a £230 million+, approx. $300 million, market cap). At around 160p and at up to 165p, the shares are still a buy.