Anglo Asian Mining (AAZ) has seen its share price fall by a half since last autumn as falling metals prices, higher production costs and increased capital spending combined to take the shine off the company's investment proposition.
The Azerbaijan-focused miner produced 50,125 ounces (oz) of gold from its Gebabek mine in 2012, down on prior year output of 57,068 oz due to lower ore grades. That meant revenues slipped 12 per cent year on year. To compound matters, cash operating costs rose markedly - from $448 per oz in 2011 to $668 per oz in 2012 - reflecting higher haulage and fuel costs as well as lower plant throughput. And if you strip out the gold owed to the Azerbaijani government under a production sharing agreement, operating costs actually totalled $766 per oz.
Yet closer to investors' hearts has been the recent tumble in the gold price. Anglo Asian sold its gold at a lucrative average of $1,666 an oz in 2012, but the yellow metal has since fallen to $1,375 an oz. However, Anglo Asian has borrowed $40.1m (£26.5m) to build a new agitation leaching plant at Gedabek, which should result in lower operating costs and medium-term production growth when it comes fully operational later this year.
ANGLO ASIAN MINING (AAZ) | ||||
|---|---|---|---|---|
| ORD PRICE: | 29p | MARKET VALUE: | £31.9m | |
| TOUCH: | 27.5-30p | 12-MONTH HIGH: | 56p | LOW: 25p |
| DIVIDEND YIELD: | nil | PE RATIO: | 2 | |
| NET ASSET VALUE: | 87¢* | NET DEBT: | 29% | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2008 | nil | -4.5 | -4.1 | nil |
| 2009 | 10.3 | -11.7 | -11.3 | nil |
| 2010 | 72.0 | 19.8 | 13.9 | nil |
| 2011 | 83.7 | 31.6 | 16.9 | nil |
| 2012 | 73.5 | 28.6 | 17.4 | nil |
| % change | -12 | -9 | +3 | - |
*Includes intangible assets of $22.8m, or 21¢ a share £1=$1.51 | ||||
