Hardman & Co Research
Hardman & Co Research: Prodigious cash generation and FCF yield
Anglo Asian Mining (AAZ) is a highly cash-generative miner of gold, silver and copper from three mines in Azerbaijan, where it has a track record of close cooperation with the government. The company listed on AIM in 2005 and produced its first gold in 2009. In 2018, it produced 83,376 of Gold Equivalent Ounces (GEOs), paid its first dividend and the balance sheet moved into a net cash position. At this stage, we have made the highly conservative assumption of no production beyond 2025. Nevertheless, our DCF valuation of 146p reflects AAZ's prodigious cash generation. Indeed, we estimate that the annual free cash yield during 2019-25 will average 18.7%.
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About Hardman & Co: For the past 21 years Hardman has been producing specialist research designed to improve investors' understanding of companies, sectors, industries and investment securities. Our analysts are highly experienced in their sectors, and have often been highly rated by professional investors for their knowledge. Our focus is to raise companies' profiles across the UK and abroad with outstanding research, investor engagement programmes and advisory services. Some of our notes have been commissioned by the company which is the subject of the note; this is clearly stated in the disclaimer where this is the case.
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