www.aamining.com
Anglo Asian Mining plc (AIM:AAZ) is an emerging gold producer in Central Asia with a broad portfolio of production and exploration assets in Azerbaijan. The Company has a 1,962 sq km prospective exploration portfolio and has developed Azerbaijan’s first operating gold/copper mine, Gedabek, which commenced gold production in May 2009. Anglo Asian is a low cost producer and is currently on track to produce 60,000 ounces of gold the year ending 31 December 2010.
Anglo Asian is actively looking to exploit its first mover advantage in Azerbaijan to identify additional projects, as well as looking for other properties in Central Asia and Caucasia in order to fulfil its expansion ambitions and become a mid-tier gold and base metal production company focussed in these regions.
Anglo Asian Mining shares rise after 31% boost to Gedabek gold resource
Anglo Asian Mining (LON:AAZ) was one of AIM’s top risers jumping over 15 percent in early trading, after it reported a significant 31 percent upgrade to its gold resource in Azerbaijan.
A new JORC resource estimate puts the Gedabek mine’s Measured and Indicated resource at 704,000 ounces of gold, with 6.8 million ounces of silver and 44,100 tonnes of copper.
The new resource statement represents a significant upgrade from the previous 2006 resource estimate which only had resources stated in the Indicated and Inferred resource categories.
Crucially the new resource is all the more impressive for the fact its an upgrade from the ‘pre-mining era’ at Gedabek, so it omits the areas of the deposit that have already been mined.
"We are delighted to announce this upgraded resource which, after taking account of ore already mined, gives a total gold uplift across the Measured and Indicated resource categories of 31.2%,” chief executive Reza Vaziri said.
“This resource increase reaffirms the inherent value of the Gedabek mine.
“The increasing gold production figures we are seeing at the mine and the favourable gold price environment will further strengthen our position as a profitable and cash generative gold production company."
Gedabek’s first gold was poured back in May 2009.
Since then Anglo Asian produced 11,365 ounces of gold in 2009 and so far it has produced around 48,000 ounces of gold in 2010.
In total it expects to produce 60,000 ounces of gold in 2010, and over a six-year mine life is expected to exceed 300,000 ounces.
As its production has grown, Anglo Asian’s shares have performed well throughout 2010 and it has been particularly strong over the past few weeks.
There has been a sharp rise in the share price on AIM since late August when it more than doubled in price. It moved from around 19p on the 25 August to reach a four-year high at 55p on the 23 September.
Since then the price has pulled back somewhat and they were last trading at 40p, after trading at 43p in early trading on Friday.
Numis Securities mining analyst Cailey Barker told Proactive Investors that the resource upgrade is a positive but expected development.
“We have based our model already assuming this increased resource, assuming 50- 60kozpa over an 8 year mine life,” the analyst said in a note to clients.
“With the stock now trading at a cheap 0.7x NAV, below its peer group, we see potential for a re-rating with further operational success and as the company looks for growth.”
Numis upgraded Anglo Asian recently, taking its price target from 50p to 70p. The team of analysts’ bullish view followed a site visit to Azerbaijan, and rise in commodity prices.
“We believe AAZ is a good play on the gold price with solid management and good growth potential,” Numis told clients recently.
It was made up from 13,895 assays from a total of 3,252 holes and it excludes materials mined up until the 7 June 2010.
The latest estimate also included 87,000 ounces of gold in the Inferred category, along with 783,000 ounces of silver and 5,200 tonnes of copper.
