Anglo Asian Mining (LON:AAZ) believes it has put all the pieces in place for a “transformational” year for the AIM-listed Azeri gold miner.
The company said that the new agitation leaching plant at its Gedabek mine, which is expected to boost gold production and recovery as well as cut operating costs, is now in the process of full scale commissioning after construction started in August last year.
Anglo Asian hopes to see the benefits of the new plant in the second half of 2013 as it aims to produce 60,000 ounces of gold in the year.
It pointed out that the plant, at US$45mln, should set it back US$7mln less than originally planned.
Improving the production profile of the mine meant production slipped in 2012 to just above 50,000 ounces as anticipated, with 42,557 ounces sold at an average of US$1,666 an ounce – an improvement on 2011.
Gold was produced at an average operating cost of US$668 per ounce, compared with US$448 an ounce the year before.
Pre-tax profits were US$28.6mln, down from US$31.6mln in 2011, while revenues also dipped from US$84mln to US$73mln.
Meanwhile, first production from Gosha, just 50 kilometres from Gedabek, is tipped for the first half of 2014.
As for the gold price, which has struggled over the past couple of months, chairman Reza Vaziri remains upbeat.
“Looking at Anglo Asian in the wider market context, despite the economic turmoil in the market that all resource companies are facing at present, I remain positive about the longer term fundamentals for gold mining companies and indeed Anglo Asian,” he said.
“In spite of recent gold pricing developments, which have seen gold price levels drop to circa US$1,350, I believe that there remains a convincing case for sustainable upside in the gold price based on gold as a hedge against inflation/currency depreciation, a 'safe haven' and store of value, and with continued robust physical demand from China and India projected.”
Similar patterns in 2006 and 2008, he continued, point to the recent trend being a correction rather than a bearish gold market.
“I consider that gold equities, especially Anglo Asian as a low cost producer, still represent a compelling investment opportunity.”