Sign up UNITED KINGDOM
Proactive Investors - Run By Investors For Investors

Anglo Asian Mining Plc RNS Release

Q4 & FY 2017 Production and Operations Review


RNS Number : 9322B
Anglo Asian Mining PLC
16 January 2018
 

Anglo Asian Mining plc / Ticker: AAZ / Index: AIM / Sector: Mining

 

16 January 2018

 

Anglo Asian Mining plc

Q4 & FY 2017 Production and operations review

 

Anglo Asian delivers total production in top percentile of forecast

 

Anglo Asian Mining plc ("Anglo Asian" or the "Company"), the AIM listed gold, copper and silver producer focused in Azerbaijan, is pleased to provide a production, sales and operations review for its Gedabek gold, copper and silver mining and production contract area ("Gedabek") in western Azerbaijan for the three months to 31 December 2017 ("Q4 2017") and the year ended 31 December 2017 ("FY 2017").  Note that all references to "$" are to United States dollars.

 

Overview

 

·    71,461 gold equivalent ounces ("GEOs") produced during FY 2017 - at the uppermost level of the Company's forecast of 64,000 to 72,000 GEOs

·    Production for FY 2017 was just over one per cent. lower than FY 2016 of 72,304 GEOs despite suspension of mining for part of the year from the main open pit and the Gadir underground mine whilst production optimisation was carried out

·    Increased copper and silver production during FY 2017 with a small decrease in gold production

o 2.6 per cent. increase in copper produced to 1,991 tonnes of copper (FY 2016: 1,941 tonnes)

o 4.7 per cent. increase in silver produced to 172,853 ounces (FY 2016: 165,131 ounces)

o 8.8 per cent. decrease in gold produced to 59,617 ounces (2016: 65,394 ounces)

·    Solid upward trajectory in total production during 2017 reflecting the expansion initiatives undertaken at Gedabek with a significant increase in Q4 2017 due to the commencement of production in September from the new Ugur open pit mine as follows:

 

2017 quarter ended

Total production (GEOs)

31 March

14,577

30 June

15,985

30 September

17,714

31 December

23,185

Total - FY 2017

71,461

 

 

·    Net debt reduced by approximately 47 per cent. during FY 2017 to $18.3 million at 31 December 2017 (31 December 2016: $34.6 million)

·    Water treatment plant now producing around 200,000 litres of clean water per day and a six-metre raise of the tailings dam wall completed in Q4 2017

·    Operational performance anticipated to be further enhanced in 2018 due to

o Recommencement of mining operations from the main Gedabek open pit in Q1 2018

o Recommencement of flotation processing, independent of the agitation leaching plant, following installation of a second, dedicated crusher line targeted for Q2 2018 - this will increase processing capacity significantly 

 

Anglo Asian CEO Reza Vaziri commented , "I am delighted to report that following a very strong performance in Q4 2017, Anglo Asian has delivered full year production at the very top of its published forecast range. This is a considerable achievement in itself, but when taken together with the recent expansion and production optimisation initiatives put in place and commencement of production from Ugur, it is clear that 2017 was an overwhelmingly successful year for Anglo Asian. The almost halving of net debt in the year is also a significant achievement as the Company returns to financial health.

 

"Anglo Asian is continuing to lay the foundations for long term sustainable production growth and to deliver value to its shareholders. Mining is expected to recommence at our main open pit at Gedabek in the near-term together with the installation of a second, dedicated crusher line for the flotation plant. These should significantly enhance our production profile throughout 2018. I look forward to providing further updates on forecast 2018 production and expansion and exploration objectives in the coming weeks."

 

Production and sales review

 

Q4 2017

 

·    31 per cent. increase in total production expressed as GEOs for Q4 2017 to 23,185 GEOs (Q3 2017: 17,714 GEOs)

·    52 per cent. increase in gold production for Q4 2017 to 21,931 ounces (Q3 2017: total 14,468 ounces) due to production from Ugur

·    Copper production for Q4 2017 totalled 119 tonnes (Q3 2017: 550 tonnes) from SART processing only. No flotation concentrate produced in Q4 2017 as the agitation leaching plant treated Ugur ore which does not contain copper

·    18 per cent. increase in silver production for Q4 2017 to 47,478 ounces (Q3 2017: total 40,288 ounces)

·    Gold bullion sales of 18,520 ounces at an average of $1,278 per ounce (Q3 2017: 9,287 ounces at an average of $1,286 per ounce)

·    Copper concentrate shipments to the customer totalled 196 dry metric tonnes ("dmt") with a sales value of $1.0 million (excluding Government of Azerbaijan production share) (Q3 2017: 2,905 dmt with a sales value of $5.5 million)

 

FY 2017

 

·    Total production expressed as gold equivalent ounces was 71,461 GEOs (FY 2016: 72,304 GEOs) compared to target production of between 64,000 and 72,000 GEOs

·    Gold production for FY 2017 totalled 59,617 ounces (FY 2016: total 65,394 ounces) - lower production earlier in the year was partially offset by production from Ugur commencing in September 2017

·    Copper production for FY 2017 totalled 1,991 tonnes (FY 2016: 1,941 tonnes) despite flotation plant idled in Q4 2017

·    Silver production for FY 2017 totalled 172,853 ounces (FY 2016: total 165,131 ounces)

·    Gold bullion sales of 43,496 ounces at an average of $1,265 per ounce (FY 2016: sales of 53,281 ounces at an average of $1,253 per ounce)

·    Copper concentrate shipments to the customer totalled 8,497 dmt with a sales value of $16.8 million (excluding Government of Azerbaijan production share) (FY 2016: 6,830 dmt with a sales value of $12.3 million)

 

Company financial review

 

Net debt

The Company had net debt at 31 December 2017 of $18.3 million, a reduction of $16.3 million since 31 December 2016.        


$m   

Kapital Bank

1.0

Amsterdam Trade Bank and Gazprombank (Switzerland)

7.4

International Bank of Azerbaijan

2.1

Atlas Copco equipment finance loan

YapiKredit

Pasha Bank

Reza Vaziri - director's loan

0.3

2.2

3.7

3.9

Total loans     

20.6

Cash on hand and at bank

(2.3)

Net debt

18.3

 

The amount of the loan facility from Reza Vaziri is $4.0 million and the term of the loan has been extended until 8 January 2019. The amount currently outstanding under the facility is $3.9 million. The interest rate of the loan has been reduced from 10 per cent. to 7 per cent. from 9 January 2018 with all other terms of the loan remaining unchanged.

Operations review

 

The Company mined the following ore in the year ended 31 December 2017:

 


9 months to

30 September 2017

3 months to

31 December 2017

12 months to

 31 December 2017

Mine

Ore mined

Average

gold grade

Ore mined

Average

gold grade

Ore mined

Average

gold grade


(tonnes)

(g/t)

(tonnes)

(g/t)

(tonnes)

(g/t)

Open pit

712,444

1.18

-

-

712,444

1.18

Ugur - o/pit

57,155

3.34

181,663

3.16

238,818

3.20

Gadir - u/g

40,176

3.51

40,438

3.61

80,614

3.56

Gosha - u/g

24,826

4.07

3,458

3.45

28,284

3.99

Total

834,601

1.52

225,559

3.24

1,060,160

1.89

 

As previously reported, low grade ore (less than 1.5 grammes per tonne of gold) is being treated by heap leaching, whilst higher grade ore (more than 1.5 grammes per tonne of gold) is being processed through the agitation leaching plant.

 

During Q4 2017, Anglo Asian stacked 201,097 tonnes of dry crushed ore on to heap leach pads with an average gold content of 0.86 grammes of gold per tonne (Q3 2017: 173,616 tonnes with an average gold content of 1.02 grammes per tonne). The Company also heap leached uncrushed Run of Mine ("ROM") ore. During Q4 2017, Anglo Asian stacked 99,046 tonnes of ROM ore on to heap leach pads with an average gold content of 0.68 grammes of gold per tonne (Q3 2017: 87,979 tonnes with an average gold content of 0.95 grammes per tonne).

 

During Q4 2017, the Company processed 211,421 tonnes of ore with an average gold content of 2.92 grammes of gold per tonne through the agitation leaching plant (Q3 2017: 176,997 tonnes with an average gold content of 2.04 grammes per tonne through the combined agitation leaching and flotation plants).

 

During Q4 2017, the Company produced gold doré containing 21,924 ounces of gold and 12,634 ounces of silver at Gedabek (Q3 2017: 12,221 ounces of gold and 4,381 ounces of silver). During Q4 2017, the agitation leaching plant produced 16,952 and 9,777 ounces of gold and silver, respectively, and the heap leach operations produced 4,972 and 2,857 ounces of gold and silver, respectively. During FY 2017 the Company produced gold doré containing 52,534 ounces of gold and 22,728 ounces of silver (FY 2016: 60,937 ounces of gold and 10,288 ounces of silver).

 

During Q4 2017, the flotation plant was idled as the agitation leaching plant was processing Ugur ore which does not contain copper. During FY 2017, the flotation plant processed 374,202 tonnes of ore in the form of feed-stock of both milled ore and tailings from the agitation leaching plant (FY 2016: 531,840 tonnes). The gross metal contained within this feed-stock was 14,978 ounces of gold, 198,751 ounces of silver and 1,861 tonnes of copper (FY 2016: 15,808 ounces of gold, 335,820 ounces of silver and 2,331 tonnes of copper). Copper concentrate of 7,894 dmt was produced containing 1,310 tonnes of copper and 7,063 ounces of gold (FY 2016: copper concentrate of 6,931 dmt was produced containing 1,121 tonnes of copper and 4,430 ounces of gold).

 

During Q4 2017, SART processing produced 256 dmt of copper concentrate containing 119 tonnes of copper and 7 ounces of gold (Q3 2017: 333 dmt of copper concentrate containing 165 tonnes of copper and 4 ounces of gold). During FY 2017, SART processing produced 1,436 dmt of copper concentrate containing 681 tonnes of copper and 20 ounces of gold (FY 2016: 1,599 dmt of copper concentrate containing 820 tonnes of copper and 27 ounces of gold).

 

The following table summarises gold doré production and sales at Gedabek for FY 2016 and FY 2017:

 


Gold produced*

(ounces)            

Silver

Produced*

(ounces)

Gold sales**

(ounces)

Gold Sales price

($/ounce)

Quarter ended





31 March 2016

13,383

1,958

12,058        

  1,184

30 June 2016

17,926

2,983

15,661

  1,265

H1 2016

31,309

4,941

27,719

1,230

30 Sept 2016

15,407

2,502

12,567

1,332

31 Dec 2016

14,221

2,845

12,995

1,227

H2 2016

29,628

5,347

25,562

1,278

FY 2016

60,937

10,288

53,281

1,253






31 March 2017

9,258

2,447

8,283

1,220

30 June 2017

9,131

3,266

7,406

1,258

H1 2017

18,389

5,713

15,689

1,238

30 Sept 2017

12,221

4,381

9,287

1,286

31 Dec 2017

21,924

12,634

18,520

1,278

H2 2017

34,145

17,015

27,807

1,281

FY 2017

52,534

22,728

43,496

1,265

NOTE




 

* including Government of Azerbaijan's share

** excludes Government of Azerbaijan's share

 

 

 

The following table summarises copper concentrate production from both its SART and flotation plants for FY 2016 and FY 2017:

 


Concentrate

Copper 

Gold

Silver


production*

content*

content*

content*

2016

(dmt)

(tonnes)

(ounces)

(ounces)

Quarter ended 31 March





SART processing

363

181

12

7,789

Flotation

1,458

200

607

19,055

Total

1,821

381

619

26,844






Quarter ended 30 June





SART processing

373

195

4

10,047

Flotation

1,988

302

1,445

39,184

Total

2,361

497

1,449

49,231






Quarter ended 30 Sept





SART processing

418

225

4

7,291

Flotation

1,426

260

1,123

24,106

Total

1,844

485

1,127

31,397






Quarter ended 31 December





SART processing

445

219

7

6,751

Flotation

2,059

359

1,255

40,620

Total

2,504

578

1,262

47,371






2017





Quarter ended 31 March





SART processing

428

210

5

5,523

Flotation

2,312

396

1,815

31,399

Total

2,740

606

1,820

36,922






Quarter ended 30 June





SART processing

419

187

4

4,717

Flotation

3,203

529

3,005

37,735

Total

3,622

716

3,009

42,452






Quarter ended 30 Sept





SART processing

333

165

4

9,097

Flotation

2,379

385

2,243

26,810

Total

2,712

550

2,247

35,907






Quarter ended 31 December





SART processing

256

119

7

34,844

Flotation

-

-

-

-

Total

256

119

7

34,844

 

* including Government of Azerbaijan's share.

Note that certain amounts for flotation production are different to those previously disclosed due to final reconciliation of production and sales.

 

The following table summarises total copper concentrate production and sales at Gedabek for FY 2016 and FY 2017. Note that sales of concentrates are initially recorded at provisional amounts until agreement of final assa y:

 


Concentrate

Copper 

Gold

Silver

 Concentrate

 

Concentrate


production*

content*

content*

content*

sales**

sales**


(dmt)

(tonnes)

(ounces)

(ounces)

(dmt)

($000)

Quarter ended







31 March 2016

1,821

381

619

26,844

1,319

2,043

30 June 2016

2,361

497

1,449

49,231

1,582

3,019

H1 2016

4,182

878

2,068

76,075

2,901

5,062








30 Sept 2016

1,844

485

1,127

31,397

1,782

3,577

31 Dec 2016

2,504

578

1,262

47,371

2,147

3,615

H2 2016

4,348

1,063

2,389

78,768

3,929

7,192

FY 2016

8,530

1,941

4,457

154,843

6,830

12,254








31 March 2017

2,740

606

1,820

36,922

2,230

4,220

30 June 2017

3,622

716

3,009

42,452

3,166

6,104

H1 2017

6,362

1,322

4,829

79,374

5,396

10,324








30 Sept 2017

2,712

550

2,247

35,907

2,905

5,480

31 Dec 2017

256

119

7

34,844

196

977

H2 2017

2,968

669

2,254

70,751

3,101

6,457

FY 2017

9,330

1,991

7,083

150,125

8,497

16,781

* including Government of Azerbaijan's share.

** excluding Government of Azerbaijan's share.

Note that certain figures are different to those previously disclosed due to final reconciliation of concentrate production and sales.

 

Market Abuse Regulation (MAR) Disclosure

 

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

 

**ENDS**

 

 

 

 

 

 

 

 

For further information please visit www.angloasianmining.com or contact:

 

Reza Vaziri

Anglo Asian Mining plc

Tel: +994 12 596 3350

Bill Morgan

Anglo Asian Mining plc

Tel: +994 502 910 400

Stephen Westhead

Anglo Asian Mining plc

Tel: +994 502 916 894

Ewan Leggat

SP Angel Corporate Finance LLP

Nominated Adviser and Broker

Tel: +44 (0) 20 3470 0470

Soltan Tagiev

SP Angel Corporate Finance LLP

Tel + 44 (0) 20 3470 0470

Susie Geliher

St Brides Partners Ltd

Tel: +44 (0) 20 7236 1177

Lottie Wadham

St Brides Partners Ltd

Tel: +44 (0) 20 7236 1177

 

Notes:

Anglo Asian Mining plc (AIM:AAZ) is a gold, copper and silver producer in Central Asia with a broad portfolio of production and exploration assets in Azerbaijan. The Company has a 1,962 square kilometre portfolio, assembled from analysis of historic Soviet geological data and held under a Production Sharing Agreement modelled on the Azeri oil industry.

The Company's main operating location is the Gedabek contract area ("Gedabek") which is a 300 square kilometer area in the lower Caucasus mountains in western Azerbaijan. The Company developed Azerbaijan's first operating gold/copper/silver mine at Gedabek which commenced gold production in May 2009.  Mining at Gedabek was initially from its main open pit which is an open cast mine with a series of interconnected pits. The Company also operates the high grade Gadir underground mine which is co-located at the Gedabek site,   In September 2017, production commenced at the Ugur open pit mine, a recently discovered gold ore deposit at Gedabek. The Company has a second underground mine, Gosha, which is 50 kilometres from Gedabek. Ore mined at Gosha is processed at Anglo Asian's Gedabek plant.

The Company produced 71,461 gold equivalent ounces ('GEOs') for the year ended 31 December 2017.  Gedabek is a polymetallic project which demonstrates a high copper content at the main open pit mine, and an oxide gold-rich zone at Ugur.  The Company therefore employs a series of flexible processing routes through which to optimise recoveries and efficiencies.  The Company produces gold doré through agitation and heap leaching operations, copper concentrate from its Sulphidisation, Acidification, Recycling, and Thickening (SART) plant and also a copper and precious metal concentrate from its flotation plant, which is processing tailings from the agitation leach plant. A second dedicated crusher line is also currently being installed for the flotation plant to enable it to operate independently of the agitation leaching plant.

Anglo Asian is also actively seeking to exploit its first mover advantage in Azerbaijan to identify additional projects, as well as looking for other properties in order to fulfil its expansion ambitions and become a mid-tier gold and copper metal production company.


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
MSCSFMFMIFASEIF

Anglo Asian Mining Plc Timeline

© Proactive Investors 2018

Proactive Investor UK Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use