Anglo Asian Mining PLC (ISE:AAZ)

Anglo Asian Mining PLC (ISE:AAZ)


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Anglo Asian Mining PLC RNS Release

Q4 and FY 2018 Production and Operations Review


RNS Number : 1126N
Anglo Asian Mining PLC
15 January 2019
 

 

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

15 January 2019

 

Anglo Asian Mining plc

Q4 and FY 2018 Production and Operations review

 

 Full year production at upper range of guidance and net cash of $6.1 million at 31 December 2018

 

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 2018 ("Q4 2018") and the year ended 31 December 2018 ("FY 2018").

 

Note that all references to "$" are to United States dollars.

 

Overview

 

·    83,736 gold equivalent ounces ("GEOs") produced during FY 2018 - at the upper range of the Company's forecast of 78,000 to 84,000 GEOs

·    17 per cent. year on year ("y-o-y") increase in total production for FY 2018 compared to the previous year (FY 2017: 71,461 GEOs)

·    Maiden dividend of $0.03 per share paid in November 2018 - total distribution paid to shareholders of $3.4 million

·    Net cash increased in Q4 2018 by $3.3 million to $6.1 million at 31 December 2018

·    Helicopter site survey of entire 300 square kilometre Gedabek contract area complete and data now being analysed to define new drill targets and identify new mineable deposits - results expected in Q1 2019

·    JORC resource of the existing Gadir underground mine being compiled with publication expected in Q1 2019

 

Anglo Asian CEO Reza Vaziri commented: "This has been another excellent quarter which has resulted in Anglo Asian achieving full year production at the upper limit of its guidance of 84,000 GEOs.  In addition to increasing production from the previous year, Anglo Asian has also significantly strengthened its balance sheet and paid a maiden dividend, all of which has bolstered Anglo Asian's value and investment profile.

 

"The Company is actively working towards, and investing in, the future expansion of our various operations and in line with this, Anglo Asian continues to both better define its current resources through publication of JORC resources for its existing mines and to maximise the potential of its current licence areas. In this respect, in Q1 2019 we expect to both release a JORC resource for the existing Gadir underground mine and also publish the results of the helicopter survey. We are aware of multiple additional gold and copper mineral occurrences at Gedabek, which may become future mineable deposits like our latest discovery, Ugur.  We are hopeful that the helicopter survey, which is the first of its kind covering the entire 300 square kilometre Gedabek contract area, is a first step in unlocking this potential.

 

"Anglo Asian is continuing to lay the foundations for long term sustainable production whilst delivering value and cash returns to its shareholders. I look forward to providing further updates on forecast 2019 production and expansion and exploration results in the coming weeks."

 

Production Overview

 

Q4 2018

·    Total production of 21,945 GEOs (Q4 2017: 23,185 GEOs) - prior year benefitted from higher grade ores due to the commencement of mining from the Ugur open pit mine, partially offset by higher copper production in Q4 2018

·    Gold production of 18,209 ounces (Q4 2017: 21,931 ounces):

o 15,444 ounces contained within gold doré

o 13 ounces from SART processing

o 2,752 ounces from flotation

·    394 per cent. y-o-y increase in copper production to 588 tonnes (Q4 2017: 119 tonnes) as flotation plant operated throughout Q4 2018:

o 67 tonnes from SART processing

o 521 tonnes from flotation processing

·    39 per cent. y-o-y increase in silver production to 65,822 ounces (Q4 2017: 47,478 ounces):

o 5,646 ounces contained within gold doré

o 14,229 ounces from SART processing

o 45,947 ounces from flotation

 

FY 2018

·    17 per cent. y-o-y increase in total production to 83,736 GEOs (FY 2017: 71,461 GEOs)

·    22 per cent. y-o-y increase in gold production to 72,798 ounces (FY 2017: 59,617 ounces)

·    Copper production totalled 1,645 tonnes (FY 2017: 1,991 tonnes)

·    Silver production totalled 210,184 ounces (FY 2017: 172,853 ounces)

 

 

Sales overview

 

Q4 2018

·    Q4 2018 gold bullion sales of 15,066 ounces at an average of $1,231 per ounce (Q3 2018 gold bullion sales of 18,637 ounces at an average of $1,216 per ounce)

Q4 2018 copper concentrate shipments to the customer totalled 3,774 dry metric tonnes ("dmt") with a sales value of $6.1 million (excluding Government of Azerbaijan profit share) (Q3 2018: 1,557 dmt with a sales value of $3.4 million)

 

 FY 2018

·    FY 2018 gold bullion sales of 59,481 ounces at an average of $1,265 per ounce (FY 2017 gold bullion sales of 43,496 ounces at an average of $1,265 per ounce)

·    FY 2018 copper concentrate shipments to the customer totalled 7,675 dry metric tonnes ("dmt") with a sales value of $15.4 million (excluding Government of Azerbaijan profit share) (FY 2017: 8,499 dmt with a sales value of $16.7 million)

 

Company financials

·    Net cash, being cash and cash equivalents less interest-bearing loans and borrowings, totalled $6.1 million at 31 December 2017 ($2.8 million at 30 September 2018)

 

Gedabek - mining, production and sales

 

The Company mined the following ore in the year ended 31 December 2018:

 


9 months to

30 September 2018*

3 months to

31 December 2018

12 months to

 31 December 2018

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

141,652

1.20

220,760

0.96

362,412

1.06

Ugur - o/pit

887,702

1.24

355,175

1.33

1,242,877

1.27

Gadir - u/g

91,204

4.97

34,674

3.34

125,878

4.52

Gosha - u/g

-

-

10,988

3.44

10,988

3.44

Total

1,120,558

1.54

621,597

1.35

1,742,155

1.47

* There have been some minor changes to the previously reported figures following reconciliation of ore stockpiles.

 

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.

 

Anglo Asian stacked 154,901 tonnes of dry crushed ore onto heap leach pads with an average gold content of 0.81 grammes per tonne (Q3 2018: 195,957 tonnes with an average gold content of 0.91 grammes per tonne) during Q4 2018. The Company also heap leached uncrushed Run of Mine ("ROM") ore. During Q4 2018, Anglo Asian stacked 131,861 tonnes of ROM ore onto heap leach pads with an average gold content of 0.48 grammes per tonne (Q3 2018: 136,595 tonnes with an average gold content of 0.40 grammes per tonne).

 

The Company processed during Q4 2018, 173,332 dry tonnes of ore with an average gold content of 2.26 grammes per tonne through the agitation leaching plant (Q3 2018: 196,700 dry tonnes with an average gold content of 2.39 grammes per tonne). 129,946 dry tonnes of ore containing an average copper content of 0.53 per cent. were processed by the flotation plant in Q4 2018 (Q3 2018: 126,009 dry tonnes of ore containing an average copper content of 0.47 per cent.).

 

During Q4 2018, the Company produced gold doré containing 15,444 ounces of gold and 5,646 ounces of silver at Gedabek (Q3 2018: 18,874 ounces of gold and 7,416 ounces of silver). During Q4 2018, the agitation leaching plant produced 11,588 and 4,130 ounces of gold and silver, respectively, and the heap leach operations produced 3,856 and 1,516 ounces of gold and silver, respectively. During FY 2018 the Company produced gold doré containing 65,616 ounces of gold and 26,186 ounces of silver (FY 2017: 52,534 ounces of gold and 22,728 ounces of silver).

 

SART processing in Q4 2018 produced 109 dmt of copper concentrate containing 67 tonnes of copper and 13 ounces of gold (Q3 2018: 162 dmt of copper concentrate containing 81 tonnes of copper and 7 ounces of gold). During FY 2018, SART processing produced 754 dmt of copper concentrate containing 399 tonnes of copper and 32 ounces of gold (FY 2017: 1,436 dmt of copper concentrate containing 681 tonnes of copper and 20 ounces of gold).

 

Flotation processing in Q4 2018 produced 3,557 dmt of copper concentrate containing 521 tonnes of copper and 2,752 ounces of gold (Q3 2018: 2,501 dmt of copper concentrate containing 389 tonnes of copper and 2,437 ounces of gold). During 2018 Copper concentrate of 8,013 dmt was produced containing 1,246 tonnes of copper and 7,150 ounces of gold (FY 2017: copper concentrate of 7,894 dmt was produced containing 1,310 tonnes of copper and 7,063 ounces of gold).

 

 

 

 

 

 

 

The following table summarises gold doré production and sales at Gedabek for FY 2017 and FY 2018:

 


Gold produced*

(ounces)            

Silver

Produced*

(ounces)

Gold sales**

(ounces)

Gold Sales price

($/ounce)

Quarter ended





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






31 March 2018

15,750

7,110

14,956

1,328

30 June 2018

15,537

6,014

10,822

1,307

H1 2018

31,287

13,124

25,778

1,319

30 Sept 2018

18,885

7,416

18,637

1,216

31 Dec 2018

15,444

5,646

15,066

1,231

H2 2018

34,329

13,062

33,703

1,223

FY 2018

65,616

26,186

59,481

1,265

Note that some of the figures in the above table may differ from previously reported due to agreement of final assay.

* including Government of Azerbaijan's share

** excludes Government of Azerbaijan's share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following table summarises copper concentrate production from both the Company's SART and flotation plants at Gedabek for FY 2017 and FY 2018:

 


Concentrate

Copper 

Gold

Silver


production*

content*

content*

content*

2017

(dmt)

(tonnes)

(ounces)

(ounces)

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






2018





Quarter ended 31 March





SART processing

223

114

6

22,118

Flotation

819

141

735

11,587

Total

1,042

255

741

33,705






Quarter ended 30 June





SART processing

260

137

6

21,800

Flotation

1,136

195

1,226

16,387

Total

1,396

332

1,232

38,187






Quarter ended 30 September





SART processing

162

81

7

17,357

Flotation

2,501

389

2,437

34,573

Total

2,663

470

2,444

51,930






Quarter ended 31 December





SART processing

109

67

13

14,229

Flotation

3,557

521

2,752

45,947

Total

3,666

588

2,765

60,176

 

* including Government of Azerbaijan's share.

** 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 2017 and FY 2018. Note that sales of concentrates are initially recorded at provisional amounts until agreement of final assay:

 


Concentrate

Copper 

Gold

Silver

 Concentrate

 

Concentrate


production*

content*

content*

content*

sales**

sales**


(dmt)

(tonnes)

(ounces)

(ounces)

(dmt)

($000)

Quarter ended







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

198

854

H2 2017

2,968

669

2,254

70,751

3,103

6,334

FY 2017

9,330

1,991

7,083

150,125

8,499

16,658








31 March 2018

1,042

255

741

33,705

608

1,715

30 June 2018

1,396

332

1,232

38,187

1,736

4,221

H1 2018

2,438

587

1,973

71,892

2,344

5,936

30 Sept 2018

2,663

470

2,444

51,930

1,557

3,368

31 Dec 2018

3,666

588

2,765

60,176

3,774

6,131

H2 2018

6,329

1,058

5,209

112,106

5,331

9,499

FY 2018

8,767

1,645

7,182

183,998

7,675

15,435

.

* including Government of Azerbaijan's share

** excludes Government of Azerbaijan's share

 

Net cash

The Company had net cash at 31 December 2018 of $6.1 million, an increase in net cash of $3.3 million from $2.8 million at 30 September 2018 as follows:


$m   

Cash at bank and on hand

14.5

Pasha Bank refinancing loan

(8.4)

Net cash

6.1

 

The Company paid a dividend in Q4 2018 of $3.4 million.

 

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

Gaby Jenner

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 kilometre area in the lesser 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 83,736 gold equivalent ounces ('GEOs') for the year ended 31 December 2018.  Gedabek is a polymetallic ore deposit that has gold together with significant concentrations of copper in the main open pit mine, and an oxide gold-rich zone at Ugur. The Company therefore employs a series of flexible processing routes to optimise metal 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. A second dedicated crusher line has been commissioned and is now in operation 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. 

 


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