Anglo Asian Mining PLC (AIM:AAZ, OTC:AGXKF) told investors that state-run AzerGold is its new production-sharing partner in Azerbaijan, which the company expects to be of "considerable benefit" for the running of operations in the country.
The newly amended production-sharing agreement (PSA) sees the Ministry of Ecology and Natural Resources (MENR) replaced as the local party,
Anglo explained that the original PSA was signed before AzerGold was established when there was no state body in Azerbaijan's mining sector, but that it is now the most suitable state organisation as it has more operational mining experience than the MENR.
A law to replace MENR with AzerGold has recently been ratified by Azerbaijan's parliament and signed by the President, to be adopted into law.
Anglo chief executive Reza Vaziri said: "These amendments provide a considerable benefit to Anglo Asian Mining, as the company will now work with AzerGold on exploration, development and mining projects under the production sharing agreement.
"AzerGold fully understands the mining sector in Azerbaijan, including the obtaining of permits and associated governmental procedures. We look forward to continuing to develop the portfolio with the support of AzerGold, while maintaining our strong relationship with the MENR."
The agreement also includes other tweaks to allow the AIM-listed company's Azerbaijan International Mining Company (AIMC) subsidiary full use of all mining workings, drill core, machines and other equipment at the handover.