Increased sales of copper concentrate partially offset reduced sales of gold bullion in the first half of 2017 at Anglo Asian Mining Plc (LON:AAZ).
The Azerbaijan-focused gold, copper and silver producer’s half-year results confirmed, as anticipated, increased copper and decreased gold bullion production due to optimisation and expansion initiatives undertaken during the period that will significantly enhance the long term outlook, Anglo Asia said.
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Those optimisation activities and expansion activities, as expected, led to the company falling into the red in the first half of 2017.
Gold production reached 23,218 ounces, down from 33,837 ounces in the first half of 2016.
Copper production rose to 1,322 tonnes from 969 tonnes the year before.
Silver production dipped to 85,087 ounces from 90,782 ounces the year before.
Adding it all together, total production for the first half of 2017 was 28,489 gold equivalent ounces, down from 36,729 ounces the previous year.
Target production for the whole of 2017 expressed as gold equivalent ounces remains at between 64,000 and 72,000 ounces compared to 2016 actual total production of 72,304 gold equivalent ounces.
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First half revenue decreased to US$29.8mln from US$39.3mln due to lower gold bullion sales.
On the plus side, the all-in-sustaining-cost (AISC) of production per ounce of gold (including the government of Azerbaijan’s share) declined 20% to US$564 an ounce from US$703 an ounce.
Furthermore, production of gold as doré since the beginning of September has increased significantly with the commencement of mining from the Ugur asset.
The increase in precious metal prices seen last year continued into 2017, and the company sold its gold bullion at an average selling price of US$1,238 per ounce compared to US$1,230 per ounce in the corresponding period of 2016.
“The increase in the price of gold has accelerated since the end of June with the gold price now around US$1,300 per ounce. The increasing price of copper from its low of US$4,350 per tonne in January 2016 to its current price in the region of US$6,500 per tonne has also been very beneficial for the company given its increasing copper production,” noted Khosrow Zamani, non-executive chairman of Anglo Asian.
The loss before tax was US$1.3mln, versus a profit of US$3.5mln the year before.
At the end of June, the cash balance stood at US$1.5mln, up from US$1.4mln at the end of 2016.
Net debt had decreased to US$29.0mln from US$34.6mln at the end of December 2016.