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Anglo Asian Mining (AAZ)

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Tuesday 15 October, 2019

Anglo Asian Mining

Q3 2019 Production and Operations review

RNS Number : 8399P
Anglo Asian Mining PLC
15 October 2019
 

 

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

 

15 October 2019

 

Anglo Asian Mining plc

Q3 2019 Production and Operations review

 

Total production for YTD Q3 2019 of 60,122 GEOs and net cash of 19.1 million

 

 

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 and nine months to 30 September 2019 ("Q3 2019" and "YTD Q3 2019" respectively).

 

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

 

Overview

 

·    Continued improvement in 2019 production expressed as gold equivalent ounces ("GEOs") with a three per cent. quarter-on-quarter increase to 20,227 GEOs (Q2 2019: 19,618 GEOs)

·    YTD Q3 2019 total production of 60,122 GEOs (YTD Q3 2018: 61,761 GEOs)

·    Strong cash generation with $8.5 million generated in the quarter (H1 2019: $9.3 million)

o Cash generation in YTD Q3 2019 of $17.6 million

o $19.1 million net cash at 30 September 2019 ($15.2 million at 30 June 2019)

·    Significant increase in average price of gold bullion sold in Q3 2019 to $1,513 per ounce (H1 2019: $1,319 per ounce) 

·    Full Year 2019 ("FY 2019") Production guidance maintained at lower end of 82,000 to 86,000 GEOs

·    As announced on 18 September 2019, an interim dividend of US$0.035 per share will be paid gross in respect of the year ending 31 December 2019 to shareholders on 31 October 2019

 

Anglo Asian CEO Reza Vaziri commented: "We are delighted to report another successful quarter for the Company with production increasing compared to the previous quarter and strong cash generation helped by the recent increase in the gold price. Production guidance is maintained at the lower end of 82,000 to 86,000 gold equivalent ounces due to the decrease in copper price in relation to the increase in gold price since the start of 2019."

 

Production Overview

 

Q3 2019

·    Total production of 20,227 GEOs (Q3 2018: 24,412 ounces)

·    Gold production of 17,804 ounces (Q3 2018: 21,318 ounces):

o 16,626 ounces contained within gold doré

o 10 ounces from SART processing

o 1,168 ounces from flotation

·    Copper production totalled 521 tonnes (Q3 2018: 470 tonnes):

o 71 tonnes from sulfidisation, acidification, recycling and thickening ("SART") processing

o 450 tonnes from flotation processing

·    Silver production totalled 33,354 ounces (Q3 2018: 59,346 ounces):

o 4,423 ounces contained within gold doré

o 11,789 ounces from SART processing

o 17,142 ounces from flotation

 

YTD Q3 2019

 

·    Total production of 60,122 GEOs (YTD Q3 2018: 61,761 GEOs)

·    Gold production of 52,198 ounces (YTD Q3 2018: 54,573 ounces)

·    Copper production totalled 1,478 tonnes (YTD Q3 2018: 1,057 tonnes)

·    Silver production totalled 117,708 ounces (YTD Q3 2018: 144,362 ounces)

·    Forecast production for FY 2019 at the lower end of 82,000 to 86,000 GEOs

 

Sales

 

·    Q3 2019 gold bullion sales of 14,894 ounces at an average of $1,513 per ounce (Q2 2019 gold bullion sales of 13,467 ounces at an average of $1,332 per ounce)

·    Q3 2019 copper concentrate shipments to the customer totalled 2,255 dry metric tonnes ("dmt") with a sales value of $3.4 million (excluding Government of Azerbaijan profit share) (Q2 2019: 4,007 dmt with a sales value of $6.7 million)

 

Company financials

 

·    Net cash, being cash and cash equivalents less interest-bearing loans and borrowings, totalled $19.1 million at 30 September 2019 (Net cash of $15.2 million at 30 June 2019)

·    Cash generation before payment of final dividend for 2018 in Q3 2019 of $8.5 million with $17.6 million generated YTD Q3 2019

 

 

Gedabek - mining, production and sales

 

The Company mined the following ore in the nine months to 30 September 2019:

 


6 months to

30 June 2019*

3 months to

30 September 2019

9 months to

 30 September 2019

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

817,649

0.72

323,008

0.71

1,140,657

0.72

Ugur - o/pit

568,993

1.53

337,506

1.05

906,499

1.35

Gadir - u/g

89,927

2.70

37,101

2.96

127,028

2.78

Gosha - u/g

-

-

-

-

-

-

Total

1,476,569

1.15

697,615

1.00

2,174,184

1.10

* 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 148,269 tonnes of dry crushed ore onto heap leach pads with an average gold content of 0.93 grammes per tonne during Q3 2019 (Q2 2019: 152,173 tonnes with an average gold content of 0.90 grammes per tonne). The Company also heap leached uncrushed Run of Mine ("ROM") ore. During Q3 2019, Anglo Asian stacked 261,414 tonnes of ROM ore onto heap leach pads with an average gold content of 0.46 grammes per tonne (Q2 2019: 286,163 tonnes with an average gold content of 0.49 grammes per tonne).

 

The Company processed 192,097 dry tonnes of ore with an average gold content of 2.25 grammes per tonne through the agitation leaching plant during Q3 2019 (Q2 2019: 176,602 dry tonnes with an average gold content of 2.4 grammes per tonne). 127,762 dry tonnes of ore containing an average copper content of 0.55 per cent. was processed by the flotation plant in Q3 2019 (Q2 2019: 131,161 dry tonnes of ore containing an average copper content of 0.47 per cent.).

 

During Q3 2019, the Company produced gold doré containing 16,626 ounces of gold and 4,423 ounces of silver at Gedabek (Q2 2018: 16,073 ounces of gold and 4,773 ounces of silver). During Q3 2019, the agitation leaching plant produced 12,836 and 3,369 ounces of gold and silver, respectively, and the heap leach operations produced 3,790 and 1,054 ounces of gold and silver, respectively.

 

SART processing in Q3 2019 produced 154 dmt of copper concentrate containing 71 tonnes of copper and 10 ounces of gold (Q2 2019: 143 dmt of copper concentrate containing 67 tonnes of copper and 8 ounces of gold). YTD Q3 2019 SART copper production was 195 tonnes compared to YTD Q3 2018 production of 332 tonnes.

 

Flotation processing in Q3 2019 produced 2,793 dmt of copper concentrate containing 450 tonnes of copper, 1,168 ounces of gold and 17,142 ounces of silver (Q2 2019: 2,252 dmt of copper concentrate containing 383 tonnes of copper, 1,068 ounces of gold and 15,491 ounces of silver).

 

The following table summarises gold doré production and sales at Gedabek for FY 2018 and Q1 to Q3 2019:

 


Gold produced*

(ounces)            

Silver

Produced*

(ounces)

Gold sales**

(ounces)

Gold Sales price

($/ounce)

Quarter ended





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






31 March 2019

15,547

6,634

13,121

1,306

30 June 2019

16,073

4,773

13,467

1,332

H1 2019

31,620

11,407

26,588

1,319

 

30 September 2019

 

16,626

 

4,423

 

14,894

 

1,513

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 2018 and Q1 to Q3 2019:


Concentrate

Copper 

Gold

Silver


production*

content*

content*

content*

2018

(dmt)

(tonnes)

(ounces)

(ounces)

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 Sept





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






2019





Quarter ended 31 March





SART processing

142

60

11

16,201

Flotation

2,871

450

1,687

28,461

Total

3,013

510

1,698

44,662






Quarter ended 30 June





SART processing

143

64

8

12,794

Flotation

2,252

383

1,068

15,491

Total

2,395

447

1,076

28,285






Quarter ended 30 September





SART processing

154

71

10

11,789

Flotation

2,793

450

1,168

17,142

Total

2,947

521

1,178

28,931

* including Government of Azerbaijan's share.

Certain amounts for SART and flotation production may different to those previously disclosed due to final reconciliation of production.

 

 

The following table summarises total copper concentrate production and sales at Gedabek for FY 2018 and Q1 to Q3 2019. 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 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








31 March 2019

3,013

510

1,698

44,662

279

718

30 June 2019

2,395

447

1,076

28,285

4,007

6,713

H1 2019

5,408

957

2,774

72,947

4,286

7,431

 

30 Sept 2019

2,946

521

1,178

28,931

2,255

 

3,438

.

* including Government of Azerbaijan's share

** excludes Government of Azerbaijan's share

 

Net cash

The Company had net cash at 30 September 2019 of $19.1 million, an increase in cash of $3.9 million from net cash of $15.2 million at 30 June 2019 as follows:


$m   

Cash at bank and on hand

22.5

Pasha Bank refinancing loan

(3.4)

Net cash

19.1

 

In Q3 2019, the Company paid the final dividend for 2018 of $4.6 million and corporation tax of $2.5 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

Camilla Horsfall

Blytheweigh Financial

Tel: +44 (0) 20 7138 3224

Megan Ray

Blytheweigh Financial

Tel: +44 (0) 20 7138 3224

 

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 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.

The Company has forecast production for FY 2019 of between 82,000 to 86,000 GEOs.

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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