Anglo Asian Mining plc / Ticker: AAZ / Index: AIM / Sector: Mining
15 January 2014
Anglo Asian Mining plc ('Anglo Asian' or 'the Company')
Q4 Operations and FY 2013 Update - Gedabek Gold/Copper/Silver Mine in Azerbaijan
Anglo Asian Mining plc, the AIM listed gold producer in Azerbaijan, is pleased to provide an update for the three months to 31 December 2013 ('Q4 2013') and the year ended 31 December 2013 ('FY 2013') on production and operations at its flagship Gedabek gold/copper/silver mine ('Gedabek') in western Azerbaijan.
Overview
· Gold production at Gedabek for Q4 2013 totalled 14,329 oz with 11,159 oz from Agitation Leaching Plant operations and 3,170 oz from heap leach operations
· FY 2013 gold production totalled 52,068 oz (2012: 50,025 oz gold)
· Q4 2013 gold sales of 12,445 oz at an average of US$1,280 per oz bringing the full year gold sales to 46,075 oz of gold at an average of US$1,387 per oz for FY 2013
· A continuous Knelson concentrator is targeted to be on-line by Q2 2014 and is expected to enhance gold recovery from high-copper sulphide ore and reduce cyanide consumption
· Copper, silver and gold production from SART processing operations for Q4 2013 totalled 71t of copper, 6,563 oz of silver and 4 oz of gold
· Copper concentrate production for FY 2013 from SART processing of 327 t of copper, 45,621 oz of silver and 39 oz of gold (2012: 502 t copper, 98,158 oz silver, 86 oz gold)
· Strong cash position of US$5.4 million at 31 December 2013
· Net debt, being interest-bearing loans and borrowings less cash and cash equivalents totals US$46.3 million at 31 December 2013
Anglo Asian CEO Reza Vaziri said, "Whilst we increased gold production at Gedabek in 2013 to 52,068 oz from 50,025 oz in 2012, naturally we are disappointed to have missed our production target for the year due to unexpected weather conditions and processing issues in Q4 2013, especially given the successful commissioning of our new Agitation Leaching Plant in June 2013. This, in tandem with the lower gold price, in particular during the second half, will see the cash cost per ounce increase and profitability for 2013 significantly reduced from FY 2012.
"Looking ahead, we are taking steps to ensure we maximise our output and efficiency for 2014 and beyond. We are committed to increasing Gedabek's gold production by utilising the Agitation Leaching Plant and aim to double production from the heap leaching operation through efficiencies. Additionally, the installation of a Knelson concentrator in the second quarter of 2014 is expected to enable isolation of copper sulphides that have been found to restrict gold recoveries in the agitation leach tanks during the latter part of 2013.
"Furthermore we are making good progress on the development of our second mining project in Azerbaijan, Gosha, located 50km away from Gedabek, with the prospect of gold production in 2014. Successful processing at Gedabek of a test batch of ore from Gosha indicates that a simple screen concentrator will enable separation of the high grade fines from the lower grade host rock and there will be no need to construct a floatation plant at Gosha therefore minimising capital expenditure and any environmental impact. With all these developments in mind I look forward to 2014 with optimism and to updating shareholders on our activities as we continue to build a leading gold, copper and silver mining company in Azerbaijan."
Full Details
During the quarter ended 31 December 2013, the Company produced 14,329 oz of gold ('Au') at Gedabek from its Agitation Leaching Plant and heap leach operations. This brings total production for the year ended 31 December 2013 from Gedabek to 52,068 oz of gold, an increase of 2,043 oz in comparison to 2012. Anglo Asian completed gold sales of 12,445 oz Au at an average of US$1,280 per oz for Q4 2013 and gold sales of 46,076 oz Au at an average of US$1,387 per oz for FY 2013.
The following summary table of gold production and prices outlines quarter-on-quarter gold production at Gedabek for FY 2013.
Quarter Ended |
Gold Produced (including Govt. of Azerbaijan's share) (oz) |
Weighted Average Gold Sales Price (US$) |
31 March 2013 |
8,585 |
1,638 |
30 June 2013 |
8,912 |
1,438 |
30 September 2013 |
20,242 |
1,328 |
31 December 2013 |
14,329 |
1,280 |
Total FY 2013 |
52,068 |
1,387 |
|
|
|
|
Since the start-up of the agitation leach plant in June, only low grade ore (<1.5 g/t) has been treated by heap leaching, with high grade ore being sent for agitation leaching. During Q4 2013, the Company transferred 66,694 tonnes of dry ore onto the heap leach pads with an average gold content of 1.36 g/t. For the year to 31 December 2013, Anglo Asian transferred 576,748 tonnes of dry ore onto the leach pad with an average gold content of 1.31 g/t.
As previously disclosed, to improve gold recovery and production at Gebabek the Company constructed and commissioned a new Agitation Leaching Plant in June 2013 that is initially treating 100 tonnes of ore per hour, increasing to up to 150 tonnes per hour under optimal conditions and with an expected average of 120 tonnes per hour within a few months. The problems experienced with higher grade copper as mining progresses deeper should be minimised with the addition of a Knelson concentrator for the gold at the Agitation Leaching Plant.
Copper concentrate production from the Company's Sulphidisation, Acidification, Recycling, and Thickening ('SART') plant totalled 327 tonnes Cu, 45,621 oz Ag and 39 oz Au for FY 2013. For Q4 2013 copper concentrate production contained 71 tonnes Cu, 6,563 oz Ag and 4 oz Au. The Company plans to re-configure the SART plant in 2014 in order to achieve better performance than in 2013.
The reduced FY 2013 production and the lower gold price will have a significant impact on Anglo Asian's 2013 profitability; however, an increased focus is in place to ensure maximisation of output and efficiency for 2014 and beyond.
During FY 2013 total sales of copper concentrate were US$6.6 million. During Q4 2013 the Company signed a contract with Glencore International plc ('Glencore') for the sale of 550 wet metric tonnes ('WMT'). Under the terms of the agreement, which is already underway, Glencore agreed to purchase a total of 550 WMT of copper concentrate product during December 2013 and January 2014.
Net debt as at 31 December 2013 stands at:
|
US$(m) |
ATB Agitation Plant loan balance |
37.0 |
IBA loan balance |
11.6 |
Atlas Copco equipment finance loan |
3.1 |
Total Loans |
51.7 |
Cash on hand and at bank |
5.4 |
Net debt |
46.3 |
The amount of the loans with International Bank of Azerbaijan ('IBA') and Amsterdam Trade Bank N.V. ('ATB') were US$11.6 million and US$37.0 million respectively and cash in the bank was US$5.4 million at 31 December 2013. In January 2013, the Company entered into an arrangement with industrial group Atlas Copco for financing of underground mining equipment for the Gosha gold project for US$3.8 million (representing 85% of the equipment value) with a one off 1% arrangement fee and 8.47% annual interest fee, to be paid in eight quarterly instalments starting April 2013. Including this loan, the net debt, being interest-bearing loans and borrowings less cash and cash equivalents therefore, stood at US$46.3 million at 31 December 2013.
**ENDS**
For further information please visit www.angloasianmining.com or contact:
Reza Vaziri |
Anglo Asian Mining plc |
Tel: +994 12 596 3350 |
Sean Duffy |
Anglo Asian Mining plc |
Tel: +994 12 596 3350 |
Ewan Leggat |
SP Angel Corporate Finance LLP |
Tel: +44 (0) 20 3463 2260 |
Laura Littley |
SP Angel Corporate Finance LLP |
Tel: +44 (0) 20 3463 2260 |
Felicity Edwards |
St Brides Media & Finance Ltd |
Tel: +44 (0) 20 7236 1177 |
Lottie Brocklehurst |
St Brides Media & Finance Ltd |
Tel: +44 (0) 20 7236 1177 |
Notes:
Anglo Asian Mining plc (AIM:AAZ) is a gold producer in Central Asia with a broad portfolio of production and exploration assets in Azerbaijan. The Company has a 1,962 sq km prospective exploration portfolio, assembled from analysis of historic Soviet geological data and held under a Production Sharing Agreement ('PSA') based on the Azeri oil industry. The Company developed Azerbaijan's first operating gold/copper mine, Gedabek, which commenced gold production in May 2009.
Anglo Asian is actively looking to exploit its first mover advantage in Azerbaijan to identify additional projects, as well as looking for other properties in Central Asia and Caucasia in order to fulfil its expansion ambitions and become a mid-tier gold and base metal production company focussed in these regions.
