Anglo Asian Mining plc / Ticker: AAZ / Index: AIM / Sector: Mining
14 January 2014
Anglo Asian Mining plc
Quarter 4 and Full Year 2014, operations and production update - Gedabek and Gosha gold, copper and silver mines, Azerbaijan
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 and operations update for its Gedabek and Gosha gold, copper and silver mines in western Azerbaijan for the three months to 31 December 2014 ("Q4 2014") and the year ended 31 December 2014 ("FY 2014").
Production overview
· Gold production for Q4 2014 increased to 17,053 ounces with 10,176 ounces from the agitation leaching plant, 6,827 ounces from heap leach operations and 50 ounces from SART processing (Q3 2014: total 16,178 ounces)
· Copper production for Q4 2014 totalled 205 tonnes from SART processing (Q3 2014: 210 tonnes)
· Silver production for Q4 2014 totalled 3,749 ounces with 345 ounces from the agitation leaching plant, 366 ounces from heap leaching operations and 3,038 ounces from SART processing (Q3 2014: total 5,504 ounces)
· Anglo Asian's FY 2014 production was as follows:
o Gold - 60,285 ounces. 16 per cent. increase over FY 2013 production of 52,107 ounces
o Copper - 784 tonnes of copper. 140 per cent. increase over FY 2013 production of 327 tonnes
o Silver - 31,177 ounces. 53 per cent. decrease over FY 2013 production of 65,939 ounces
Sales
· Q4 2014 gold sales of 13,272 ounces at an average of US$1,201 per ounce - FY 2014 gold sales of 50,615 ounces of gold at an average of US$1,267 per ounce
· Q4 2014 copper concentrate shipments to the customer totalled 391 dry metric tonnes ('dmt'), containing 232 tonnes of copper - FY 2014 copper concentrate sales of 1,316 dmt generating US$4.4 million in sales proceeds for FY 2014
Gedabek operations
· Construction of the small scale flotation plant is underway - financing for the turnkey construction contract has been finalised with The Pasha Bank providing the entire financing required of up to US$2.7 million
· Updated JORC ore reserve estimate for Gedabek of 20.5 million tonnes of ore grading 1.03 grammes per tonne of gold (682 thousand ounces), 0.50 per cent. copper (102 thousand tonnes); and 7.35 grammes per tonne of silver (4.84 million ounces)
· The contained copper in the updated ore reserve estimate increased by 72 per cent. and recoverable copper increased by over 570 per cent. from the May 2012 ore reserve estimate demonstrating the positive economic potential of commissioning a flotation plant at Gedabek
Company financials
· Cash position of US$0.4 million at 31 December 2014
· Net debt, being interest-bearing loans and borrowings less cash and cash equivalents totalled US$52.4 million at 31 December 2014
Anglo Asian CEO Reza Vaziri said, "I am delighted to report a strong fourth quarter's production which resulted in a significant 16 per cent. increase in our gold production for 2014 compared to 2013 and a step increase in copper production of 140 per cent. to 784 tonnes. We have achieved our latest target for both gold and copper for the year and hope to continue 2015 on this positive note. I am also pleased to report that the construction of the small scale flotation plant is progressing well and we have successfully agreed terms for the full financing of its turnkey construction contract. This small scale flotation plant, once it commences operations, will enable us to exploit the substantial increase in recoverable copper reserves contained within our latest ore reserve estimate."
Full details
Gedabek is a polymetallic deposit from which Anglo Asian produces gold, copper and silver from its open pit mining operation. The Company also processes ore from its Gosha deposit, approximately 50 kilometres away from Gedabek. Three different processing methods, agitation leaching, heap leaching and Sulphidisation, Acidification, Recycling, and Thickening ('SART') are used to produce gold, copper and silver.
During Q4 2014, the Company produced 17,053 ounces of gold at Gedabek; 10,176 ounces from the agitation leaching plant, 6,827 ounces from heap leach operations and 50 ounces from SART processing. This brings total production for FY 2014 at Gedabek to 60,285 ounces of gold, a 16 per cent. increase in production compared to FY 2013 (2013: total 52,107 ounces). Anglo Asian completed gold sales of 13,272 ounces of gold at an average of US$1,201 per ounce for Q4 2014 and gold sales of 50,615 ounces at an average of US$1,267 per ounce for FY 2014.
The Company's SART plant has been performing strongly producing copper concentrate and for Q4 2014 copper production totalled 205 dmt, giving a total FY 2014 copper production of 784 dmt, exceeding the management's target of 750 dmt for the FY 2014 and achieving a 140 per cent. increase from FY 2013 of 327 dmt. Anglo Asian has a strategic three year sales partnership in place with Industrial Minerals (SA) which commenced in May 2014 for the sale of Anglo Asian copper concentrates. Sales of copper concentrate for Q4 2014 totalled 391 dmt giving total sales for FY 2014 of 1,316 dmt, which generated sales proceeds of US$4.4 million for FY 2014.
Silver production for Q4 2014 totalled 3,749 ounces; with 345 ounces from the agitation leaching plant, 366 ounces from heap leaching operations and 3,038 ounces from SART. This brings FY 2014 total silver production to 31,177 ounces.
The following summary table of gold production and sales demonstrates the quarter-on-quarter increase in gold production and also details copper and silver production at Gedabek.
Quarter ended |
Gold Produced* (oz) |
Gold Sales** (oz) |
Gold Sales Price (US$) |
Copper Produced (dmt) |
Copper Concentrate Sales (dmt) |
Silver Produced (oz) |
31 Mar 2014 |
11,318 |
10,403 |
1,302 |
141 |
152 |
13,139 |
30 Jun 2014 |
15,736 |
13,142 |
1,291 |
228 |
523 |
8,785 |
30 Sept 2014 |
16,178 |
13,798 |
1,281 |
210 |
250 |
5,504 |
31 Dec 2014 |
17,053 |
13,272 |
1,201 |
205 |
391 |
3,749 |
Total FY 2014 |
60,285 |
50,615 |
1,267 |
784 |
1,316 |
31,177 |
* including Government of Azerbaijan's share
** excludes Government of Azerbaijan's share
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.
During Q4 2014, the Company stacked 120,390 tonnes of dry crushed ore on to heap leach pads with an average gold content of 1.44 grammes per tonne. FY 2014, the heap leach total was 530,717 tonnes with an average gold content of 1.26 grammes per tonne. The Company also heap leached uncrushed (Run of Mine - "ROM") ore. During Q4 2014, the Company stacked 313,282 tonnes of ROM ore on to heap leach pads with an average gold content of 0.97 grammes per tonne and the FY 2014 total was 816,060 tonnes with an average gold content of 0.97 grammes per tonne.
During Q4 2014, the Company processed 133,471 tonnes of ore with an average gold content of 3.41 grammes per tonne through the agitation leaching plant. The FY 2014 total was 597,102 tonnes of ore with an average gold content of 2.93 grammes per tonne. Of that, 10,542 tonnes of ore at a grade of 4.68 grammes per tonne was transferred from the Company's Gosha deposit during Q4 2014. The FY 2014 total from Gosha was 28,891 tonnes of ore at a grade of 4.15 grammes per tonne.
There was a 71 per cent. gold recovery in agitation leaching for both Q3 and Q4 2014. However, the gold recovery for December 2014 increased to 75 per cent. This was as a result of optimisation of the operation of the plant and the management team are committed to further improving the recoveries in the agitation leaching plant. The overall FY 2014 gold recovery for agitation leaching was 72 per cent. and the FY 2014 gold recovery for crushed ore heap leach operations was 56 per cent. Gold doré is produced from both heap and agitated leach intermediate solutions, which are combined for final processing and also recirculated around the plant, heap leach pads and tailings dam. Heap leaching is also a long term process and recoveries are therefore only estimates calculated from available metallurgical statistics.
In November 2014, Anglo Asian announced an updated ore reserve estimate for the Gedabek open pit showing a significant increase in its copper reserves. The updated JORC ore reserve for the Gedabek open pit as of 1 September 2014 is 20.5 million tonnes of ore grading 1.03 grammes per tonne of gold (682 thousand ounces), 0.50 per cent. copper (102 thousand tonnes); and 7.35 grammes per tonne of silver (4.84 million ounces). The contained copper in the ore reserve statement increased by 72 per cent. to 102 thousand tonnes and the recoverable copper increased by over 570 per cent. to 76 thousand tonnes from the May 2012 ore reserve.
To exploit the high copper content of the Company's ore reserves, the construction of a small scale flotation plant was commenced in Q4 2014. This flotation plant will act as a pilot plant to assess future full scale copper production and it will initially process 379,000 tonnes of stockpiled high copper content sulphide ore to produce a copper and precious metal concentrate. A contract has been placed for up to US$2.7 million for the turnkey construction of the plant. The Pasha Bank, Azerbaijan, will provided the entire financing of up to US$2.7 million for the contract, which will be repayable in two equal instalments in May and November 2016. The plant is scheduled to be operational in Q3 2015.
Following on from the updated reserve report, mining consultants CAE Mining, UK, have developed a new, detailed, life-of-mine plan for Gedabek to assess both the copper and gold cut-off grades.
Net debt as at 31 December 2014:
|
US$m |
Amsterdam Trade Bank - Agitation plant loan |
37.0 |
International Bank of Azerbaijan - loan |
13.1 |
Atlas Copco equipment finance loan YapiKredit Pasha Bank |
0.8 0.9 1.0 |
Total Loans |
52.8 |
Cash on hand and at bank |
(0.4) |
Net debt |
52.4 |
**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 |
Ewan Leggat |
SP Angel Corporate Finance LLP Nominated Adviser and Broker |
Tel: +44 (0) 20 3470 0500 |
Stuart Gledhill |
SP Angel Corporate Finance LLP |
Tel + 44 (0) 20 370 0500 |
Felicity Winkles |
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, 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 prospective exploration portfolio, assembled from analysis of historic Soviet geological data and held under a Production Sharing Agreement modelled on the Azeri oil industry.
The Company developed Azerbaijan's first operating gold/copper/silver mine, Gedabek, which commenced gold production in May 2009. Gold production for the year ended 31 December 2014 from Gedabek totalled 60,285 ounces and 784 tonnes of copper. The Company is also developing a second resource area, Gosha, which is 50 kilometres from Gedabek, and the ore produced at Gosha is processed at Anglo Asian's Gedabek plant. Gedabek is a polymetallic deposit and its ore has a high copper content, and as a result the Company produces copper concentrate from its Sulphidisation, Acidification, Recycling, and Thickening (SART) plant. Anglo Asian is also constructing a small scale, low capital expenditure flotation plant to produce a copper and precious metal concentrate. This will initially process ore from its existing stockpiles of sulphide ore with a high copper content.
Anglo Asian is also actively looking 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.
