Q4 2015/ FY 2015 Production Update Gedabek

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

 

14 January 2016

Anglo Asian Mining plc

Quarter 4 and Full Year 2015, operations and production update - Gedabek gold, copper and silver mine, 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 an operations and production update from its Gedabek gold, copper and silver mine ("Gedabek") in western Azerbaijan for the three months to 31 December 2015 ("Q4 2015") and the year ended 31 December 2015 ("FY 2015").  Note that all references to "$" are to United States dollars.

 

Production overview

 

·    Gold production for Q4 2015 totalled 17,930 ounces with 12,996 ounces from the agitation leaching plant, 4,593 ounces from heap leach operations, 6 ounces from SART processing and 335 ounces from flotation (Q3 2015: total 18,164 ounces)

·    Copper production for Q4 2015 totalled 335 tonnes, 205 tonnes from SART processing and 130 tonnes from flotation (Q3 2015: 216 tonnes)

·    Silver production for Q4 2015 totalled 17,710 ounces with 1,373 ounces from the agitation leaching plant, 485 ounces from heap leaching operations, 6,589 ounces from SART processing and 9,263 ounces from flotation (Q3 2015: total 4,439 ounces)

·    Anglo Asian's FY 2015 production was as follows:

o Gold: 72,032 ounces, a 19 per cent. increase over FY 2014 production of 60,285 ounces

o Copper: 969 tonnes of copper, a 24 per cent. increase over FY 2014 production of 784 tonnes

o Silver: 28,626 ounces, an 8 per cent. decrease over FY 2014 production of 31,177 ounces

 

Sales overview

 

·    Q4 2015 gold doré sales of 15,759 ounces at an average of $1,108 per ounce - FY 2015 gold doré sales of 63,924 ounces at an average of $1,161 per ounce

·    Q4 2015 SART copper concentrate sales totalled 425 dry metric tonnes ("dmt"), containing 235 tonnes of copper - FY 2015 copper concentrate sales of 1,310 dmt generating $3.3 million in sale proceeds

·    Q4/FY 2015 flotation copper concentrate sales of 392 dmt generating $0.6 million in sale proceeds

 

Operational update

 

·    Flotation plant commenced production in Q4 2015 with production in the quarter of 578 dmt of copper concentrate containing 130 tonnes of copper and 335 and 9,263 ounces of gold and silver respectively

·    28,819 tonnes of ore with average gold content of 7.71 grammes per tonne from the Gadir underground mine was processed by the agitation leach plant in Q4 2015. For FY 2015, 37,880 tonnes with average gold content of 7.98 grammes per tonne was processed

 

Company financials

 

·    Net debt, being interest-bearing loans and borrowings less cash and cash equivalents, totaled $49.2 million at 31 December 2015 ($52.4 million at 31 December  2014)

·    Loan from Reza Vaziri extended to 8 July 2016 with all other terms of the loan remaining the same

 

Anglo Asian CEO Reza Vaziri commented, "This has been a significant year of growth for Anglo Asian at our flagship Gedabek mine in Azerbaijan. Gold production was the highest recorded and we met our production target set at the beginning of 2015. Gold production in the year increased 19 per cent. to 72,032 ounces and copper production increased 24 per cent. to 969 tonnes.  With production at Gedabek increasing, the successful launch of our flotation plant in Q3 2015 and our continuing plant optimization to improve efficiencies and cost controls, I believe we have delivered on our turnaround strategy this year to return Anglo Asian to profitability. I look forward to reporting on our developments during the course of 2016 as we continue our momentum of establishing Anglo Asian as a leading mid-tier gold and copper producer in Caucasia."

 

Full details

 

Gedabek is a polymetallic deposit from which Anglo Asian produces gold, copper and silver from its open pit mining operation and its co-located Gadir underground mine. The Company also transports ore from its Gosha underground mine and processes it at Gedabek which is approximately 50 kilometres away. The Company produces gold doré from heap and agitation leaching. Sulphidisation, Acidification, Recycling, and Thickening ("SART") and flotation are used to produce copper and precious metal in the form of copper concentrates.

 

During Q4 2015, the Company produced 17,930 ounces of gold at Gedabek; 12,996 ounces from the agitation leach plant, 4,593 ounces from heap leach operations, 6 ounces from SART processing and 335 ounces from flotation. Anglo Asian completed gold doré sales of 15,759 ounces of gold at an average of $1,108 per ounce. For FY 2015, the Company produced 72,032 ounces of gold at Gedabek which was a 19 per cent. increase compared to the total gold production for FY 2014. Of the gold production in FY 2015, 48,226 ounces was from the agitation leach plant, 23,444 ounces was from heap leach operations, 27 ounces was from SART processing and 335 ounces was from flotation. For FY 2015, Anglo Asian completed gold doré sales of 63,924 ounces of gold at an average of $1,161 per ounce.

 

During Q4 2015, the Company produced 17,710 ounces of silver at Gedabek; 1,373 ounces from the agitation leaching plant, 485 ounces from heap leaching operations, 6,589 ounces from SART and 9,263 ounces from flotation. FY 2015 silver production totalled 28,626 ounces; with 2,935 ounces from the agitation leaching plant, 1,326 ounces from heap leaching operations, 15,102 ounces from SART and 9,263 ounces from flotation.

 

The Company's SART plant has been performing well producing a copper/silver sulphide concentrate and for Q4 2015 contained copper in the SART concentrate totalled 205 tonnes. FY 2015 SART copper production totalled 839 tonnes. 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 produced by SART in Q4 2015 totalled 425 dmt. FY 2015 sales of SART concentrate totalled 1,310 dmt which realised sales proceeds of $3.3 million.

 

The Company's new flotation plant to increase copper production at Gebabek was commissioned in Q3 2015 and began commercial production during Q4 2015. For Q4/FY 2015, 578 dmt of copper concentrate was produced containing 130 tonnes of copper, 335 ounces of gold and 9,263 ounces of silver. 392 dmt were shipped and sold during Q4 2015 containing 88 tonnes of copper, 239 ounces of gold and 6,381 ounces of silver. These shipments had a sales value of $0.6 million.

 

The following table summarises metal production and sales (excluding those produced from flotation) at Gedabek for FY 2015: 

 

 

 

	Gold produced* (ounces)	Gold sales** (ounces)			Gold Sales price ($/oz)	Copper  produced* (tonnes)		Copper Concentrate sales** (dmt)			Silver produced* (ounces)
FY 2014 - total   Quarter ended	60,285	50,615			1,267	784		1,148			31,177
31 March 2015	17,193	17,206			1,214	182		234		1,950
30 June 2015	18,745	16,088			1,193	236		372		4,527
30 Sept 2015	18,164	14,871			1,123	216		279		4,439
31 Dec 2015	17,595	15,759			1,108	205		425		8,447
Cumulative
FY 2015 - total	71,697	63,924			1,161	839		1,310		19,363

* including Government of Azerbaijan's share

** excludes Government of Azerbaijan's share

 

The following table summarises flotation concentrate production and sales at Gedabek for Q4/FY 2015:

 

	Flotation	Gold	Silver	Copper	Flotation concentrate
	concentrate	content	content	content	sales
	(dmt)	(ounces)	(ounces)	(tonnes)	($000)
Produced*	578	335	9,263	130	Not applicable
Sold**	392	239	6,381	88	626

 

* 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 leach plant.

 

During Q4 2015, Anglo Asian stacked 101,086 (FY 2015: 393,999) tonnes of dry crushed ore on to heap leach pads with an average gold content of 1.48 grammes per tonne (FY 2015: 1.47 grammes per tonne). The Company also heap leached uncrushed (Run of Mine - "ROM") ore. During Q4 2015, Anglo Asian stacked 32,004 (FY 2015: 546,712) tonnes of ROM ore on to heap leach pads with an average gold content of 1.1 grammes per tonne (FY 2015: 0.97 grammes per tonne).

 

During Q4 2015, the Company processed 148,240 tonnes of ore (FY 2015: 576,879 tonnes of ore) with an average gold content of 3.51 grammes per tonne (FY 2015: 3.44 grammes per tonne) through the agitation leach plant.

 

There was a 78 per cent. gold recovery in agitation leaching for Q4 2015, an increase of 3 per cent. over the previous two quarters. The overall FY 2015 gold recovery for agitation leaching was 76 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 a long term process and recoveries are therefore only estimates calculated from available metallurgical statistics.

 

The Company's small scale flotation plant is now producing a concentrate from the tailings of the agitation leach plant. Commissioning took longer than anticipated due to some minor delays in final installation of equipment and the time required for the optimisation of the quality of the concentrate due to the presence of zinc which is an impurity. These teething problems have now been overcome and the plant is currently producing at around 75 to 80 per cent. of its design capacity which equates to approximately 1,000 wet tonnes of concentrate production per month.

 

The Company had net debt at 31 December 2015 of $49.2 million, a reduction of $3.2 million since 31 December 2014. The net debt at 31 December 2015 was as follows:           

           

	$m
Amsterdam Trade Bank -  Agitation plant loan	27.1
International Bank of Azerbaijan	11.7
Atlas Copco equipment finance loan YapiKredit Pasha Bank Reza Vaziri	0.4   1.7   4.6 3.9
Total Loans	49.4
Cash on hand and at bank	(0.2)
Net debt	49.2

 

Reza Vaziri has agreed to extend the term of his loan by 6 months to 8 July 2016 on the same terms as the original loan agreement.

 

The amount due to International Bank of Azerbaijan ("IBA") contains an amount of $1.5 million originally due on 26 December 2015. IBA have agreed to extend the repayment date to 30 June 2016.

 

**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 0470
Laura Harrison	SP Angel Corporate Finance LLP	Tel + 44 (0) 20 3470 0470
Felicity Winkles	St Brides Partners Ltd	Tel: +44 (0) 20 7236 1177
Lottie Brocklehurst	St Brides Partners 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 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 totaled 60,285 ounces with 784 tonnes of copper also produced. The Company has a second mine, Gosha, which is 50 kilometres from Gedabek, and the ore produced at Gosha is processed at Anglo Asian's Gedabek plant. The Company is also developing the Gadir underground mine which is co-located at the Gedabek site. 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 has also commenced production of a copper and precious metal concentrate using a small scale, low capital expenditure flotation plant which commenced production in the last quarter of 2015. This is initially processing tailings from the agitation leach plant.

 

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.