Anglo Asian Mining plc / Ticker: AAZ / Index: AIM / Sector: Mining
30 November 2016
Anglo Asian Mining plc
Gedabek gold, copper and silver mine connected to Azerbaijan power grid and operations update
Anglo Asian Mining plc ("Anglo Asian" or "the Company"), the AIM listed gold, copper and silver producer in Azerbaijan, announces an operational update from its Gedabek mine ("Gedabek") in western Azerbaijan. The Company is pleased to report that its Gedabek mine site is now connected to the Azerbaijan national power grid. This will result in the Gedabek mine site using cleaner and cheaper power which up to now has been provided by diesel generators. The Company's website has also been revised and expanded to include details of the electrical installation and other recent developments (www.angloasianmining.com) and these revisions will be made live shortly. Note that all references to "$" and "cents" are to the United States dollar.
Highlights
· Gedabek site now connected to the Azerbaijan national power grid
· Expected annual cost savings of approximately $2.3 million
· Payback of capital cost of electrical installation expected in around one year
· Reduction in diesel fuel consumed of around 11 million litres per annum
· Full Year 2016 gold production target slightly reduced to between 67,000 to 69,000 ounces from 69,000 ounces and 71,000 ounces due to recent lower grade ore from the Gadir underground mine and the transition to the new power source
Anglo Asian CEO, Reza Vaziri, said, "I am absolutely delighted to announce that the Gedabek site is now connected to the Azerbaijan national power grid. This enables us to operate the site at a considerably reduced cost and in a cleaner and more sustainable manner. It will also enable us to expand production at the Gedabek site, unconstrained by the availability of electrical power. The diesel electrical generators at site will be retired from service but kept as backup, which will de-risk the operation to power outages. This is the culmination of over two years of work by both the Company and various departments within the Government of Azerbaijan. I would like to thank everybody for their efforts in this successful project.
"Although we are reducing our full year gold production target by 2,000 ounces, the Company's recent return to profitability will be now be further enhanced by the cost savings resulting from connection to the power grid and release of power constraints on our processing.
"This has been a busy few months for Anglo Asian and as a result we have considerably revised and expanded our website to include recent developments. This includes not only details of the electrical installation but also the recent developments in exploration."
Further details on connection of Gedabek to Azerbaijan power grid
The capital works to connect the Gedabek site to the Azerbaijan national power grid comprised installation of the following:
- Seven kilometres of 35 kilovolt overhead power cable and five kilometres of 6.3 kilovolt overhead distribution line.
- Two main and five auxiliary electricity transformers.
- An electrical power house comprising two sets of 6.3 and 35 kilovolt electrical panels and ancillary measuring equipment.
The total cost of the installation was $2.1 million. Electricity is currently being purchased from the grid at a cost of 3.5 cents per kilowatt hour. As a result of the connection to the grid, the Gedabek site will no longer consume around 11 million litres of diesel fuel per annum to generate electrical power. This will result in a cost saving of approximately $2.3 million per annum and therefore the capital cost of the installation will be recovered in around one year. The reduction in fuel usage will substantially reduce fuel management at the site and the consequent environmental risk.
The Company's nine existing diesel generators will not now be used but will be kept as a standby power supply.
Note that translation of amounts from Azerbaijani New Manats (AZN) to United States dollars has been carried out at the current rate of $1 = 1.71 AZN.
**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 |
Laura Harrison |
SP Angel Corporate Finance LLP |
Tel + 44 (0) 20 3470 0470 |
Lottie Brocklehurst |
St Brides Partners Ltd |
Tel: +44 (0) 20 7236 1177 |
Susie Geliher |
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. Gedabek is an open cast mine with a series of interconnected pits. The Company also mines high grade ore from the Gadir underground mine which is co-located at the Gedabek site. 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.
Gold production for the year ended 31 December 2015 from Gedabek totalled 72,032 ounces with 969 tonnes of copper also produced. 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 also produces a copper and precious metal concentrate from its flotation plant, which commenced production in the last quarter of 2015.
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.
