Q3 2017 Production Update

 

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

13 October 2017

 

Anglo Asian Mining plc

Q3 2017 - 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 a production update from its Gedabek gold, copper and silver mine ("Gedabek") in western Azerbaijan for the three months to 30 September 2017 ("Q3 2017"). Note that all references to "$" are to United States dollars.

 

Production overview

 

·    19 per cent. increase in gold production to 14,468 ounces as production begins to benefit from the Ugur open pit following commencement of mining in September 2017

·    Gold production for Q3 2017 of 14,468 ounces was 12,221 ounces contained within gold doré, 4 ounces from SART processing and 2,243 ounces from flotation (Q2 2017: total 12,140 ounces)

·    Copper production for Q3 2017 totalled 550 tonnes - 165 tonnes from SART processing and 385 tonnes from flotation (Q2 2017: total 716 tonnes)

·    Silver production for Q3 2017 totalled 40,288 ounces - 4,381 ounces contained within gold doré, 9,097 ounces from SART processing and 26,810 ounces from flotation (Q2 2017: total 45,718 ounces)

·    Cumulative total production in the nine months to 30 September 2017 (YTDQ3 2017) as follows:

·    Gold - 37,686 ounces (YTDQ3 2016: 49,911 ounces)

·    Silver - 125,375 ounces (YTDQ3 2016: 114,915 ounces)

·    Copper - 1,872 tonnes (YTDQ3 2016: 1,363 tonnes)

·    Gold equivalent ounces - 48,276 ounces (YTDQ3 2016: 54,924 ounces)

·    Target production for the 12 months to 31 December 2017 expressed as gold equivalent ounces remains at between 64,000 and 72,000 ounces compared to FY 2016 actual total production of 72,304 gold equivalent ounces

Sales

·    Q3 2017 gold bullion sales of 9,287 ounces at an average of $1,286 per ounce (Q2 2017 gold bullion sales of 7,406 ounces at an average of $1,258 per ounce)

·    Q3 2017 copper concentrate shipments to the customer totalled 2,905 dry metric tonnes ("dmt") with a sales value of $5.5 million (excluding Government of Azerbaijan profit share) (Q2 2017: 3,166 tonnes with a sales value of $6.1 million)

 

Company financials

 

·    Net debt, being interest-bearing loans and borrowings less cash and cash equivalents, totalled $25.2 million at 30 September 2017 ($29.0 million at 30 June 2017)

 

Anglo Asian CEO Reza Vaziri commented: "This has been an excellent quarter for Anglo Asian as the benefits of the strategic review earlier in the year are now being realised. The commencement of mining from Ugur in September is already having a very positive influence with gold production rising by over 2,300 ounces from the previous quarter. Anglo Asian expects a strong fourth quarter and finish to 2017 and I look forward to updating our shareholders on our progress."

 

Gedabek - mining, production and sales

 

The Company mined the following ore in the nine months to 30 September 2017:

 

	6 months to 30 June 2017		3 months to 30 September 2017		9 months to  30 September 2017
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	578,492	1.15	133,952	1.28	712,444	1.18
Ugur - o/pit	-	-	57,155	3.34	57,155	3.34
Gadir - u/g	25,573	3.77	14,603	3.07	40,176	3.51
Gosha - u/g	3,637	5.09	21,189	3.89	24,826	4.07
Total	607,702	1.29	226,899	2.16	834,601	1.52

 

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 Q3 2017, Anglo Asian stacked 173,616 tonnes of dry crushed ore onto heap leach pads with an average gold content of 1.02 grammes per tonne (Q2 2017: 162,147 tonnes with an average gold content of 1.05 grammes per tonne). The Company also heap leached uncrushed Run of Mine ("ROM") ore. During Q3 2017, Anglo Asian stacked 87,979 tonnes of ROM ore on to heap leach pads with an average gold content of 0.95 grammes per tonne (Q2 2017: 115,559 tonnes with an average gold content of 0.89 grammes per tonne).

 

 

 

During Q3 2017, the Company processed 176,997 tonnes of ore with an average gold content of 2.04 grammes per tonne through the combined agitation leaching and flotation plants (Q2 2017: 176,798 tonnes with an average gold content of 1.69 grammes per tonne).

 

During Q3 2017, the Company produced gold doré containing 12,221 ounces of gold and 4,381 ounces of silver at Gedabek (Q2 2017: 9,131 ounces of gold and 3,266 ounces of silver). During Q3 2017, the agitation leaching plant produced 7,318 and 2,882 ounces of gold and silver, respectively, and the heap leach operations produced 4,903 and 1,499 ounces of gold and silver, respectively. The increase in gold doré production in Q3 2017 was due to the commencement of mining from Ugur in September 2017. Of the 12,221 ounces of gold and 4,381 ounces of silver produced in the quarter, 6,842 ounces of gold and 3,219 ounces of silver were produced in September 2017.

 

During Q3 2017, the flotation plant processed 98,621 tonnes of ore in the form of feed-stock of both milled ore and tailings from the agitation leaching plant (Q2 2017: 133,027 tonnes). The gross metal contained within this feed-stock was 4,662 ounces of gold, 49,163 ounces of silver and 521 tonnes of copper (Q2 2017: 5,753 ounces of gold, 72,115 ounces of silver and 660 tonnes of copper). Copper concentrate of 2,379 dmt was produced containing 385 tonnes of copper and 2,243 ounces of gold (Q2 2017: copper concentrate of 3,203 dmt was produced containing 529 tonnes of copper and 3,005 ounces of gold). SART processing produced 333 dmt of copper concentrate containing 165 tonnes of copper and 4 ounces of gold (Q2 2017: 419 dmt of copper concentrate containing 187 tonnes of copper and 4 ounces of gold).

 

The following table summarises gold doré production and sales at Gedabek for FY 2016 and Q1 to Q3 2017:

 

	Gold produced* (ounces)		Silver Produced* (ounces)		Gold sales** (ounces)		Gold Sales price ($/ounce)
Quarter ended
31 March 2016	13,383		1,958		12,143		1,184
30 June 2016	17,926		2,983		15,661		1,265
H1 2016	31,309		4,941		27,804		1,230
30 Sept 2016	15,407		2,502		12,567		1,332
31 Dec 2016	14,221		2,845		12,995		1,227
H2 2016	29,628		5,347		25,562		1,278
FY 2016	60,937		10,288		53,366		1,253
31 March 2017	9,258		2,447		8,283		1,220
30 June 2017	9,131		3,266		7,406		1,258
H1 2017	18,389		5,713		15,689		1,238
30 Sept 2017	12,221		4,381		9,287		1,286

* 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 2016 and Q1 to Q3 2017:

 

	Concentrate	Copper	Gold	Silver
	production*	content*	content*	content*
2016	(dmt)	(tonnes)	(ounces)	(ounces)
Quarter ended 31 March
SART processing	363	181	12	7,789
Flotation**	1,458	200	607	19,055
Total	1,821	381	619	26,844
Quarter ended 30 June
SART processing	373	195	4	10,047
Flotation**	1,988	302	1,445	39,184
Total	2,361	497	1,449	49,231
Quarter ended 30 Sept
SART processing	418	225	4	7,291
Flotation	1,426	260	1,123	24,106
Total	1,844	485	1,127	31,397
Quarter ended 31 December
SART processing	445	219	7	6,751
Flotation	2,059	359	1,255	40,620
Total	2,504	578	1,262	47,371
2017
Quarter ended 31 March
SART processing	428	210	5	5,523
Flotation	2,312	396	1,815	31,399
Total	2,740	606	1,820	36,922
Quarter ended 30 June
SART processing	419	187	4	4,717
Flotation	3,203	529	3,005	37,735
Total	3,622	716	3,009	42,452
Quarter ended 30 Sept
SART processing	333	165	4	9,097
Flotation	2,379	385	2,243	26,810
Total	2,712	550	2,247	35,907

 

* including Government of Azerbaijan's share.

** certain amounts for flotation production are different to those previously disclosed due to final reconciliation of production and sales.

 

 

The following table summarises total copper concentrate production and sales at Gedabek for FY 2016 and Q1 through Q3 2017. 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 2016	1,821	381	619	26,844	1,319	2,137
30 June 2016	2,361	497	1,449	49,231	1,582	2,977
H1 2016	4,182	878	2,068	76,075	2,901	5,114
30 Sept 2016	1,844	485	1,127	31,397	1,782	3,612
31 Dec 2016	2,504	578	1,262	47,371	2,147	3,865
H2 2016	4,348	1,063	2,389	78,768	3,929	7,477
FY 2016	8,530	1,941	4,457	154,843	6,830	12,591
31 March 2017	2,740	606	1,820	36,922	2,230	4,220
30 June 2017	3,622	716	3,009	42,452	3,166	6,104
H1 2017	6,362	1,322	4,829	79,374	5,396	10,324
30 Sept 2017	2,712	550	2,247	35,907	2,905	5,480

Note that certain figures are different to those previously disclosed due to final reconciliation of concentrate production and sales.

* including Government of Azerbaijan's share

** excludes Government of Azerbaijan's share

 

Net debt

The Company had net debt at 30 September 2017 of $25.2 million, a reduction of $9.4 million since 31 December 2016.      

	$m
Amsterdam Trade Bank	4.9
Gazprombank (Switzerland) Ltd.	4.9
International Bank of Azerbaijan - loan International Bank of Azerbaijan	3.5 0.9
Atlas Copco equipment finance loan YapiKredit Pasha Bank Kapital Bank	0.4 2.4 5.4 1.2
Reza Vaziri - director's loan	3.9
Total Loans	27.5
Cash on hand and at bank	(2.3)
Net debt	25.2

 

 

**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
Susie Geliher	St Brides Partners Ltd	Tel: +44 (0) 20 7236 1177
Lottie Wadham	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 operates the high grade 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. The Company has also started production in September 2017 from its Ugur open pit mine, a recently discovered gold ore deposit at Gedabek.

Gold production for the year ended 31 December 2016 from Gedabek totalled 65,394 ounces with 1,941 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 is 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.