Q3 2019 Production and Operations review

 

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

 

15 October 2019

 

Anglo Asian Mining plc

Q3 2019 Production and Operations review

 

Total production for YTD Q3 2019 of 60,122 GEOs and net cash of 19.1 million

 

 

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, sales and operations review for its Gedabek gold, copper and silver mining and production contract area ("Gedabek") in western Azerbaijan for the three and nine months to 30 September 2019 ("Q3 2019" and "YTD Q3 2019" respectively).

 

Note that all references to "$" are to United States dollars.

 

Overview

 

·    Continued improvement in 2019 production expressed as gold equivalent ounces ("GEOs") with a three per cent. quarter-on-quarter increase to 20,227 GEOs (Q2 2019: 19,618 GEOs)

·    YTD Q3 2019 total production of 60,122 GEOs (YTD Q3 2018: 61,761 GEOs)

·    Strong cash generation with $8.5 million generated in the quarter (H1 2019: $9.3 million)

o Cash generation in YTD Q3 2019 of $17.6 million

o $19.1 million net cash at 30 September 2019 ($15.2 million at 30 June 2019)

·    Significant increase in average price of gold bullion sold in Q3 2019 to $1,513 per ounce (H1 2019: $1,319 per ounce) 

·    Full Year 2019 ("FY 2019") Production guidance maintained at lower end of 82,000 to 86,000 GEOs

·    As announced on 18 September 2019, an interim dividend of US$0.035 per share will be paid gross in respect of the year ending 31 December 2019 to shareholders on 31 October 2019

 

Anglo Asian CEO Reza Vaziri commented: "We are delighted to report another successful quarter for the Company with production increasing compared to the previous quarter and strong cash generation helped by the recent increase in the gold price. Production guidance is maintained at the lower end of 82,000 to 86,000 gold equivalent ounces due to the decrease in copper price in relation to the increase in gold price since the start of 2019."

 

Production Overview

 

Q3 2019

·    Total production of 20,227 GEOs (Q3 2018: 24,412 ounces)

·    Gold production of 17,804 ounces (Q3 2018: 21,318 ounces):

o 16,626 ounces contained within gold doré

o 10 ounces from SART processing

o 1,168 ounces from flotation

·    Copper production totalled 521 tonnes (Q3 2018: 470 tonnes):

o 71 tonnes from sulfidisation, acidification, recycling and thickening ("SART") processing

o 450 tonnes from flotation processing

·    Silver production totalled 33,354 ounces (Q3 2018: 59,346 ounces):

o 4,423 ounces contained within gold doré

o 11,789 ounces from SART processing

o 17,142 ounces from flotation

 

YTD Q3 2019

 

·    Total production of 60,122 GEOs (YTD Q3 2018: 61,761 GEOs)

·    Gold production of 52,198 ounces (YTD Q3 2018: 54,573 ounces)

·    Copper production totalled 1,478 tonnes (YTD Q3 2018: 1,057 tonnes)

·    Silver production totalled 117,708 ounces (YTD Q3 2018: 144,362 ounces)

·    Forecast production for FY 2019 at the lower end of 82,000 to 86,000 GEOs

 

Sales

 

·    Q3 2019 gold bullion sales of 14,894 ounces at an average of $1,513 per ounce (Q2 2019 gold bullion sales of 13,467 ounces at an average of $1,332 per ounce)

·    Q3 2019 copper concentrate shipments to the customer totalled 2,255 dry metric tonnes ("dmt") with a sales value of $3.4 million (excluding Government of Azerbaijan profit share) (Q2 2019: 4,007 dmt with a sales value of $6.7 million)

 

Company financials

 

·    Net cash, being cash and cash equivalents less interest-bearing loans and borrowings, totalled $19.1 million at 30 September 2019 (Net cash of $15.2 million at 30 June 2019)

·    Cash generation before payment of final dividend for 2018 in Q3 2019 of $8.5 million with $17.6 million generated YTD Q3 2019

 

 

Gedabek - mining, production and sales

 

The Company mined the following ore in the nine months to 30 September 2019:

 

	6 months to 30 June 2019*		3 months to 30 September 2019		9 months to  30 September 2019
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	817,649	0.72	323,008	0.71	1,140,657	0.72
Ugur - o/pit	568,993	1.53	337,506	1.05	906,499	1.35
Gadir - u/g	89,927	2.70	37,101	2.96	127,028	2.78
Gosha - u/g	-	-	-	-	-	-
Total	1,476,569	1.15	697,615	1.00	2,174,184	1.10

* There have been some minor changes to the previously reported figures following reconciliation of ore stockpiles.

 

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.

 

Anglo Asian stacked 148,269 tonnes of dry crushed ore onto heap leach pads with an average gold content of 0.93 grammes per tonne during Q3 2019 (Q2 2019: 152,173 tonnes with an average gold content of 0.90 grammes per tonne). The Company also heap leached uncrushed Run of Mine ("ROM") ore. During Q3 2019, Anglo Asian stacked 261,414 tonnes of ROM ore onto heap leach pads with an average gold content of 0.46 grammes per tonne (Q2 2019: 286,163 tonnes with an average gold content of 0.49 grammes per tonne).

 

The Company processed 192,097 dry tonnes of ore with an average gold content of 2.25 grammes per tonne through the agitation leaching plant during Q3 2019 (Q2 2019: 176,602 dry tonnes with an average gold content of 2.4 grammes per tonne). 127,762 dry tonnes of ore containing an average copper content of 0.55 per cent. was processed by the flotation plant in Q3 2019 (Q2 2019: 131,161 dry tonnes of ore containing an average copper content of 0.47 per cent.).

 

During Q3 2019, the Company produced gold doré containing 16,626 ounces of gold and 4,423 ounces of silver at Gedabek (Q2 2018: 16,073 ounces of gold and 4,773 ounces of silver). During Q3 2019, the agitation leaching plant produced 12,836 and 3,369 ounces of gold and silver, respectively, and the heap leach operations produced 3,790 and 1,054 ounces of gold and silver, respectively.

 

SART processing in Q3 2019 produced 154 dmt of copper concentrate containing 71 tonnes of copper and 10 ounces of gold (Q2 2019: 143 dmt of copper concentrate containing 67 tonnes of copper and 8 ounces of gold). YTD Q3 2019 SART copper production was 195 tonnes compared to YTD Q3 2018 production of 332 tonnes.

 

Flotation processing in Q3 2019 produced 2,793 dmt of copper concentrate containing 450 tonnes of copper, 1,168 ounces of gold and 17,142 ounces of silver (Q2 2019: 2,252 dmt of copper concentrate containing 383 tonnes of copper, 1,068 ounces of gold and 15,491 ounces of silver).

 

The following table summarises gold doré production and sales at Gedabek for FY 2018 and Q1 to Q3 2019:

 

	Gold produced* (ounces)	Silver Produced* (ounces)	Gold sales** (ounces)	Gold Sales price ($/ounce)
Quarter ended
31 March 2018	15,750	7,110	14,956	1,328
30 June 2018	15,537	6,014	10,822	1,307
H1 2018	31,287	13,124	25,778	1,319
30 Sept 2018	18,885	7,416	18,637	1,216
31 Dec 2018	15,444	5,646	15,066	1,231
H2 2018	34,329	13,062	33,703	1,223
FY 2018	65,616	26,186	59,481	1,265
31 March 2019	15,547	6,634	13,121	1,306
30 June 2019	16,073	4,773	13,467	1,332
H1 2019	31,620	11,407	26,588	1,319
30 September 2019	16,626	4,423	14,894	1,513

Note that some of the figures in the above table may differ from previously reported due to agreement of final assay.

* 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 2018 and Q1 to Q3 2019:

	Concentrate	Copper	Gold	Silver
	production*	content*	content*	content*
2018	(dmt)	(tonnes)	(ounces)	(ounces)
Quarter ended 31 March
SART processing	223	114	6	22,118
Flotation	819	141	735	11,587
Total	1,042	255	741	33,705
Quarter ended 30 June
SART processing	260	137	6	21,800
Flotation	1,136	195	1,226	16,387
Total	1,396	332	1,232	38,187
Quarter ended 30 Sept
SART processing	162	81	7	17,357
Flotation	2,501	389	2,437	34,573
Total	2,663	470	2,444	51,930
Quarter ended 31 December
SART processing	109	67	13	14,229
Flotation	3,557	521	2,752	45,947
Total	3,666	588	2,765	60,176
2019
Quarter ended 31 March
SART processing	142	60	11	16,201
Flotation	2,871	450	1,687	28,461
Total	3,013	510	1,698	44,662
Quarter ended 30 June
SART processing	143	64	8	12,794
Flotation	2,252	383	1,068	15,491
Total	2,395	447	1,076	28,285
Quarter ended 30 September
SART processing	154	71	10	11,789
Flotation	2,793	450	1,168	17,142
Total	2,947	521	1,178	28,931

* including Government of Azerbaijan's share.

Certain amounts for SART and flotation production may different to those previously disclosed due to final reconciliation of production.

 

 

The following table summarises total copper concentrate production and sales at Gedabek for FY 2018 and Q1 to Q3 2019. 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 2018	1,042	255	741	33,705	608	1,715
30 June 2018	1,396	332	1,232	38,187	1,736	4,221
H1 2018	2,438	587	1,973	71,892	2,344	5,936
30 Sept 2018	2,663	470	2,444	51,930	1,557	3,368
31 Dec 2018	3,666	588	2,765	60,176	3,774	6,131
H2 2018	6,329	1,058	5,209	112,106	5,331	9,499
FY 2018	8,767	1,645	7,182	183,998	7,675	15,435
31 March 2019	3,013	510	1,698	44,662	279	718
30 June 2019	2,395	447	1,076	28,285	4,007	6,713
H1 2019	5,408	957	2,774	72,947	4,286	7,431
30 Sept 2019	2,946	521	1,178	28,931	2,255	3,438

.

* including Government of Azerbaijan's share

** excludes Government of Azerbaijan's share

 

Net cash

The Company had net cash at 30 September 2019 of $19.1 million, an increase in cash of $3.9 million from net cash of $15.2 million at 30 June 2019 as follows:

	$m
Cash at bank and on hand	22.5
Pasha Bank refinancing loan	(3.4)
Net cash	19.1

 

In Q3 2019, the Company paid the final dividend for 2018 of $4.6 million and corporation tax of $2.5 million.

 

Market Abuse Regulation (MAR) Disclosure

 

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

 

**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
Camilla Horsfall	Blytheweigh Financial	Tel: +44 (0) 20 7138 3224
Megan Ray	Blytheweigh Financial	Tel: +44 (0) 20 7138 3224

 

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's main operating location is the Gedabek contract area ("Gedabek") which is a 300 square kilometer area in the lesser Caucasus mountains in western Azerbaijan. The Company developed Azerbaijan's first operating gold/copper/silver mine at Gedabek which commenced gold production in May 2009.  Mining at Gedabek was initially from its main open pit which 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, In September 2017, production commenced at the Ugur open pit mine, a recently discovered gold ore deposit at Gedabek. 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 produced 83,736 gold equivalent ounces ('GEOs') for the year ended 31 December 2018.  Gedabek is a polymetallic ore deposit that has gold together with significant concentrations of copper in the main open pit mine, and an oxide gold-rich zone at Ugur. The Company therefore employs a series of flexible processing routes to optimise metal recoveries and efficiencies.  The Company produces gold doré through agitation and heap leaching operations, copper concentrate from its Sulphidisation, Acidification, Recycling, and Thickening (SART) plant and also a copper and precious metal concentrate from its flotation plant.

The Company has forecast production for FY 2019 of between 82,000 to 86,000 GEOs.

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.