TIDMAAZ
RNS Number : 8820G
Anglo Asian Mining PLC
09 March 2015
Anglo Asian Mining plc / Ticker: AAZ / Index: AIM / Sector:
Mining
9 March 2015
Anglo Asian Mining plc
Update on flotation plant to increase copper, gold and silver
production at Gedabek 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 positive update on the development and
construction of its small scale flotation plant at the Gedabek
gold, copper, silver mine, in western Azerbaijan, aimed at
increasing future metal production; and a corporate update on
potential cost savings and the net debt position.
Highlights
-- Construction of the small scale 20 tonne per hour flotation
plant progressing well - the main building has been completed and
the flotation cells are now being installed
-- Small scale flotation plant originally designed to increase
copper production, however, in-house test work and engineering
studies have demonstrated the feasibility of a modified small scale
flotation plant improving not only copper but also gold and silver
recoveries
-- Final design of the small scale flotation plant will
accordingly be modified - plant targeted to be commissioned Q3
2015
-- Additional capital cost of design modifications will be
approximately US$1.0 million to bring the total capital expenditure
to US$4.7 million
-- Recent devaluation of the Azerbaijan manat against the US
dollar expected to result in Company cost savings of approximately
US$6.5 million for the rest of FY 2015
-- Net debt decreased by US$2.0 million to US$50.4 million at 27
February 2015 from US$52.4 million at 31 December 2014
Anglo Asian CEO Reza Vaziri said, "I am delighted to report on
the significant progress being made with regards to the
construction of our small scale flotation plant with commissioning
targeted for Q3 2015. Recent test work and engineering studies have
shown that flotation should enable us to achieve much higher
production of precious metal and copper than previously
anticipated. It should also help solve the issue of the low
recoveries recently being experienced by the agitation leaching
plant, which is the main process to recover gold at Gedabek. In
addition, the revised specification of the small scale flotation
plant will give us flexibility in processing the poly-metallic ore
at Gedabek.
"The recent 34 per cent. devaluation of the Azerbaijan manat
against the US dollar due to the effect of the current low oil
price on the economy is obviously an unwelcome development for
Azerbaijan and its people. However, as a Company which sells its
products for US dollars and which has a significant portion of its
costs in Azerbaijan manats, this will have a beneficial effect for
us."
Full details
Small scale flotation plant
The construction of the small scale flotation plant is
proceeding to plan. The foundations and main building structures
have been installed. The flotation cells are on site and the
installation of the cell stands is 40 per cent. complete. The mills
and agitators have been constructed and are ready for shipment to
site.
The Company has been exploring a number of options to overcome
the lower than expected metal recoveries and high cyanide usage
resulting from the high copper sulphide content of its high grade
ore. In order to demonstrate how the flotation process can be used
to enhance recoveries, in-house test work has shown that by
applying the flotation process to the agitation leaching plant
tailings, overall recoveries can be increased to 80 per cent. for
copper, 70 per cent. for silver and 90 per cent. for gold. The
flotation process can produce a saleable copper concentrate with
approximately 20 per cent. copper content. The tailings require no
further treatment prior to flotation as the material has already
been through grinding and is of a proper size to be treated.
On-going test work is examining the effects on the overall process
of applying flotation to the ore ahead of agitation leaching.
The small scale flotation plant was originally designed as a
pilot to treat different types of ore at Gedabak at a feed rate of
up to 20 tonnes per hour. Further engineering studies have
determined that by the addition of an extra 6 large flotation
cells, each of 50 cubic meters, the plant can be configured to
treat 90 tons of ore per hour which is equivalent to the current
throughput of the agitation leaching plant.
The design of the necessary modifications to the small scale
flotation plant for plant layout, piping and electrical works etc.
has been completed and in such a way to minimise their cost.
Together with the cost of the new flotation cells, the revised
design specification for the modified small scale flotation plant
are expected to add an additional US$1 million, revising its total
cost from US$3.7 million to US$4.7 million.
The modified small scale flotation plant will have the
flexibility to be configured for various methods of operation. It
will be able to process the stockpiles of high copper sulphide ore
as initially envisaged. However, it will now also be able to be
configured to treat ore feed to, or tailings from, the agitation
leaching plant. In such configurations, the plant would no longer
be a pilot but an integral part of the agitation leaching
plant.
Azerbaijan manat devaluation
Over the weekend of 22/23 February, Azerbaijan devalued its
currency by 34 per cent. against the US dollar. The exchange rate
moved from US$1 equals Azerbaijan manat 0.78 to US$1 equals
Azerbaijan manat 1.05. The exchange rate has remained at this rate
since the devaluation.
The future exchange rate of the US dollar against the Azerbaijan
manat is uncertain. Additionally, the devaluation of the Azerbaijan
manat is also likely to cause an increase in the inflation rate in
Azerbaijan. However, the Company has estimated that provided the
exchange rate remains at its new value, and in the absence of
significant Azerbaijan manat inflation, this devaluation will
result in a cost saving for the Company of approximately US$6.5m in
the current year.
Net debt
The Company had net debt at 27 February of US$50.4 million, a
reduction of US$2 million since 31 December 2014. The movement in
net debt was as a result of making the scheduled principal loan
repayment to Amsterdam Trade Bank of US$2.6 million due on 27
February partially offset by an increase in the International Bank
of Azerbaijan working capital facility of US$ 0.5 million and a
decrease in cash balances of US$0.1 million.
**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 Tel: +44 (0) 20 3470
LLP 0470
Nominated Adviser and Broker
-------------------- ------------------------------ ----------------------
Stuart Gledhill SP Angel Corporate Finance Tel + 44 (0) 20 3470
LLP 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 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. Production for the year ended 31 December 2014 from
Gedabek totalled 60,285 ounces of gold 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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