TIDMAAZ
RNS Number : 9024K
Anglo Asian Mining PLC
16 April 2018
Anglo Asian Mining plc / Ticker: AAZ / Index: AIM / Sector:
Mining
16 April 2018
Anglo Asian Mining plc
Q1 2018 Production and operations review
Anglo Asian Delivers 26 per cent. Increase in Year-on-Year
Production and Further Reduction in net debt of $7.9 million
Anglo Asian Mining plc ("Anglo Asian" or the "Company"), the AIM
listed gold, copper and silver producer focused in Azerbaijan, is
pleased to provide a production, sales and operations review for
its Gedabek gold, copper and silver mining and production contract
area ("Gedabek") in western Azerbaijan for the three months to 31
March 2018 ("Q1 2018").
Note that all references to "$" are to United States
dollars.
Overview
-- 26% increase in year-on-year gold equivalent ounces ("GEOs")
production highlights strong growth trajectory following
implementation of expansion and optimisation programme at Gedabek
in 2017
-- 18,307 GEOs produced during Q1 2018 (Q1 2017: 14,577 GEOs) -
historically the Company's weakest production quarter
-- Net debt reduced by 43% during Q1 2018 to $10.4 million at 31
March 2018 (31 December 2017: $18.3 million)
-- Gross cash of $8.6 million at 31 March 2018
-- Reconfiguration of processing facilities successfully
initiated in March 2018 to utilise the combined flotation and
agitation leaching plants
-- Optionality of the processing configuration highlights
flexibility of operations in order to maximise production depending
on composition of plant feedstock
Anglo Asian CEO Reza Vaziri commented, "This has again been
another excellent quarter for the Company given that production in
the first quarter of the year is always our lowest due to the
winter weather conditions. This strong increase in performance can
be attributed to the optimisation and expansion initiatives which
we implemented during the course of 2017, and, perhaps most
importantly, the commencement of production from our new Ugur open
pit.
"The increased production that Anglo Asian is now achieving,
coupled with improved metal prices, is flowing through strongly to
our cash generation. I am delighted to report that net debt was
further reduced by $7.9 million during Q1 2018, down from $33.1
million at end March 2017, with a healthy gross cash balance of
$8.6 million at the end of the period.
"The discovery of new potential mines, such as Ugur, together
with the conversion of already known but under-explored prospects
across our contract lease areas, is crucial to the continued growth
and enhancement of our total production profile. With this in mind,
I look forward to reporting on our exploration and appraisal
activities over the coming months as we look to continue and
increase the upward trajectory in production that we are now
delivering."
Production overview
-- 26% year-on-year increase in GEO production to 18,307 GEOs (Q1 2017: 14,577 ounces)
-- 49% year-on-year increase in gold production to 16,479 ounces (Q1 2017: 11,078 ounces):
o 15,738 ounces contained within gold doré
o 6 ounces from SART processing
o 735 ounces from flotation
-- Copper production for Q1 2018 totalled 255 tonnes (Q1 2017: 606 tonnes):
o 114 tonnes from SART processing
o 141 tonnes from flotation processing in March
-- Silver production for Q1 2018 totalled 40,583 ounces (Q1 2017: 39,369 ounces):
o 7,109 ounces contained within gold doré
o 21,887 ounces from SART processing
o 11,587 ounces from flotation
Sales overview
-- Q1 2018 gold bullion sales of 14,956 ounces at an average of
$1,328 per ounce (Q1 2017: 8,283 ounces at an average of $1,220 per
ounce)
-- Q1 2018 copper concentrate shipments to the customer totalled
608 dry metric tonnes ("dmt") with a sales value of $1.7 million
(excluding Government of Azerbaijan production share) (Q1 2017:
2,230 dmt with a sales value of $4.2 million)
Company financials
-- Net debt, being interest-bearing loans and borrowings, less
cash and cash equivalents, totalled $10.4 million at 31 March 2018
($18.3 million at 31 December 2017)
Operations review
The Company mined the following ore in the 3 months ended 31
March 2018:
12 months to
31 December 3 months to
2017 31 March 2018
-------------------- --------------------
Average Average
gold gold
Mine Ore mined grade Ore mined grade
(tonnes) (g/t) (tonnes) (g/t)
---------- ---------- -------- ---------- --------
Open pit 712,444 1.18 28,326 0.92
Ugur -
o/pit 238,818 3.20 288,214 0.96
Gadir
- u/g 80,614 3.56 19,948 5.86
Gosha
- u/g 28,284 3.99 - -
---------- ---------- -------- ---------- --------
Total 1,060,160 1.89 336,488 1.25
========== ========== ======== ========== ========
The lower grade of ore mined from Ugur in Q1 2018 with an
average gold content of 0.96 g/t of gold was because 198,564 tonnes
of ore of with an average gold content of 0.57 g/t of gold was
mined for heap leaching.
Anglo Asian stacked 170,655 tonnes of dry crushed ore on to heap
leach pads with an average gold content of 0.92 g/t of gold (Q4
2017: 201,097 tonnes with an average gold content of 0.86 g/t of
gold) in the quarter. The Company also heap leached uncrushed Run
of Mine ("ROM") ore. During Q1 2018, Anglo Asian stacked 188,364
tonnes of ROM ore on to heap leach pads with an average gold
content of 0.51 g/t of gold (Q4 2017: 99,046 tonnes with an average
gold content of 0.68 g/t of gold).
The Company changed the configuration of its processing
facilities in March 2018 in conjunction with the recommencement of
mining at the Gedabek main open pit. Ore from the main open pit
together with stockpiled ore was treated initially by flotation and
then by agitation leaching. This configuration will continue until
the second crusher line is commissioned, when the flotation plant
can operate as a stand-alone processing facility, which is
anticipated during the current quarter. In Q1 2018, flotation
processing produced 819 dmt of copper concentrate containing 141
tonnes of copper and 735 ounces of gold.
The Company processed 184,846 dry tonnes of ore with an average
gold content of 2.07 g/t of gold through the agitation leaching
plant (Q4 2017: 211,421 tonnes with an average gold content of 2.92
g/t of gold through the combined agitation leaching and flotation
plants) in the quarter.
The Company produced gold doré containing 15,738 ounces of gold
and 7,109 ounces of silver at Gedabek (Q4 2017: 21,924 ounces of
gold and 12,634 ounces of silver) in the quarter. During Q1 2018,
the agitation leaching plant produced 10,629 and 4,877 ounces of
gold and silver, respectively, and the heap leach operations
produced 5,109 and 2,232 ounces of gold and silver,
respectively.
SART processing produced 223 dmt of copper concentrate
containing 114 tonnes of copper and 6 ounces of gold (Q4 2017: 256
dmt of copper concentrate containing 119 tonnes of copper and 7
ounces of gold) in the quarter.
The Company sold 608 dmt of copper concentrate in Q1 2018 for
$1.7 million compared to 198 dmt for $0.9 million in Q4 2017
(excluding Government of Azerbaijan production share). The lower
average selling price per tonne in Q1 2018 was because 432 tonnes
(Q4 2017 - nil) of the concentrate sold was produced by flotation
processing which has a much lower average copper content than
concentrate produced by SART processing.
The following table summarises gold doré production and sales at
Gedabek for FY 2017 and Q1 2018:
Gold produced* Silver Gold sales** Gold Sales
(ounces) Produced* (ounces) price
(ounces) ($/ounce)
Quarter ended
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
31 Dec 2017 21,924 12,634 18,520 1,278
H2 2017 34,145 17,015 27,807 1,281
FY 2017 52,534 22,728 43,496 1,265
31 March 2018 15,738 7,109 14,956 1,328
-------------- -------------- ----------- ------------- ----------
NOTE
* including Government of Azerbaijan's share
** excludes Government of Azerbaijan's share
The following table summarises copper concentrate production
from both its SART and flotation plants for FY 2017 and Q1
2018:
Concentrate Copper Gold Silver
production* content* content* content*
(dmt) (tonnes) (ounces) (ounces)
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
Quarter ended 31
December
SART processing 256 119 7 34,844
Flotation - - - -
Total 256 119 7 34,844
2018
Quarter ended 31
March
SART processing 223 114 6 21,887
Flotation 819 141 735 11,587
Total 1,042 255 741 33,474
------------------ ------------ --------- --------- ---------
* including Government of Azerbaijan's share.
Note that 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 2017 and Q1 2018. 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
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
31 Dec
2017 256 119 7 34,844 198 854
H2 2017 2,968 669 2,254 70,751 3,103 6,334
FY 2017 9,330 1,991 7,083 150,125 8,499 16,658
31 March
2018 1,042 255 741 33,474 608 1,715
---------- ------------ --------- --------- --------- ------------- --------------
* including Government of Azerbaijan's share.
** excluding Government of Azerbaijan's share.
Note that certain figures are different to those previously
disclosed due to final reconciliation of concentrate production and
sales.
Company financial review
Net debt
The Company had net debt at 31 March 2018 of $10.4 million, a
reduction of $7.9 million since 31 December 2017.
$m
International Bank of Azerbaijan 0.9
Kapital Bank 1.0
Pasha Bank - refinancing loan 13.5
Pasha Bank - other loans 3.5
Atlas Copco equipment finance loan 0.1
Total loans 19.0
Cash on hand and at bank (8.6)
-----
Net debt 10.4
-----
The loan from Reza Vaziri of $3.9 million was fully repaid in
March 2018 from the proceeds of the Pasha Bank refinancing
loan.
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:
Anglo Asian Mining Tel: +994 12 596
Reza Vaziri plc 3350
----------------- ------------------- ------------------
Anglo Asian Mining Tel: +994 502 910
Bill Morgan plc 400
----------------- ------------------- ------------------
Anglo Asian Mining Tel: +994 502 916
Stephen Westhead plc 894
----------------- ------------------- ------------------
Ewan Leggat SP Angel Corporate Tel: +44 (0) 20
Finance LLP 3470 0470
Nominated Adviser
and Broker
----------------- ------------------- ------------------
Soltan Tagiev SP Angel Corporate Tel + 44 (0) 20
Finance LLP 3470 0470
----------------- ------------------- ------------------
Susie Geliher St Brides Partners Tel: +44 (0) 20
Ltd 7236 1177
----------------- ------------------- ------------------
Lottie Wadham St Brides Partners Tel: +44 (0) 20
Ltd 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's main operating location is the Gedabek contract
area ("Gedabek") which is a 300 square kilometer area in the lower
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 71,461 gold equivalent ounces ('GEOs') for
the year ended 31 December 2017. Gedabek is a polymetallic project
which demonstrates a high copper content at the main open pit mine,
and an oxide gold-rich zone at Ugur. The Company therefore employs
a series of flexible processing routes through which to optimise
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, which is processing tailings from the agitation
leach plant. A second dedicated crusher line is also currently
being installed for the flotation plant to enable it to operate
independently of the agitation leaching plant.
The Company has forecast production for FY 2018 of between
78,000 to 84,000 GEOs an increase for the mid-point of this
guidance of over 13 per cent. compared to FY 2017 production of
71,461 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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