Anglo Asian Mining plc ('Anglo Asian' or 'the Company')
Q4 Operations and FY 2011 Update - Gedabek Gold/Copper Mine
Anglo Asian Mining plc, the AIM listed gold producer, is pleased to provide an update for the three months to 31 December 2011 ('Q4 2011') and the year ended 31 December 2011 ('FY 2011') on operations at its flagship Gedabek gold/copper mine ('Gedabek') in Azerbaijan.
· Increased gold production from heap leach processing totalling 15,292 oz at Gedabek for Q4 2011 (Q3 2011: 13,166 oz)
· Production for FY 2011 totals 57,068 oz of gold
· Buoyant gold price - gold sales of 13,376 oz of gold at an average of US$1,688 per oz completed for Q4 2011 and 49,304 oz of gold completed at an average of US$1,573 per oz for FY 2011
· Produced gold at an estimated average cash operating cost of US$450 per oz of gold including the Government of Azerbaijan's share for FY 2011 and US$535 per oz of gold net of the Government of Azerbaijan's share for FY 2011
· Silver dore production for Q4 2011 totalled 6,841 oz and for FY 2011 totalled 39,086 oz
· Operations at Gedabek running in line with management's expectation:
o 190,737 tonnes of dry ore transferred during Q4 2011 onto the leach pad with an average gold content of 3.22 g/t
o 842,751 tonnes of dry ore transferred during FY 2011 onto the leach pad with an average gold content of 3.29 g/t
· Q4 2011 copper, silver and gold production from SART operations totalled 170 tonnes of copper, 38,392 oz of silver and 62 oz of gold
· Total copper concentrate produced significantly increased in 2011 and exceeded 525 tonnes of copper forecast target - 611 tonnes of copper, 134,240 oz of silver and 200 oz of gold (2010: 182.5 tonnes of copper, 46,940 oz of silver and 832 oz of gold)
· Net debt, being interest-bearing loans and borrowings less cash and cash equivalents, reduced from US$25.6 million at 31 December 2010 to US$3.2 million at 31 December 2011
· Cash in the bank as at 31 December 2011 - US$9.8 million
Anglo Asian CEO Reza Vaziri said, "Solid gold production and a favourable gold price has provided for a strong performance in 2011 for Anglo Asian. Our strong operational performance has enabled us to accelerate the repayment of loans, reduce debt ahead of schedule and build a strong cash position, which stood at US$9.8 million at 31 December 2011. Looking ahead to 2012, whilst we remain committed to improving the long-term production efficiency of our flagship Gedabek mine, we expect to see continued solid gold and copper production for the year, positively impacting our bottom line.
"We are also focussed on increasing the Company's total resource base, which based on data available at June 2010 stood at 791,000 oz of gold, 49,300 tonnes of copper and 7,597,000 oz of silver for all categories, by Q1 2012 and in turn to calculate a JORC compliant reserve estimate thereafter.
"Furthermore we remain dedicated to establishing our second mining project in Azerbaijan, Gosha, located 50km away from Gedabek, which will be another significant step for Anglo Asian as we look to become a leading mid-tier gold producer in Caucasia and Central Asia. We look forward to reporting on these developments in due course."
During the quarter ended 31 December 2011, the Company produced 15,292 oz of gold ('Au') at Gedabek from its heap leach operations. This brings total production for the year ended 31 December 2011 to 57,068 oz Au. The strong gold price has seen Anglo Asian completing gold sales* of 13,376 oz Au at an average of US$1,688 per oz for Q4 2011 and gold sales* of 49,304 oz Au at an average of US$1,573 per oz for FY 2011.
The following summary table of gold production and prices highlights the quarter-on-quarter gold production at Gedabek over the past year.
Gold Produced (including Govt. of Azerbaijan's share)
Weighted Average Gold Sale Price
31 Mar 2011
30 Jun 2011
30 Sept 2011
31 December 2011
Total for FY 2011
Anglo Asian estimates that its cash cost of gold produced, including the Government of Azerbaijan's share for FY 2011, was US$450 per oz and the cash cost excluding the Government of Azerbaijan's share is estimated at US$535 per oz. It must be noted that these figures are unaudited and are estimates at this stage.
Gebabek's heap leach processing operations have been performing in line with management's expectations. During the fourth quarter the Company transferred 190,737 tonnes of dry ore onto the leach pad with an average gold content of 3.22 g/t. For the year to 31 December 2011, Anglo Asian has transferred 842,751 tonnes of dry ore onto the leach pad with an average gold content of 3.29 g/t (2010: 821,176 tonnes of dry ore onto the leach pad with an average gold content of 4.33 g/t). This reduction of grade is a result of treating transitional ore whilst developing the mine to expose additional areas of oxide ore.
In terms of improving gold recovery and production at Gebabek both in the short-term and long-term the Company has implemented various initiatives and assessed different process routes. Due to the ongoing changes in the physical characteristics of the ore being transferred to the leach pad during the course of 2011, in Q3/Q4 2011 Anglo Asian took a number of steps to address this which included the acceleration of waste removal to open up new areas of oxide ore, crushing the ore finer to become more accessible to cyanide leaching, and speeding up the construction and extension of heap leach pads to allow the ore to be stacked at a lesser height which will increase leaching rate and reduce lock up of gold in solution.
Furthermore, the Company is pleased to report that the pre-feasibility study assessing the viability and suitability of building a new agitation leaching plant at Gedabek has been completed. The plant, if commissioned, will process high grade ore and additional resources that are not suitable for heap leaching, together with spent ore from the leach heaps to further improve total gold recoveries. Agitation leaching recovery rates are typically measured at over 90% compared to circa 70% normally achieved in heap leaching. We will announce a full update containing the pre-feasibility results and the Board's review of the suitability of a new agitation leaching plant at Gedabek in a separate announcement in due course.
In terms of copper concentrate production from the Company's Sulphidisation, Acidification, Recycling, and Thickening ('SART') plant, production has significantly improved in FY 2011 and exceeded the 525 Cu tonnes target. For FY 2011 copper, silver and gold production from SART operations totalled 611 tonnes Cu, 134,240 oz Ag and 200 oz Au (2010: 182.5 tonnes Cu, 46,940 oz Ag and 832 oz Au). For Q4 2011 copper concentrate production contained 170 tonnes Cu, 38,392 oz Ag and 62 oz Au.
During FY 2011 total sales of copper concentrate have been estimated at US$5.0 million. A large portion of the sales have not been finally settled, with final grade to be agreed, so the sales value remains an estimate at present. The Company currently has copper concentrate stockpiles containing 562 tonnes Cu, 171 oz Au, and 118,000 oz Ag and is in detailed discussion with various parties regarding finding a long-term sales partner. The Company will update on this progress in due course.
During Q4 2011, the Company repaid US$2.0 million of its loan with the International Bank of Azerbaijan ('IBA') bringing the outstanding loan balance with IBA to US$13.0 million as at 31 December 2011. In addition, the Company repaid the final US$0.8 million of its loan with the Company's CEO Reza Vaziri bringing the outstanding loan balance to US$nil. Total outstanding loans as at 31 December 2011 stand at US$13.0 million. This is a US$17.6 debt reduction from US$30.6 million as at 31 December 2010. Cash in the bank as at 31 December 2011 stands at US$9.8 million. Net debt, being interest-bearing loans and borrowings less cash and cash equivalents, reduced from US$25.6 million at 31 December 2010 to US$3.2 million at 31 December 2011.
he Company has a Production Sharing Agreement ('PSA') in place with the Government of Azerbaijan which governs how the production of each of the Company's Contract Areas under the PSA is divided between the Company and the Government of Azerbaijan. Currently, the Company takes ownership of 87.25% of the production at Gedabek, which accounts for the difference between the total gold produced at Gedabek and the amount of gold sold by the Company. It should also be noted that there will always be short-term timing differences between gold production and sales.
Anglo Asian Mining plc (AIM:AAZ) is a gold producer in Central Asia with a broad portfolio of production and exploration assets in Azerbaijan. The Company has a 1,962 sq km prospective exploration portfolio, assembled on the back of analysis of historic Soviet geological data and held under a Production Sharing Agreement ('PSA') based on the Azeri oil industry. The Company developed Azerbaijan's first operating gold/copper mine, Gedabek, which commenced gold production in May 2009. Gold production for the year ended 31 December 2011 totalled 57,068 oz of gold.
Anglo Asian is actively looking to exploit its first mover advantage in Azerbaijan to identify additional projects, as well as looking for other properties in Central Asia and Caucasia in order to fulfil its expansion ambitions and become a mid-tier gold and base metal production company focussed in these regions.
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