LONDON (Alliance News) - Anglo Asian Mining PLC Monday said it hit record levels of silver and copper production in the first half of the year as the Gedabek mine in Azerbaijan returned to profitability and allowed the miner to turn to profit.
Anglo Asian turned to a USD3.5 million pretax profit in the first six months of the year from the USD4.1 million loss a year earlier despite revenue falling to USD39.3 million from USD41.8 million, as the gross margin was considerably better and some costs declined slightly.
Gross profit in the half totalled USD9.4 million from only USD1.9 million whilst administrative and finance costs both fell, partly offset by a rise in other operating expenses.
Anglo Asian turned to an operating profit of USD6.0 million in the half, swinging from a USD1.1 million loss a year earlier.
The miner said copper production rose to 969 tonnes from 418 tonnes whilst silver production increased to 90,782 ounces from only 6,478 ounces - both new records for the business - but gold production dipped slightly to 33,837 ounces from 35,938 ounces.
Copper concentrate sales in the period amounted to 2,912 dry metric tonnes which generated revenue of USD5.2 million compared to last year when it sold 606 dry metric tonnes for USD1.7 million.
Those increased sales helped to offset a fall in gold bullion to 27,719 ounces at an average of USD1,230 per ounce compared to 33,294 ounces at USD1,204 per ounce a year ago.
Anglo Asian has 18,000 ounces of gold bullion hedged for the second half at a price between USD1,200 to USD1,426 per ounce.
To put that into perspective, the average cash operating costs dropped to USD546 per ounce from USD736.
Production for the full year, however, has been lowered to 69,000 to 71,000 ounces of gold whilst copper has remained unchanged at 1,700 to 2,100 tonnes.
"I am delighted that your company has returned to profitability and look forward to the rest of 2016 and beyond with optimism. Although the third quarter of 2016 has seen a slower start than budgeted which has resulted in a small reduction in our 2016 target gold production," said Non-Executive Chairman Khosrow Zamani.
Net debt at the end of the period had fallen to USD40.7 million from USD49.0 million at the end of 2015 as operating cashflow rose to USD16.9 million from USD10.7 million. Anglo Asian has a cash balance of USD3.3 million and said capital expenditure in the first half fell to USD6.6 million from USD9.1 million a year ago.
Anglo Asian shares were up 0.8% to 15.25 pence per share on Monday.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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Anglo Asian (AAZ)