Anglo Asian's mine cuts costs by connecting to grid

(ShareCast News) - Anglo Asian Mining's Gedabek site has been connected to the Azerbaijan national power grid in order to use cheaper power from diesel generators and enable it to expand production.Connection to the Azerbaijan national power grid is expected to generate annual savings of about $2.3m as electricity will be bought from the grid at 3.5 cents per kilowatt hour.It will reduce the 11m litres of diesel fuel consumed a year, and the company's nine existing diesel generators will now no longer be used, but kept as a back-up.The $2.1m cost of installation is expected to be paid back in around a year's time.Chief executive Reza Vaziri said the connection to the Azerbaijan power grid will also enable it to expand production at the Gedabek site, unconstrained by the availability of electrical power.The AIM-listed company also reduced its full year gold production target to between 67,000 to 69,000 ounces from 69,000 and 70,000 ounces, due to a lower grade ore from the Gadir mine and the new power connection.Vaziri added: "Although we are reducing our full year gold production target by 2,000 ounces, the company's recent return to profitability will be now be further enhanced by the cost savings resulting from connection to the power grid and release of power constraints on our processing."Shares in Anglo Asian Mining were up 12.5% to 22.50p at 0941 GMT.