Anglo Asian Regulatory News (AAZ)

RNS Number : 5662G

Anglo Asian Mining PLC

03 February 2010

 

Anglo Asian Mining plc / Ticker: AAZ / Index: AIM / Sector: Mining

3 February 2010

Anglo Asian Mining plc ('Anglo Asian' or 'the Company')

Operations Update

 

Anglo Asian Mining plc, the AIM listed emerging gold producer, is pleased to provide an operations update at its Gedabek gold/copper mine ('Gedabek') in Azerbaijan, including gold production analysis and the conclusion of increased monthly gold sales during the three months to January 2010.

 

The Company produced 3,483 oz of gold ('Au') in the month ended 31 January 2010, bringing total production to 14,848 oz. As can be seen from the following table, this represents the latest increase in the positive trend experienced since July 2009 when the Company commenced gold production.

 

Month	Gold Produced (Including Govt. of Azerbaijan's share) (oz)	Weighted Average Gold Sale Price (US$)
July 2009	802	944
August 2009	751	951
September 2009	2,192	997
October 2009	2,208	1,037
November 2009	2,549	1,129
December 2009	2,863	1,105
January 2010	3,483	1,112

 

It should be noted that under the Production Sharing Agreement, the Government of Azerbaijan receive 12.75% of gold produced until Anglo Asian has recovered its capital, operating and financing costs in full at which point the Government of Azerbaijan is then entitled to a 51% share of profit.

 

In terms of processing, during November and December 2009, 27,000 tonnes and 62,000 tonnes of dry ore with an average gold content of 4.59 g/t and 4.04 g/t were crushed and transferred to the leach pad respectively. For the month of January 2010, the Company transferred a further 59,000 tonnes of dry ore onto the leach pad with an average gold content of 4.7 g/t. Anglo Asian anticipates that it will see ongoing increases in production during 2010. As such, the Board is hopeful that it will exceed its revised production target for the first 12 months of operation to 30 June 2010 of 25,000 oz Au while simultaneously benefiting from the buoyant gold price.

 

The improved plant's performance and production figures can be attributed to the Company's operational initiatives put in place in July/ August 2009 to overcome initial start-up technical difficulties at the plant. These initiatives included installing two new cone crushers, which were fitted and completed at the end of September 2009 to improve operational consistency. Anglo Asian also installed an additional tertiary cone crusher and has sourced a reconditioned cone crusher that will be introduced as a standby for the secondary cone crusher to increase the plant's operational flexibility. The Company is also purchasing a new stacker system, which it is planning to be operational by April 2010.

 

Additionally, in October 2009 the Company appointed a new Operations Manager, Timothy van Zellar, to oversee Gedabek on a day-to-day basis and strengthen its management team within Azerbaijan. Timothy has over 30 years experience in the mining industry having worked for many large scale mining operations in Zimbabwe, South Africa, Uzbekistan and Kazakhstan and specialises in heap leach operations.

 

Anglo Asian CEO Reza Vaziri said, "We are delighted with the gold production increases seen over the past few months and hope that, having overcome the initial teething problems, this growth will continue. Our focus is now on achieving full ramp-up of production at Gedabek, to realise the mine's potential and profit from being the first gold producer in Azerbaijan."

 

As previously stated in the Company's interim results 25 September 2009, should operating costs increase significantly, ramp-up be delayed further or revenues otherwise fall short of expectations, there may be insufficient cash flow for the Group to sustain its day to day operations without seeking and relying on further financing. Accordingly, the Company continues to monitor the situation carefully, but is pleased with the recent improvements in production and cash flow.

 

**ENDS**

 

For further information please visit www.aamining.com or contact:

Reza Vaziri	Anglo Asian Mining plc	Tel: +994 12 596 3350
Andrew Herbert	Anglo Asian Mining plc	Tel: +994 12 596 3350
John Harrison	Numis Securities Limited, as Nominated Adviser	Tel: +44 (0) 20 7260 1000
James Black	Numis Securities Limited, as Corporate Broker	Tel: +44 (0) 20 7260 1000
Hugo de Salis	St Brides Media & Finance Ltd	Tel: +44 (0) 20 7236 1177 / +44 (0) 7967 496 863
Felicity Edwards	St Brides Media & Finance Ltd	Tel: +44 (0) 20 7236 1177 / +44 (0) 7748 843 871

 

Notes:

Anglo Asian Mining plc (AIM:AAZ) is an emerging 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. 

 

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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