Last checked at 17 Jul 2018 07:00
Anglo Asian Mining plc / Ticker: AAZ / Index: AIM / Sector: Mining
17 July 2018
Anglo Asian Mining plc
Q2 & H1 2018 Production and Operations Review
22 per cent. year-on-year increase in total production for H1 2018 and net debt reduced in Q2 2018 by $7.5 million to $2.9 million
Anglo Asian Mining plc ("Anglo Asian" or the "Company"), the AIM listed gold, copper and silver producer focused in Azerbaijan, is pleased to provide a production, sales and operations review for its Gedabek gold, copper and silver mining and production contract area ("Gedabek") in western Azerbaijan for the three months to 30 June 2018 ("Q2 2018") and six months to 30 June 2018 ("H1 2018").
Note that all references to "$" are to United States dollars.
Overview
· Continued improvement in total production in Q2 2018 expressed as gold equivalent ounces ("GEOs") with a four per cent. quarter-on-quarter and a 19 per cent. year-on-year ("y-o-y") increase to 19,042 GEOs
· 22 per cent. y-o-y increase in H1 2018 total production to 37,349 GEOs
· Net debt reduced to $2.9 million at end of June 2018 and all debt repaid except for the Pasha Bank low cost refinancing loan by 5 July 2018
· Second crusher line now in operation at Gedabek with the agitation leaching and flotation plants now processing independently
Anglo Asian CEO Reza Vaziri commented, "Thanks to the successful completion of several initiatives, both operational and financial, Anglo Asian has delivered excellent performance in both the second quarter and first half of 2018. Our production from Gedabek continues on its upward trajectory with a 22 per cent. year on year increase in total production measured as gold equivalent ounces for the first half and we expect to see increased copper production this current quarter now the second crusher line is operating.
"The increase in total production has resulted in an outstanding financial performance with net debt in the quarter reducing by $7.5 million to $2.9 million. Furthermore, Anglo Asian had repaid all the Group's outstanding borrowings in early July, save for the Pasha Bank refinancing loan which bears interest at a fixed 7 per cent. - a rate which is considerably lower than Anglo Asian's recent average cost of borrowing.
"Our operations are moving up a gear with the new Ugur mine and second crusher line adding significantly to our production capacity and, I believe, we are well placed to meet our FY 2018 production target of between 78,000 to 84,000 gold equivalent ounces. We are accordingly creating a sound financial position from which to announce and pay a maiden dividend, in line with our previous announcements, following completion of the share capital reduction proposed in the recent circular to Shareholders."
Production Overview
Q2 2018
· 19 per cent. y-o-y increase in total production to 19,042 GEOs (Q2 2017: 15,984 ounces)
· 38 per cent. y-o-y increase in gold production to 16,764 ounces (Q2 2017: 12,140 ounces):
o 15,532 ounces contained within gold doré
o 6 ounces from SART processing
o 1,226 ounces from flotation
· Copper production totalled 332 tonnes (Q2 2017: 716 tonnes):
o 137 tonnes from SART processing
o 195 tonnes from flotation processing
· Silver production totalled 44,201 ounces (Q2 2017: 45,718 ounces):
o 6,014 ounces contained within gold doré
o 21,800 ounces from SART processing
o 16,387 ounces from flotation
H1 2018
· 22 per cent. y-o-y increase in total production to 37,349 GEOs (H1 2017: 30,561 GEOs)
· 43 per cent. y-o-y increase in gold production to 33,255 ounces (H1 2017: 23,218 ounces)
· Copper production totalled 587 tonnes (H1 2017: 1,322 tonnes)
· Silver production totalled 84,785 ounces (H1 2017: 85,087 ounces)
· Well positioned to achieve forecast production for FY 2018 of between 78,000 to 84,000 GEOs
Sales overview
· Q2 2018 gold bullion sales of 10,822 ounces at an average of $1,307 per ounce (Q2 2017: 7,406 ounces at an average of $1,258 per ounce)
· Q2 2018 copper concentrate shipments to the customer totalled 1,736 dry metric tonnes ("dmt") with a sales value of $4.2 million (excluding Government of Azerbaijan production share) (Q2 2017: 3,166 dmt with a sales value of $6.1 million)
Company financials
· Net debt, being interest-bearing loans and borrowings, less cash and cash equivalents, totalled $2.9 million at 30 June 2018 ($10.4 million at 31 March 2018)
· All outstanding borrowings repaid by 5 July 2018, except the Pasha Bank refinancing loan which has a current balance of $11.8 million with a fixed interest rate of 7 per cent. (see RNS dated 12 February 2018 for details of the Pasha Bank refinancing loan facility)
Operations review
The Company mined the following ore in the six months ended 30 June 2018:
| 12 months to 31 December 2017 | 3 months to 31 March 2018 | 3 months to 30 June 2018 | |||
Mine | Ore mined | Average gold grade | Ore mined | Average gold grade | Ore mined | Average gold grade |
| (tonnes) | (g/t) | (tonnes) | (g/t) | (tonnes) | (g/t) |
Open pit | 712,444 | 1.18 | 28,326 | 0.92 | 22,732 | 0.99 |
Ugur - o/pit | 238,818 | 3.20 | 288,214 | 0.96 | 173,168 | 1.87 |
Gadir - u/g | 80,614 | 3.56 | 19,948 | 5.86 | 25,411 | 4.43 |
Gosha - u/g | 28,284 | 3.99 | - | - | - | - |
Total | 1,060,160 | 1.89 | 336,488 | 1.25 | 227,311 | 2.02 |
Anglo Asian stacked 150,573 tonnes of dry crushed ore on to heap leach pads with an average gold content of 0.91 g/t of gold (Q1 2018: 170,655 tonnes with an average gold content of 0.92 g/t of gold) during Q2 2018. The Company also heap leached uncrushed Run of Mine ("ROM") ore. During Q2 2018, Anglo Asian stacked 77,493 tonnes of ROM ore on to heap leach pads with an average gold content of 0.51 g/t of gold (Q1 2018: 188,364 tonnes with an average gold content of 0.51 g/t of gold).
The Company processed 196,107 dry tonnes of ore with an average gold content of 2.19 g/t of gold through the agitation leaching plant (Q1 2018: 184,198 tonnes with an average gold content of 2.07 g/t of gold through the agitation leaching plant) in Q2 2018.
The Company produced gold doré containing 15,532 ounces of gold and 6,014 ounces of silver at Gedabek (Q1 2018: 15,750 ounces of gold and 7,110 ounces of silver) in Q2 2018. During Q2 2018, the agitation leaching plant produced 10,505 and 4,136 ounces of gold and silver, respectively, and the heap leach operations produced 5,027 and 1,878 ounces of gold and silver, respectively.
SART processing in Q2 2018 produced 260 dmt of copper concentrate containing 137 tonnes of copper and 6 ounces of gold (Q1 2018: 223 dmt of copper concentrate containing 114 tonnes of copper and 6 ounces of gold). Flotation processing in Q2 2018 produced 1,396 dmt of copper concentrate containing 195 tonnes of copper and 1,226 ounces of gold (Q1 2018: 819 dmt of copper concentrate containing 141 tonnes of copper and 735 ounces of gold).
The Company sold 1,735 dmt of copper concentrate in Q2 2018 for $4.2 million compared to 608 dmt for $1.7 million in Q1 2018 (excluding Government of Azerbaijan production share).
The following table summarises gold doré production and sales at Gedabek for FY 2017 and H1 2018:
| Gold produced* (ounces) | Silver Produced* (ounces) | Gold sales** (ounces) | Gold Sales price ($/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 | 15,750 | 7,110 | 14,956 | 1,328 |
30 June 2018 | 15,532 | 6,014 | 10,822 | 1,307 |
H1 2018 | 31,282 | 13,124 | 25,778 | 1,319 |
Note that some of the figures in the above table may differ from previously reported due to agreement of final assay.
* 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 at Gedabek for FY 2017 and H1 2018:
| Concentrate | Copper | Gold | Silver |
| production* | content* | content* | content* |
2017 | (dmt) | (tonnes) | (ounces) | (ounces) |
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 |
|
|
|
|
|
Quarter ended 30 June |
|
|
|
|
SART processing | 260 | 137 | 6 | 21,800 |
Flotation | 1,136 | 195 | 1,226 | 16,387 |
Total | 1,396 | 332 | 1,232 | 38,187 |
* including Government of Azerbaijan's share.
The following table summarises copper concentrate production and sales at Gedabek for FY 2017 and H1 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 |
30 June 2018 | 1,396 | 332 | 1,232 | 38,187 | 1,736 | 4,221 |
H1 2018 | 2,438 | 587 | 1,973 | 71,661 | 2,344 | 5,936 |
Note that certain figures are different to those previously disclosed due to final reconciliation of concentrate production and sales.
* including Government of Azerbaijan's share
** excludes Government of Azerbaijan's share
Company financial review
Net debt
The Company had net debt at 30 June 2018 of $2.9 million, a reduction of $7.5 million since 31 March 2018.
| $m |
Kapital Bank | 1.0* |
Pasha Bank - refinancing loan | 11.8 |
Pasha Bank - other loans | 2.6* |
Total loans | 15.4 |
Cash on hand and at bank | (12.5) |
Net debt | 2.9 |
* These loans totalling $3.6 million were repaid by 5 July 2018.
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:
Reza Vaziri | Anglo Asian Mining plc | Tel: +994 12 596 3350 |
Bill Morgan | Anglo Asian Mining plc | Tel: +994 502 910 400 |
Stephen Westhead | Anglo Asian Mining plc | Tel: +994 502 916 894 |
Ewan Leggat | SP Angel Corporate Finance LLP Nominated Adviser and Broker | Tel: +44 (0) 20 3470 0470 |
Soltan Tagiev | SP Angel Corporate Finance LLP | Tel + 44 (0) 20 3470 0470 |
Susie Geliher | St Brides Partners Ltd | Tel: +44 (0) 20 7236 1177 |
Lottie Wadham | St Brides Partners Ltd | Tel: +44 (0) 20 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 lesser 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 ore deposit that has gold together with significant concentrations of copper in the main open pit mine, and an oxide gold-rich zone at Ugur. The Company therefore employs a series of flexible processing routes to optimise metal 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 has recently been commissioned and is now in operation 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.