Last checked at 13 Oct 2016 07:00
Anglo Asian Mining plc / Ticker: AAZ / Index: AIM / Sector: Mining
13 October 2016
Anglo Asian Mining plc
Q3 2016 Operations and Production Update - Gedabek gold, copper and silver mine, Azerbaijan
Anglo Asian Mining plc ("Anglo Asian" or "the Company"), the AIM listed gold, copper and silver producer focused in Azerbaijan, is pleased to provide an operations and production update from its Gedabek gold, copper and silver mine ("Gedabek") in western Azerbaijan for the three months to 30 September 2016 ("Q3 2016"). Note that all references to "$" are to United States dollars.
Production overview
· Gold production for Q3 2016 totalled 16,497 ounces - 15,370 ounces contained within gold doré, 4 ounces from SART processing and 1,123 ounces from flotation (Q2 2016: total 19,375 ounces)
· Copper production for Q3 2016 totalled 485 tonnes - 225 tonnes from SART processing and 260 tonnes from flotation (Q2 2016: total 497 tonnes)
· Silver production for Q3 2016 totalled 33,899 ounces - 2,502 ounces contained within gold doré, 7,291 ounces from SART processing and 24,106 ounces from flotation (Q2 2016: total 52,214 ounces)
· Cumulative total production in the nine months to 30 September 2016 (YTDQ3 2016) as follows:
o Gold - 49,874 ounces (YTDQ3 2015: 54,103 ounces)
o Silver - 114,915 ounces (YTDQ3 2015: 10,916 ounces)
o Copper - 1,363 tonnes (YTDQ3 2015: 634 tonnes)
· Gold production target for the year to 31 December 2016 ("FY 2016") remains a total of between 69,000 ounces and 71,000 ounces
· Copper production target for FY 2016 is between 1,700 tonnes and 2,100 tonnes
Operational update
· New Semi-Autogenous Grinding ("SAG") mill now operational - ore milled by the agitation leaching plant in Q3 2016 increased to 160,211 tonnes from 151,649 tonnes in Q2 2016 partially offsetting lower ore gold grade
· Work on construction of electrical sub-station and associated overhead power lines now substantially complete
· Water treatment plant and water evaporation initiatives proceeding to plan with equipment now being manufactured
· Stockpiled sulphide ore used for feedstock for the flotation plant in Q3 2016
Sales
· Q3 2016 gold bullion sales of 12,567 ounces at an average of $1,332 per ounce (Q2 2016 gold bullion sales of 15,661 ounces at an average of $1,265 per ounce)
· Q3 2016 copper concentrate shipments to the customer totalled 1,702 dry metric tonnes ("dmt") with a sales value of $3.5 million (excluding Government of Azerbaijan profit share) (Q2 2016: 1,582 tonnes with a sales value of $3.0 million)
Company financials
· Net debt, being interest-bearing loans and borrowings less cash and cash equivalents, totalled $37.7 million at 30 September 2016 ($40.8 million at 30 June 2016)
· 18,000 ounces of gold bullion sales in H2 2016 were hedged at no cost with a minimum and maximum sales price per ounce of $1,200 and $1,426 respectively. 10,500 ounces of these hedged sales have now expired at no gain or loss to the Company
Anglo Asian CEO Reza Vaziri said "Anglo Asian continues to make solid progress in developing its mining operations. Whilst production during the period was impacted due to slightly later than anticipated commissioning of the second SAG mill, total tonnes milled during the quarter increased which partially offset the lower gold grades encountered. The utilisation of stockpiled sulphide ore as feedstock for the flotation plant is another positive development for Anglo Asian. The Company continues with its cost reduction and sustainability initiatives, and the connection of the Gedabek site to the national power grid by the end of next month will be another milestone."
Gedabek - mining, production and sales
During Q3 2016, the Company mined 409,572 tonnes of ore from its Gedabek open pit (Q2 2016: 491,210 tonnes) and 27,582 tonnes of ore with an average content of 5.13 grammes per tonne from its Gadir underground mine (Q2 2016: 37,732 tonnes average grade content of 6.43 grammes per tonne).
As previously reported, low grade ore (less than 1.5 grammes per tonne of gold) is being treated by heap leaching, whilst higher grade ore (more than 1.5 grammes per tonne of gold) is being processed through the agitation leaching plant.
During Q3 2016, Anglo Asian stacked 92,437 tonnes of dry crushed ore on to heap leach pads with an average gold content of 1.21 grammes per tonne (Q2 2016: 110,202 tonnes with an average gold content of 1.36 grammes per tonne). The Company also heap leached uncrushed Run of Mine ("ROM") ore. During Q3 2016, Anglo Asian stacked 190,185 tonnes of ROM ore on to heap leach pads with an average gold content of 0.80 grammes per tonne (Q2 2016: 263,432 tonnes with an average gold content of 0.76 grammes per tonne).
During Q3 2016, the Company processed 160,211 tonnes of ore with an average gold content of 2.50 grammes per tonne through the agitation leaching plant (Q2 2016: 151,649 tonnes with an average gold content of 3.59 grammes per tonne).
There was a 77 per cent. gold recovery in agitation leaching for Q3 2016 (Q2 2016: 74 per cent.). Gold doré is produced from both heap and agitated leach intermediate solutions, which are combined for final processing and also re-circulated around the plant, heap leach pads and tailings dam. Heap leaching is a long term process and recoveries are therefore only estimates calculated from available metallurgical statistics.
During Q3 2016, the Company produced gold doré containing 15,370 ounces of gold and 2,502 ounces of silver at Gedabek (Q2 2016: 17,926 ounces of gold and 2,983 ounces of silver). During Q3 2016, the agitation leaching plant produced 9,908 and 1,692 ounces of gold and silver, respectively, and the heap leach operations produced 5,462 and 810 ounces of gold and silver, respectively.
During Q3 2016, 134,770 dmt of agitation leaching plant tailings were processed by the flotation plant. The gross metal contained within this feed-stock was 3,498 ounces of gold, 75,017 ounces of silver and 514 tonnes of copper. Copper concentrate of 1,426 dmt was produced containing 260 tonnes of copper, 1,123 ounces of gold and 24,106 ounces of silver. SART processing produced 418 dmt of copper concentrate containing 225 tonnes of copper, 4 ounces of gold and 7,291 ounces of silver.
The following table summarises gold doré production and sales at Gedabek for FY 2015 and Q1 through Q3 2016:
| Gold produced* (ounces) | Silver produced* (ounces) | Gold sales** (ounces) | Gold sales price ($/ounce) |
Quarter ended |
|
|
|
|
31 March 2015 | 17,185 | 597 | 17,206 | 1,214 |
30 June 2015 | 18,739 | 900 | 16,088 | 1,193 |
H1 2015 | 35,924 | 1,497 | 33,294 | 1,204 |
|
|
|
|
|
30 Sept 2015 | 18,158 | 907 | 14,871 | 1,123 |
31 Dec 2015 | 17,588 | 1,858 | 15,759 | 1,108 |
H2 2015 | 35,746 | 2,765 | 30,630 | 1,115 |
FY 2015 | 71,670 | 4,262 | 63,924 | 1,161 |
|
|
|
|
|
31 March 2016 | 13,383 | 1,958 | 12,058 | 1,184 |
30 June 2016 | 17,926 | 2,983 | 15,661 | 1,265 |
H1 2016 | 31,309 | 4,941 | 27,719 | 1,230 |
30 Sept 2016 | 15,370 | 2,502 | 12,567 | 1,332 |
* including Government of Azerbaijan's share.
** excluding Government of Azerbaijan's share.
The following table summarises copper concentrate production from both its SART and flotation plants for Q1 through Q3 2016:
| Concentrate | Copper | Gold | Silver |
| production* | content* | content* | content* |
2016 | (dmt) | (tonnes) | (ounces) | (ounces) |
Quarter ended 31 March |
|
|
|
|
SART processing | 363 | 181 | 12 | 7,789 |
Flotation** | 1,458 | 200 | 607 | 19,055 |
Total | 1,821 | 381 | 619 | 26,844 |
|
|
|
|
|
Quarter ended 30 June |
|
|
|
|
SART processing | 373 | 195 | 4 | 10,047 |
Flotation** | 1,988 | 302 | 1,445 | 39,184 |
Total | 2,361 | 497 | 1,449 | 49,231 |
|
|
|
|
|
Quarter ended 30 Sept |
|
|
|
|
SART processing | 418 | 225 | 4 | 7,291 |
Flotation | 1,426 | 260 | 1,123 | 24,106 |
Total | 1,844 | 485 | 1,127 | 31,397 |
* including Government of Azerbaijan's share.
** certain figures for flotation production are different to those previously disclosed due to final reconciliation of production and sales.
The following table summarises total copper concentrate production and sales at Gedabek for FY 2015 and Q1 through Q3 2016. 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 2015 | 298 | 182 | 8 | 1,354 | 234 | 660 |
30 June 2015 | 391 | 236 | 6 | 3,627 | 372 | 1,076 |
H1 2015 | 689 | 418 | 14 | 4,981 | 606 | 1,736 |
|
|
|
|
|
|
|
30 Sept 2015 | 406 | 216 | 7 | 3,532 | 279 | 661 |
31 Dec 2015 | 955 | 335 | 341 | 15,851 | 817 | 1,285 |
H2 2015 | 1,361 | 551 | 348 | 19,383 | 1,096 | 1,946 |
FY 2015 | 2,050 | 969 | 362 | 24,364 | 1,702 | 3,682 |
|
|
|
|
|
|
|
31 March 2016*** | 1,821 | 381 | 619 | 26,844 | 1,330 | 2,137 |
30 June 2016*** | 2,361 | 497 | 1,449 | 49,231 | 1,582 | 3,019 |
H1 2016 | 4,182 | 878 | 2,068 | 76,075 | 2,912 | 5,156 |
|
|
|
|
|
|
|
30 Sept 2016 | 1,844 | 485 | 1,127 | 31,397 | 1,702 | 3,467 |
* including Government of Azerbaijan's share.
** excluding Government of Azerbaijan's share.
*** certain figures are different to those previously disclosed due to final reconciliation of concentrate production and sales.
Gedabek - operational update
Work on constructing the electrical sub-station and associated overhead power lines is substantially complete. The two transformers and ancillary power equipment have been installed at the Gedabek site and the pylons and overhead cables erected. It is expected that the site will be connected to the national electricity grid by the end of November.
Stockpiled sulphide ore has now been used as feedstock for the flotation plant. The ore was crushed and then milled by the flotation plant before treatment. From 1 September to 10 October, 4,600 tonnes of ore grading 0.8 per cent. copper and 1.5 grammes per tonne of gold was treated by the flotation plant.
The water treatment plant is now being manufactured by the supplier and is expected to be installed at site at the beginning of Q2 2017 with a target start-up date of end April 2017. The water evaporation equipment is expected to be received and installed by the end of 2016.
Net debt
The Company had net debt at 30 September 2016 of $37.7 million, a reduction of $11.3 million since 31 December 2015.
| $m |
Amsterdam Trade Bank - Agitation plant loan | 19.7 |
International Bank of Azerbaijan - loan International Bank of Azerbaijan - letter of credit financing | 8.2 0.5 |
Atlas Copco equipment finance loan YapiKredit Pasha Bank Reza Vaziri - director's loan | 1.0 0.9 4.2 3.9 |
Total Loans | 38.4 |
Cash on hand and at bank | (0.7) |
Net debt | 37.7 |
**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 |
Ewan Leggat | SP Angel Corporate Finance LLP Nominated Adviser and Broker | Tel: +44 (0) 20 3470 0470 |
Laura Harrison | SP Angel Corporate Finance LLP | Tel + 44 (0) 20 3470 0470 |
Lottie Brocklehurst | St Brides Partners Ltd | Tel: +44 (0) 20 7236 1177 |
Susie Geliher | 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 developed Azerbaijan's first operating gold/copper/silver mine, Gedabek, which commenced gold production in May 2009. Gedabek is an open cast mine with a series of interconnected pits. The Company is also mines high grade ore from the Gadir underground mine which is co-located at the Gedabek site. 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.
Gold production for the year ended 31 December 2015 from Gedabek totalled 72,032 ounces with 969 tonnes of copper also produced. Gedabek is a polymetallic deposit and its ore has a high copper content, and as a result the Company produces copper concentrate from its Sulphidisation, Acidification, Recycling, and Thickening (SART) plant. Anglo Asian also produces a copper and precious metal concentrate from its flotation plant, which commenced production in the last quarter of 2015. This is initially processing tailings from the agitation leach plant.
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.