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Q4 & Full Year 2019 Production & Operations Review

Tue, 14th Jan 2020 07:00

RNS Number : 6572Z
Anglo Asian Mining PLC
14 January 2020
 

 

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

 

14 January 2020

 

Anglo Asian Mining plc

Quarter 4 and Full Year 2019 Production and Operations review

 

Full year production of 82,795 gold equivalent ounces calculated at budgeted prices and net cash of $21.2 million at 31 December 2019

 

Anglo Asian Mining plc ("Anglo Asian" or the "Company"), the AIM listed gold, copper and silver producer focused on 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 31 December 2019 ("Q4 2019") and the year ended 31 December 2019 ("FY 2019").

 

Note that all references to "$" are to United States dollars.

 

Overview

 

·    Record revenues anticipated for FY 2019 in excess of $90.0 million driven by sustained gold and increased copper production and strong commodity prices

·    Strong cash generation of $31.3 million before payment of corporation taxes and dividends driven by strong sales and continued operational efficiencies as one of the lowest cash cost gold producers

o Net cash increased to $21.1 million at the end of December 2019 from $6.1 million at the beginning of the year

o Company will make its final debt repayment in early February 2020 delivering on its strategic plan to be debt free

·    82,795 gold equivalent ounces ("GEOs") produced during FY 2019 calculated using budgeted metal prices

o Reportable GEOs marginally lower at 81,399 due to the increase in the market price of gold relative to the market price of copper during the year

 

Anglo Asian CEO Reza Vaziri commented: 

"We have had another strong year, delivering production in line with expectations and also making good progress with our exploration programme. We report our production in gold equivalent ounces which have reduced due to the increase in the market price of gold relative to the market price of copper during the year. Our production calculated as gold equivalent ounces using our budgeted metal prices was 82,795 ounces and within our original production forecast.

 

"The Company's financial performance continues to be exceptional. We have increased net cash in 2019 by $15.1 million, notwithstanding paying dividends of $8.7 million and corporation taxes of $7.5 million in the year. The Company will achieve the significant milestone of becoming debt free early next month when the final installment of the refinancing loan is repaid. This strong cash generation will allow the Company to continue to enhance our announced dividend policy.

 

"The Company is in a strong operational position and robust financial health as we move into 2020. I look forward to updating you on the progress of our exploration programme which we anticipate releasing within quarter one and other activities which the Company will be carrying out during the rest of the year."

 

Production Overview

 

Q4 2019

·    Three per cent. year on year ("y-o-y") decrease in total production to 21,284 GEOs (Q4 2018: 21,945 ounces)

·    Copper production totalled 729 tonnes (Q4 2018: 588 tonnes)

o 113 tonnes from SART processing

o 616 tonnes from flotation

·    Gold production totalled 17,907 ounces (Q4 2018: 18,209 ounces):

o 15,912 ounces contained within gold doré

o 16 ounces from SART processing

o 1,979 ounces from flotation

·    Silver production totalled 41,686 ounces (Q4 2018: 65,822 ounces):

o 3,880 ounces contained within gold doré

o 11,159 ounces from SART processing

o 26,647 ounces from flotation

 

FY 2019

 

·    Total production of 82,795 GEOs (FY 2018: 83,736 GEOs) at budgeted metal prices (81,399 GEOs at actual metal prices)

·    34 per cent y-o-y increase in copper production to 2,210 tonnes (FY 2018: 1,645 tonnes)

·    Four per cent. y-o-y decrease in gold production to 70,098 ounces (FY 2018: 72,798 ounces)

·    Silver production totalled 159,356 ounces (FY 2018: 210,184 ounces)

 

Sales

 

Q4 2019

·    Q4 2019 gold bullion sales of 12,509 ounces at an average of $1,481 per ounce (Q3 2019 gold bullion sales of 14,894 ounces at an average of $1,513 per ounce)

·    Q4 2019 copper concentrate shipments to the customer totalled 3,723 dry metric tonnes ("dmt") with a sales value of $6.9 million (excluding Government of Azerbaijan profit share) (Q3 2019: 2,255 dmt with a sales value of $3.4 million)

FY 2019

·    FY 2019 gold bullion sales of 54,061 ounces at an average of $1,410 per ounce (FY 2018 gold bullion sales of 59,481 ounces at an average of $1,265 per ounce)

·    FY 2019 copper concentrate shipments to the customer totaled 10,264 dmt with a sales value of $17.9 million (excluding Government of Azerbaijan profit share) (FY 2018: 7,675 dmt with a sales value of $15.4 million)

 

Company financials

 

·    Net cash, being cash and cash equivalents less interest-bearing loans and borrowings, totalled $21.2 million at 31 December 2019 (Net cash of $19.1 million at 30 September 2019 and $6.1 million at 1 January 2019)

 

Gedabek - mining, production and sales

 

The Company mined the following ore in the year ended 31 December 2019:

 


9 months to

30 September 2019

3 months to

31 December 2019

12 months to

 31 December 2019

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

1,140,657

0.72

334,621

0.78

1,475,278

0.73

Ugur - o/pit

906,499

1.35

376,938

1.02

1,283,437

1.24

Gadir - u/g

127,028

2.78

20,288

2.43

147,316

2.73

Gosha - u/g

-

-

7,235

2.81

7,235

2.81

Total

2,174,184

1.10

739,082

0.97

2,913,266

1.06

Note that there may have been some minor changes to the previously reported figures following reconciliation of ore stockpiles.

 

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.

 

Anglo Asian stacked 98,280 tonnes of dry crushed ore onto heap leach pads with an average gold content of 0.86 grammes per tonne during Q4 2019 (Q3 2019: 148,269 tonnes with an average gold content of 0.93 grammes per tonne). The Company also heap leached uncrushed Run of Mine ("ROM") ore. During Q4 2019, Anglo Asian stacked 288,583 tonnes of ROM ore onto heap leach pads with an average gold content of 0.49 grammes per tonne (Q3 2019: 261,414 tonnes with an average gold content of 0.46 grammes per tonne).

The Company processed, during Q4 2019, 181,710 dry tonnes of ore with an average gold content of 2.44 grammes per tonne through the agitation leaching plant (Q3 2019: 192,097 dry tonnes with an average gold content of 2.25 grammes per tonne).  125,205 dry tonnes of ore containing an average copper content of 0.63 per cent. were processed by the flotation plant in Q4 2019 (Q3 2019: 127,762 dry tonnes of ore containing an average copper content of 0.55 per cent).

 

During Q4 2019, the Company produced gold doré containing 15,912 ounces of gold and 3,880 ounces of silver at Gedabek (Q3 2019: 16,619 ounces of gold and 4,420 ounces of silver). During Q4 2019, the agitation leaching plant produced 12,647 and 3,037 ounces of gold and silver, respectively, and the heap leach operations produced 3,265 and 843 ounces of gold and silver, respectively.

 

SART processing in Q4 2019 produced 165 dmt of copper concentrate containing 113 tonnes of copper and 16 ounces of gold (Q3 2019: 154 dmt of copper concentrate containing 70 tonnes of copper and 10 ounces of gold). During FY 2019 SART produced 311 tonnes of copper and 45 ounces of gold compared to FY 2018 production of 399 tonnes of copper and 32 ounces of gold.

 

Flotation processing in Q4 2019 produced 3,354 dmt of copper concentrate containing 616 tonnes of copper, 1,979 ounces of gold and 26,647 ounces of silver (Q3 2019: 2,793 dmt of copper concentrate containing 450 tonnes of copper, 1,168 ounces of gold and 17,142 ounces of silver).

 

The following table summarises gold doré production and sales at Gedabek for FY 2018 and FY 2019:

 


Gold produced*

(ounces)            

Silver

Produced*

(ounces)

Gold sales**

(ounces)

Gold Sales price

($/ounce)

Quarter ended





31 March 2018

15,750

7,110

14,956

1,328

30 June 2018

15,537

6,014

10,822

1,307

H1 2018

31,287

13,124

25,778

1,319

30 Sept 2018

18,885

7,416

18,637

1,216

31 Dec 2018

15,444

5,646

15,066

1,231

H2 2018

34,329

13,062

33,703

1,223

FY 2018

65,616

26,186

59,481

1,265






31 March 2019

15,547

6,634

13,191

1,306

30 June 2019

16,073

4,773

13,467

1,332

H1 2019

31,620

11,407

26,658

1,319

30 Sept 2019

16,619

4,420

14,894

1,513

31 Dec 2019

15,912

3,880

12,509

1,481

H2 2019

32,531

8,300

27,403

1,498

FY 2019

64,151

19,707

54,061

1,410

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 the Company's SART and flotation plants at Gedabek for FY 2018 and FY 2019:


Concentrate

Copper 

Gold

Silver


production*

content*

content*

content*

2018

(dmt)

(tonnes)

(ounces)

(ounces)

Quarter ended 31 March





SART processing

223

114

6

22,118

Flotation

819

141

735

11,587

Total

1,042

255

741

33,705






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






Quarter ended 30 September





SART processing

162

81

7

17,357

Flotation

2,501

389

2,437

34,573

Total

2,663

470

2,444

51,930






Quarter ended 31 December





SART processing

109

67

13

14,229

Flotation

3,557

521

2,752

45,947

Total

3,666

588

2,765

60,176






2019





Quarter ended 31 March





SART processing

142

63

11

16,201

Flotation

2,871

450

1,687

28,461

Total

3,013

513

1,698

44,662






Quarter ended 30 June





SART processing

143

65

8

12,794

Flotation

2,252

383

1,068

15,491

Total

2,395

448

1,076

28,285

 

Quarter ended 30 September





SART processing

154

70

10

11,754

Flotation

2,793

450

1,168

17,142

Total

2,947

520

1,178

28,896

 

Quarter ended 31 December





SART processing

165

113

16

11,159

Flotation

3,354

616

1,979

26,647

Total

3,519

729

1,995

37,806

Certain amounts for flotation production may different to those previously disclosed due to final reconciliation of production.

* including Government of Azerbaijan's share.

 

The following table summarises total copper concentrate production and sales at Gedabek for FY 2018 and FY 2019. 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 2018

1,042

255

741

33,705

608

1,715

30 June 2018

1,396

332

1,232

38,187

1,736

4,221

H1 2018

2,438

587

1,973

71,892

2,344

5,936








30 Sept 2018

2,663

470

2,444

51,930

1,557

3,368

31 Dec 2018

3,666

588

2,765

60,176

3,774

6,131

H2 2018

6,329

1,058

5,209

112,106

5,331

9,499

FY 2018

8,767

1,645

7,182

183,998

7,675

15,435








31 March 2019

3,013

513

1,698

44,662

279

718

30 June 2019

2,395

448

1,076

28,285

4,007

6,771

H1 2019

5,408

961

2,774

72,947

4,286

7,492








30 Sept 2019

2,947

520

1,178

28,896

2,255

3,438

31 Dec 2019

3,519

729

1,995

37,806

3,723

6,931

H2 2019

6,466

1,249

3,173

66,702

5,978

10,369

FY 2019

11,874

2,210

5,947

139,649

10,264

17,861








 

* including Government of Azerbaijan's share.

** excludes Government of Azerbaijan's share.

 

FY 2019 production expressed as gold equivalent ounces

The Company calculates the gold equivalent of copper and silver by multiplying the quantity of the metal by its price and then dividing by the price of gold. This is done at the following prices:

For calculation of forecast production: Budget prices set prior to the start of the financial year.

For calculation of actual production: Actual market prices at the time of production.

 

The budgeted prices of gold, silver and copper and their market prices at the start and end of 2019 together with their corresponding gold equivalent ounces are as follows:

 


Price of metal

Gold equivalent ounces of metal

Metal

Budget

 

$

1 January 2019

 

$

31 December 2019

$

Budget

 

Ounces

1 January 2019

 

Ounces

31 December 2019

Ounces

Gold

1,250

1,283

1,517

1.000

1.000

1.000

Silver

15.00

15.51

17.85

0.012

0.012

0.012

Copper

6,100

5,965

6,174

4.880

4.649

4.070

 

The increase in the market price of gold relative to the market price of copper throughout the year has resulted in the steady decrease of one tonne of copper expressed as gold equivalent ounces from 4.88 ounces used for the budget to 4.07 ounces at 31 December 2019.

 

Net cash

The Company had net cash at 31 December 2019 of $21.2 million, an increase in net cash of $2.1 million from $19.1 million at 30 September 2019 and an increase of $15.1 million from $6.1 million at 1 January 2019


$m   

Cash at bank and on hand

22.9

Pasha Bank refinancing loan

(1.7)

Net cash

21.2

 

The Company made payments of $0.5 million in Q4 2019 in respect of corporation tax in Azerbaijan (FY 2019: $7.5 million). The Company paid an interim dividend in Q4 2019 in respect of the financial year 2019 of $4.1 million (FY 2019: total dividends paid of $8.7 million).

 

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

Camilla Horsfall

Blytheweigh Financial

Tel: +44 (0) 20 7138 3224

Megan Ray

Blytheweigh Financial

Tel: +44 (0) 20 7138 3224

 

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 83,736 gold equivalent ounces ('GEOs') for the year ended 31 December 2018.  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.

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.

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
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