TIDMAAZ
RNS Number : 0002T
Anglo Asian Mining PLC
15 July 2020
Anglo Asian Mining plc / Ticker: AAZ / Index: AIM / Sector:
Mining
15 July 2020
Anglo Asian Mining plc
Q2 & H1 2020 Production and Operations Review
Production of 14,819 gold equivalent ounces in Q2 2020
calculated using budget metal prices
Increase in Cash to $29.2 million
Anglo Asian Mining plc ("Anglo Asian" or the "Company"), the AIM
listed gold, copper and silver producer focused in Azerbaijan, is
pleased to provide a production, sales and operations review for
its Gedabek gold, copper and silver mining and production contract
area ("Gedabek") in western Azerbaijan for the three months to 30
June 2020 ("Q2 2020") and six months to 30 June 2020 ("H1
2020").
Note that all references to "$" are to United States
dollars.
Overview
-- Cash increased by $3.2 million to $29.2 million at the end of Q2 2020
-- 14,819 gold equivalent ounces ("GEOs") produced in Q2 2020
calculated using budgeted metal prices
-- Reportable production at actual metal prices of 14,301 GEOs (Q2 2019: 19,618 GEOs)
-- Gold production of 12,048 ounces (Q2 2019: 17,149 ounces)
o Lower gold production in Q2 2020 due to the lower grade of ore
processed from the Gedabek open pit and less ore mined from the
Gadir underground mine
o COVID-19 restrictions had some impact on efficiency at
Gedabek
-- Copper production increased to 648 tonnes (Q2 2019: 448 tonnes)
-- Gold dor é production from 7 May to 22 June 2020 was shipped
to the refiner and 90 per cent. of the Company's share received
prior to the end of June
-- Current FY 2020 production guidance of 75,000 GEOs to 80,000
GEOs and revenue guidance of over $100 million at current metal
prices remains unchanged with various measures being taken to
increase production in the second half of the year
o New portal opened with a decline currently being constructed
to allow underground mining of high-grade ore beneath the Gedabek
open pit starting in Q4 2020
o Previously heap leached ore with high residual gold grades
being recovered from old heaps and reprocessed by agitation
leaching
-- New JORC resource and reserves statements to be released by the end of Q3 2020
-- Baku office remains open
Anglo Asian CEO Reza Vaziri commented :
"The first half of the year has presented a number of challenges
for the Company. However, it is pleasing to note that we have
maintained gold shipments and increased our net cash position by
$3.2 million during the quarter and by $8.0 million since the start
of the year.
"The COVID-19 pandemic has had some effect on our operations at
Gedabek including our second quarter production. Our workforce
remains highly committed but the COVID-19 restrictions in
Azerbaijan have resulted in staff working without rotation
continuously at Gedabek since March with reduced social
interaction. The constraints placed on obtaining supplies,
maintaining equipment and shipping gold have also required extra
effort. Whilst we are largely overcoming the issues, Gedabek is not
yet operating as efficiently as prior to the pandemic.
"The lower gold production than the previous quarter was also a
result of lower than anticipated gold grades. A number of measures
are currently on-going to ensure we meet our production guidance
for the year. These include constructing a new decline to allow
underground mining of the high-grade ore below the Gedabek open pit
and the reprocessing by agitation leaching of previously heap
leached ore with residual high gold grades.
"The gold price continues to perform favourably and, in Q2 2020,
we received an increase of approximately $400 per ounce for gold
bullion sales compared to the same period last year. With prices
expected to remain at these levels, this bodes well for the future
financial performance of the Company.
"I look forward to a more productive second half of the year as
we remain on track to meet our FY 2020 production guidance of
75,000 GEOs to 80,000 GEOs and revenue guidance of over $100
million"
Measures to ensure FY 2020 Guidance is achieved
The Company is carrying out several measures to ensure the FY
2020 Guidance is achieved:
A new portal has been opened and a new decline is being
constructed of approximately 500 metres to access the high-grade
extension of the ore body under the main open pit. It is
anticipated the decline will be completed around the end of the
current quarter depending on the hardness of rock encountered. It
will join the tunnel currently being constructed from the Gadir
underground mine to give the two egresses required to commence
mining. It is anticipated underground mining of Gedabek ore will
begin in Q4 2020.
Around 100,000 tonnes of previously heap leached ore containing
gold grades greater than two grammes per tonne has been identified.
This ore, which was processed in the early years of the Company's
life, will be recovered from the old heaps and retreated by
agitation leaching in H2 2020. The final lift of the tailings dam
wall is almost complete, which is releasing earth-moving equipment
that will be transferred to this task.
Production Overview
Q2 2020
-- Total production of 14,301 GEOs (Q2 2019: 19,618 GEOs)
-- Gold production totalled 12,048 ounces (Q2 2019: 17,149 ounces):
o 11,468 ounces contained within gold doré
o Seven ounces from SART processing
o 573 ounces from flotation
-- Copper production totalled 648 tonnes (Q2 2019: 448 tonnes):
o 151 tonnes from SART processing
o 497 tonnes from flotation processing
-- Silver production totalled 23,884 ounces (Q2 2019: 33,058 ounces):
o 3,449 ounces contained within gold doré
o 10,893 ounces from SART processing
o 9,542 ounces from flotation
H1 2020
-- Total reportable production of 32,501 GEOs (H1 2019: 39,905 GEOs)
-- Gold production totalled 27,922 ounces (H1 2019: 34,394 ounces)
-- Copper production totalled 1,207 tonnes (H1 2019: 963 tonnes)
-- Silver production totalled 58,529 ounces (H1 2019: 84,354 ounces)
-- On track to achieve forecast production for FY 2020 of 75,000 to 80,000 GEOs
Sales overview
-- Q2 2020 gold bullion sales of 12,743 ounces at an average of
$1,713 per ounce (Q2 2019: 13,467 ounces at an average of $1,332
per ounce)
-- Q2 2020 copper concentrate shipments to the customer totalled
3,526 dry metric tonnes ("dmt") with a sales value of $4.8 million
(excluding Government of Azerbaijan production share) (Q2 2019:
4,007 dmt with a sales value of $6.7 million)
Company financials
-- Net cash, being cash less interest-bearing loans and
borrowing equivalents, totalled $29.2 million at 30 June 2020 (
$26.0 million at 31 March 2020)
Operations review
The Company mined the following ore in the six months ended 30
June 2020:
12 months to 3 months to 3 months to
31 December 2019 31 March 2020 30 June 2020
Average Average Average
Mine Ore mined gold grade Ore mined gold grade Ore mined gold grade
(tonnes) (g/t) (tonnes) (g/t) (tonnes) (g/t)
---------- ------------ ---------- ------------ ---------- ------------
Open pit 1,475,278 0.73 292,480 0.86 197,014 0.99
Ugur - o/pit 1,283,437 1.24 285,600 1.08 134,539 0.79
Gadir -
u/g 147,316 2.73 20,243 2.64 26,445 2.48
Gosha -
u/g 7,235 2.81 - - 4,517 2.50
---------- ------------ ---------- ------------ ---------- ------------
Total 2,913,266 1.06 598,323 1.03 362,515 1.04
============== ========== ============ ========== ============ ========== ============
Anglo Asian stacked 139,752 tonnes of dry crushed ore on to heap
leach pads with an average gold content of 0.79 grammes per tonne
of gold during Q2 2020 (Q1 2020: 132,731 tonnes with an average
gold content of 0.84 grammes per tonne of gold). The Company also
heap leached uncrushed Run of Mine ("ROM") ore. During Q2 2020,
Anglo Asian stacked 134,675 tonnes of ROM ore on to heap leach pads
with an average gold content of 0.44 grammes per tonne of gold (Q1
2020: 258,121 tonnes with an average gold content of 0.49 grammes
per tonne of gold).
The Company processed 161,079 dry tonnes of ore with an average
gold content of 1.95 grammes per tonne of gold through the
agitation leaching plant in Q2 2020 (Q1 2020: 163,379 dry tonnes
with an average gold content of 2.53 grammes per tonne of gold).
136,314 dry tonnes of ore containing an average copper content of
0.56 per cent. were processed by the flotation plant (Q1 2020:
126,354 dry tonnes of ore containing an average copper content of
0.49 per cent.).
The Company produced gold doré containing 11,468 ounces of gold
and 3,449 ounces of silver at Gedabek (Q1 2020: 15,041 ounces of
gold and 3,852 ounces of silver) in the quarter. During Q2 2020,
the agitation leaching plant produced 8,139 and 2,440 ounces of
gold and silver, respectively, and the heap leach operations
produced 3,329 and 1,008 ounces of gold and silver,
respectively.
SART processing produced 267 dmt of copper concentrate
containing 151 tonnes of copper, seven ounces of gold and 10,893
ounces of silver in Q2 2020 (Q1 2020: 221 dmt of copper concentrate
containing 114 tonnes of copper, eight ounces of gold and 12,898
ounces of silver).
In Q2 2020, flotation processing produced 2,904 dmt of copper
concentrate containing 497 tonnes of copper, 573 ounces of gold and
9,542 ounces of silver ( Q1 2020, 2,773 dmt of copper concentrate
containing 445 tonnes of copper, 825 ounces of gold and 17,895
ounces of silver).
The Company sold 3,526 dmt of copper concentrate in Q2 2020 for
$4.7 million compared to 2,018 dmt for $2.9 million in Q1 2020 (
excluding Government of Azerbaijan production share).
The following table summarises gold doré production and sales at
Gedabek for FY 2019 and H1 2020:
Gold produced* Silver Gold sales** Gold Sales
(ounces) Produced* (ounces) price
(ounces) ($/ounce)
Quarter ended
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
31 March 2020 15,041 3,852 11,236 1,577
30 June 2020 11,468 3,449 12,743 1,713
H1 2020 26,509 7,301 23,979 1,649
---------------- ---------------- ------------- --------------- ----------
NOTE
* including Government of Azerbaijan's share
** excludes Government of Azerbaijan's share
The following table summarises copper concentrate production
from both the SART and flotation plants for FY 2019 and H1
2020:
Concentrate Copper Gold Silver
production* content* content* content*
(dmt) (tonnes) (ounces) (ounces)
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 Sept
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
2020
Quarter ended 31 March
SART processing 221 114 8 12,898
Flotation 2,773 445 825 17,895
Total 2,994 559 833 30,793
Quarter ended 30 June
SART processing 267 151 7 10,893
Flotation 2,904 497 573 9,542
Total 3,171 648 580 20,435
--------------------------- ------------ --------- --------- ---------
* including Government of Azerbaijan's share.
Note that certain amounts for flotation production maybe
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 2019 and H1 2020. Note that
sales of concentrates are initially recorded at provisional amounts
until agreement of final assa y:
Concentrate Copper Gold Silver Concentrate Concentrate
production* content* content* content* sales** sales**
(dmt) (tonnes) (ounces) (ounces) (dmt) ($000)
Quarter ended
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 7,350
H2 2019 6,466 1,249 3,173 66,702 5,978 10,788
FY 2019 11,874 2,210 5,947 139,649 10,264 18,280
31 March 2020 2,994 559 833 30,793 2,018 2,863
30 June 2020 3,171 648 580 20,435 3,526 4,707
H1 2020 6,165 1,207 1,413 51,228 5,544 7,570
--------------- ------------ --------- --------- --------- ------------- --------------
* including Government of Azerbaijan's share.
** excluding Government of Azerbaijan's share.
Note that certain figures maybe different to those previously
disclosed due to final reconciliation of concentrate production and
sales.
Geological exploration report for H1 2020 and new JORC resource
and reserves statements
The preparation of the H1 2020 geological exploration report is
currently underway and the Company expects this to be released
around the end of July. The Company can confirm the new JORC
resource and reserves statements are still expected to be released
by end of the current quarter (Q3 2020).
Company financial review
Cash
The Company had cash at 30 June 2020 of $29.2 million and no
bank debt, an increase in cash of $3.2 million since 31 March 2020
when cash was $26.0 million. The Company made advance profit tax
payments totalling $2.9 million in Q2 2020.
Gold dor é shipment and sales
Gold dor é production for the period 7 May to 22 June 2020 was
shipped to the refiner prior to the end of June. 90 per cent. of
the Company's share of the estimated gold content was sold for $7.4
million with the proceeds received before the end of June.
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.
**S**
For further information please 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 Tel: +44 (0) 20 3470
LLP 0470
Nominated Adviser and Broker
------------------------------ ----------------------
Soltan Tagiev SP Angel Corporate Finance Tel + 44 (0) 20 3470
LLP 0470
Nominated Adviser and Broker
------------------------------ ----------------------
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 kilometre 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 newly 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 81,399 gold equivalent ounces ("GEOs") for
the year ended 31 December 2019. 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.
The Company has a production target for the year to 31 December
2020 of 65,000 ounces to 67,000 ounces of gold and 2,200 tonnes to
2,400 tonnes of copper. This total production target expressed as
gold equivalent ounces ("GEOs") at budgeted prices is between
75,000 GEOs and 80,000 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 elsewhere 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
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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