TIDMAAZ
RNS Number : 4990V
Anglo Asian Mining PLC
15 April 2021
Anglo Asian Mining plc / Ticker: AAZ / Index: AIM / Sector:
Mining
15 April 2021
Anglo Asian Mining plc
Q1 2021 Production and Operations Review
Production of 15,810 gold equivalent ounces calculated using
budget metal prices
Full year production guidance for 2021 of 64,000 to 72,000 gold
equivalent ounces
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 31
March 2021 ("Q1 2021") together with its production guidance for
the full year to 31 December 2021 ("FY 2021").
Note that all references to "$" are to United States
dollars.
Q1 2021 Production Update
-- Gold production for Q1 2021 of 11,907 ounces (Q1 2020: 15,867 ounces)
-- Copper production for Q1 2021 increased by 14 per cent. to 638 tonnes (Q1 2020: 559 tonnes)
-- Silver production for Q1 2021 totalled 35,365 ounces (Q1 2020: 34,642 ounces)
-- 15,810 gold equivalent ounces ("GEOs") produced calculated using budgeted metal prices
Q1 2021 Sales and Cash Update
-- Cash of $22.9 million at 31 March 2021 (31 December 2020: $38.8 million)
o Dividend of $1.7 million paid in Q1 2021
o Balance of corporation tax for FY 2020 of $6.3 million paid in
Q1 2021
o Post Q1 2021 sales of inventory
-- Unsold Company inventory at 31 March 2021 valued at $15.2
million (5,592 ounces of gold valued at $9.7 million and $5.5
million worth of copper concentrate)
FY 2021 Production Guidance
-- Forecast gold production for FY 2021 of 48,000 to 54,000
ounces (FY 2020 actual production: 56,864 ounces of gold)
o Lower gold production forecast due to mining only from the
Company's existing Gedabek and Gadir mines in 2021 with no
contribution from Ugur which has now been depleted
-- Forecast copper production for FY 2021 of 2,500 to 2,800
tonnes of copper (FY 2020 actual production: 2,591 tonnes of
copper)
-- Forecast production assumes no production from the newly restored contract areas during 2021
-- Forecast total metal production for FY 2021 of 64,000 to
72,000 GEOs (FY 2020 actual production: 67,249 GEOs)
Anglo Asian CEO Reza Vaziri commented: "This year we will only
be mining from our existing Gedabek open pit and Gedabek and Gadir
underground mines. Gold production is therefore expected to be
lower as there will be no contribution from Ugur, which was
depleted in 2020. However, we are expecting an increase in copper
production as we take more ore from the Gedabek open pit. The first
quarter's production and the full year production guidance reflect
this fact.
"Our successful exploration programme, which has progressed
significantly during 2020, is continuing. We are looking forward to
starting to reap the benefits of this exploration with production
next year from Avshancli. The drilling results from Zafer continue
to be encouraging and we have now engaged third party consultants
to provide indicative estimates of resources. We are also just
starting to understand the potential of the newly-restored contract
areas. A recent visit to the Vejnaly contract area in Zangilan has
identified some high grade ore stockpiles and the feasibility of
transporting this ore to Gedabek for processing is being evaluated.
I look forward to updating shareholders further throughout the
year."
Production Overview for Q1 2021
-- Q1 2021 gold production of 11,907 ounces (Q1 2020: 15,867 ounces):
o 11,541 ounces contained within gold doré
o 13 ounces from sulphidisation, acidification, recycling and thickening ("SART") processing
o 353 ounces from flotation
-- Copper production for Q1 2021 increased by 14 per cent. to 638 tonnes (Q1 2020: 559 tonnes):
o 276 tonnes from SART processing
o 362 tonnes from flotation processing
-- Silver production for Q1 2021 totalled 35,365 ounces (Q1 2020: 34,642 ounces):
o 4,916 ounces contained within gold doré
o 19,850 ounces from SART processing
o 10,599 ounces from flotation
-- Reportable total metal production of 15,431 GEOs (Q1 2020: 18,219 ounces)
o The actual price of gold was higher than the budgeted price
which decreased the gold equivalent value of the copper
Sales overview
-- Q1 2021 gold bullion sales of 5,635 ounces at an average of
$1,697 per ounce (Q1 2020: 11,236 ounces at an average of $1,577
per ounce)
-- No copper concentrate shipments were made in Q1 2021 as the
renegotiated contracts with off-takers were waiting the approval of
the Government of Azerbaijan (Q1 2020: sales of 2,018 dry metric
tonnes ("dmt") with a value of $2.9 million)
o Government approval for the new contracts has now been
obtained
Company financials
-- Cash of $22.9 million at 31 March 2021 (Cash of $38.8 million at 31 December 2020)
-- Unsold gold dor é and copper concentrate inventory of $15.2 million at 31 March 2021
-- Gold dor é production from 11 February to 31 March 2021 was
not shipped to the refiner until April to minimise shipping costs.
2,000 ounces of the contained gold bullion was sold on 6 April 2021
for $3.5 million
Operations review
The Company mined the following ore in the three months ended 31
March 2021:
12 months to 3 months to
31 December 2020 31 March 2021
Average Average
Mine Ore mined gold grade Ore mined gold grade
(tonnes) (g/t) (tonnes) (g/t)
---------- ------------ ---------- ------------
Open pit 1,303,956 0.94 537,044 0.90
Ugur - o/pit 505,426 0.95 - -
Gadir - u/g 125,001 2.53 27,017 2.02
Gosha - u/g 6,024 2.58 - -
Gedabek -
u/g 16,376 2.37 40,768 1.41
---------- ------------ ---------- ------------
Total 1,956,783 1.06 604,829 0.98
============== ========== ============ ========== ============
Anglo Asian stacked 110,612 tonnes of dry crushed ore on to heap
leach pads with an average gold content of 0.90 grammes per tonne
("g/t") during Q1 2021 (Q4 2020: 107,22 tonnes with an average gold
content of 0.89 g/t). The Company also heap leached uncrushed Run
of Mine ("ROM") ore. During Q1 2021, Anglo Asian stacked 258,097
tonnes of ROM ore on to heap leach pads with an average gold
content of 0.61 g/t (Q4 2020: 173,812 tonnes with an average gold
content of 0.59 g/t).
The Company processed 154,373 dry tonnes of ore with an average
gold content of 1.84 g/t through the agitation leaching plant in Q1
2021 (Q4 2020: 177,487 dry tonnes with an average gold content of
1.81 g/t). 114,903 dry tonnes of ore containing an average copper
content of 0.56 per cent. were processed by the flotation plant (Q4
2020: 110,772 dry tonnes of ore containing an average copper
content of 0.63 per cent.).
The Company produced gold doré containing 11,541 ounces of gold
and 4,916 ounces of silver at Gedabek in Q1 2021 (Q4 2020: 13,276
ounces of gold and 4,614 ounces of silver). During Q1 2021, the
agitation leaching plant produced 7,196 and 3,092 ounces of gold
and silver, respectively, and the heap leach operations produced
4,345 and 1,824 ounces of gold and silver, respectively.
SART processing produced 473 dmt of copper concentrate
containing 276 tonnes of copper, 13 ounces of gold and 19,850
ounces of silver in Q1 2021 (Q4 2020: 421 dmt of copper concentrate
containing 196 tonnes of copper, 15 ounces of gold and 21,327
ounces of silver).
In Q1 2021, flotation processing produced 2,375 dmt of copper
concentrate containing 362 tonnes of copper, 353 ounces of gold and
10,599 ounces of silver ( Q4 2020: 2,929 dmt of copper concentrate
containing 500 tonnes of copper, 243 ounces of gold and 7,086
ounces of silver).
The Company sold no copper concentrate in Q1 2021 compared to
4,211 dmt sold for $6.8 million in Q4 2020 ( excluding Government
of Azerbaijan production share). The Company was waiting approval
from the Government of Azerbaijan for the renegotiated sales
contracts with the off-takers. This approval has now been
obtained.
The following table summarises gold doré production and sales at
Gedabek for FY 2020 and Q1 2021:
Gold Silver Gold sales** Gold Sales
produced* produced* (ounces) price
(ounces) (ounces) ($/ounce)
Quarter ended
31 March 2020 15,034 3,852 11,236 1,577
30 June 2020 11,455 3,562 12,743 1,713
H1 2020 26,489 7,414 23,979 1,649
30 Sept 2020 14,945 5,487 6,599 1,947
31 Dec 2020 13,276 4,614 18,072 1,884
H2 2020 28,221 10,101 24,671 1,901
FY 2020 54,710 17,515 48,650 1,777
31 March 2021 11,541 4,916 5,635 1,697
-------------- ---------- ----------- ------------- ----------
NOTE
* 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 for FY 2020 and Q1
2021:
Concentrate Copper Gold Silver
production* content* content* content*
(dmt) (tonnes) (ounces) (ounces)
2020
Quarter ended 31 March
SART processing 221 114 8 12,895
Flotation 2,773 445 825 17,895
Total 2,994 559 833 30,790
Quarter ended 30 June
SART processing 267 151 7 10,957
Flotation 2,904 497 573 9,542
Total 3,171 648 580 20,499
Quarter ended 30 Sept
SART processing 301 165 7 17,329
Flotation 2,965 523 476 8,416
Total 3,266 688 483 25,745
Quarter ended 31 December
SART processing 421 196 15 21,327
Flotation 2,929 500 243 7,086
Total 3,350 696 258 28,413
2021
Quarter ended 31 March
SART processing 473 276 13 19,850
Flotation 2,375 362 353 10,599
Total 2,848 638 366 30,449
--------------------------- ------------ --------- --------- ---------
* 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 2020 and Q1 2021. 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 2020 2,994 559 833 30,790 2,018 2,863
30 June 2020 3,171 648 580 20,499 3,526 4,707
H1 2019 6,165 1,207 1,413 51,289 5,544 7,570
30 Sept 2020 3,266 688 483 25,745 2,084 3,377
31 Dec 2020 3,350 696 258 28,413 4,211 6,763
H2 2020 6,616 1,384 741 54,158 6,295 10,140
FY 2020 12,781 2,591 2,154 105,447 11,839 17,710
31 March 2021 2,848 638 366 30,499 - -
--------------- ------------ --------- --------- --------- ------------- --------------
* 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.
Company financial review
Cash
The Company had cash at 31 March 2021 of $22.9 million, a
decrease in cash of $15.9 million since 31 December 2020 when cash
was $38.8 million and no bank debt.
A dividend of $1.7 million and the balance of the FY 2020
corporation tax of $6.3 million were paid in Q1 2021. Additionally,
the Company had unsold inventory at 31 March 2021 of 5,592 ounces
of gold and $5.5 million of copper concentrate which totalled $15.2
million in value.
2,000 ounces of the gold dor é production from 11 February 2021
to 31 March 2021 was sold on 6 April 2021 for $3.5 million.
FY 2021 production guidance
The production guidance has been calculated using the following
metal prices used for the 2021 budget:
- Gold: $1,650 per ounce
- Silver: $25 per ounce
- Copper: $8,700 per tonne
The production guidance is for 100 per cent. of the Company's
production which will be subject to an expected 12.75 per cent.
production share throughout 2021 with the Government of Azerbaijan
under the Company's existing production sharing agreement.
The production guidance contains no production from the three
new restored territories. The Company is evaluating whether ore
stockpiled at the Vejnaly contract area can be transported to
Gedabek for processing.
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 For further information please visit 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 Tel: +44 (0) 20 3470
LLP 0470
Nominated Adviser and Broker
------------------------------ ----------------------
Adam Cowl SP Angel Corporate Finance Tel + 44 (0) 20 3470
LLP 0470
Nominated Adviser and Broker
------------------------------ ----------------------
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 at its active Gedabek, Gosha and Ordubad
contract areas assembled from analysis of historic Soviet
geological data and held under a Production Sharing Agreement
("PSA") modelled on the Azeri oil industry. The Company also has
three recently restored contract areas in the formerly Occupied
Territories and Karabakh under its PSA and which the Company has
started to preliminary evaluate.
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. 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 67,249 gold equivalent ounces ("GEOs") for
the year ended 31 December 2020. Gedabek is a polymetallic ore
deposit that has gold together with significant concentrations of
copper in the main open pit mine. 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
2021 of 48,000 ounces to 54,000 ounces of gold and 2,500 tonnes to
2,800 tonnes of copper. This total production target expressed as
gold equivalent ounces ("GEOs") at budgeted prices is between
64,000 GEOs and 72,000 GEOS.
Anglo Asian is also actively seeking to exploit its first mover
advantage in Azerbaijan to identify additional projects, as well as
looking for properties in other jurisdictions in order to fulfil
its expansion ambitions and become a mid-tier gold and copper metal
production company.
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