TIDMAAZ
RNS Number : 2770U
Anglo Asian Mining PLC
17 January 2017
Anglo Asian Mining plc / Ticker: AAZ / Index: AIM / Sector:
Mining
17 January 2017
Anglo Asian Mining plc
Quarter 4 and Full Year 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 31 December 2016 ("Q4 2016") and
the year ended 31 December 2016 ("FY 2016"). Note that all
references to "$" are to United States dollars.
Production overview
-- Gold production for Q4 2016 totalled 15,483 ounces - 14,221
ounces contained within gold dorè, 7 ounces from SART processing
and 1,255 ounces from flotation (Q3 2016: total 16,534 ounces)
-- Copper production for Q4 2016 totalled 578 tonnes - 219
tonnes from SART processing and 359 tonnes from flotation (Q3 2016:
485 tonnes)
-- Silver production for Q4 2016 totalled 50,216 ounces - 2,845
ounces contained within gold dorè, 6,751 ounces from SART
processing and 40,620 ounces from flotation (Q3 2016: total 33,899
ounces)
-- Anglo Asian's FY 2016 production was as follows:
o Gold: 65,394 ounces, a 9 per cent. decrease over FY 2015
production of 72,032 ounces
o Copper: 1,941 tonnes of copper, a 100 per cent. increase over
FY 2015 production of 969 tonnes
o Silver: 165,131 ounces, a 5.8 times increase over FY 2015
production of 28,626 ounces
Sales overview
-- Q4 2016 gold bullion sales of 12,995 ounces at an average of
$1,227 per ounce - FY 2016 gold bullion sales of 53,366 ounces at
an average of $1,253 per ounce
-- Q4 2016 copper concentrate shipments to the customer totalled
2,147 dry metric tonnes ("dmt") with a sales value of $3.9 million
(excluding Government of Azerbaijan production share) - FY 2016:
6,830 tonnes with a sales value of $12.6 million
-- In Q4 2016, put options over 3,000 ounces of gold at $1,200
per ounce exercised generating additional revenue of $80,400
Operational exploration update
-- Gedabek site connected to the Azerbaijan national power grid in November 2016
-- Extensive exploration of the Gedabek site continues - mineral
resource delineation drilling of the Gadir underground mine and
core drilling of the Ugur discovery deposit underway with
encouraging initial results
Company financials
-- Net debt, being interest-bearing loans and borrowings less
cash and cash equivalents, totaled $35.1 million at 31 December
2016 ($37.7 million at 30 September 2016)
-- Loan from chief executive officer extended for another twelve
months to 8 January 2018, all other terms remaining the same
Anglo Asian CEO Reza Vaziri commented, "This has been a year of
progress for Anglo Asian. Whilst disappointing that gold production
for 2016 was marginally below our revised forecast of 67,000 to
69,000 ounces due to lower than expected grades in December, there
were other successful developments in the year and copper
production doubled due to the operation of the flotation plant.
Progress was made in cost reduction and sustainability at Gedabek,
and in particular, the connection of the Gedabek site to the
national power grid in quarter four was a major milestone and will
result in significant future cost savings. Having made a gold
discovery at Ugur, only three kilometres from our Gedabek
processing facilities, we are excited to have commenced a
significant exploration programme which is already yielding
potential new sources of ore. I look forward to this progress
continuing and updating shareholders further in 2017."
Gedabek - mining, production and sales
During Q4 2016, the Company mined 309,984 tonnes of ore from its
Gedabek open pit (Q3 2016: 409,572 tonnes) and 40,663 tonnes of ore
with an average content of 4.79 grammes of gold per tonne from its
Gadir underground mine (Q3 2016: 27,582 tonnes average grade
content of 5.13 grammes of gold per tonne). Total ore mined in 2016
was 1,554,935 tonnes from the Gedabek open pit and 123,732 tonnes
with an average content of 5.40 grammes of gold per tonne from its
Gadir underground mine.
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 Q4 2016, Anglo Asian stacked 80,976 tonnes of dry crushed
ore on to heap leach pads with an average gold content of 1.21
grammes of gold per tonne (Q3 2016: 92,437 tonnes with an average
gold content of 1.21 grammes per tonne). The Company also heap
leached uncrushed Run of Mine ("ROM") ore. During Q4 2016, Anglo
Asian stacked 90,310 tonnes of ROM ore on to heap leach pads with
an average gold content of 0.84 grammes of gold per tonne (Q3 2016:
190,185 tonnes with an average gold content of 0.80 grammes per
tonne).
During Q4 2016, the Company processed 192,502 tonnes of ore with
an average gold content of 2.26 grammes of gold per tonne through
the agitation leaching plant (Q3 2016: 164,492 tonnes with an
average gold content of 2.50 grammes per tonne).
There was a 72 per cent. gold recovery in agitation leaching for
Q4 2016 (Q3 2016: 77 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 Q4 2016, the Company produced gold doré containing 14,221
ounces of gold and 2,845 ounces of silver at Gedabek (Q3 2016:
15,407 ounces of gold and 2,502 ounces of silver). During Q4 2016,
the agitation leaching plant produced 10,183 and 1,799 ounces of
gold and silver, respectively, and the heap leach operations
produced 4,038 and 1,046 ounces of gold and silver,
respectively.
During Q4 2016, 148,119 dmt of agitation leaching plant tailings
was processed by the flotation plant. The gross metal contained
within this feed-stock was 3,441 ounces of gold, 96,774 ounces of
silver and 640 tonnes of copper. Copper concentrate of 2,059 dmt
was produced containing 359 tonnes of copper, 1,255 ounces of gold
and 40,620 ounces of silver. SART processing produced 445 dmt of
copper concentrate containing 219 tonnes of copper, 7 ounces of
gold and 6,751 ounces of silver.
The following table summarises gold doré production and sales at
Gedabek for FY 2015 and FY 2016:
Gold produced* Silver Gold sales** Gold sales
(ounces) produced* (ounces) price
(ounces) ($/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 12,143 1,184
30 June 2016 17,926 2,983 15,661 1,265
H1 2016 31,309 4,941 27,804 1,230
30 Sept 2016 15,407 2,502 12,567 1,332
31 Dec 2016 14,221 2,845 12,995 1,227
H2 2016 29,628 5,347 25,562 1,278
FY2016 60,937 10,288 53,366 1,253
-------------- -------------- ----------- ------------- ----------
* 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 FY 2016 by quarter:
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
Quarter ended 31
Dec
SART processing 445 219 7 6,751
Flotation 2,059 359 1,255 40,620
Total 2,504 578 1,262 47,371
------------------ ------------ --------- --------- ---------
* 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 FY 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 1,319 2,137
30 June 2016*** 2,361 497 1,449 49,231 1,582 2,977
H1 2016 4,182 878 2,068 76,075 2,901 5,114
30 Sept 2016 1,844 485 1,127 31,397 1,782 3,612
31 Dec 2016 2,504 578 1,262 47,371 2,147 3,865
H2 2015 4,348 1,063 2,389 78,768 3,929 7,477
FY2016 8,530 1,941 4,457 154,843 6,830 12,591
----------------- ------------ --------- --------- --------- ------------- --------------
* 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
The Gedabek site was connected to the Azerbaijan national power
grid in Q4 2016. This involved the construction of seven kilometres
of 35 kilovolt overhead power cable and five kilometres of 6.3
kilovolt overhead distribution line, the installation of two main
and five auxiliary electricity transformers and the construction of
an electrical power house. The total cost of the installation was
$2.1 million and it will result in significant cost savings and
improve availability of the processing 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 Q1 2017.
Gedabek - exploration update
Area adjacent to the current operational mine
Geological mapping was carried out over 0.7 square kilometres
from which 290 outcrop samples were taken and 20 metres of
follow-up trenching was carried out. In addition, two drill holes
with a total of 530 metres of diamond drilling were completed.
Gadir underground mine
Efforts focused on underground mapping that comprised 596 linear
metres backed up with 596 linear metres of channel sampling.
Mineral resource delineation drilling continued with the aim of
assessing the down dip and lateral extensions of the known ore
bodies. In Q4 2016, four core drill holes (HQ size core) with a
total of 365 metres had been completed. These drill holes were
designed to confirm and extend mineralisation at Gadir. An
additional 21 drill holes (BQ size core) with a total of 598 metres
were drilled to define ore zone geometry.
Ugur discovery
Geological mapping was carried out over 0.6 square kilometres
from which 220 outcrop samples were taken and 290 metres of
follow-up trenching that was sampled every metre was carried out.
In addition, 55 reverse circulation drill holes with a total of
1,842 metres and 12 drill holes with a total of 1,893 metres of
diamond core drilling were completed. Encouraging results have been
received from the newly discovered Ugur deposit which enhance the
Company's understanding of the deposit and show that the oxide zone
extends deeper than initially determined by previous drilling. Ugur
is only three kilometres from the processing facilities at the main
Gedabek site, highlighting the clear strategic value of developing
this deposit.
The Bittibulag mineral occurrence
A surface mapping exercise was completed covering an area of 1.1
square kilometres that included taking 190 outcrop samples for
analysis. Preparation and analysis of 648 samples is on-going from
the soil geochemistry sampling programme conducted earlier in 2016.
A total of 40 metres of trenches were excavated and mapped from
which 54 samples were taken.
Company financials
Net debt
The Company had net debt at 31 December 2016 of $35.1 million, a
reduction of $14.9 million since 31 December 2015.
$m
Kapital Bank 1.0
Amsterdam Trade Bank - Agitation plant
loan 17.3
International Bank of Azerbaijan - loan 6.4
International Bank of Azerbaijan - letter 0.5
of credit financing
Atlas Copco equipment finance loan 0.8
YapiKredit 0.7
Pasha Bank 5.9
Reza Vaziri - director's loan 3.9
-----
Total loans 36.5
Cash on hand and at bank (1.4)
-----
Net debt 35.1
-----
The amount of the loan facility from Reza Vaziri is $4.0 million
and the term of the loan has been extended until 8 January 2018.
The amount currently outstanding under the facility is $3.9
million. All other terms of the loan remain unchanged.
As Mr. Vaziri is a director of the Company, the loan constitutes
a related party transaction pursuant to AIM Rule 13. The
independent directors (being Khosrow Zamani, Richard Round, John H.
Sununu and John Monhemius) consider, having consulted with the
Company's nominated adviser, SP Angel Corporate Finance LLP, that
the terms of the Loan are fair and reasonable insofar as its
shareholders are concerned.
Exercise of options for sale of gold
On 29 June 2016, the Company entered into a series of net zero
cost options with a lower (PUT option) sales price of $1,200 per
ounce and an upper (CALL option) sales price of $1,426 per ounce.
The options matured in lots of 1,500 ounces of gold every two weeks
from inception date with the final lot maturing on 13 December
2016.
The final two lots of PUT options expired on 29 November and 13
December 2016. On both these dates the spot price of gold was below
the PUT option price of $1,200 per ounce. Accordingly, the company
exercised both these options yielding additional revenue of
$80,400.
**S**
For further information please visit www.angloasianmining.com or
contact:
Anglo Asian Mining Tel: +994 12 596
Reza Vaziri plc 3350
-------------------- ------------------- ------------------
Anglo Asian Mining Tel: +994 502 910
Bill Morgan plc 400
-------------------- ------------------- ------------------
Ewan Leggat SP Angel Corporate Tel: +44 (0) 20
Finance LLP 3470 0470
Nominated Adviser
and Broker
-------------------- ------------------- ------------------
Laura Harrison SP Angel Corporate Tel + 44 (0) 20
Finance LLP 3470 0470
-------------------- ------------------- ------------------
Susie Geliher St Brides Partners Tel: +44 (0) 20
Ltd 7236 1177
-------------------- ------------------- ------------------
Lottie Brocklehurst St Brides Partners Tel: +44 (0) 20
Ltd 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
DRLSFLFLMFWSELF
(END) Dow Jones Newswires
January 17, 2017 02:00 ET (07:00 GMT)