Anglo Asian Mining PLC Q4 and FY 2018 Production and Operations Review (1126N)

TIDMAAZ

RNS Number : 1126N

Anglo Asian Mining PLC

15 January 2019

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

15 January 2019

Anglo Asian Mining plc

Q4 and FY 2018 Production and Operations review

Full year production at upper range of guidance and net cash of $6.1 million at 31 December 2018

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 December 2018 ("Q4 2018") and the year ended 31 December 2018 ("FY 2018").

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

Overview

-- 83,736 gold equivalent ounces ("GEOs") produced during FY 2018 - at the upper range of the Company's forecast of 78,000 to 84,000 GEOs

-- 17 per cent. year on year ("y-o-y") increase in total production for FY 2018 compared to the previous year (FY 2017: 71,461 GEOs)

-- Maiden dividend of $0.03 per share paid in November 2018 - total distribution paid to shareholders of $3.4 million

   --    Net cash increased in Q4 2018 by $3.3 million to $6.1 million at 31 December 2018 

-- Helicopter site survey of entire 300 square kilometre Gedabek contract area complete and data now being analysed to define new drill targets and identify new mineable deposits - results expected in Q1 2019

-- JORC resource of the existing Gadir underground mine being compiled with publication expected in Q1 2019

Anglo Asian CEO Reza Vaziri commented: "This has been another excellent quarter which has resulted in Anglo Asian achieving full year production at the upper limit of its guidance of 84,000 GEOs. In addition to increasing production from the previous year, Anglo Asian has also significantly strengthened its balance sheet and paid a maiden dividend, all of which has bolstered Anglo Asian's value and investment profile.

"The Company is actively working towards, and investing in, the future expansion of our various operations and in line with this, Anglo Asian continues to both better define its current resources through publication of JORC resources for its existing mines and to maximise the potential of its current licence areas. In this respect, in Q1 2019 we expect to both release a JORC resource for the existing Gadir underground mine and also publish the results of the helicopter survey. We are aware of multiple additional gold and copper mineral occurrences at Gedabek, which may become future mineable deposits like our latest discovery, Ugur. We are hopeful that the helicopter survey, which is the first of its kind covering the entire 300 square kilometre Gedabek contract area, is a first step in unlocking this potential.

"Anglo Asian is continuing to lay the foundations for long term sustainable production whilst delivering value and cash returns to its shareholders. I look forward to providing further updates on forecast 2019 production and expansion and exploration results in the coming weeks."

Production Overview

Q4 2018

-- Total production of 21,945 GEOs (Q4 2017: 23,185 GEOs) - prior year benefitted from higher grade ores due to the commencement of mining from the Ugur open pit mine, partially offset by higher copper production in Q4 2018

   --    Gold production of 18,209 ounces (Q4 2017: 21,931 ounces): 

o 15,444 ounces contained within gold doré

o 13 ounces from SART processing

o 2,752 ounces from flotation

-- 394 per cent. y-o-y increase in copper production to 588 tonnes (Q4 2017: 119 tonnes) as flotation plant operated throughout Q4 2018:

o 67 tonnes from SART processing

o 521 tonnes from flotation processing

   --    39 per cent. y-o-y increase in silver production to 65,822 ounces (Q4 2017: 47,478 ounces): 

o 5,646 ounces contained within gold doré

o 14,229 ounces from SART processing

o 45,947 ounces from flotation

FY 2018

   --    17 per cent. y-o-y increase in total production to 83,736 GEOs (FY 2017: 71,461 GEOs) 
   --    22 per cent. y-o-y increase in gold production to 72,798 ounces (FY 2017: 59,617 ounces) 
   --    Copper production totalled 1,645 tonnes (FY 2017: 1,991 tonnes) 
   --    Silver production totalled 210,184 ounces (FY 2017: 172,853 ounces) 

Sales overview

Q4 2018

-- Q4 2018 gold bullion sales of 15,066 ounces at an average of $1,231 per ounce (Q3 2018 gold bullion sales of 18,637 ounces at an average of $1,216 per ounce)

Q4 2018 copper concentrate shipments to the customer totalled 3,774 dry metric tonnes ("dmt") with a sales value of $6.1 million (excluding Government of Azerbaijan profit share) (Q3 2018: 1,557 dmt with a sales value of $3.4 million)

FY 2018

-- FY 2018 gold bullion sales of 59,481 ounces at an average of $1,265 per ounce (FY 2017 gold bullion sales of 43,496 ounces at an average of $1,265 per ounce)

-- FY 2018 copper concentrate shipments to the customer totalled 7,675 dry metric tonnes ("dmt") with a sales value of $15.4 million (excluding Government of Azerbaijan profit share) (FY 2017: 8,499 dmt with a sales value of $16.7 million)

Company financials

-- Net cash, being cash and cash equivalents less interest-bearing loans and borrowings, totalled $6.1 million at 31 December 2017 ($2.8 million at 30 September 2018)

Gedabek - mining, production and sales

The Company mined the following ore in the year ended 31 December 2018:

 
                       9 months to               3 months to              12 months to 
                    30 September 2018*         31 December 2018          31 December 2018 
                                 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          141,652          1.20     220,760          0.96     362,412          1.06 
 Ugur - o/pit      887,702          1.24     355,175          1.33   1,242,877          1.27 
 Gadir - u/g        91,204          4.97      34,674          3.34     125,878          4.52 
 Gosha - u/g             -             -      10,988          3.44      10,988          3.44 
                ----------  ------------  ----------  ------------  ----------  ------------ 
 Total           1,120,558          1.54     621,597          1.35   1,742,155          1.47 
==============  ==========  ============  ==========  ============  ==========  ============ 
 

* There 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 154,901 tonnes of dry crushed ore onto heap leach pads with an average gold content of 0.81 grammes per tonne (Q3 2018: 195,957 tonnes with an average gold content of 0.91 grammes per tonne) during Q4 2018. The Company also heap leached uncrushed Run of Mine ("ROM") ore. During Q4 2018, Anglo Asian stacked 131,861 tonnes of ROM ore onto heap leach pads with an average gold content of 0.48 grammes per tonne (Q3 2018: 136,595 tonnes with an average gold content of 0.40 grammes per tonne).

The Company processed during Q4 2018, 173,332 dry tonnes of ore with an average gold content of 2.26 grammes per tonne through the agitation leaching plant (Q3 2018: 196,700 dry tonnes with an average gold content of 2.39 grammes per tonne). 129,946 dry tonnes of ore containing an average copper content of 0.53 per cent. were processed by the flotation plant in Q4 2018 (Q3 2018: 126,009 dry tonnes of ore containing an average copper content of 0.47 per cent.).

During Q4 2018, the Company produced gold doré containing 15,444 ounces of gold and 5,646 ounces of silver at Gedabek (Q3 2018: 18,874 ounces of gold and 7,416 ounces of silver). During Q4 2018, the agitation leaching plant produced 11,588 and 4,130 ounces of gold and silver, respectively, and the heap leach operations produced 3,856 and 1,516 ounces of gold and silver, respectively. During FY 2018 the Company produced gold doré containing 65,616 ounces of gold and 26,186 ounces of silver (FY 2017: 52,534 ounces of gold and 22,728 ounces of silver).

SART processing in Q4 2018 produced 109 dmt of copper concentrate containing 67 tonnes of copper and 13 ounces of gold (Q3 2018: 162 dmt of copper concentrate containing 81 tonnes of copper and 7 ounces of gold). During FY 2018, SART processing produced 754 dmt of copper concentrate containing 399 tonnes of copper and 32 ounces of gold (FY 2017: 1,436 dmt of copper concentrate containing 681 tonnes of copper and 20 ounces of gold).

Flotation processing in Q4 2018 produced 3,557 dmt of copper concentrate containing 521 tonnes of copper and 2,752 ounces of gold (Q3 2018: 2,501 dmt of copper concentrate containing 389 tonnes of copper and 2,437 ounces of gold). During 2018 Copper concentrate of 8,013 dmt was produced containing 1,246 tonnes of copper and 7,150 ounces of gold (FY 2017: copper concentrate of 7,894 dmt was produced containing 1,310 tonnes of copper and 7,063 ounces of gold).

The following table summarises gold doré production and sales at Gedabek for FY 2017 and FY 2018:

 
                Gold produced*       Silver   Gold sales**  Gold Sales 
                      (ounces)    Produced*       (ounces)       price 
                                   (ounces)                  ($/ounce) 
Quarter ended 
31 March 2017            9,258        2,447          8,283       1,220 
30 June 2017             9,131        3,266          7,406       1,258 
H1 2017                 18,389        5,713         15,689       1,238 
30 Sept 2017            12,221        4,381          9,287       1,286 
31 Dec 2017             21,924       12,634         18,520       1,278 
H2 2017                 34,145       17,015         27,807       1,281 
FY 2017                 52,534       22,728         43,496       1,265 
 
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 
--------------  --------------  -----------  -------------  ---------- 
 

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 2017 and FY 2018:

 
                               Concentrate     Copper       Gold     Silver 
                               production*   content*   content*   content* 
 2017                                (dmt)   (tonnes)   (ounces)   (ounces) 
 Quarter ended 31 March 
 SART processing                       428        210          5      5,523 
 Flotation                           2,312        396      1,815     31,399 
 Total                               2,740        606      1,820     36,922 
 
 Quarter ended 30 June 
 SART processing                       419        187          4      4,717 
 Flotation                           3,203        529      3,005     37,735 
 Total                               3,622        716      3,009     42,452 
 
 Quarter ended 30 Sept 
 SART processing                       333        165          4      9,097 
 Flotation                           2,379        385      2,243     26,810 
 Total                               2,712        550      2,247     35,907 
 
 Quarter ended 31 December 
 SART processing                       256        119          7     34,844 
 Flotation                               -          -          -          - 
 Total                                 256        119          7     34,844 
 
 2018 
 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 
----------------------------  ------------  ---------  ---------  --------- 
 

* including Government of Azerbaijan's share.

** certain amounts 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 2017 and FY 2018. 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 2017          2,740        606      1,820     36,922          2,230           4,220 
 30 June 2017           3,622        716      3,009     42,452          3,166           6,104 
 H1 2017                6,362      1,322      4,829     79,374          5,396          10,324 
 30 Sept 2017           2,712        550      2,247     35,907          2,905           5,480 
 31 Dec 2017              256        119          7     34,844            198             854 
 H2 2017                2,968        669      2,254     70,751          3,103           6,334 
 FY 2017                9,330      1,991      7,083    150,125          8,499          16,658 
 
 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 
---------------  ------------  ---------  ---------  ---------  -------------  -------------- 
 

.

* including Government of Azerbaijan's share

** excludes Government of Azerbaijan's share

Net cash

The Company had net cash at 31 December 2018 of $6.1 million, an increase in net cash of $3.3 million from $2.8 million at 30 September 2018 as follows:

 
                                 $m 
Cash at bank and on hand       14.5 
Pasha Bank refinancing loan   (8.4) 
                              ----- 
Net cash                        6.1 
                              ----- 
 

The Company paid a dividend in Q4 2018 of $3.4 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.

**S**

For further information please visit www.angloasianmining.com or contact:

 
 Reza Vaziri        Anglo Asian Mining plc          Tel: [phone] 
 Bill Morgan        Anglo Asian Mining plc          Tel: [phone] 
                   ------------------------------  ---------------------- 
 Stephen Westhead   Anglo Asian Mining plc          Tel: [phone] 
                   ------------------------------  ---------------------- 
 Ewan Leggat        SP Angel Corporate Finance      Tel: [phone] 
                     LLP                             0470 
                     Nominated Adviser and Broker 
                   ------------------------------  ---------------------- 
 Soltan Tagiev      SP Angel Corporate Finance      Tel + 44 (0) 20 3470 
                     LLP                             0470 
                   ------------------------------  ---------------------- 
 Susie Geliher      St Brides Partners Ltd          Tel: [phone] 
                                                     1177 
                   ------------------------------  ---------------------- 
 Gaby Jenner        St Brides Partners Ltd          Tel: [phone] 
                                                     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'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 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. A second dedicated crusher line has been commissioned and is now in operation for the flotation plant to enable it to operate independently of the agitation leaching 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 [e-mail] or visit www.rns.com.

END

MSCQELBFKFFFBBL

(END) Dow Jones Newswires

January 15, 2019 02:00 ET (07:00 GMT)