Anglo Asian Mining PLC Q3 2019 Production and Operations review (8399P)

TIDMAAZ

RNS Number : 8399P

Anglo Asian Mining PLC

15 October 2019

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

15 October 2019

Anglo Asian Mining plc

Q3 2019 Production and Operations review

Total production for YTD Q3 2019 of 60,122 GEOs and net cash of 19.1 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 and nine months to 30 September 2019 ("Q3 2019" and "YTD Q3 2019" respectively).

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

Overview

-- Continued improvement in 2019 production expressed as gold equivalent ounces ("GEOs") with a three per cent. quarter-on-quarter increase to 20,227 GEOs (Q2 2019: 19,618 GEOs)

   --    YTD Q3 2019 total production of 60,122 GEOs (YTD Q3 2018: 61,761 GEOs) 
   --    Strong cash generation with $8.5 million generated in the quarter (H1 2019: $9.3 million) 

o Cash generation in YTD Q3 2019 of $17.6 million

o $19.1 million net cash at 30 September 2019 ($15.2 million at 30 June 2019)

-- Significant increase in average price of gold bullion sold in Q3 2019 to $1,513 per ounce (H1 2019: $1,319 per ounce)

-- Full Year 2019 ("FY 2019") Production guidance maintained at lower end of 82,000 to 86,000 GEOs

-- As announced on 18 September 2019, an interim dividend of US$0.035 per share will be paid gross in respect of the year ending 31 December 2019 to shareholders on 31 October 2019

Anglo Asian CEO Reza Vaziri commented: "We are delighted to report another successful quarter for the Company with production increasing compared to the previous quarter and strong cash generation helped by the recent increase in the gold price. Production guidance is maintained at the lower end of 82,000 to 86,000 gold equivalent ounces due to the decrease in copper price in relation to the increase in gold price since the start of 2019."

Production Overview

Q3 2019

   --    Total production of 20,227 GEOs (Q3 2018: 24,412 ounces) 
   --    Gold production of 17,804 ounces (Q3 2018: 21,318 ounces): 

o 16,626 ounces contained within gold doré

o 10 ounces from SART processing

o 1,168 ounces from flotation

   --    Copper production totalled 521 tonnes (Q3 2018: 470 tonnes): 

o 71 tonnes from sulfidisation, acidification, recycling and thickening ("SART") processing

o 450 tonnes from flotation processing

   --    Silver production totalled 33,354 ounces (Q3 2018: 59,346 ounces): 

o 4,423 ounces contained within gold doré

o 11,789 ounces from SART processing

o 17,142 ounces from flotation

YTD Q3 2019

   --    Total production of 60,122 GEOs (YTD Q3 2018: 61,761 GEOs) 
   --    Gold production of 52,198 ounces (YTD Q3 2018: 54,573 ounces) 
   --    Copper production totalled 1,478 tonnes (YTD Q3 2018: 1,057 tonnes) 
   --    Silver production totalled 117,708 ounces (YTD Q3 2018: 144,362 ounces) 
   --    Forecast production for FY 2019 at the lower end of 82,000 to 86,000 GEOs 

Sales

-- Q3 2019 gold bullion sales of 14,894 ounces at an average of $1,513 per ounce (Q2 2019 gold bullion sales of 13,467 ounces at an average of $1,332 per ounce)

-- Q3 2019 copper concentrate shipments to the customer totalled 2,255 dry metric tonnes ("dmt") with a sales value of $3.4 million (excluding Government of Azerbaijan profit share) (Q2 2019: 4,007 dmt with a sales value of $6.7 million)

Company financials

-- Net cash, being cash and cash equivalents less interest-bearing loans and borrowings, totalled $19.1 million at 30 September 2019 (Net cash of $15.2 million at 30 June 2019)

-- Cash generation before payment of final dividend for 2018 in Q3 2019 of $8.5 million with $17.6 million generated YTD Q3 2019

Gedabek - mining, production and sales

The Company mined the following ore in the nine months to 30 September 2019:

 
                       6 months to               3 months to               9 months to 
                      30 June 2019*           30 September 2019         30 September 2019 
                                 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          817,649          0.72     323,008          0.71   1,140,657          0.72 
 Ugur - o/pit      568,993          1.53     337,506          1.05     906,499          1.35 
 Gadir - u/g        89,927          2.70      37,101          2.96     127,028          2.78 
 Gosha - u/g             -             -           -             -           -             - 
                ----------  ------------  ----------  ------------  ----------  ------------ 
 Total           1,476,569          1.15     697,615          1.00   2,174,184          1.10 
==============  ==========  ============  ==========  ============  ==========  ============ 
 

* 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 148,269 tonnes of dry crushed ore onto heap leach pads with an average gold content of 0.93 grammes per tonne during Q3 2019 (Q2 2019: 152,173 tonnes with an average gold content of 0.90 grammes per tonne). The Company also heap leached uncrushed Run of Mine ("ROM") ore. During Q3 2019, Anglo Asian stacked 261,414 tonnes of ROM ore onto heap leach pads with an average gold content of 0.46 grammes per tonne (Q2 2019: 286,163 tonnes with an average gold content of 0.49 grammes per tonne).

The Company processed 192,097 dry tonnes of ore with an average gold content of 2.25 grammes per tonne through the agitation leaching plant during Q3 2019 (Q2 2019: 176,602 dry tonnes with an average gold content of 2.4 grammes per tonne). 127,762 dry tonnes of ore containing an average copper content of 0.55 per cent. was processed by the flotation plant in Q3 2019 (Q2 2019: 131,161 dry tonnes of ore containing an average copper content of 0.47 per cent.).

During Q3 2019, the Company produced gold doré containing 16,626 ounces of gold and 4,423 ounces of silver at Gedabek (Q2 2018: 16,073 ounces of gold and 4,773 ounces of silver). During Q3 2019, the agitation leaching plant produced 12,836 and 3,369 ounces of gold and silver, respectively, and the heap leach operations produced 3,790 and 1,054 ounces of gold and silver, respectively.

SART processing in Q3 2019 produced 154 dmt of copper concentrate containing 71 tonnes of copper and 10 ounces of gold (Q2 2019: 143 dmt of copper concentrate containing 67 tonnes of copper and 8 ounces of gold). YTD Q3 2019 SART copper production was 195 tonnes compared to YTD Q3 2018 production of 332 tonnes.

Flotation processing in Q3 2019 produced 2,793 dmt of copper concentrate containing 450 tonnes of copper, 1,168 ounces of gold and 17,142 ounces of silver (Q2 2019: 2,252 dmt of copper concentrate containing 383 tonnes of copper, 1,068 ounces of gold and 15,491 ounces of silver).

The following table summarises gold doré production and sales at Gedabek for FY 2018 and Q1 to Q3 2019:

 
                      Gold produced*       Silver   Gold sales**  Gold Sales 
                            (ounces)    Produced*       (ounces)       price 
                                         (ounces)                  ($/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         13,121       1,306 
30 June 2019                  16,073        4,773         13,467       1,332 
H1 2019                       31,620       11,407         26,588       1,319 
 
  30 September 2019           16,626        4,423         14,894       1,513 
--------------------  --------------  -----------  -------------  ---------- 
 

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 Q1 to Q3 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 Sept 
 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         60         11     16,201 
 Flotation                           2,871        450      1,687     28,461 
 Total                               3,013        510      1,698     44,662 
 
 Quarter ended 30 June 
 SART processing                       143         64          8     12,794 
 Flotation                           2,252        383      1,068     15,491 
 Total                               2,395        447      1,076     28,285 
 
 Quarter ended 30 September 
 SART processing                       154         71         10     11,789 
 Flotation                           2,793        450      1,168     17,142 
 Total                               2,947        521      1,178     28,931 
----------------------------  ------------  ---------  ---------  --------- 
 

* including Government of Azerbaijan's share.

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

The following table summarises total copper concentrate production and sales at Gedabek for FY 2018 and Q1 to Q3 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        510      1,698     44,662            279             718 
 30 June 2019            2,395        447      1,076     28,285          4,007           6,713 
 H1 2019                 5,408        957      2,774     72,947          4,286           7,431 
 
   30 Sept 2019          2,946        521      1,178     28,931          2,255           3,438 
----------------  ------------  ---------  ---------  ---------  -------------  -------------- 
 

.

* including Government of Azerbaijan's share

** excludes Government of Azerbaijan's share

Net cash

The Company had net cash at 30 September 2019 of $19.1 million, an increase in cash of $3.9 million from net cash of $15.2 million at 30 June 2019 as follows:

 
                                 $m 
Cash at bank and on hand       22.5 
Pasha Bank refinancing loan   (3.4) 
                              ----- 
Net cash                       19.1 
                              ----- 
 

In Q3 2019, the Company paid the final dividend for 2018 of $4.6 million and corporation tax of $2.5 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: [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 
                   ------------------------------  ---------------------- 
 Camilla Horsfall   Blytheweigh Financial           Tel: [phone] 
                                                     3224 
                   ------------------------------  ---------------------- 
 Megan Ray          Blytheweigh Financial           Tel: [phone] 
                                                     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.

The Company has forecast production for FY 2019 of between 82,000 to 86,000 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 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.

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October 15, 2019 02:00 ET (06:00 GMT)