ANGLO ASIAN MINING PLC

Earnings Release • Jan 15, 2024

National Storage Mechanism | Additional information

RNS Number : 6109Z

Anglo Asian Mining PLC

15 January 2024

15 January 2024

Anglo Asian Mining plc

Q4 and FY 2023 Production and Operations Review

FY 2023 production of 31,821 gold equivalent ounces at mid-range of guidance

Anglo Asian Mining plc ("Anglo Asian" or the "Company"), the AIM-listed gold, copper and silver producer primarily operating in Azerbaijan, is pleased to provide an operational and production review for the fourth quarter ("Q4 2023") and twelve months to 31 December 2023 ("FY 2023" or the "Period").

Production during the Period was significantly reduced due to operations being partially suspended as the Company and third-party contractors finalised the results of an environmental audit at its operations. An action plan was agreed with the Government of Azerbaijan on 7 November 2023, and the Company was pleased to restart mining at Gedabek in December 2023.

Production update

·   Total FY 2023 production of 31,821 gold equivalent ounces ("GEOs"), in the mid-range of the revised guidance of 30,000 to 34,000 GEOs (FY 2022: 57,618 GEOs)

·    Q4 2023 production of 3,080 GEOs (Q4 2022: 14,532 GEOs)

Operational update

·    Protocol agreed with the Government of Azerbaijan to restart operations following the partial environmental shut-down in Q3 2023

o Mining from the Gedabek open pit restarted in December 2023

o Operations now being ramped up with flotation production restarting in Q2 2024

·   Production of gold doré and copper concentrate continued throughout Q4 2023 from heap leaching and SART processing

·    Caterpillar underground mining fleet for the new Gilar mine delivered to Gedabek in early December 2023

·    Gilar maiden JORC mineral resource confirmed meaningful quantities of copper and gold

o  In-situ mineral resource of 54,000 tonnes of copper, 255,000 ounces of gold and 46,000 tonnes of zinc

·    Gilar development continues with production planned to commence during Q3 2024

Cash and inventory update

·    Net debt of $10.3 million at 31 December 2023 (30 September 2023: net cash of $1.6 million) with the following payment made in Q4 2023

o $4.7 million to Caterpillar for the underground mining fleet and associated equipment

§ Negotiations ongoing to refinance $3.7 million of the mining fleet purchase price with vendor financing

·    Gross cash of $10.3 million at 31 December 2023

o $15.0 million drawn down from International Bank of Azerbaijan under its revolving credit facility and loan agreements

o $5.6 million loan drawn down from Access Bank in August 2023

·    The Company had inventory at market value of $7.1 million at 31 December 2023 (gold and silver bullion of $6.9 million and copper concentrate of $0.2 million)

·    1,000 ounces of gold bullion sold in Q4 2023 at an average price of $2,001 per ounce under the gold hedging programme, generating additional sales revenue of $44,000

o Total gold bullion sales in Q4 2023 of 2,416 ounces at an average of $2,004 per ounce

o 1,500 ounces of gold bullion was sold for $2,061.5 per ounce on 3 January 2024 yielding proceeds of $3.1 million

Anglo Asian CEO Reza Vaziri commented:

"Despite a number of challenges faced during the Period, we are pleased to announce production within our previously revised guidance range.

"In November, we were pleased to agree a protocol with the Government of Azerbaijan to restart our operations, and mining at our flagship Gedabek mine recommenced in December. We continue to make meaningful progress in restarting flotation production, which is on-track to begin from Q2 2024.

"The completion of a maiden JORC mineral resource for Gilar marked a milestone for the Company, confirming our internal estimates regarding the asset's potential and its ability to meaningfully contribute to our production portfolio in the years ahead. We were also pleased to announce the delivery of a new state-of-the-art underground mining fleet for Gilar from Caterpillar, the first deployment of this type of equipment in Azerbaijan.

"Looking ahead to 2024, we will continue to prioritise the development of our exciting asset portfolio in line with our growth strategy, while driving production from our existing mines. I look forward to updating the market on our progress in the coming months."

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

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, which was incorporated into UK law by the European Union (Withdrawal) Act 2018, until the release of this announcement.

For further information please contact:

Anglo Asian Mining plc
Reza Vaziri, Chief Executive Officer	Tel: +994 12 596 3350
Bill Morgan, Chief Financial Officer	Tel: +994 502 910 400
Stephen Westhead, Vice President	Tel: +994 502 916 894
SP Angel Corporate Finance LLP (Nominated Adviser and Broker) Ewan Leggat Adam Cowl	Tel: +44 (0) 20 3470 0470
Hudson Sandler (Financial PR) Charlie Jack Harry Griffiths	Tel: +44 0) 20 7796 4133

Notes to Editors:

Anglo Asian Mining plc (AIM:AAZ) is a gold, copper and silver producer with a high-quality portfolio of production and exploration assets in Azerbaijan. The Company produced 57,618 gold equivalent ounces ("GEOs") for the year ended 31 December 2022. 

On 30 March 2023, the Company published its strategic plan for growth which shows a clearly defined path for the Company to transition to a multi-asset, mid-tier copper and gold producer by 2028, by which time copper will be the principal product of the Company, with forecast production of around 36,000 copper equivalent tonnes. It plans to achieve this growth by bringing into production four new mines during the period 2024 to 2028 at Zafar, Gilar, Xarxar and Garadag. 

The Company owns approximately 13.1 per cent. of Libero Copper & Gold Corporation ("Libero"). Libero is listed on the TSX Venture Exchange in Canada and owns Mocoa in Colombia, one of the world's largest undeveloped copper-molybdenum resources. https://www.angloasianmining.com/

Production and sales overview

Q4 2023 production

·    Total production of 3,080 GEOs (Q4 2022: 14,531 GEOs), comprising of:

o  2,979 ounces of gold (Q4 2022: 11,121 ounces):

§ 2,975 ounces contained within gold doré

§ 4 ounces from sulfidisation, acidification, recycling and thickening ("SART") processing

o  18 tonnes of copper (Q4 2022: 624 tonnes):

§ 18 tonnes from SART processing

o  2,874 ounces of silver (Q4 2022: 37,378 ounces):

§ 1,610 ounces contained within gold doré

§ 1,264 ounces from SART processing

FY 2023 production

·    Total production of 31,821 GEOs (FY 2022: 57,618 GEOs), including:

o  21,758 ounces of gold (FY 2022: 43,114 ounces)

o  2,138 tonnes of copper (FY 2022: 2,516 tonnes)

o  53,226 ounces of silver (FY 2022: 182,046 ounces)

Q4 2023 Sales

·    Q4 2023 gold bullion sales of 2,416 ounces at an average of $2,004 per ounce (Q4 2022: 13,645 ounces sold at an average of $1,727 per ounce)

·    Q4 2023 copper concentrate shipments totalled 2,186 dry metric tonnes ("dmt") with a sales value of $2.3 million (excluding Government of Azerbaijan profit share) (Q4 2022: 4,606 dmt with a sales value of $7.5 million)

Gedabek - mining, detailed production and sales

The Company mined the following amounts and grades of ore in the 12 months to 31 December 2023:

	9 months to 30 September 2023		3 months to 31 December 2023		12 months to  31 December 2023
Mine	Ore mined	Average gold grade	Ore mined	Average gold grade	Ore mined	Average gold grade
	(tonnes)	(g/t)	(tonnes)	(g/t)	(tonnes)	(g/t)
Open pit	1,079,302	0.35	101,393	0.69	1,180,695	0.38
Gadir - u/g	93,625	1.65	15,695	1.58	109,320	1.64
Gedabek - u/g	-	-	-	-	-	-
Total	1,172,927	0.67	117,088	0.81	1,290,015	0.49

The Company processed the following amounts and grades of ore by leaching for FY 2022 and FY 2023:

Quarter ended	Ore processed			Gold grade of ore processed
	Heap leach pad crushed ore (tonnes)	Heap leach pad ROM ore (tonnes)	Agitation leaching plant* (tonnes)	Heap leach pad crushed ore (g/t)	Heap leach pad ROM ore (g/t)	Agitation leaching plant* (g/t)
31 March 2022	115,173	273,577	144,275	0.75	0.48	1.63
30 June 2022	82,814	299,762	162,239	0.78	0.53	1.40
30 September 2022	92,398	302,714	162,669	0.81	0.57	1.42
31 December 2022	24,606	213,120	156,285	0.72	0.56	1.42
FY 2022	314,991	1,089,173	625,468	0.77	0.56	1.43
31 March 2023	94,518	196,595	62,006	0.74	0.49	1.3
30 June 2023	56,522	202,788	105,213	0.75	0.46	1.4
H1 2023	151,040	399,383	167,219	0.75	0.49	1.4
30 September 2023	25,690	34,621	-	0.83	0.45	-
31 December 2023	-	-	-	-	-	-
H2 2023	25,690	34,621	-	0.83	0.45	-
FY 2023	176,730	434,004	167,219	0.76	0.48	1.4

* includes previously heap leached ore

The Company processed the following amounts of ore and contained metal by flotation for FY 2022 and FY 2023: 

Quarter ended	Ore processed	Gold content	Silver content	Copper content
	(tonnes)	(ounces)	(ounces)	(tonnes)
31 March 2022	104,475	1,921	33,522	577
30 June 2022	114,099	1,293	24,209	745
30 September 2022	143,838	1,314	24,582	724
31 December 2022	119,819	1,389	18,003	670
FY 2022	482,231	5,917	100,316	2,716
31 March 2023	192,516	1,487	19,787	1,133
30 June 2023	190,593	1,033	10,380	1,191
H1 2023	383,109	2,520	30,167	2,324
30 September 2023	62,369	478	4,358	363
31 December 2023	-	-	-	-
H2 2023	62,369	478	4,358	363
FY 2023	445,478	2,998	34,525	2,687

The following table summarises gold doré production and sales at Gedabek for FY 2022 and FY 2023:

Quarter ended	Gold produced* (ounces)	Silver produced* (ounces)	Gold sales** (ounces)	Gold Sales price ($/ounce)
31 March 2022	8,963	7,574	7,519	1,904
30 June 2022	10,137	7,620	3,754	1,895
30 September 2022	10,473	6,949	10,000	1,727
31 December 2022	10,437	4,820	13,645	1,727
FY 2022	40,010	26,963	34,918	1,783
31 March 2023	5,965	2,841	5,719	1,895
30 June 2023	7,375	3,593	4,787	1,992
H1 2023	13,340	6,434	10,506	1,939
30 September 2023	4,001	1,488	2,900	1,949
31 December 2023	2,975	1,610	2,416	2,004
H2 2023	6,976	3,098	5,316	1,974
FY 2023	20,316	9,532	15,822	1,951

Note

* including Government of Azerbaijan's share

** excluding Government of Azerbaijan's share

The gold and silver production from agitation and heap leaching for FY 2022 and FY 2023 is as follows:

Quarter ended	Gold			Silver
Agitation leaching (ounces)	Heap leaching (ounces)	Total (ounces)	Agitation leaching (ounces)	Heap leaching (ounces)	Total (ounces)
31 March 2022	5,674	3,289	8,963	4,803	2,771	7,574
30 June 2022	6,196	3,941	10,137	4,654	2,966	7,620
30 Sept 2022	5,517	4,956	10,473	3,673	3,276	6,949
31 Dec 2022	5,831	4,606	10,437	2,684	2,136	4,820
FY 2022	23,218	16,792	40,010	15,814	11,149	26,963
31 March 2023	2,105	3,860	5,965	1,077	1,764	2,841
30 June 2023	3,463	3,912	7,375	1,735	1,858	3,593
H1 2023	5,568	7,772	13,340	2,812	3,622	6,434
30 Sept 2023	-	4,001	4,001	-	1,488	1,488
31 Dec 2023	-	2,975	2,975	-	1,610	1,610
H2 2023	-	6,976	6,976	-	3,098	3,098
FY 2023	5,568	14,748	20,316	2,812	6,720	9,532

The following table summarises copper concentrate production from both the Company's SART and flotation plants at Gedabek for FY 2022 and FY 2023:

	Concentrate	Copper	Gold	Silver
	production*	content*	content*	content*
	(dmt)	(tonnes)	(ounces)	(ounces)
2022
Quarter ended 31 March
SART processing	330	188	12	25,114
Flotation	2,586	380	1,065	17,986
Total	2,916	568	1,077	43,100
Quarter ended 30 June
SART processing	316	168	14	25,582
Flotation	3,811	547	715	15,672
Total	4,127	715	729	41,254
Quarter ended 30 September
SART processing	367	208	33	24,077
Flotation	2,805	401	581	14,094
Total	3,172	609	614	38,171
Quarter ended 31 December
SART processing	438	244	39	20,833
Flotation	2,648	380	645	11,725
Total	3,086	624	684	32,558
2023
Quarter ended 31 March
SART processing	364	191	26	8,750
Flotation	4,544	665	762	11,095
Total	4,908	856	788	19,845
Quarter ended 30 June
SART processing	272	145	16	10,316
Flotation	5,613	869	479	8,101
Total	5,885	1,014	495	18,417
Quarter ended 30 September
SART processing	85	43	4	2,194
Flotation	1,316	207	151	1,974
Total	1,401	250	155	4,168
Quarter ended 31 December
SART processing	29	18	4	1,264
Flotation	-	-	-	-
Total	29	18	4	1,264

Note

* including Government of Azerbaijan's share.

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

The following table summarises total copper concentrate production and sales for FY 2022 and FY 2023. Note that sales of concentrates are initially recorded as 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 2022	2,916	568	1,077	43,100	1,477	3,248
30 June 2022	4,127	715	729	41,254	4,642	8,127
30 Sept 2022	3,172	609	614	38,171	1,718	3,378
31 December 2022	3,086	624	684	32,558	4,606	7,487
FY 2022	13,301	2,516	3,104	155,083	12,443	22,240
31 March 2023	4,908	856	788	19,845	1,147	2,743
30 June 2023	5,885	1,014	495	18,417	5,501	7,678
H1 2023	10,793	1,870	1,283	38,262	6,648	10,421
30 Sept 2023	1,401	250	155	4,168	2,358	3,066
31 December 2023	29	18	4	1,264	2,186	2,306
H2 2023	1,430	268	159	5,432	4,544	5,372
FY 2023	12,223	2,138	1,442	43,694	11,192	15,793

Notes

* including Government of Azerbaijan's share

** excludes Government of Azerbaijan's share

Cash and net debt at 31 December 2023

	US$m
Cash at bank (available for use)	4.3
Restricted cash (security for borrowing)	6.0
Total cash	10.3
IBA - credit facility: 5.5 % per annum	(5.0)
IBA - revolving credit line: 6.5 % per annum	(10.0)
Access bank: 0.5 % per month	(5.6)
Total debt	(20.6)
Net cash / (debt)	(10.3)

**ENDS**

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