ANGLO ASIAN MINING PLC

Earnings Release • Jan 13, 2022

National Storage Mechanism | Additional information

RNS Number : 2768Y

Anglo Asian Mining PLC

13 January 2022

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

13 January 2022

Anglo Asian Mining plc

Q4 and FY 2021 Operations and production review

FY 2021 Production of 64,610 gold equivalent ounces

Strategic investment in Libero Copper & Gold Corporation - first investment outside of Azerbaijan

Ore from Vejnaly stockpiles processed at Gedabek

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 operations and production review for the three and twelve months to 31 December 2021 ("Q4 2021" and "FY 2021" respectively).

Note that all references to "US$" are to United States dollars and "CAN$" are to Canadian dollars. An exchange rate of US$1 = CAN$1.29 has been used throughout.

Overview

·    FY 2021 production within guidance of 64,610 gold equivalent ounces ("GEOs") (FY 2020: 67,249 GEOs)

·    Private placement to acquire a strategic interest of 19.9 per cent. in Libero Copper & Gold Corporation ("Libero") completed in December 2021:

o 9.9 per cent. acquired immediately upon closing the subscription agreement for CAN$2.8 million (US$2.2 million)

o 10.0 per cent. providing a total of 19.9 per cent. to be acquired for CAN$3.5 million (US$2.7 million) following approval of the TSX Venture Exchange expected in Q1 2022

·    Assessment of the Vejnaly contract area commenced in December 2021:

o A technical study is underway to determine the commercial viability of commencing production from the existing Vejnaly underground mine in H2 2022

o 10,957 dry metric tonnes of stockpiled ore grading 3.91 grammes per tonne of gold and 0.27 per cent. copper were transported to Gebabek, and processed by agitation leaching, in December 2021 with gold recoveries of 95 per cent. producing 1,308 ounces of gold

·    Cash of US$37.5 million at 31 December 2021 (30 September 2021: US$30.9 million)

o Free cash flow for FY 2021 within the guidance of US$10 million to US$15 million given in September 2021

o Interim dividend for 2021 totalling US$5.2 million paid in November 2021

o CAN$2.8 million (US$2.2 million) paid for 9.9 per cent. of Libero in December 2021

Anglo Asian CEO Reza Vaziri commented: 

"I am very pleased with Anglo Asian's operating performance in 2021, comfortably meeting our guidance for the year with total production of 64,610 gold equivalent ounces. This was achieved despite the logistical difficulties and other disruption due to the COVID-19 pandemic in the first half of the year.

"It has been an exciting year for the Company. We are developing new opportunities to grow both in Azerbaijan and abroad, with the three additional contract areas in Azerbaijan, and our recent strategic investment in Libero Copper & Gold Corporation.

We enter 2022 in a strong financial position and will continue to execute our planned growth strategy. I look forward to providing an update on our technical study of the Vejnaly underground mine, with a view to commencing production later this year."

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:

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 Adam Cowl	SP Angel Corporate Finance LLP Nominated Adviser and Broker	Tel: +44 (0) 20 3470 0470
Charlie Jack Elfie Kent	Hudson Sandler	Tel: +44(0) 20 7796 4133

Notes to editors

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 produced 64,610 gold equivalent ounces ("GEOs") for the year ended 31 December 2021.  

In September 2021, the Company announced a transaction with the Government of Azerbaijan which grants it three additional concessions with a combined area of 882 square kilometres, including the Garadagh porphyry copper deposit, with a Soviet classified resource of over 300,000 tonnes of copper. The transaction is subject to ratification by the parliament of Azerbaijan.

In December 2021, the Company completed a private placement to acquire 19.9 per cent. of Libero Copper & Gold Corporation ("Libero"). Libero is listed on the TSX Venture Exchange in Canada and owns, or has the option to acquire, several copper exploration properties in North and South America, including Mocoa in Colombia, one of the world's largest undeveloped copper-molybdenum resources.    

https://www.angloasianmining.com/

Production overview

Q4 2021

·    Total production of 15,949 GEOs (Q4 2020: 16,593 GEOs)

·    Gold production of 11,589 ounces (Q4 2020: 13,534 ounces):

o 10,561 ounces contained within gold doré

o 16 ounces from sulfidisation, acidification, recycling and thickening ("SART") processing

o 1,012 ounces from flotation processing

·    Copper production totalled 743 tonnes (Q4 2020: 696 tonnes):

o 193 tonnes from SART processing

o 550 tonnes from flotation processing

·    Silver production totalled 38,673 ounces (Q4 2020: 32,979 ounces):

o 5,430 ounces contained within gold doré

o 16,414 ounces from SART processing

o 16,829 ounces from flotation processing

FY 2021

·    Total production of 64,610 GEOs (FY 2020: 67,249 GEOs)

·    Gold production of 48,680 ounces (FY 2020: 56,864 ounces)

·    Copper production totalled 2,649 tonnes (FY 2020: 2,591 tonnes)

·    Silver production totalled 154,564 ounces (FY 2020: 122,962 ounces)

Sales

·    Q4 2021 gold bullion sales of 13,153 ounces at an average of US$1,825 per ounce (Q4 2020: 18,072 ounces sold at an average of US$1,884 per ounce)

·    Q4 2021 copper concentrate shipments totalled 4,132 dry metric tonnes ("dmt") with a sales value of US$8.9 million (excluding Government of Azerbaijan profit share) (Q4 2020: 4,211 dmt with a sales value of US$6.3 million)

Company financials

·    Cash of US$37.5 million at 31 December 2021 (30 September 2021: US$30.9 million)

o Free cash flow for FY 2021 within the guidance of US$10 million to US$15 million given in September 2021

o Interim dividend for 2021 of US$5.2 million paid in November 2021

o CAN$2.8 million (US$2.2 million) paid for 9.9 per cent. of Libero in December 2021

Strategic investment of 19.9 per cent. in Libero Copper & Gold Corporation

In December 2021, the Company completed a Private Placement to acquire 19.9 per of Libero. Libero is listed on the TSX Venture Exchange ("TSXV") in Canada (ticker: LBC). 9.9 per cent. of Libero was acquired immediately with the remaining 10 per cent. to be acquired following the approval of the TSXV which is expected in Q1 2022. The total cost of the acquisition will be CAN$6.3 million (US$4.9 million).

Libero has an extremely attractive portfolio of exploration assets in mining-friendly jurisdictions in North and South America including Mocoa in Colombia, Big Bulk and Big Red in British Columbia, Canada, and Esperanza in Argentina. Mocoa is one of the world's largest undeveloped Copper-Molybdeum resources. Libero has a very experienced and seasoned board of directors and management team. Its Executive Chairman is Ian Slater, who has founded numerous companies and been involved in the Mining industry for 25 years. The Company's management team is led by Ian Harris, Chief Executive Officer and President, who is a mining engineer with over 20 years' experience leading mining projects worldwide including over 10 years working and living in South America. Further information can be found at  https://www.liberocopper.com/

Anglo Asian has been granted a comprehensive package of participation rights over future share issues of Libero to avoid any dilution of its shareholding. It has also been granted "piggyback" rights, which become effective on the fifth anniversary of the initial subscription and will enable the Company to sell its shares to the public as a secondary offering should Libero sell future shares by way of a prospectus. Anglo Asian will appoint a director to the board of Libero. A technical committee, which will include one Anglo Asian appointee, is being formed to determine the future direction of Libero's exploration programme.

Assessment of the Vejnaly contract area and processing of ore stockpiles

Members of the Company's senior management including Reza Vaziri, Chief Executive Officer and President, travelled to Zangilan in early December 2021 to assess its newly-restored Vejnaly contract area, including the existing underground mine at the site.

Initial investigations of the site have been carried out and surveying of ore stockpiles has been completed. A technical study is underway to determine the commercial viability of commencing production from the existing underground mine in the second half of 2022. The handover of the surface properties and infrastructure in the Vejnaly contract area and related documents etc. from the Government of Azerbaijan is also ongoing. A contract has recently been signed with a de-mining company and work has already started to find and destroy any land mines, or other abandoned munitions from the recent conflict, on the access road to the mine, in the surrounding areas and the underground mine itself, to ensure safety of the whole area prior to the start-up of operations.

10,957 dry metric tonnes of stockpiled Vejnaly ore grading 3.91 grammes per tonne of gold and 0.27 per cent. copper were transported to Gebabek and processed by agitation leaching in December 2021 with gold recoveries of 95 per cent. producing 1,308 ounces of gold.

Final Mineral Resource estimation for Zafar

The final Mineral Resource estimation for Zafar deposit is now scheduled to be released in Q1 2022.

Gedabek - mining, detailed production and sales

Anglo Asian continued to mine its existing sites during the period following the exhaustion of the Ugur open pit in late 2020, in line with the previously announced guidance for the year. Ore stockpiled at Vejnaly was also transported and processed at Gedabek in Q4 2021.

The Company mined the following amounts and grades of ore in the 12 months to 31 December 2021:

	9 months to 30 September 2021		3 months to 31 December 2021		12 months to  31 December 2021
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	1,290,670	0.78	525,187	0.64	1,815,857	0.74
Gadir - u/g	85,333	1.96	30,610	1.76	115,943	1.91
Gedabek - u/g	154,026	1.52	94,766	1.25	248,792	1.42
Total	1,530,029	0.92	650,563	0.78	2,180,592	0.80

The Company processed the following amounts and grades of ore by leaching for FY 2020 and 2021:

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 2020	132,731	258,121	163,379	0.84	0.49	2.53
30 June 2020	139,752	134,675	161,079	0.79	0.44	1.95
30 September 2020	168,945	149,031	181,200	0.87	0.50	2.09
31 December 2020	107,852	172,206	177,487	0.89	0.59	1.81
FY 2020	549,280	714,033	683,145	0.85	0.51	2.17
31 March 2021	110,612	258,097	154,373	0.90	0.61	1.92
30 June 2021	154,619	177,369	164,288	0.81	0.59	1.64
30 September 2021	154,112	194,816	171,029	0.79	0.51	1.65
31 December 2021	113,623	309,374	151,701	0.68	0.49	1.53
FY 2021	532,966	939,656	641,391	0.80	0.54	1.68

* includes previously heap leached ore.

The Company processed the following amounts of ore and contained metal by flotation for FY 2020 and 2021:

Quarter ended	Ore processed	Gold content	Silver content	Copper content
	(tonnes)	(ounces)	(ounces)	(tonnes)
31 March 2020	126,354	1,860	28,831	622
30 June 2020	132,848	1,459	18,354	762
30 September 2020	123,440	1,565	15,530	741
31 December 2020	110,772	859	8,660	693
FY 2020	493,414	5,743	71,375	2,818
31 March 2021	111,060	920	15,782	652
30 June 2021	116,910	1,251	23,870	596
30 September 2021	121,283	1,231	19,939	519
31 December 2021	129,384	1,856	28,480	762
FY 2021	478,637	5,258	88,071	2,529

The following table summarises gold doré production and sales at Gedabek for FY 2020 and 2021:

	Gold produced* (ounces)			Silver produced* (ounces)		Gold sales** (ounces)		Gold Sales price ($/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
30 June 2021	11,789			5,921		13,947		1,808
H1 2021	23,330			10,837		19,582		1,776
30 Sept 2021	12,314			5,473		6,828		1,815
31 Dec 2021	10,561			5,430		13,153		1,825
H2 2021	22,875			10,903		19,981		1,821
FY 2021	46,205			21,740		39,563		1,799
Note

* including Government of Azerbaijan's share

** excluding 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 2020 and 2021:

	Concentrate	Copper	Gold	Silver
	production*	content*	content*	content*
2020	(dmt)	(tonnes)	(ounces)	(ounces)
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	10,857
Flotation	2,904	497	573	9,542
Total	3,171	648	580	20,399
Quarter ended 30 Sept
SART processing	301	165	7	17,148
Flotation	2,965	523	476	8,416
Total	3,266	688	483	25,564
Quarter ended 31 December
SART processing	421	196	15	21,279
Flotation	2,929	500	243	7,086
Total	3,350	696	258	28,365
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
Quarter ended 30 June
SART processing	512	301	12	22,428
Flotation	2,652	394	539	15,216
Total	3,164	695	551	37,644
Quarter ended 30 Sept
SART processing	503	265	13	19,526
Flotation	2,600	308	517	11,913
Total	3,103	573	530	31,439
Quarter ended 31 December
SART processing	338	193	16	16,414
Flotation	3,584	550	1,012	16,829
Total	3,922	743	1,028	33,243

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 2020 and 2021. 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 2020	2,994	559	833	30,790	2,018	2,863
30 June 2020	3,171	648	580	20,399	3,526	4,707
H1 2020	6,165	1,207	1,413	51,189	5,544	7,570
30 Sept 2020	3,266	688	483	25,564	2,084	3,377
31 Dec 2020	3,350	696	258	28,365	4,211	6,763
H2 2020	6,616	1,384	741	53,929	6,295	10,140
FY 2020	12,781	2,591	2,154	105,118	11,839	17,710
31 March 2021	2,848	638	366	30,499	-	-
30 June 2021	3,164	695	551	37,644	3,467	9,066
H1 2021	6,012	1,333	917	68,143	3,467	9,066
30 Sept 2021	3,103	573	530	31,439	3,549	5,712
31 Dec 2021	3,922	743	1,028	33,243	4,132	8,941
H2 2021	7,025	1,316	1,558	64,682	7,681	14,653
FY 2021	13,037	2,649	2,475	132,825	11,148	23,719

* including Government of Azerbaijan's share

** excludes Government of Azerbaijan's share

Cash

The Company had cash of US$37.5 million at 31 December 2021 (US$30.9 million at 30 September 2021) and no debt.

**ENDS**

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