ANGLO ASIAN MINING PLC

Earnings Release • Jul 14, 2021

National Storage Mechanism | Additional information

RNS Number : 1341F

Anglo Asian Mining PLC

14 July 2021

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

14 July 2021

Anglo Asian Mining plc

Q2 & H1 2021 Production and Operations review

Production of 16,740 gold equivalent ounces in Q2 2021

Increase in Cash to $36.6 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 months to 30 June 2021 ("Q2 2021") and six months to 30 June 2021 ("H1 2021").

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

Overview

·    Cash increased by $13.7 million to $36.6 million as at 30 June 2021

·    Production in Q2 2021 of 16,740 gold equivalent ounces ("GEOs") (Q2 2020: 14,301 GEOs)

·    Gold production of 12,342 ounces (Q2 2020: 12,035 ounces) increasing quarter on quarter

·    Quarterly copper production increased to 695 tonnes (Q2 2020: 648 tonnes)

·    Current FY 2021 production guidance of between 64,000 to 72,000 GEOs remains unchanged

·    COVID-19 restrictions within Azerbaijan continued to ease during Q2 2021 with the vast majority now lifted

·    New JORC maiden resource for the newly-found Zafar deposit to be released by early August

Anglo Asian CEO Reza Vaziri commented:

"The Company produced a solid performance in the second quarter with production increasing to 16,740 gold equivalent ounces compared to 15,431 in the first quarter. Cash generation was excellent, with $13.7 million generated. The Company remains on track to achieve its production guidance for the full year of 48,000 ounces to 54,000 ounces of gold and 2,500 tonnes to 2,800 tonnes of copper.

"The Company continues to work hard on the top-priority exploration of the new Zafar deposit, which has already demonstrated significant copper-gold drill hole intersections with encouraging copper, zinc and gold grades. We look forward to releasing the maiden JORC resource for the project by the end of this month or early August."

Production Overview

Q2 2021

·    Total production of 16,740 GEOs (Q2 2020: 14,301 GEOs)

·    Gold production totalled 12,342 ounces (Q2 2020: 12,035 ounces):

o 11,791 ounces contained within gold doré

o 12 ounces from SART processing

o 539 ounces from flotation

·    Copper production totalled 695 tonnes (Q2 2020: 648 tonnes):

o 301 tonnes from SART processing

o 394 tonnes from flotation processing

·    Silver production totalled 43,566 ounces (Q2 2020: 23,961 ounces):

o 5,922 ounces contained within gold doré

o 22,428 ounces from SART processing

o 15,216 ounces from flotation

H1 2021

·    Total reportable production of 32,171 GEOs (H1 2020: 32,501 GEOs)

·    Gold production totalled 24,249 ounces (H1 2020: 27,696 ounces)

·    Copper production totalled 1,333 tonnes (H1 2020: 1,207 tonnes)

·    Silver production totalled 78,931 ounces (H1 2020: 58,603 ounces)

Sales Overview

·    Q2 2021 gold bullion sales of 13,947 ounces at an average of $1,808 per ounce (Q2 2020: 12,743 ounces at an average of $1,713 per ounce)

·    Q2 2021 copper concentrate shipments to the customer totalled 3,467 dry metric tonnes ("dmt") with a sales value of $9 million, excluding Government of Azerbaijan production share (Q2 2020: 3,526 dmt with a sales value of $4.7 million)

Cash and Inventory

·    Cash of $36.6 million at 30 June 2021 ($22.9 million at 31 March 2021)

·    Unsold Company inventory at 30 June 2021 valued at $7.8 million (1,698 ounces of gold valued at $3.3 million and $4.5 million worth of copper concentrate)

Operations Review

The Company mined the following ore in the six months ended 30 June 2020:

	12 months to  31 December 2020		3 months to 31 March 2021		3 months to 30 June 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	1,303,956	0.94	537,044	0.90	360,249	0.68
Ugur - o/pit	505,426	0.95	-	-	-	-
Gadir - u/g	125,001	2.53	27,017	2.02	27,128	2.08
Gosha - u/g	7,235	2.58	-	-	-	-
Gedabek - u/g	16,376	2.37	40,768	1.41	59,079	1.73
Total	1,956,783	1.06	604,829	0.98	446,456	0.90

Anglo Asian stacked 154,619 tonnes of dry crushed ore on to heap leach pads with an average gold content of 0.81 grammes per tonne of gold during Q2 2021 (Q1 2021: 110,612 tonnes with an average gold content of 0.90 grammes per tonne of gold). The Company also heap leached uncrushed Run of Mine ("ROM") ore. During Q2 2021, Anglo Asian stacked 177,369 tonnes of ROM ore on to heap leach pads with an average gold content of 0.59 grammes per tonne of gold (Q1 2021: 258,097 tonnes with an average gold content of 0.61 grammes per tonne of gold).

The Company processed 164,288 dry tonnes of ore with an average gold content of 1.64 grammes per tonne through the agitation leaching plant in Q2 2021 (Q1 2021: 154,373 dry tonnes with an average gold content of 1.84 grammes per tonne). 121,708 dry tonnes of ore containing an average copper content of 0.36 per cent. were processed by the flotation plant (Q1 2021: 114,903 dry tonnes of ore containing an average copper content of 0.56 per cent.).

The Company produced gold doré containing 11,791 ounces of gold and 5,922 ounces of silver at Gedabek (Q1 2021: 11,541 ounces of gold and 4,916 ounces of silver) in the quarter. During Q2 2021, the agitation leaching plant produced 6,788 and 3,393 ounces of gold and silver, respectively, and the heap leach operations produced 5,003 and 2,529 ounces of gold and silver, respectively.

SART processing produced 512 dmt of copper concentrate, containing 301 tonnes of copper, 12 ounces of gold and 22,428 ounces of silver in Q2 2021 (Q1 2021: 473 dmt of copper concentrate containing 276 tonnes of copper, 13 ounces of gold and 19,850 ounces of silver).

In Q2 2021, flotation processing produced 2,652 dmt of copper concentrate, containing 394 tonnes of copper, 539 ounces of gold and 15,216 ounces of silver (Q1 2021, 2,375 dmt of copper concentrate containing 362 tonnes of copper, 353 ounces of gold and 10,599 ounces of silver).

The Company sold 3,467 dmt of copper concentrate in Q2 2021 for $9 million (excluding Government of Azerbaijan's production share). No copper concentrate was sold in Q1 2021.

The following table summarises gold doré production and sales at Gedabek for FY 2020 and H1 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	11,791			5,922		13,947		1,808
H1 2021	23,332			10,838		19,582		1,776
NOTE

* including Government of Azerbaijan's share

** excludes Government of Azerbaijan's share

The following table summarises copper concentrate production from both the SART and flotation plants for FY 2020 and H1 2021:

	Concentrate	Copper	Gold	Silver
	production*	content*	content*	content*
	(dmt)	(tonnes)	(ounces)	(ounces)
2020
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

* including Government of Azerbaijan's share.

Note that certain amounts for flotation production maybe 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 2020 and H1 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

* including Government of Azerbaijan's share.

** excluding Government of Azerbaijan's share.

Note that certain figures maybe different to those previously disclosed due to final reconciliation of concentrate production and sales.

Maiden Resource for Zafar deposit

A maiden mineral resource estimate will be reported as soon as delays at an external analytical laboratory are resolved. It is anticipated the estimate will be ready for publication by the end of July or in early August and will show around 8 million tonnes of mineralisation with average grades of 0.6 per cent. copper, 0.5 per cent. zinc and 0.3 grammes per tonne of gold.

Company financial review

Cash

The Company had cash at 30 June 2021 of $36.6 million and no bank debt, an increase in cash of $13.7 million since 31 March 2021 when cash was $22.9 million. The Company made payments of corporation tax totalling $1.2 million in Q2 2021.

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.

**ENDS**

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

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 at its active Gedabek, Gosha and Ordubad contract areas assembled from analysis of historic Soviet geological data and held under a Production Sharing Agreement ("PSA") modelled on the Azeri oil industry. The Company also has three recently restored contract areas in the formerly Occupied Territories and Karabakh under its PSA and which the Company has started to preliminary evaluate.

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. 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 67,249 gold equivalent ounces ("GEOs") for the year ended 31 December 2020.  Gedabek is a polymetallic ore deposit that has gold together with significant concentrations of copper in the main open pit mine. 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 a production target for the year to 31 December 2021 of 48,000 ounces to 54,000 ounces of gold and 2,500 tonnes to 2,800 tonnes of copper. This total production target expressed as gold equivalent ounces ("GEOs") at budgeted prices is between 64,000 GEOs and 72,000 GEOs.

Anglo Asian is also actively seeking to exploit its first mover advantage in Azerbaijan to identify additional projects, as well as looking for properties in other jurisdictions in order to fulfil its expansion ambitions and become a mid-tier gold and copper metal production company. 

https://www.angloasianmining.com/

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