ANGLO ASIAN MINING PLC

Earnings Release • Jan 14, 2021

National Storage Mechanism | Additional information

RNS Number : 6176L

Anglo Asian Mining PLC

14 January 2021

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

14 January 2021

Anglo Asian Mining plc

Q4 and Full Year 2020 Production and Operations review

Record revenues over $100 million for FY2020 and cash of $38.8 million at 31 December 2020

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 2020 ("Q4 2020") and the year ended 31 December 2020 ("FY 2020").

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

Overview

·    Record revenues for FY 2020 in excess of $100 million driven by higher metal prices in the year

·    Strong cash generation of $38.6 million before the payment of corporation taxes and dividends

o Company achieved debt-free milestone in 2020 with cash increasing to $38.8 million at the end of December

·    69,091 gold equivalent ounces ("GEOs") produced during FY 2020 calculated using budgeted metal prices

o Reportable GEOs marginally lower at 67,249 due to the increase in the market price of gold relative to the market price of copper during the year

·    Application to confirm a five-year extension to the Gedabek contract area submitted to the Government of Azerbaijan on 24 November 2020

Anglo Asian CEO Reza Vaziri commented: "The year just ended has been without precedent and extremely demanding for Anglo Asian, yet the Company continues to perform and generate returns for its shareholders. The year commenced with the COVID-19 pandemic gradually restricting our ability to operate normally. The second half of the year saw several weeks of conflict with Armenia. Even as these issues impacted the availability of our personnel and our procurement of materials, throughout this entire period, the Company continued to operate with only minor operational inefficiencies. Despite these significant challenges, we have produced 69,091 gold equivalent ounces in the year and buoyed by increased metal prices, we will record revenues of above 100 million dollars.

"The Company is now pursuing several opportunities to grow. Having delivered updated JORC statements, we will now continue the exploration of the five priority discoveries at Gedabek with the aim to fast track mines into production. We have now also submitted the application to confirm the five-year extension of the Gedabek contract area concession, which we believe will be routine. We are also looking at acquiring new concessions in Azerbaijan.

"Very significantly, in partnership with the Government of Azerbaijan, we will start evaluating additional development of our licenses in the restored Vejnaly, Soutely and Gyzilbulakh contract areas as soon as practically possible. Finally, while our negotiations continue and are taking longer than anticipated, we are hopeful the issues that have held up the joint venture with Conroy Gold can be resolved and the agreement completed.

"With our continued operational and financial discipline, the Company is in a very good position to develop the opportunities it has been working on over the past several years. With a very strong balance sheet and available capital, Anglo Asian can take advantage of the current market to expand its operations, increase its resources and grow its production. With the discoveries at Gedabek and impending access to our restored licenses which include the Vejnali and Soutely mines (the latter being the largest gold mine in the Caucasus region), we believe the Company will be able to deliver substantial shareholder value over the coming years."

Production Overview

Q4 2020

·    Total production of 16,819 GEOs (Q4 2019: 21,284 GEOs) at budgeted metal prices

·    Gold production of 13,534 ounces (Q4 2019: 17,907 ounces):

o 13,276 ounces contained within gold doré

o 15 ounces from sulfidisation, acidification, recycling and thickening ("SART") processing

o 243 ounces from flotation processing

·    Copper production totalled 696 tonnes (Q4 2019: 729 tonnes):

o 196 tonnes from SART processing

o 500 tonnes from flotation processing

·    Silver production totalled 33,027 ounces (Q4 2019: 41,686 ounces):

o 4,614 ounces contained within gold doré

o 21,327 ounces from SART processing

o 7,086 ounces from flotation processing

FY 2020

·    Total production of 69,091 GEOs (FY 2019: 82,795 GEOs) at budgeted metal prices

·    Total reportable production at actual metal prices of 67,249 (FY 2019: 81,399)

·    Gold production of 56,864 ounces (FY 2019: 70,098 ounces)

·    Copper production totalled 2,591 tonnes (FY 2019: 2,210 tonnes)

·    Silver production totalled 122,962 ounces (FY 2019: 159,356 ounces)

Sales

Q4 2020

·    Q4 2020 gold bullion sales of 18,072 ounces at an average of $1,884 per ounce (Q4 2019 gold bullion sales of 12,509 ounces at an average of $1,481 per ounce)

·    Q4 2020 copper concentrate shipments to the customer totalled 4,211 dry metric tonnes ("dmt") with a sales value of $6.8 million (excluding Government of Azerbaijan profit share) (Q4 2019: 3,730 dmt with a sales value of $6.8 million)

FY 2020

·    FY 2020 gold bullion sales of 48,650 ounces at an average of $1,777 per ounce (FY 2019 gold bullion sales of 53,992 ounces at an average of $1,410 per ounce)

·    FY 2020 copper concentrate shipments to the customer totaled 11,839 dmt with a sales value of $17.7 million (excluding Government of Azerbaijan profit share) (FY 2019: 10,281 dmt with a sales value of $16.7 million)

Company financials

·    Cash and cash equivalents totalled $38.8 million at 31 December 2020 (Net cash, including cash in transit of $21.2 million at 31 December 2019)

Gedabek - mining, production and sales

The Company mined the following ore in the 12 months to 31 December 2020:

	9 months to 30 September 2020		3 months to 31 December 2020		12 months to  31 December 2020
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	889,274	0.95	414,682	0.89	1,303,956	0.94
Ugur - o/pit	505,426	0.95	-	-	505,426	0.95
Gadir - u/g	86,793	2.70	38,208	2.17	125,001	2.53
Gosha - u/g	6,024	2.58	-	-	6,024	2.58
Gedabek - u/g	-	-	16,376	2.37	16,376	2.37
Total	1,487,517	1.06	469,266	1.05	1,956,783	1.06

Anglo Asian stacked 107,220 tonnes of dry crushed ore on to heap leach pads with an average gold content of 0.89 grammes per tonne ("g/t") of gold during Q4 2020 (Q3 2020: 168,945 tonnes with an average gold content of 0.87 g/t of gold). The Company also heap leached uncrushed Run of Mine ("ROM") ore. During Q4 2020, Anglo Asian stacked 173,812 tonnes of ROM ore on to heap leach pads with an average gold content of 0.59 g/t of gold (Q3 2020: 149,031 tonnes with an average gold content of 0.50 g/t of gold).

The Company processed 177,487 dry tonnes of ore with an average gold content of 1.81 g/t of gold through the agitation leaching plant in Q4 2020 (Q3 2020: 181,200 dry tonnes with an average gold content of 2.39 g/t of gold). 114,447 dry tonnes of ore containing an average copper content of 0.63 per cent. were processed by the flotation plant in Q4 2020 (Q3 2020: 127,100 dry tonnes of ore containing an average copper content of 0.58 per cent.).

The Company produced gold doré containing 13,276 ounces of gold and 4,614 ounces of silver at Gedabek (Q3 2020: 14,945 ounces of gold and 5,487 ounces of silver) in Q4 2020. During Q4 2020, the agitation leaching plant produced 9,222 ounces and 3,195 ounces of gold and silver, respectively, and the heap leach operations produced 4,054 ounces and 1,419 ounces of gold and silver, respectively.

SART processing produced 421 dmt of copper concentrate containing 196 tonnes of copper, 15 ounces of gold and 21,327 ounces of silver in Q4 2020 (Q3 2020: 301 dmt of copper concentrate containing 165 tonnes of copper, seven ounces of gold and 17,329 ounces of silver).

In Q4 2020, flotation processing produced 2,929 dmt of copper concentrate containing 500 tonnes of copper, 243 ounces of gold and 7,086 ounces of silver (Q3 2020, 2,965 dmt of copper concentrate containing 523 tonnes of copper, 476 ounces of gold and 8,416 ounces of silver).

The Company sold 4,211 dmt of copper concentrate in Q4 2020 for $6.8 million compared to 2,084 dmt for $3.4 million in Q3 2020 (excluding Government of Azerbaijan production share).

The following table summarises gold doré production and sales at Gedabek for FY 2019 and FY 2020:

	Gold produced* (ounces)		Silver Produced* (ounces)		Gold sales** (ounces)		Gold Sales price ($/ounce)
Quarter ended
31 March 2019	15,547		6,634		13,122		1,306
30 June 2019	16,073		4,773		13,467		1,332
H1 2019	31,620		11,407		26,589		1,319
30 Sept 2019	16,619		4,420		14,894		1,513
31 Dec 2019	15,912		3,880		12,509		1,481
H2 2019	32,531		8,300		27,403		1,498
FY 2019	64,151		19,707		53,992		1,410
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
NOTE

* 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 2019 and FY 2020:

	Concentrate	Copper	Gold	Silver
	production*	content*	content*	content*
	(dmt)	(tonnes)	(ounces)	(ounces)
2019
Quarter ended 31 March
SART processing	142	63	11	16,201
Flotation	2,871	450	1,687	28,461
Total	3,013	513	1,698	44,662
Quarter ended 30 June
SART processing	143	65	8	12,794
Flotation	2,252	383	1,068	15,491
Total	2,395	448	1,076	28,285
Quarter ended 30 Sept
SART processing	154	70	10	11,754
Flotation	2,793	450	1,168	17,142
Total	2,947	520	1,178	28,896
Quarter ended 31 December
SART processing	165	113	16	11,159
Flotation	3,354	616	1,979	26,647
Total	3,519	729	1,995	37,806
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	10,957
Flotation	2,904	497	573	9,542
Total	3,171	648	580	20,499
Quarter ended 30 September
SART processing	301	165	7	17,329
Flotation	2,965	523	476	8,416
Total	3,266	688	483	25,745
Quarter ended 31 December
SART processing	421	196	15	21,327
Flotation	2,929	500	243	7,086
Total	3,350	696	258	28,413

* 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 2019 and FY 2020. 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 2019	3,013	513	1,698	44,662	275	625
30 June 2019	2,395	448	1,076	28,285	4,030	6,069
H1 2019	5,408	961	2,774	72,947	4,305	6,694
30 Sept 2019	2,947	520	1,178	28,896	2,246	3,189
31 Dec 2019	3,593	729	1,995	37,806	3,730	6,770
H2 2019	6,540	1,249	3,173	66,702	5,976	9,959
FY 2019	11,948	2,210	5,947	139,649	10,281	16,653
31 March 2020	2,994	559	833	30,790	2,018	2,863
30 June 2020	3,171	648	580	20,499	3,526	4,707
H1 2020	6,165	1,207	1,413	51,289	5,544	7,570
30 Sept 2020	3,266	688	483	25,745	2,084	3,377
31 Dec 2020	3,350	696	258	28,413	4,211	6,763
H2 2020	6,616	1,384	741	54,158	6,295	10,140
FY 2020	12,781	2,591	2,154	105,447	11,839	17,710

* including Government of Azerbaijan's share

** excludes Government of Azerbaijan's share

Cash

The Company had cash and cash equivalents at 31 December 2020 of $38.8 million (Net cash, including cash in transit of $21.2 million at 31 December 2019).

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: +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	Tel + 44 (0) 20 3470 0470
Camilla Horsfall	Blytheweigh Financial	Tel: +44 (0) 20 7138 3224
Megan Ray	Blytheweigh Financial	Tel: +44 (0) 20 7138 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 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 81,399 gold equivalent ounces ("GEOs") for the year ended 31 December 2019.  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.

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. It has recently announced that it will enter into a joint venture with Conroy Gold and Natural resources PLC to explore and develop various gold properties in The Republic of Ireland and Northern Ireland.

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