ANGLO ASIAN MINING PLC

Business and Financial Review • Oct 11, 2018

National Storage Mechanism | Additional information

You don't have Javascript enabled. For full functionality this page requires javascript to be enabled.

RNS Number : 6485D

Anglo Asian Mining PLC

11 October 2018

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

11 October 2018

Anglo Asian Mining plc

Q3 2018 Production and Operations review

28 per cent. year-on-year increase in total production for YTD Q3 2018 to 61,761 GEOs and net cash of $2.8 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 2018 ("Q3 2018" and "YTD Q3 2018" respectively).

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

Overview

·    Continued improvement in total production in Q3 2018 expressed as gold equivalent ounces ("GEOs") with a 28 per cent. quarter-on-quarter and a 38 per cent. year-on-year ("y-o-y") increase to 24,412 GEOs

·    28 per cent. y-o-y increase in YTD Q3 2018 total production to 61,761 GEOs

·    Net cash of $2.8 million at end of September 2018 with only debt being the Pasha Bank low cost refinancing loan

·    As announced on 19 September 2018, an interim dividend of US$0.03 per share will be paid gross in respect of the year ending 31 December 2018 to shareholders on 8 November 2018

Anglo Asian CEO Reza Vaziri commented: "This has been another excellent quarter for Anglo Asian as copper production restarted from the flotation plant following the commissioning of the second crusher line. Quarter three production showed strong year-on-year growth of 38 per cent. to 24,412 gold equivalent ounces. Given the strong production in the year so far, I am expecting production for the full year to be at the upper end of our guidance.

"The Company's increasing production continues to strengthen our balance sheet and I am again pleased to say that the Company moved into having net cash of $2.8 million at the end of September. This is an exciting time for Anglo Asian as we prepare to pay our maiden dividend in November 2018."

Production Overview

Q3 2018

·    38 per cent. y-o-y increase in total production to 24,412 GEOs (Q3 2017: 17,714 ounces)

·    47 per cent. y-o-y increase in gold production to 21,318 ounces (Q3 2017: 14,468 ounces):

o 18,874 ounces contained within gold doré

o 7 ounces from SART processing

o 2,437 ounces from flotation

·    Copper production totalled 470 tonnes (Q3 2017: 550 tonnes):

o 81 tonnes from SART processing

o 389 tonnes from flotation processing

·    Silver production totalled 59,346 ounces (Q3 2017: 40,288 ounces):

o 7,416 ounces contained within gold doré

o 17,357 ounces from SART processing

o 34,573 ounces from flotation

YTD Q3 2018

·    28 per cent. y-o-y increase in total production to 61,761 GEOs (YTD Q3 2017: 48,275 GEOs)

·    45 per cent. y-o-y increase in gold production to 54,573 ounces (YTD Q3 2017: 37,686 ounces)

·    Copper production totalled 1,057 tonnes (YTD Q3 2017: 1,872 tonnes)

·    Silver production totalled 144,362 ounces (YTD Q3 2017: 125,375 ounces)

·    Forecast production for FY 2018 now at upper end of previous guidance of between 78,000 to 84,000 GEOs

Sales

·    Q3 2018 gold bullion sales of 18,637 ounces at an average of $1,216 per ounce (Q2 2018 gold bullion sales of 10,822 ounces at an average of $1,307 per ounce)

·    Q3 2018 copper concentrate shipments to the customer totalled 1,557 dry metric tonnes ("dmt") with a sales value of $3.4 million (excluding Government of Azerbaijan profit share) (Q2 2018: 1,736 dmt with a sales value of $4.2 million)

Company financials

·    Net cash, being cash and cash equivalents less interest-bearing loans and borrowings, totalled $2.8 million at 30 September 2017 (Net debt of $2.9 million at 30 June 2018)

Gedabek - mining, production and sales

The Company mined the following ore in the nine months to 30 September 2018:

	6 months to 30 June 2018*		3 months to 30 September 2018		9 months to  30 September 2018
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	51,237	0.95	90,415	1.34	141,652	1.20
Ugur - o/pit	467,382	1.31	420,320	1.17	887,702	1.24
Gadir - u/g	56,765	5.62	34,439	3.91	91,204	4.97
Gosha - u/g	-	-	-	-	-	-
Total	575,384	1.70	545,174	1.37	1,120,558	1.54

* 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 195,957 tonnes of dry crushed ore onto heap leach pads with an average gold content of 0.91 grammes per tonne (Q2 2018: 150,573 tonnes with an average gold content of 0.91 grammes per tonne) during Q3 2018. The Company also heap leached uncrushed Run of Mine ("ROM") ore. During Q3 2018, Anglo Asian stacked 136,595 tonnes of ROM ore onto heap leach pads with an average gold content of 0.40 grammes per tonne (Q2 2018: 77,493 tonnes with an average gold content of 0.51 grammes per tonne).

The Company processed during Q3 2018, 196,700 dry tonnes of ore with an average gold content of 2.39 grammes per tonne through the agitation leaching plant (Q2 2018: 196,107 dry tonnes with an average gold content of 2.19 grammes per tonne). 126,009 dry tonnes of ore containing an average copper content of 0.47 per cent. was processed by the flotation plant in Q3 2018.

During Q3 2018, the Company produced gold doré containing 18,874 ounces of gold and 7,416 ounces of silver at Gedabek (Q2 2018: 15,532 ounces of gold and 6,014 ounces of silver). During Q3 2018, the agitation leaching plant produced 13,881 and 5,404 ounces of gold and silver, respectively, and the heap leach operations produced 4,993 and 2,012 ounces of gold and silver, respectively.

SART processing in Q3 2018 produced 162 dmt of copper concentrate containing 81 tonnes of copper and 7 ounces of gold (Q2 2018: 260 dmt of copper concentrate containing 137 tonnes of copper and 6 ounces of gold). YTD Q3 2018 SART copper production was 332 tonnes compared to YTD Q3 2017 production of 562 tonnes. Production of copper was lower YTD 2018 due to processing mainly Ugur ores in the agitation leaching plant which do not contain copper.

Flotation processing in Q3 2018 produced 2,501 dmt of copper concentrate containing 389 tonnes of copper and 2,437 ounces of gold (Q2 2018: 1,396 dmt of copper concentrate containing 195 tonnes of copper and 1,226 ounces of gold).

The following table summarises gold doré production and sales at Gedabek for FY 2017 and Q1 to Q3 2018:

	Gold produced* (ounces)	Silver Produced* (ounces)	Gold sales** (ounces)	Gold Sales price ($/ounce)
Quarter ended
31 March 2017	9,258	2,447	8,283	1,220
30 June 2017	9,131	3,266	7,406	1,258
H1 2017	18,389	5,713	15,689	1,238
30 Sept 2017	12,221	4,381	9,287	1,286
31 Dec 2017	21,924	12,634	18,520	1,278
H2 2017	34,145	17,015	27,807	1,281
FY 2017	52,534	22,728	43,496	1,265
31 March 2018	15,750	7,110	14,956	1,328
30 June 2018	15,532	6,014	10,822	1,307
H1 2018	31,282	13,124	25,778	1,319
30 September 2018	18,874	7,416	18,637	1,216

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 2017 and Q1 to Q3 2018:

	Concentrate	Copper	Gold	Silver
	production*	content*	content*	content*
2017	(dmt)	(tonnes)	(ounces)	(ounces)
Quarter ended 31 March
SART processing	428	210	5	5,523
Flotation	2,312	396	1,815	31,399
Total	2,740	606	1,820	36,922
Quarter ended 30 June
SART processing	419	187	4	4,717
Flotation	3,203	529	3,005	37,735
Total	3,622	716	3,009	42,452
Quarter ended 30 Sept
SART processing	333	165	4	9,097
Flotation	2,379	385	2,243	26,810
Total	2,712	550	2,247	35,907
Quarter ended 31 December
SART processing	256	119	7	34,844
Flotation	-	-	-	-
Total	256	119	7	34,844
2018
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 September
SART processing	162	81	7	17,357
Flotation	2,501	389	2,437	34,573
Total	2,663	470	2,444	51,930

* including Government of Azerbaijan's share.

** certain amounts for flotation production are 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 2017 and Q1 through Q3 2018. 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 2017	2,740	606	1,820	36,922	2,230	4,220
30 June 2017	3,622	716	3,009	42,452	3,166	6,104
H1 2017	6,362	1,322	4,829	79,374	5,396	10,324
30 Sept 2017	2,712	550	2,247	35,907	2,905	5,480
31 Dec 2017	256	119	7	34,844	198	854
H2 2017	2,968	669	2,254	70,751	3,103	6,334
FY 2017	9,330	1,991	7,083	150,125	8,499	16,658
31 March 2018	1,042	255	741	33,474	608	1,715
30 June 2018	1,396	332	1,232	38,187	1,736	4,221
H1 2018	2,438	587	1,973	71,661	2,344	5,936
30 Sept 2018	2,663	470	2,444	51,930	1,557	3,368

* including Government of Azerbaijan's share

** excludes Government of Azerbaijan's share

Net cash

The Company had net cash at 30 September 2018 of $2.8 million, an increase in cash of $5.7 million from net debt of $2.9 million at 30 June 2018 as follows:

	$m
Cash at bank and on hand	14.4
Pasha Bank refinancing loan	(11.6)
Net cash	2.8

The Company made a payment of $3.0 million at the end of September in respect of corporation tax in Azerbaijan. The Company has now utilised all brought forward tax losses in Azerbaijan and going forward will be a corporation tax payer.

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
Soltan Tagiev	SP Angel Corporate Finance LLP	Tel + 44 (0) 20 3470 0470
Susie Geliher	St Brides Partners Ltd	Tel: +44 (0) 20 7236 1177
Lottie Wadham	St Brides Partners Ltd	Tel: +44 (0) 20 7236 1177

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 71,461 gold equivalent ounces ('GEOs') for the year ended 31 December 2017.  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, which is processing tailings from the agitation leach plant. A second dedicated crusher line has recently been commissioned and is now in operation for the flotation plant to enable it to operate independently of the agitation leaching plant.

The Company has forecast production for FY 2018 of between 78,000 to 84,000 GEOs an increase for the mid-point of this guidance of over 13 per cent. compared to FY 2017 production of 71,461 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 rns@lseg.com or visit www.rns.com.

END

DRLEASEEFFKPFFF