Production of 14,819 gold equivalent ounces in Q2 2020 calculated using budget metal prices
Increase in Cash to $29.2 million
Anglo Asian Mining plc (“Anglo Asian” or the “Company”), the AIM listed gold, copper and silver producer focused in Azerbaijan, is pleased to provide a production, sales and operations review for its Gedabek gold, copper and silver mining and production contract area (“Gedabek”) in western Azerbaijan for the three months to 30 June 2020 (“Q2 2020”) and six months to 30 June 2020 (“H1 2020”).
Note that all references to “$” are to United States dollars.
· Cash increased by $3.2 million to $29.2 million at the end of Q2 2020
· 14,819 gold equivalent ounces (“GEOs”) produced in Q2 2020 calculated using budgeted metal prices
· Reportable production at actual metal prices of 14,301 GEOs (Q2 2019: 19,618 GEOs)
· Gold production of 12,048 ounces (Q2 2019: 17,149 ounces)
o Lower gold production in Q2 2020 due to the lower grade of ore processed from the Gedabek open pit and less ore mined from the Gadir underground mine
o COVID-19 restrictions had some impact on efficiency at Gedabek
· Copper production increased to 648 tonnes (Q2 2019: 448 tonnes)
· Gold dor é production from 7 May to 22 June 2020 was shipped to the refiner and 90 per cent. of the Company’s share received prior to the end of June
· Current FY 2020 production guidance of 75,000 GEOs to 80,000 GEOs and revenue guidance of over $100 million at current metal prices remains unchanged with various measures being taken to increase production in the second half of the year
o New portal opened with a decline currently being constructed to allow underground mining of high-grade ore beneath the Gedabek open pit starting in Q4 2020
o Previously heap leached ore with high residual gold grades being recovered from old heaps and reprocessed by agitation leaching
· New JORC resource and reserves statements to be released by the end of Q3 2020
· Baku office remains open
Anglo Asian CEO Reza Vaziri commented :
“The first half of the year has presented a number of challenges for the Company. However, it is pleasing to note that we have maintained gold shipments and increased our net cash position by $3.2 million during the quarter and by $8.0 million since the start of the year.
“The COVID-19 pandemic has had some effect on our operations at Gedabek including our second quarter production. Our workforce remains highly committed but the COVID-19 restrictions in Azerbaijan have resulted in staff working without rotation continuously at Gedabek since March with reduced social interaction. The constraints placed on obtaining supplies, maintaining equipment and shipping gold have also required extra effort. Whilst we are largely overcoming the issues, Gedabek is not yet operating as efficiently as prior to the pandemic.
“The lower gold production than the previous quarter was also a result of lower than anticipated gold grades. A number of measures are currently on-going to ensure we meet our production guidance for the year. These include constructing a new decline to allow underground mining of the high-grade ore below the Gedabek open pit and the reprocessing by agitation leaching of previously heap leached ore with residual high gold grades.
“The gold price continues to perform favourably and, in Q2 2020, we received an increase of approximately $400 per ounce for gold bullion sales compared to the same period last year. With prices expected to remain at these levels, this bodes well for the future financial performance of the Company.
“I look forward to a more productive second half of the year as we remain on track to meet our FY 2020 production guidance of 75,000 GEOs to 80,000 GEOs and revenue guidance of over $100 million”
Measures to ensure FY 2020 Guidance is achieved
The Company is carrying out several measures to ensure the FY 2020 Guidance is achieved:
A new portal has been opened and a new decline is being constructed of approximately 500 metres to access the high-grade extension of the ore body under the main open pit. It is anticipated the decline will be completed around the end of the current quarter depending on the hardness of rock encountered. It will join the tunnel currently being constructed from the Gadir underground mine to give the two egresses required to commence mining. It is anticipated underground mining of Gedabek ore will begin in Q4 2020.
Around 100,000 tonnes of previously heap leached ore containing gold grades greater than two grammes per tonne has been identified. This ore, which was processed in the early years of the Company’s life, will be recovered from the old heaps and retreated by agitation leaching in H2 2020. The final lift of the tailings dam wall is almost complete, which is releasing earth-moving equipment that will be transferred to this task.
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