Anglo Asian Mining : Q4 and FY 2018 Production and Operations Review

RNS Number : 1126N

Anglo Asian Mining PLC

15 January 2019

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

15 January 2019

Anglo Asian Mining plc

Q4 and FY 2018 Production and Operations review

Full year production at upper range of guidance and net cash of $6.1 million at 31 December 2018

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 2018 ("Q4 2018") and the year ended 31 December 2018 ("FY 2018").

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

Overview

· 83,736 gold equivalent ounces ("GEOs") produced during FY 2018 - at the upper range of the Company's forecast of 78,000 to 84,000 GEOs

· 17 per cent. year on year ("y-o-y") increase in total production for FY 2018 compared to the previous year (FY 2017: 71,461 GEOs)

· Maiden dividend of $0.03 per share paid in November 2018 - total distribution paid to shareholders of $3.4 million

· Net cash increased in Q4 2018 by $3.3 million to $6.1 million at 31 December 2018

· Helicopter site survey of entire 300 square kilometre Gedabek contract area complete and data now being analysed to define new drill targets and identify new mineable deposits - results expected in Q1 2019

· JORC resource of the existing Gadir underground mine being compiled with publication expected in Q1 2019

Anglo Asian CEO Reza Vaziri commented:"This has been another excellent quarter which has resulted in Anglo Asian achieving full year production at the upper limit of its guidance of 84,000 GEOs. In addition to increasing production from the previous year, Anglo Asian has also significantly strengthened its balance sheet and paid a maiden dividend, all of which has bolstered Anglo Asian's value and investment profile.

"The Company is actively working towards, and investing in, the future expansion of our various operations and in line with this, Anglo Asian continues to both better define its current resources through publication of JORC resources for its existing mines and to maximise the potential of its current licence areas. In this respect, in Q1 2019 we expect to both release a JORC resource for the existing Gadir underground mine and also publish the results of the helicopter survey. We are aware of multiple additional gold and copper mineral occurrences at Gedabek, which may become future mineable deposits like our latest discovery, Ugur. We are hopeful that the helicopter survey, which is the first of its kind covering the entire 300 square kilometre Gedabek contract area, is a first step in unlocking this potential.

"Anglo Asian is continuing to lay the foundations for long term sustainable production whilst delivering value and cash returns to its shareholders. I look forward to providing further updates on forecast 2019 production and expansion and exploration results in the coming weeks."

Production Overview

Q4 2018

· Total production of 21,945 GEOs (Q4 2017: 23,185 GEOs) - prior year benefitted from higher grade ores due to the commencement of mining from the Ugur open pit mine, partially offset by higher copper production in Q4 2018

· Gold production of 18,209 ounces (Q4 2017: 21,931 ounces):

o15,444 ounces contained within gold doré

o13 ounces from SART processing

o2,752 ounces from flotation

· 394 per cent. y-o-y increase in copper production to 588 tonnes (Q4 2017: 119 tonnes) as flotation plant operated throughout Q4 2018:

o67 tonnes from SART processing

o521 tonnes from flotation processing

· 39 per cent. y-o-y increase in silver production to 65,822 ounces (Q4 2017: 47,478 ounces):

o5,646 ounces contained within gold doré

o14,229 ounces from SART processing

o45,947 ounces from flotation

FY 2018

· 17 per cent. y-o-y increase in total production to 83,736 GEOs (FY 2017: 71,461 GEOs)

· 22 per cent. y-o-y increase in gold production to 72,798 ounces (FY 2017: 59,617 ounces)

· Copper production totalled 1,645 tonnes (FY 2017: 1,991 tonnes)

· Silver production totalled 210,184 ounces (FY 2017: 172,853 ounces)

Sales overview

Q4 2018

· Q4 2018 gold bullion sales of 15,066 ounces at an average of $1,231 per ounce (Q3 2018 gold bullion sales of 18,637 ounces at an average of $1,216 per ounce)

Q4 2018 copper concentrate shipments to the customer totalled 3,774 dry metric tonnes ("dmt") with a sales value of $6.1 million (excluding Government of Azerbaijan profit share) (Q3 2018: 1,557 dmt with a sales value of $3.4 million)

FY 2018

· FY 2018 gold bullion sales of 59,481 ounces at an average of $1,265 per ounce (FY 2017 gold bullion sales of 43,496 ounces at an average of $1,265 per ounce)

· FY 2018 copper concentrate shipments to the customer totalled 7,675 dry metric tonnes ("dmt") with a sales value of $15.4 million (excluding Government of Azerbaijan profit share) (FY 2017: 8,499 dmt with a sales value of $16.7 million)

Company financials

· Net cash, being cash and cash equivalents less interest-bearing loans and borrowings,totalled $6.1 million at 31 December 2017 ($2.8million at 30 September 2018)

Gedabek - mining, production and sales

The Company mined the following ore in the year ended 31 December 2018:

	9 months to 30 September 2018*		3 months to 31 December 2018		12 months to 31 December 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	141,652	1.20	220,760	0.96	362,412	1.06
Ugur - o/pit	887,702	1.24	355,175	1.33	1,242,877	1.27
Gadir - u/g	91,204	4.97	34,674	3.34	125,878	4.52
Gosha - u/g	-	-	10,988	3.44	10,988	3.44
Total	1,120,558	1.54	621,597	1.35	1,742,155	1.47

* 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 154,901 tonnes of dry crushed ore onto heap leach pads with an average gold content of 0.81 grammes per tonne (Q3 2018: 195,957 tonnes with an average gold content of 0.91 grammes per tonne) during Q4 2018. The Company also heap leached uncrushed Run of Mine ("ROM") ore. During Q4 2018, Anglo Asian stacked 131,861 tonnes of ROM ore onto heap leach pads with an average gold content of 0.48 grammes per tonne (Q3 2018: 136,595 tonnes with an average gold content of 0.40 grammes per tonne).

The Company processed during Q4 2018, 173,332 dry tonnes of ore with an average gold content of 2.26 grammes per tonne through the agitation leaching plant (Q3 2018: 196,700 dry tonnes with an average gold content of 2.39 grammes per tonne). 129,946 dry tonnes of ore containing an average copper content of 0.53 per cent. were processed by the flotation plant in Q4 2018 (Q3 2018: 126,009 dry tonnes of ore containing an average copper content of 0.47 per cent.).

During Q4 2018, the Company produced gold doré containing 15,444 ounces of gold and 5,646 ounces of silver at Gedabek (Q3 2018: 18,874 ounces of gold and 7,416 ounces of silver). During Q4 2018, the agitation leaching plant produced 11,588 and 4,130 ounces of gold and silver, respectively, and the heap leach operations produced 3,856 and 1,516 ounces of gold and silver, respectively. During FY 2018 the Company produced gold doré containing 65,616 ounces of gold and 26,186 ounces of silver (FY 2017: 52,534 ounces of gold and 22,728 ounces of silver).

SART processing in Q4 2018 produced109 dmt of copper concentrate containing 67 tonnes of copper and 13 ounces of gold (Q3 2018: 162 dmt of copper concentrate containing 81 tonnes of copper and 7 ounces of gold). During FY 2018, SART processing produced 754 dmt of copper concentrate containing 399 tonnes of copper and 32 ounces of gold (FY 2017: 1,436 dmt of copper concentrate containing 681 tonnes of copper and 20 ounces of gold).

Flotation processing in Q4 2018 produced3,557 dmt of copper concentrate containing 521 tonnes of copper and 2,752 ounces of gold (Q3 2018: 2,501 dmt of copper concentrate containing 389 tonnes of copper and 2,437 ounces of gold). During 2018 Copper concentrate of 8,013 dmt was produced containing 1,246 tonnes of copper and 7,150 ounces of gold (FY 2017: copper concentrate of 7,894 dmt was produced containing 1,310 tonnes of copper and 7,063 ounces of gold).

The following table summarises gold doré production and sales at Gedabek for FY 2017 and FY 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	15,537	6,014	10,822	1,307
H1 2018	31,287	13,124	25,778	1,319
30 Sept 2018	18,885	7,416	18,637	1,216
31 Dec 2018	15,444	5,646	15,066	1,231
H2 2018	34,329	13,062	33,703	1,223
FY 2018	65,616	26,186	59,481	1,265

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 FY 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
Quarter ended 31 December
SART processing	109	67	13	14,229
Flotation	3,557	521	2,752	45,947
Total	3,666	588	2,765	60,176

* 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 FY 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	33,705	608	1,715
30 June 2018	1,396	332	1,232	38,187	1,736	4,221
H1 2018	2,438	587	1,973	71,892	2,344	5,936
30 Sept 2018	2,663	470	2,444	51,930	1,557	3,368
31 Dec 2018	3,666	588	2,765	60,176	3,774	6,131
H2 2018	6,329	1,058	5,209	112,106	5,331	9,499
FY 2018	8,767	1,645	7,182	183,998	7,675	15,435

.

* including Government of Azerbaijan's share

** excludes Government of Azerbaijan's share

Net cash

The Company had net cash at 31 December 2018 of $6.1 million, an increase in net cash of $3.3 million from $2.8 million at 30 September 2018 as follows:

	$m
Cash at bank and on hand	14.5
Pasha Bank refinancing loan	(8.4)
Net cash	6.1

The Company paid a dividend in Q4 2018 of $3.4 million.

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 visitwww.angloasianmining.comor contact:

Reza Vaziri	Anglo Asian Mining plc	Tel: [phone]
Bill Morgan	Anglo Asian Mining plc	Tel: [phone]
Stephen Westhead	Anglo Asian Mining plc	Tel: [phone]
Ewan Leggat	SP Angel Corporate Finance LLP Nominated Adviser and Broker	Tel: [phone]
Soltan Tagiev	SP Angel Corporate Finance LLP	Tel + 44 (0) 20 3470 0470
Susie Geliher	St Brides Partners Ltd	Tel: [phone]
Gaby Jenner	St Brides Partners Ltd	Tel: [phone]

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.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 produced83,736 gold equivalent ounces ('GEOs') for the year ended 31 December 2018. 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.A second dedicated crusher line has been commissioned and is now in operation forthe flotation plant to enable it to operate independently of the agitation leaching plant.

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.

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