Anglo Asian Mining plc, the AIM listed gold, copper and silver producer focused in Azerbaijan, is holding its annual general meeting ('AGM') at 10:30am today at The London Marriott Hotel Twickenham, 198 Whitton Road, Twickenham TW2 7BA.
As previously notified, this is a closed AGM and shareholders will not be able to attend due to COVID-19 pandemic safety concerns. Accordingly, the following letter to shareholders has been released by Reza Vaziri, the Company's CEO.
Dear Shareholders
As you are all aware, I cannot be with any of you today. This is personally a big disappointment as I always enjoy meeting shareholders at our annual general meetings which are very valuable opportunities for exchanging views. I and my fellow directors very much look forward to meeting you all again next year. We all hope that the COVID-19 pandemic restrictions will be behind us by that time.
2019 has been another year of consistent delivery for the Company. Anglo Asian Mining is now a well-established, dividend paying, low cost producer of gold, copper and silver. The year demonstrated the Company's ability to deliver excellent financial performance and production whilst pursuing growth opportunities. To date, the Company has also been able to weather the COVID-19 pandemic without significant disruption to its operations or performance.
Our impressive financial performance in 2019 was highlighted by revenues of US$92.1 million, a two per cent. year-on-year increase. Profits after tax increased by over 18 per cent. to US$19.3 million and we ended the year with US$21.1 million in net cash, a significant increase compared to $6.1 million in the previous year. I am delighted to report an increased total dividend for 2019 of US$0.08 per ordinary share. We understand the importance of dividends for shareholders and, as one of the few mining companies on the London AIM market that pays dividends, we take great pleasure in rewarding our shareholders for their continued support.
Production levels in 2019 remained consistent and within our forecast range at 81,399 gold equivalent ounces. Despite producing slightly less during the year compared to 2018, continued efficiencies, our low cost base and an increased average gold sales price of $1,410 per ounce meant that revenues and profits again increased. We look to continue our consistency in production and our guidance for 2020 is between 75,000 and 80,000 gold equivalent ounces. Together with this year's increased metal prices, our excellent financial performance is set to continue.
The Company is now very focused on growing its business by both leveraging its presence in Azerbaijan and deploying its reliable cash flow elsewhere. In Azerbaijan, there are two parts to our strategy: to increase production from our existing concessions and to obtain new concessions. We have reported extensively on our exploration programme at Gedabek and elsewhere. Our efforts are starting to yield results and have already led to new discoveries. To bring these discoveries into production takes time and we have announced our expected timelines. The original Gedabek discovery within the production sharing agreement currently extends to March 2022, but it can be extended for a further 10 years and we have already started the formalities for this extension. The Company expects this renewal to be routine and in accordance with the existing agreement. We continue to operate the Gedabek mine on the basis that an extension is forthcoming.
The second part of our expansion strategy in Azerbaijan is to extend our existing concessions. We have had discussions with the Government of Azerbaijan who appear to be well disposed to granting us further exploration areas. We have also begun the legal work to determine how any new concessions can be incorporated into our existing production sharing arrangement. Although the COVID-19 pandemic has slowed these discussions throughout the first half of 2020, they have been wide-ranging and our relationship with the Government of Azerbaijan remains strong. We are working together to maximise the benefit of Azerbaijan's abundant natural resources for both parties.
We were required to acknowledge publicly in August 2019 that the Government of Azerbaijan had announced it had appointed advisors with regard to a possible transaction with Anglo Asian Mining. There have been no significant subsequent events requiring further announcements by us. Nevertheless, I can assure shareholders that it is the Company's understanding that the Government of Azerbaijan has no intention to nationalise, purchase or otherwise take control of Anglo Asian Mining or its assets in Azerbaijan.
The other pillar of our overall business strategy is to diversify and pursue opportunities outside Azerbaijan that complement our existing operations and where synergies exist. This is not an easy task. Suitable opportunities of the right size in good jurisdictions are rare and the landscape is very competitive. However, the Company has been actively investigating several opportunities and negotiations are at an advanced stage for one potential joint venture. I look forward to making further announcements about this shortly when the negotiations are concluded.
The Company has seen substantial growth over the past few years and I am confident that this will continue into the future. The COVID-19 pandemic has provided challenges, and as we prioritise the health and safety of all staff, the Company's financially robust position means we are well positioned to continue to deliver and develop, in spite of the current health emergency.
Finally, I would like to take this opportunity to thank my fellow board members, our management team and our employees for their hard work and dedication through these extraordinary times and our shareholders for their continued support and encouragement.
With kind regards
Reza Vaziri
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.
Contact:
Reza Vaziri
Tel: +994 12 596 3350
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 newly 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 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 dore 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 2020 of 65,000 ounces to 67,000 ounces of gold and 2,200 tonnes to 2,400 tonnes of copper. This total production target expressed as gold equivalent ounces ('GEOs') at budgeted metal prices is between 75,000 GEOs and 80,000 GEOS.
Anglo Asian is also actively seeking to exploit its first mover advantage in Azerbaijan to identify additional projects, as well as looking for other properties elsewhere in order to fulfil its expansion ambitions and become a mid-tier gold and copper metal production company.
ANGLO ASIAN MINING PLC 
