Gold producer to increase production in 2016

/By AzerNews/

By Nigar Orujova

Anglo Asian Mining plc, a company involved in the extraction of precious metals in Azerbaijan, plans to increase production of gold in 2016.

The company plans to produce 80,000 ounces of gold in Azerbaijan in 2016, the company’s director general Reza Vaziri told Trend.

Anglo Asian Mining has the right to develop six fields in south-west of Azerbaijan including Gadabay, Ordubad, Gosha Bulag, Gizil Bulag, Vejnali and Soyutlu.

In 2015, the company plans to produce around 74,000-75,000 ounces of gold, Vaziri noted. ??? does not expect to produce more than the abovementioned volume this year, as the development of Gadabay field is quite difficult, he added.

Meanwhile, the company expects to get $2-$2.5 million worth profit in 2015, said Vaziri noting that this will be possible if the gold production remains at the previous level by late 2015 and its price on the global market does not change.

“Otherwise we may end the year with losses,” he said. “But if there are no serious changes, we expect to get $16 million in net profit in 2016.”

The company's revenues stood at $41.8 million in the first half of 2015, which is by 27.8 percent more than in the same period of last year.

In this period, its gross profit totaled $1.9 million, whereas the company suffered a loss at $0.8 million in January to June 2014.

AAM produced 54,103 ounces of gold, 634 tons of copper with SART method and 10,916 ounces of silver in the first nine months of 2015.

No plans to increase credit debt

In this strong aspiration to increase production AAM does not plan to attract funds from banks to finance the work in several fields.

“If additional funds are required [I assume that these funds will be needed] for Gosha, Gadir and Ordubad fields, we can increase the authorized capital of AAM,” he added.

Vaziri noted that currently the company’s authorized capital nears $11 million, distributed among six shareholders: Reza Vaziri (29.1 percent), John Sununu (9.5 percent), Khosrow Zamani (1.1 percent), John Mongemius (0.3 percent), Richard Round (0.27 percent) and Limelight Industrial Developments (3.58 percent).

At the end of the third quarter of 2015, net foreign borrowings of the company amounted to $51 million, including $17.4 million taken from Azerbaijani banks - PASHA Bank, YapiKredi and the International Bank of Azerbaijan.

Meanwhile, low prices for gold have led to a decrease in value of the shares of gold mining companies, Vaziri stressed.

“Our company was no exception, but I hope that the new plant [for the production of copper and precious metals in the Gadabay region] and the opening of an underground mine Gadir on the Gadabay field will lead to an increase in share prices of the AAM,” he said.

The value of AAM shares on London Stock Exchange amounted to $5.12 per share as of November 20, whereas their value reached $8 per share at the end of November 2014.

New field under exploration

The company is also accomplishing exploration work on the new Agyurt field in Ordubad region, Vaziri said, voicing his hope to have done it before the snow. The primary data shows the approximate gold reserves at this field account for 200,000 ounces.

It is necessary to complete the exploration before the snow as the deposit is located in the area with difficult terrain very hard to develop. Otherwise, the work will be postponed until late March, 2016.

The Ordubad contract area covering 462 square kilometers is located in Nakhchivan Autonomic Republic and contains numerous targets including Shakardara, Piyazbashi, Misdag, Agyurt, Shalala and Diakchay, which are all located within a 5-kilometer radius.

Anglo Asian Mining, a cash generative and profitable gold and copper mining and exploration company, started gold and silver production in May 2009 and copper concentrate production in 2010 at the Gadabay mine.

The gold and silver produced there are sent to Switzerland for refining, and gold bars are delivered to the country and preserved by the government.