TIDMAAZ
RNS Number : 6025X
Anglo Asian Mining PLC
20 November 2014
Anglo Asian Mining plc / Ticker: AAZ / Index: AIM / Sector:
Mining
20 November 2014
Anglo Asian Mining plc
Construction of a flotation plant at the Gedabek mine and
Production update for 12 Months to 31 December 2014
Anglo Asian Mining plc ("Anglo Asian" or the "Company"), the AIM
listed gold, copper and silver producer focused in Azerbaijan is
pleased to announce that it has contracted to construct a
small-scale flotation plant at its Gedabek gold, copper and silver
mine in western Azerbaijan to assess the opportunity to increase
its copper production following an increase of over 500 per cent.
in recoverable copper announced in the recently updated ore
reserves statement (19 November 2014). The Company has also revised
its targeted gold production for the 12 months ending 31 December
2014 ("FY 2014") from circa 62,000 ounces to circa 60,000
ounces.
Flotation plant
-- Planned flotation plant will act as a pilot plant to assess
future full-scale copper production and will initially process
379,000 tonnes of stockpiled high copper content sulphide ore to
produce a copper and precious metal concentrate
-- Flotation plant will operate alongside Gedabek's existing
agitation and heap leaching operations which produce gold and
silver; and the SART plant which produces copper concentrate
-- Contract placed for up to US$2.7 million for the turnkey
construction of a small-scale flotation plant with a capacity of 20
tonnes per hour of ore
-- Scheduled total capital cost including capital works and
ancillary equipment estimated at US$3.5 million
-- Negotiations with Pasha Bank, Azerbaijan to finance the
turnkey construction contract of US$2.7 million are being
concluded. It is expected the financing will be repaid from sales
of concentrate of copper and precious metal produced by the plant
processing existing stockpiles of high sulphide ore
-- Turkish construction company YPT appointed to construct the
flotation plant - strong track record with Anglo Asian. They were a
contractor for the construction of the agitation leaching plant at
Gedabek which was built for US$7 million under budget in 2013
-- Flotation plant scheduled to be operational in Q3 2015
-- CAE Mining, UK are developing a new detailed life of mine
plan for Gedabek to assess both the copper and gold cut-off grades
- expected to be finalised January 2015
Production update
-- Targeted gold production for FY 2014 revised from circa
62,000 ounces to circa 60,000 ounces due to the continuing high
copper content of the ore mined
Anglo Asian CEO Reza Vaziri said "The construction of this
small-scale flotation plant is an exciting new development in the
growth of Anglo Asian as we look to exploit the full potential of
the copper resource at Gedabek, in conjunction with increasing our
precious metal production. We believe this will be an important
first step in Anglo Asian's transition into becoming a major
producer of copper, in addition to producing precious metals."
"The plant will be built under a turnkey construction contract
and we are delighted that Pasha Bank in Azerbaijan has agreed to
finance this construction. The successful operation of this
small-scale plant will establish the feasibility of constructing a
full-scale plant, with the potential to add significant copper
production to our current levels. At present we have 379,000 tonnes
of sulphide ore with a high copper content in stockpile at Gedabek
which is suitable for processing by flotation."
"With our established copper concentrate production from our
SART plant and having secured a three year copper sales contract,
we have already demonstrated that we can successfully sell copper
and precious metals concentrates. We anticipate repeating this
process with the commissioning of our small-scale flotation plant,
and are already in discussions with our sales partner, Industrial
Minerals, with regard to purchasing future copper production from
the flotation plant."
"Conversely, the reduction in our targeted gold production from
Gedabek for FY 2014 is a disappointment. However, we expect to
produce circa 60,000 ounces of gold and this, together with our
recently increased ore reserves statement and the construction of
the flotation plant to transition Gedabek into a poly-metallic mine
producing gold, copper and silver, provide a firm basis for the
future development of the Company"
Flotation plant
During 2014, gold recovery at the Gedabek mine has been
adversely affected by the high copper content of the ore mined.
This unexpectedly high copper content of the ore has resulted in
the Company reappraising its business plans for the Gedabek mine
and the Company now believes there is an attractive opportunity to
produce commercially significant amounts of copper using flotation
to process the sulphide ore. This will add a further production
stream to enhance Anglo Asian's production profile as a leading
precious metals and copper producer in Caucasia.
To realise this opportunity, the Anglo Asian has contracted the
construction of a small-scale, semi-commercial flotation plant at
its Gedabek mine site. The plant will have a capacity to process 20
tonnes of ore per hour and it will serve as a pilot plant for a
future full-scale flotation production plant. It will be used to
test the suitability of various types of ore to flotation and
verify the design of the main flotation plant. It will also process
Anglo Asian's existing stockpiles of sulphide ore.
The total estimated capital cost of the small-scale flotation
plant is US$3.5 million including capital works and ancillary
equipment. Yilmaz Proses Teknolojileri Detay Muhendislik Madencilik
Danismanlik Insaat Limited STI ("YPT") of Ankara, Turkey has been
contracted by the Company to manufacture and construct the plant
under an engineering, procurement, construction and installation
("EPCI") contract for up to US$2.7 million. YPT has a proven track
record of working with Anglo Asian where it was a contractor for
the Company's agitation leaching plant, which was built US$7
million under budget in 2013. The contract also provides for YPT to
supervise the commissioning of the flotation plant and to initially
operate it.
The YPT contract will be settled by stage payments upon
contractual milestones. These will be made by way of an irrevocable
and confirmed letter of credit of US$2.75 million opened in favour
of YPT. Negotiations are being concluded with Pasha Bank,
Azerbaijan to provide financing for this letter of credit for
US$2.75 million over a period of one to two years.
The Company currently has a stockpile of sulphide ore with a
high copper content totalling 379,000 tonnes. The ore has an
estimated average metal content of 2.12 grammes per tonne of gold,
20.2 grammes per tonne of silver and 0.61 per cent. copper. This
ore is suitable for concentration by flotation and it will be
processed in the new flotation plant after crushing in the existing
crusher plant. The Company estimates that the incremental cash flow
generated from the processing of this ore in the first year will be
sufficient to repay the financing from Pasha Bank.
The Company currently has a contract with Industrial Minerals
SA, Switzerland for the purchase of the copper concentrate that is
produced as a process by-product in the SART plant. Preliminary
discussions with Industrial Minerals confirm that they are prepared
to purchase the production of the flotation plant.
To fully exploit the potential of the copper resource, in
addition to the gold resource, CAE Mining, UK is developing a new,
detailed life-of-mine plan based on the most recent JORC resource
model, dated April 2014, and the mining overview contained within
the ore reserves statement. This detailed, tactical mine plan will
take account of both the copper and gold cut-off grades. The new
mine plan is expected to be finalised by January 2015.
Revised target for gold production for FY 2014
The reduction in targeted gold production is a result of lower
than forecast production since the beginning of November 2014.
Production has been adversely affected by lower than anticipated
agitated leach plant throughput due to ore feed being harder than
predicted and lower recoveries due to the high copper content of
the ore continuing longer than expected.
As a result of the decreased production target and the recent
decline in gold price, the Board of Directors of Anglo Asian
expects the Company's loss after tax for the year ending 31
December 2014 to be materially higher than market expectations.
**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
------------------------------ ----------------------
Ewan Leggat SP Angel Corporate Finance Tel: +44 (0) 20 3463
LLP 2260
Nominated Adviser and Broker
------------------------------ ----------------------
Stuart Gledhill SP Angel Corporate Finance Tel + 44 (0) 20 3463
LLP 2260
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Felicity Winkles St Brides Media & Finance Tel: +44 (0) 20 7236
Ltd 1177
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Lottie Brocklehurst St Brides Media & Finance Tel: +44 (0) 20 7236
Ltd 1177
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Notes:
Anglo Asian Mining plc (AIM:AAZ) is a gold producer in Central
Asia with a broad portfolio of production and exploration assets in
Azerbaijan. The Company has a 1,962 square kilometre prospective
exploration portfolio, assembled from analysis of historic Soviet
geological data and held under a Production Sharing Agreement based
on the Azeri oil industry. The Company developed Azerbaijan's first
operating gold/copper/silver mine, Gedabek, which commenced gold
production in May 2009. Gold production for the year ended 31
December 2013 from Gedabek totalled 52,068 ounces. The Company is
also developing a second resource area, Gosha, which is 50
kilometres from Gedabek. Gosha is being advanced with a view to
developing a high-grade underground gold mine. Due to the proximity
of Gosha to Gedabek, gold ore produced at Gosha is processed at
Anglo Asian's Gedabek plant. In addition, Gedabek is a polymetalic
deposit and its ore has a high copper content, and as a result the
Company produces copper concentrate through its Sulphidisation,
Acidification, Recycling, and Thickening plant.
Anglo Asian is also actively looking 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 company news service from the London Stock Exchange
END
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