TIDMAAZ
RNS Number : 4640J
Anglo Asian Mining PLC
12 September 2016
Anglo Asian Mining plc / Ticker: AAZ / Index: AIM / Sector:
Mining
12 September 2016
Anglo Asian Mining plc
Interim results for the six month period to 30 June 2016
Return to profitability at Gedabek gold, copper and silver mine,
Azerbaijan
Anglo Asian Mining plc ("Anglo Asian" or the "Company"), the AIM
traded gold, copper and silver producer focused in Azerbaijan, is
pleased to announce its interim results for the six month period
ended 30 June 2016 ("H1 2016") with the Group returning to
profitability during the period. Note that all references to "$"
are to United States dollars.
A presentation on the Company and its results will be available
later today, Monday 12 September on the Anglo Asian web-site
www.angloasianmining.com
Production and sales overview
-- Strong H1 2016 production figures with increasing copper and silver production:
o Record copper production of 969 tonnes (H1 2015: 418
tonnes)
o Record silver production of 90,782 ounces (H1 2015: 6,478
ounces)
o Gold production slightly reduced at 33,837 ounces (H1 2015:
35,938 ounces)
-- Increased copper concentrate sales which have partially offset reduced gold bullion sales:
o Copper concentrate sales of 2,912 dry metric tonnes ("dmt")
which generated revenue of $5.2 million (H1 2015: 606 dmt which
generated revenue of $1.7 million)
o Gold bullion sales of 27,719 ounces at an average of $1,230
per ounce (H1 2015: 33,294 ounces at an average of $1,204 per
ounce)
-- 18,000 ounces of gold bullion sales in H2 2016 hedged at no
cost with a minimum and maximum sales price per ounce of $1,200 and
$1,426 respectively
-- Target gold production for the year to 31 December 2016 ("FY
2016") lowered to between 69,000 and 71,000 ounces of gold. Target
copper production remains at between 1,700 and 2,100 tonnes of
copper
Financial overview
-- Profit before taxation of $3.5 million (H1 2015: loss of $4.1 million)
-- Revenue decreased to $39.3 million (H1 2015: $41.8 million)
due to lower gold bullion sales partially offset by higher sales of
copper concentrate
-- 26 per cent. reduction in average cash operating costs to
$546 (H1 2015: $736) per ounce of gold bullion due to both lower
mining and processing costs and higher by-product sales
-- Increased operating cash flow before movements in working
capital of $16.9 million (H1 2015: $10.7 million)
-- Reduced capital expenditure of $6.6 million (H1 2015: $9.1
million) - expenditure mainly on advanced stripping, the new SAG
mill and underground equipment
-- Decreased net debt of $40.7 million as at 30 June 2016 (31 December 2015: $49.0 million)
-- Cash of $3.3 million as at 30 June 2016 (31 December 2015: $0.2 million)
Operational overview
-- First full six months of production from flotation plant
-- Second SAG mill operational end of August 2016
-- New underground equipment fully deployed in H1 2016
-- Contracts executed for water treatment plant and evaporation equipment
-- Work commenced on construction of electrical sub-station and
associated overhead power lines to connect Gedabek to the national
power grid
Chairman's statement
I am delighted to report a return to profitability at Anglo
Asian with the Company earning a profit before taxation in the six
months to 30 June 2016 of $3.5 million. This return to
profitability, together with the reduction in capital expenditure
and net debt, demonstrates the progress of our strategy at Gedabek.
The Company has now created a foundation for increased
profitability and cash generation.
The increase in metal prices since the beginning of 2016 and the
recent devaluations of the Azerbaijan Manat have materially
assisted in our return to profitability. However, the Company is
always mindful of the volatile environment in which it operates and
therefore remains highly focused on optimising the efficiency of
its operations and reducing costs wherever possible. For example,
we are currently undertaking initiatives to lower our cost of
electricity by connecting Gedabek to the electricity grid and to
improve the sustainability of our operations by purifying and
disposing of waste water as described further below.
Anglo Asian has recently strengthened its geological department
which is now starting to have a much greater focus on increasing
our resources and reserves, primarily at our Gedabek site. The work
carried out so far in 2016 is also described further below.
During the period, we also took the opportunity to hedge some
future gold bullion sales in June 2016 due to the strength in the
gold price at that time resulting from the uncertainties of the
United Kingdom's EU referendum decision and global economic
conditions. This protects the Company against any significant
downside in the price of gold whilst still giving us exposure to
any further increases in this volatile gold market. This is the
first time Anglo Asian has hedged gold sales and this transaction
therefore marks another stage in the development of your
company.
Although we are obviously delighted to have returned Anglo Asian
to profitability, the reduction in our target gold production for
2016 is a disappointment. Unfortunately, the late commissioning of
the second semi-autogenous grinding ("SAG") mill and the Gadir
development work required in August resulted in a shortfall in gold
doré production in July and August of 2,779 ounces compared to
budget. These issues have now been overcome but as a result we have
had to lower our target gold production for FY 2016 from between
73,000 and 77,000 ounces to between 69,000 and 71,000 ounces.
Gedabek - mining, production and sales
Gedabek is a polymetallic deposit from which Anglo Asian
produces gold, copper and silver from its Gedabek open pit mining
operation and co-located underground Gadir mine. Gosha is our
second gold and silver mine and ore mined at Gosha is transported
to Gedabek for processing, due to its close proximity. Four
different processing methods are used to produce gold, silver and
copper. Agitation leaching and heap leaching (both of crushed and
whole ore) are used to produce gold doré. Sulphidisation,
Acidification, Recycling and Thickening ("SART") and flotation are
used to produce copper concentrates, which also contain some gold
and silver.
Since the beginning of 2016, we have continued to focus on
optimising production at Gedabek. The flotation plant was in
operation throughout the period and we resolved the final
commissioning issues and succeeded in reducing the zinc content of
the concentrate. An important step in optimising the production
from the agitation leaching plant was the commissioning of a second
SAG mill in August. Although the SAG mill was commissioned later
than anticipated, it will ensure sustainable production now it is
in operation.
During H1 2016, the Company mined 835,381 tonnes of ore from its
Gedabek open pit (H1 2015: 864,672 tonnes) and 55,488 tonnes of ore
with a revised average content of 5.84 grammes per tonne from our
Gadir underground mine.
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.
During H1 2016, Anglo Asian stacked 201,652 tonnes of dry
crushed ore on to heap leach pads with an average gold content of
1.40 grammes per tonne (H1 2015: 220,096 tonnes with an average
gold content of 1.48 grammes per tonne). The Company also heap
leached uncrushed Run of Mine ("ROM") ore. During H1 2016, Anglo
Asian stacked 377,940 tonnes of ROM ore on to heap leach pads with
an average gold content of 0.80 grammes per tonne (H1 2015: 378,976
tonnes with an average gold content of 0.90 grammes per tonne).
During H1 2016, the Company processed 283,579 tonnes of ore with
an average gold content of 3.29 grammes per tonne through the
agitation leaching plant (H1 2015: 278,269 tonnes with an average
gold content of 3.50 grammes per tonne).
There was a 72 per cent. gold recovery in agitation leaching for
H1 2016 (H1 2015: 75 per cent.). This slight decrease in gold
recovery was a result of the lower grade and greater refractoriness
of the ore processed. Gold doré is produced from both heap and
agitated leach intermediate solutions, which are combined for final
processing and also re-circulated around the plant, heap leach pads
and tailings dam. Heap leaching is a long term process and
recoveries are therefore only estimates calculated from available
metallurgical statistics.
During H1 2016, the Company produced gold doré containing 31,309
ounces of gold and 4,941 ounces of silver at Gedabek (H1 2015:
35,924 ounces of gold and 1,497 ounces of silver). The agitation
leaching plant produced 21,611 and 3,381 ounces of gold and silver,
respectively, and the heap leach operations produced 9,698 and
1,560 ounces of gold and silver, respectively. The decreased gold
doré production in H1 2016 compared to H1 2015 was due to lower
production from both the agitation leaching plant and from heap
leach mainly as a result of lower ore grades.
During H1 2016, 248,950 dmt of agitation leaching plant tailings
were processed by the flotation plant. The gross metal contained
within this feed-stock was 8,869 ounces of gold, 164,029 ounces of
silver and 1,176 tonnes of copper. Copper concentrate of 3,443 dmt
was produced containing 593 tonnes of copper, 2,512 ounces of gold
and 69,073 ounces of silver. SART processing produced 736 dmt of
copper concentrate containing 376 tonnes of copper, 16 ounces of
gold and 16,768 ounces of silver.
The following table summarises gold doré production and sales at
Gedabek for FY 2015 and H1 2016:
Gold produced* Silver Gold sales** Gold sales
(ounces) produced* (ounces) price
(ounces) ($/ounce)
Quarter ended
31 March 2015 17,185 597 17,206 1,214
30 June 2015 18,739 900 16,088 1,193
H1 2015 35,924 1,497 33,294 1,204
30 Sept 2015 18,158 907 14,871 1,123
31 Dec 2015 17,588 1,858 15,759 1,108
H2 2015 35,746 2,765 30,630 1,115
FY 2015 71,670 4,262 63,924 1,161
31 March 2016 13,383 1,958 12,058 1,184
30 June 2016 17,926 2,983 15,661 1,265
H1 2016 31,309 4,941 27,719 1,230
-------------- -------------- ----------- ------------- ----------
* including Government of Azerbaijan's share.
** excluding Government of Azerbaijan's share.
The following table summarises copper concentrate production
from both its SART and flotation plants for H1 2016:
Concentrate Copper Gold Silver
production* content* content* content*
(dmt) (tonnes) (ounces) (ounces)
Quarter ended 31
March 2016
SART processing 363 181 12 7,789
Flotation 1,458 251 777 24,595
Total 1,821 432 789 32,384
Quarter ended 30
June 2016
SART processing 373 195 4 8,979
Flotation 1,988 342 1,735 44,478
Total 2,361 537 1,739 53,457
6 months ended 30
June 2016
SART processing 736 376 16 16,768
Flotation 3,446 593 2,512 69,073
Total 4,182 969 2,528 85,841
------------------- ------------ --------- --------- ---------
* including Government of Azerbaijan's share.
The following table summarises total copper concentrate
production and sales at Gedabek for FY 2015 and H1 2016. 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
2015 298 182 8 1,354 234 660
30 June
2015 391 236 6 3,627 372 1,076
H1 2015 689 418 14 4,981 606 1,736
30 Sept
2015 406 216 7 3,532 279 661
31 Dec 2015 955 335 341 15,851 817 1,285
H2 2015 1,361 551 348 19,383 1,096 1,946
FY 2015 2,050 969 362 24,364 1,702 3,682
31 March
2016 1,821 432 789 32,384 1,330 2,137
30 June
2016 2,361 537 1,739 53,457 1,582 3,019
H1 2016 4,182 969 2,528 85,841 2,912 5,159
------------- ------------ --------- --------- --------- ------------- --------------
* including Government of Azerbaijan's share.
** excluding Government of Azerbaijan's share.
Gedabek - operational update
The agitation leaching plant's second SAG mill at Gedabek became
operational at the end of August, approximately seven weeks later
than scheduled. This was due to a delay in obtaining the liners for
the mill from Turkey caused by the country's recent political
unrest. Now operational, it will ensure sustainable production from
the agitation leaching plant and can be redeployed in an expanded
flotation plant in the future.
In line with our strategy to maintain Gedabek as a low cost
operation, we have started on several initiatives to improve
sustainability and further lower costs. Contracts totaling $1.7
million have been signed for equipment to purify, and dispose of,
waste water. A membrane filtration plant will remove water from the
tailings dam and purify it, so that it can be discharged into the
environment. A concentrated solution will be produced as a
by-product from which metal and cyanide will be recovered. Further
water will also be disposed of by ancillary evaporation equipment
which is also being installed. These measures will improve the
water balance of the site and save costs as they will reduce the
tailings dam capacity requirements. Additionally, they will also
enable the partial recovery of metal currently present in the
contents of the tailings dam. The system is expected to be
installed and in operation by Q4 2016 and we look forward to seeing
the benefits from this initiative.
The Company has also entered into a $2 million contract for the
construction and installation of a 35/6 kV 2x16 MVA electrical
sub-station and associated overhead power lines to connect the
Gedabek site to the national electricity grid. This will result in
cleaner and cheaper electrical power at Gedabek, which up to now
has been supplied by diesel generators. Work has commenced and the
contractor has started construction of the electrical panel
building and some of the pylons have been installed. It is expected
that the work will be completed and power will be available from
the electricity grid by the end of 2016. Once in operation,
purchasing electricity from the grid compared to generating
electricity using diesel generators will result in cost savings of
approximately $1.8 to $2.0 million per annum.
I am also pleased to report that the new underground equipment,
which was purchased from Atlas Copco, comprising an underground
drill machine, loader and truck is now fully deployed in the Gadir
underground mine where ore was first mined in 2015. Although the
output from the Gadir mine has been less than budgeted due to the
additional development work which is now underway and which has
also affected our FY 2016 target gold production, this equipment is
improving the productivity of the Gadir mine.
Exploration and development
In 2016 to date, various activities were carried out within the
greater Gedabek area with the aim of delineating further resources
and reserves to increase the life of mine.
a. Surface brownfield exploration
This focused on areas adjacent to the current operating mine and
along strike where mineralisation is exposed at the surface.
Geological mapping was carried out over 1.4 square kilometres from
which 401 outcrop samples were taken and 214 metres of follow-up
trenching was carried out. In addition, eight drill holes with a
total of 2,172 metres of diamond drilling were completed.
Additional field mapping is planned along strike to define future
exploration targets in H2 2016.
Wider exploration activity continued over the 300 square
kilometre Gedabek contract area with positive results from surface
mapping and sampling, which has targeted other areas for follow-up
work.
b. Gadir underground mine
Exploration works continued at the Gadir underground mine.
Efforts focused on underground mapping that comprised 1,494 linear
metres backed up with 3,764 linear metres of channel sampling. With
underground development having reached significant ore zones, an
exploration drift was constructed to allow drilling to take place.
Mineral resource delineation drilling continued with the aim of
assessing the down dip and lateral extensions of the known ore
bodies. A significant new copper rich zone was discovered, which
will be subject to evaluation drilling during H2 2016. In H1 2016,
4 core drill holes (HQ size core) with a total of 441 metres had
been completed. These drill holes were designed to confirm and
extend mineralisation at Gadir. This drilling yielded positive
results with the more significant intercepts being 3.5 metres at
5.1 grammes per tonne of gold; 8 metres at 2.6 grammes per tonne of
gold; 4 metres at 4.7 grammes per tonne of gold and 3.4 metres at
4.6 grammes per tonne of gold, with narrower zones up to 14.5
grammes per tonne of gold over 1 metre. An additional 60 drill
holes (BQ size core) with a total of 1,435 metres were drilled to
define ore zone geometry.
c. Bittibulag mineral occurrence
The Bittibulag mineral occurrence is approximately 6 kilometres
north-west from the Gedabek open pit. A surface mapping exercise
was completed over the Bittibulag area covering an area of 0.8
square kilometres that included taking 320 outcrop samples for
analysis. This was followed up by a soil geochemical sampling
programme over an area of 2.8 square kilometres from which 648
samples were taken and which are currently being prepared for
assaying. A total of 56 metres of trenches were excavated and
mapped from which 60 samples were taken. On the basis of the
positive results it is planned to carry out historical adit
rehabilitation, diamond drilling and metallurgical test work
drilling in H2 2016.
Exploration work also continued at the Ordubad contract licence
area in the Nakhichevan region of Azerbaijan. During H1 2016, 42
linear metres of trenching was completed. Access was gained by
2,000 metres of road cleaning to reach exploration adits at the
Pyazbashi deposit which were developed during the Soviet era. 360
metres of underground rehabilitation was completed, plus portal
support infrastructure that allowed 583 metres of channel sampling
from which 740 samples were taken that confirmed the presence of
gold mineralisation in the quartz-kaolin vein system.
Financial review
Revenue of $39.3 million was generated from the sales of Anglo
Asian's share of gold and silver bullion, refined from doré bars
which it produced, and copper concentrate in the six months ended
30 June 2016. Sales of gold and silver bullion were $34.1 million
which comprised 27,719 ounces of gold and 4,496 ounces of silver at
an average price of $1,230 and $16 per ounce respectively. Sales of
copper concentrate were $5.2 million.
The Company entered into a series of net zero cost options with
a lower (PUT option) sales price of $1,200 per ounce and an upper
(CALL option) sales price of $1,426 per ounce on 27 June 2016. The
options mature in lots of 1,500 ounces of gold with the first lot
maturing on 12 July 2016. The rest of the lots then mature every
two weeks from this date with the final lot maturing on 13 December
2016. These options were initially recorded at a net cost of $nil
and at 30 June 2016 at their net fair value of a liability of
$282,000. The difference between the value at which initially
recorded and at the balance sheet date of $282,000 was expensed to
other operating expense in the income statement. All options will
mature within the 2016 financial year and to date lots totaling
7,500 ounces have all matured within the put and call range.
Total cost of sales for the six months ended 30 June 2016
decreased by $9.9 million to $30.0 million compared to $39.9
million in 2015. Cash cost of sales decreased by $5.5 million to
$22.6 million compared to $28.1 million in 2015. Major contributors
to these cost reductions were reagents lower by $4.3 million at
$7.3 million; fuel lower by $0.9 million at $2.9 million and spare
parts lower by $0.7 million at $0.9 million. These reductions were
as a result of continued plant optimisation, good cost control and
the weakening of the Azerbaijan Manat against the US dollar.
Depreciation decreased by $1.0 million from $10.9 million in 2015
to $9.9 million in 2016 due to lower gold production.
Administrative expenses for the six months ended 30 June 2016
decreased to $2.5 million compared to $2.8 million in 2015. The
decrease in the administrative expenses was mainly due to the
depreciation of the Azerbaijan Manat. Administrative expenses
comprise the cost of the Company's office in Baku, directors and
other administrative staff salaries, professional fees and the cost
of maintaining the Company's public quotation on the AIM
market.
The finance costs for the six months ended 30 June 2016 of $2.5
million comprise interest on loans and letters of credit of $2.3
million and accretion expense on the rehabilitation provision of
$0.2 million. There were no borrowing costs capitalised in the six
months ended 30 June 2016.
The income tax charge for the six months ended 30 June 2016 of
$3.1 million was a deferred taxation charge in respect of the
Azerbaijan operations. The Company's Azerbaijan operations are
expected to produce taxable profits for the full year ending 31
December 2016.
The Group produced gold bullion at an average cash operating
cost of production in the six months ended 30 June 2016 of $546 per
ounce compared to $736 per ounce in the six months ended 2015 and
$724 for the full year 2015. Average cash operating cost of
production for H1 2016 compared to H1 2015 was lower due to total
mining, processing and selling costs lower by $5.5 million and
copper and silver by-product credits higher by $3.9 million.
Average cash operating cost of production is calculated by
reference to mining and processing costs (before depreciation) plus
precious metal selling costs less revenue (including the Government
of Azerbaijan's share) from the sale of copper concentrate and
silver bullion.
The Company had cash and cash equivalents at 30 June 2016 of
$3.3 million and total debt at amortised cost of $44.0 million,
giving net debt of $40.7 million. The Amsterdam Trade Bank loan has
a debt service cover ratio ("DSCR") covenant of 1.25, and for the
six months ended 30 June 2016, the DSCR was 1.44. The Company had
no unutilised credit facilities at 30 June 2016.
Capital expenditure of $6.6 million represents capitalised
advanced stripping costs of $2.7 million; expenditure on
underground equipment of $1.3 million; the new SAG mill of $1.0
million and miscellaneous equipment and tools of $1.6 million.
Capitalised exploration and evaluation expenditure of $0.1
million was incurred in the six months ended 30 June 2016. This was
mainly exploration in the Ordubad contract area.
The Group reports in US dollars and a substantial proportion of
its business is conducted in either US dollars or the Azerbaijan
Manat ("AZN") which has been stable at AZN 1 equaling approximately
$0.95 during the six months ended 30 June 2016. In addition, the
Company's revenues and the majority of its interest bearing debt
are denominated in US dollars. The Company believes it does not
have any significant exposure to foreign exchange fluctuations
although the situation is kept under review.
Corporate and social responsibility
Our health, safety, social and environmental performance forms a
central part of our philosophy of continuous commitment to best
practice. Given the hazardous nature of mining and the climatic
conditions at Gedabek, especially in winter, it is inevitable that
minor accidents and mishaps occur, in spite of our best efforts to
avoid them. In the H1 2016 period under review, we recorded four
lost time injury (LTI) incidents, none of which resulted in serious
injury to the casualties.
Protection of the environment in and around our properties is of
vital importance to us. In this regard, the seven kilometre
pipeline that carries the tailings slurry from our agitation
leaching plant to the tailings dam where the tailings are stored is
of particular concern, because the internal pressures make the
pipeline prone to leakages. In order to minimise risks to the
environment, we have enclosed the pipeline in a lined ditch along
its entire length and the pipeline is regularly patrolled on a
twenty four seven basis, so that any leaks can be quickly spotted
and dealt with. In spite of these precautions, we had two leakage
incidents in March, during a particularly cold spell, when tailings
escaped from the enclosing ditch and contaminated the surrounding
area and local watercourses. However, rapid remediation measures
were undertaken and in both cases environmental equilibrium was
restored within a short period.
Our efforts to improve our health safety and environmental
performance will be sustained with the aim of achieving and
maintaining the highest international standards.
Outlook
I am delighted that your Company has returned to profitability
and look forward to the rest of 2016 and beyond with optimism.
Although the third quarter of 2016 has seen a slower start than
budgeted which has resulted in a small reduction in our FY 2016
target gold production to between 69,000 to 71,000 ounces, I
believe that during the course of H1 2016, we have demonstrated
that our strategy can deliver success, and that we have built a
strong platform for increasing profitability and cash
generation.
The outlook for metal prices still remains uncertain. However,
the increase in prices during the first eight months of 2016 is
obviously beneficial to us and we hope marks the start of a
sustained recovery in prices.
Appreciation
I would like to take this opportunity to thank our Anglo Asian
senior management team and employees, partners, the Government of
Azerbaijan, advisers and fellow directors for their support as we
continue to develop Anglo Asian. I would also like to especially
thank our shareholders for their invaluable support as we look
forward to a successful 2016 and beyond.
Khosrow Zamani
Non-executive Chairman
9 September 2016
Anglo Asian Mining plc
Condensed group income statement
Six months ended 30 June 2016
6 months 6 months
to to
30 June 30 June
2016 2015
(unaudited) (unaudited)
Notes $000 $000
-------------------------- ------ ---------------------------- ------------------
Revenue 39,323 41,823
Cost of sales (29,960) (39,940)
-------------------------- ------ ---------------------------- ------------------
Gross profit 9,363 1,883
Other income 78 13
Administrative expenses (2,524) (2,786)
Other operating expense (883) (254)
Operating profit
/ (loss) 6,034 (1,144)
Finance costs (2,546) (2,980)
-------------------------- ------ ---------------------------- ------------------
Profit / (loss) before
tax 3,488 (4,124)
Income tax 3 (3,064) 746
-------------------------- ------ ---------------------------- ------------------
Profit / (loss) after
tax 424 (3,378)
-------------------------- ------ ---------------------------- ------------------
Profit / (loss) per
share for the period
attributable to the
equity holders of
the parent 424 (3,378)
-------------------------- ------ ---------------------------- ------------------
Basic (US cents per
share) 4 0.38 (3.02)
-------------------------- ------ ---------------------------- ------------------
Diluted (US cents
per share) 4 0.38 (3.02)
-------------------------- ------ ---------------------------- ------------------
Anglo Asian Mining plc
Condensed group statement of comprehensive income
Six months ended 30 June 2016
6 months 6 months
to to
30 June 30 June
2016 2015
(unaudited) (unaudited)
$000 $000
---------------------------------------- ------------ -------------
Profit / (loss) for the period 424 (3,378)
---------------------------------------- ------------ -------------
Total comprehensive profit / (loss)
for the period 424 (3,378)
---------------------------------------- ------------ -------------
Attributable to the equity holders of
the parent company 424 (3,378)
---------------------------------------- ------------ -------------
Anglo Asian Mining plc
Condensed group statement of financial position
30 June 2016
30 June 30 June 31 December
2016 2015 2015
(unaudited) (unaudited) (audited)
Notes $000 $000 $000
--------------------------- ------ -------------- -------------- -------------
Non-current assets
Intangible assets 5 17,553 19,220 18,373
Property, plant
and equipment 6 104,141 113,464 108,428
Inventory 7 2,595 2,071 2,543
Other receivables 8 1,113 818 120
--------------------------- ------ -------------- -------------- -------------
125,402 135,573 129,464
--------------------------- ------ -------------- -------------- -------------
Current assets
Inventory 7 27,087 28,693 26,197
Trade and other
receivables 8 10,209 12,523 16,131
Cash and cash
equivalents 3,262 1,784 249
--------------------------- ------ -------------- -------------- -------------
40,558 43,000 42,577
--------------------------- ------ -------------- -------------- -------------
Total assets 165,960 178,573 172,041
--------------------------- ------ -------------- -------------- -------------
Current liabilities
Trade and other
payables 9 (15,595) (20,055) (20,112)
Interest-bearing
loans and borrowings 10 (26,733) (20,325) (26,708)
--------------------------- ------ -------------- -------------- -------------
(42,328) (40,380) (46,820)
--------------------------- ------ -------------- -------------- -------------
Net current (liabilities)
/ assets (1,770) 2,620 (4,243)
--------------------------- ------ -------------- -------------- -------------
Non-current liabilities
Provision for
rehabilitation (8,800) (9,223) (8,554)
Interest-bearing
loans and borrowings 10 (17,257) (30,186) (22,588)
Deferred tax liability (18,498) (16,218) (15,435)
--------------------------- ------ -------------- -------------- -------------
(44,555) (55,627) (46,577)
--------------------------- ------ -------------- -------------- -------------
Total liabilities (86,883) (96,007) (93,397)
--------------------------- ------ -------------- -------------- -------------
Net assets 79,077 82,566 78,644
--------------------------- ------ -------------- -------------- -------------
Equity
Share capital 11 1,993 1,978 1,993
Share premium
account 32,325 32,246 32,325
Share-based payment
reserve 292 698 283
Merger reserve 46,206 46,206 46,206
Retained (loss)
/ earnings (1,739) 1,438 (2,163)
Total equity 79,077 82,566 78,644
--------------------------- ------ -------------- -------------- -------------
Anglo Asian Mining plc
Condensed group cash flow statement
Six months ended 30 June 2016
6 months 6 months
to to
30 June 30 June
2016 2015
(unaudited) (unaudited)
$000 $000
-------------------------------------- --- ------------- -------------
Profit / (loss) before taxation 3,488 (4,124)
Adjustments for:
Finance costs 2,546 2,980
Depreciation of property,
plant and equipment 9,844 10,780
Amortisation of mining rights
and other intangible assets 954 1,026
Share-based payment expense 9 28
Write down of unrecoverable
inventory 78 -
-------------------------------------- --- ------------- -------------
Operating cash flow before
movements in working capital 16,919 10,690
Increase in trade and other
receivables (1,372) (1,381)
(Increase) / decrease in inventories (1,020) 4,261
Increase in trade and other
payables 2,388 1,969
------------------------------------------- ------------- -------------
Cash generated from operations 16,915 15,539
Income tax paid - -
-------------------------------------- --- ------------- -------------
Net cash generated from operating
activities 16,915 15,539
------------------------------------------- ------------- -------------
Investing activities
Expenditure on property, plant
and equipment and mine development (6,576) (9,141)
Investment in exploration
and evaluation activities (134) (201)
Net cash used in investing
activities (6,710) (9,342)
------------------------------------------- ------------- -------------
Financing activities
Proceeds from borrowing 6,105 3,404
Repayment of borrowings (11,468) (5,772)
Interest paid (1,829) (2,367)
------------------------------------------- ------------- -------------
Net cash outflow from financing
activities (7,192) (4,735)
------------------------------------------- ------------- -------------
Net increase in cash and cash
equivalents 3,013 1,462
Cash and cash equivalents
at beginning of period 249 322
------------------------------------------- ------------- -------------
Cash and cash equivalents
at end of the period 3,262 1,784
------------------------------------------- ------------- -------------
Anglo Asian Mining plc
Condensed group statement of changes in equity
Six months ended 30 June 2016
(Unaudited)
Share-based
Share Share payment Merger Retained Total
capital premium reserve reserve loss equity
$000 $000 $000 $000 $000 $000
-------------- ----------- -------- ------------ -------- --------- -------
1 January
2016 1,993 32,325 283 46,206 (2,163) 78,644
Profit for
the period - - - - 424 424
Share based
payment - - 9 - - 9
-------------- ----------- -------- ------------ -------- --------- -------
30 June 2016 1,993 32,325 292 46,206 (1,739) 79,077
-------------- ----------- -------- ------------ -------- --------- -------
Six months ended 30 June 2015
(Unaudited)
Share-based
Share Share payment Merger Retained Total
capital premium reserve reserve earnings equity
$000 $000 $000 $000 $000 $000
-------------- ----------- -------- ------------ -------- --------- --------
1 January
2015 1,978 32,246 670 46,206 4,816 85,916
Loss for the
period - - - - (3,378) (3,378)
Share based
payment - - 28 - - 28
-------------- ----------- -------- ------------ -------- --------- --------
30 June 2015 1,978 32,246 698 46,206 1,438 82,566
-------------- ----------- -------- ------------ -------- --------- --------
Anglo Asian Mining plc
Notes to the condensed group financial statements
Six months ended 30 June 2016
1 General information
Anglo Asian Mining plc (the "Company") is a company incorporated
in England and Wales under the Companies Act 2006. The Company's
ordinary shares are traded on the AIM market of the London Stock
Exchange plc. The Company is a holding company. The principal
activity of the Company and its subsidiaries (the "Group") is
operating a portfolio of mining operations and metal production
facilities within Azerbaijan.
Basis of preparation
The condensed group financial statements for the six month
period to 30 June 2016 have been prepared in accordance with
International Accounting Standard 34 'Interim Financial Reporting'
as issued by the International Accounting Standards Board. The
information for the half year ended 30 June 2016 does not
constitute statutory accounts as defined in section 435 of the
Companies Act 2006. A copy of the statutory accounts for the year
ended 31 December 2015 has been delivered to the Registrar of
Companies. The auditor's report on those accounts was not
qualified, did not include a reference to any matters to which the
auditor drew attention by way of an emphasis of matter and did not
contain a statement under sections 498(2) or 498(3) of the
Companies Act 2006. The condensed group financial statements have
not been audited.
The condensed group financial statements have been prepared
under the historical cost convention except for the treatment of
share based payments. The condensed group financial statements are
presented in United States dollars ("$") and all values are rounded
to the nearest thousand except where otherwise stated. In the
condensed group financial statements "GBP" and "pence" are
references to the United Kingdom pound sterling.
Accounting policies
The annual financial statements of Anglo Asian Mining plc are
prepared in accordance with IFRSs as issued by the International
Accounting Standards Board and as adopted by the European Union.
The condensed group financial statements included in this
half-yearly financial report have been prepared in accordance with
International Accounting Standard 34 'Interim Financial Reporting',
as issued by the International Accounting Standards Board and
adopted by the European Union.
The accounting policies adopted in the 2016 half-yearly
condensed group financial statements are the same as those adopted
in the 2015 annual report and accounts, other than those in respect
of new and revised standards that become effective from 1 January
2016 as follows:
- Amendments to IAS 1 Disclosure Initiative.
- Annual IFRS Improvements Process - IAS 34 Interim Financial
Reporting - Disclosure of information 'elsewhere in the interim
financial report'.
The adoption of these standards has had no material impact on
the 2016 half-yearly condensed group financial statements.
Going concern
The directors have prepared the condensed group financial
statements on a going concern basis after reviewing the Group's
cash position for the period to 31 December 2017 and satisfying
themselves that the Group will have sufficient funds on hand to
realise its assets and meet its obligations as and when they fall
due.
In making this assessment the directors have acknowledged the
challenging and uncertain market conditions in which the Group is
operating. In 2015, the price of gold averaged $1,160 per ounce
with a high of $1,298 per ounce and a low of $1,060 per ounce.
However, 2016 has seen a small but significant increase in the
price of gold and during the period 1 January to 30 June 2016, the
price of gold averaged $1,210 per ounce. In addition, 2016 and 2017
will see the benefit of a full years' contribution of revenues from
the flotation plant.
The Group commenced making payments on the principal of its debt
in 2015. At the date of these condensed group financial statements,
the Group has made all payments of interest and principal on
time.
The Group's loan agreement with the Amsterdam Trade Bank
contains a debt service cover ratio ("DSCR") covenant of at least
1.25. This ratio is calculated twice a year from its published
financial statements. The Group has so far met the DSCR of 1.25 for
all reporting periods subsequent to loan drawdown. For the full
year to 31 December 2016 and subsequent periods, the Group's
forecasts show the Group can meet the debt service cover ratio of
1.25 as specified.
Key to achieving the Group's forecast cash position, and
therefore its going concern assumption are the following:
- achieving the forecast production of gold doré from its heap
and agitation leaching facilities.
- achieving the forecast production of precious metal
concentrates from its SART and flotation processing.
- its metal (principally gold and copper) price assumptions being met or bettered.
Should there be a moderate and sustained decrease in either the
production or metal price assumptions, doubt would be cast over the
Group's short term cash position. Under this circumstance, the
Group would look to defer all non-essential capital expenditure and
administrative costs in order to preserve cash. The Group also has
access to local sources of short term finance to meet any
shortfalls.
The Group's assumptions are based on best estimates and
appropriate sensitivities have been applied. Appropriate rigour and
diligence has been performed by the directors in approving the
assumptions. The directors believe all assumptions are prepared on
a realistic basis using the best available information.
After making due enquiry, the directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. Accordingly, the
Group continues to adopt the going concern basis in preparing the
financial statements.
2 Operating segments
The Group determines operating segments based on the information
that is internally provided to the Group's chief operating decision
maker. The chief operating decision maker has been identified as
the board of directors. The board of directors currently considers
consolidated financial information for the entire Group and reviews
the business based on the Group income statement and Group
statement of financial position in their entireties. Accordingly,
the Group has only one operating segment, mining operations. The
mining operations comprise the Group's major producing asset, the
Gedabek mines which accounts for all the Group's revenues and the
majority of its cost of sales, depreciation and amortisation. The
Group's mining operations are all located within Azerbaijan and
therefore all within one geographic segment.
All sales of gold and silver bullion are made to one customer,
the Group's gold refinery, MKS Finance SA, based in Switzerland.
Copper concentrate is sold to Industrial Minerals SA.
3 Income tax
Income tax (charge) or credit during the period represents the
change in deferred tax liability during the period incurred by the
RV Investment Group Services LLC (a wholly owned subsidiary of the
Company) representative office registered in Azerbaijan.
The deferred tax asset or liability is calculated at the tax
rates that are expected to apply in the period when the liability
is settled or the asset is realised. Deferred tax is charged or
credited in the income statement, except when it relates to items
charged or credited directly to equity, in which case the deferred
tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to offset current tax assets against
current tax liabilities and when they relate to income taxes levied
by the same taxation authority and the Group intends to settle its
current tax assets and liabilities on a net basis.
Deferred tax liability increased in the 6 months to 30 June 2016
due to a decrease in temporary differences arising from a decrease
of unused tax losses during the period.
At the statement of financial position date, the Group has
unused tax losses within the Company and a subsidiary (Anglo Asian
Operations Limited) available for offset against future profits. No
deferred tax asset has been recognised in respect of such losses
due to the unpredictability of future profit streams. Unused tax
losses may be carried forward indefinitely.
4 Profit / (loss) per ordinary share
6 months 6 months
to to
30 June 30 June
2016 2015
(unaudited) (unaudited)
Profit / (loss) per $000 $000
ordinary share
Profit / (loss) after
tax for the period 424 (3,378)
Basic profit / (loss)
per share (US cents) 0.38 (3.02)
Diluted profit /
(loss) per share
(US cents) 0.38 (3.02)
------------- -------------
Weighted average Number Number
number of shares
----------------------- --- ------------- -------------
For basic earnings
per share 112,661,024 111,683,972
For diluted earnings
per share 113,761,024 111,683,972
------------- -------------
5 Intangible assets
Exploration Other
& evaluation Mining intangible
Ordubad rights assets Total
(unaudited) (unaudited) (unaudited) (unaudited)
$000 $000 $000 $000
-------------------- -------------- ------------- ------------- -------------
Cost
1 January 2015 3,513 41,925 468 45,906
Additions 347 - 30 377
31 December
2015 3,860 41,925 498 46,283
Additions 134 - - 134
-------------------- -------------- ------------- ------------- -------------
30 June 2016 3,994 41,925 498 46,417
-------------------- -------------- ------------- ------------- -------------
Amortisation
and impairment
1 January 2015 - 25,606 255 25,861
Charge for year - 2,020 29 2,049
31 December
2015 - 27,626 284 27,910
Charge for period - 940 14 954
-------------------- -------------- ------------- ------------- -------------
30 June 2016 - 28,566 298 28,864
-------------------- -------------- ------------- ------------- -------------
Net book value
31 December
2015 3,860 14,299 214 18,373
-------------------- -------------- ------------- ------------- -------------
30 June 2016 3,994 13,359 200 17,553
-------------------- -------------- ------------- ------------- -------------
6 Property, plant and equipment
Plant
and
equipment,
motor
vehicles
and Assets
leasehold Producing under
improvements mines construction Total
(unaudited) (unaudited) (unaudited) (unaudited)
$000 $000 $000 $000
-------------------- -------------- ------------- -------------- -------------
Cost
1 January 2015 19,409 159,898 2,093 181,400
Additions 257 6,810 7,222 14,289
Transfer to
producing mines - 8,838 (8,838) -
Decrease in
provision for
rehabilitation - (484) - (484)
31 December
2015 19,666 175,062 477 195,205
Additions 205 3,169 2,184 5,558
Transfer to
producing mines - 1,279 (1,279) -
30 June 2016 19,871 179,510 1,382 200,763
-------------------- -------------- ------------- -------------- -------------
Depreciation
and impairment
1 January 2015 10,761 56,208 - 66,969
Charge for year 1,881 17,927 - 19,808
31 December
2015 12,642 74,135 - 86,777
Charge for period 991 8,854 - 9,845
-------------------- -------------- ------------- -------------- -------------
30 June 2016 13,633 82,989 - 96,622
-------------------- -------------- ------------- -------------- -------------
Net book value
31 December
2015 7,024 100,927 477 108,428
-------------------- -------------- ------------- -------------- -------------
30 June 2016 6,238 96,521 1,382 104,141
-------------------- -------------- ------------- -------------- -------------
7 Inventory
30 June 30 June 31 December
2016 (unaudited) 2015 2015
Non-current assets $000 (unaudited) (audited)
$000 $000
--------------------------- ------------------ -------------- -------------
Cost
Ore stockpiles 2,595 2,071 2,543
--------------------------- ------------------ -------------- -------------
Current assets
--------------------------- ------------------ -------------- -------------
Cost
Finished goods
- bullion 680 1,078 1,441
Finished goods
- metal in concentrate 507 159 203
Metal in circuit 12,618 16,267 11,899
Ore stockpiles 5,040 2,043 4,635
Spare parts and
consumables 8,242 9,146 8,019
--------------------------- ------------------ -------------- -------------
Total current inventories 27,087 28,693 26,197
--------------------------- ------------------ -------------- -------------
Total inventories 29,682 30,764 28,740
--------------------------- ------------------ -------------- -------------
Current ore stockpiles consist of high-grade and low-grade oxide
ores that are expected to be processed during the 12 months
subsequent to the balance sheet date.
Non-current ore stockpiles consist of high-grade sulphide ore
that is expected to be processed more than 12 months after the
balance sheet date.
Inventory is recognised at lower of cost or net realisable
value.
8 Trade and other receivables
30 June 30 June 31 December
2016 (unaudited) 2015 2015
Non-current assets $000 (unaudited) (audited)
$000 $000
--------------------------- ------------------ -------------- ---------------
Advances for fixed
asset purchases 1,018 677 -
Loans 95 141 120
--------------------------- ------------------ -------------- ---------------
1,113 818 120
--------------------------- ------------------ -------------- ---------------
Current assets
--------------------------- ------------------ -------------- -------------
Gold held due to the
Government of Azerbaijan 5,093 8,349 12,412
VAT refund due 319 538 186
Other tax receivable 789 617 720
Trade receivables 1,820 341 642
Prepayments and advances 2,138 2,628 2,121
Loans 50 50 50
10,209 12,523 16,131
--------------------------- ------------------ -------------- -------------
The carrying amount of trade and other receivables approximates
to their fair value.
The VAT refunds due relate to VAT paid on purchases.
Gold bullion held and transferable to the Government of
Azerbaijan is bullion held by the Group due to the Government of
Azerbaijan. The Group holds the Government's share of the product
from its mining activities and from time to time transfers that
product to the Government of Azerbaijan. A corresponding liability
to the Government of Azerbaijan is included in trade and other
payables as disclosed in note 9.
The Group does not consider any trade and other receivables as
past due or impaired.
9 Trade and other payables
30 June 31 December
2016 (unaudited) 2015
$000 30 June
2015 (unaudited) (audited)
$000 $000
--------------------------------- ----------------- ------------------ ------------
Accruals and other payables 4,349 6,768 4,861
Derivative liability 262 - -
Trade creditors 4,711 4,594 2,302
Gold held due to the Government
of Azerbaijan 5,093 8,349 12,412
Payable to the Government
of Azerbaijan from copper
concentrate joint sale 1,180 344 537
--------------------------------- ----------------- ------------------ ------------
15,595 20,055 20,112
--------------------------------- ----------------- ------------------ ------------
10 Interest-bearing loans and borrowings
Amortised cost
30 June 30 June 31 December
2016 (unaudited) 2015 (unaudited) 2015 (audited)
$000 $000 $000
-------------------------------- ----------------- ------------------ ----------------
International Bank of
Azerbaijan - agitation
leaching plant loan 8,700 11,809 10,209
International Bank of
Azerbaijan - loan facilities 3,320 1,500 1,500
Amsterdam Trade Bank 22,186 31,899 27,096
Atlas Copco - vendor financing 1,390 727 355
Yapi Kredit Bank 1,373 434 1,659
Pasha Bank 3,161 2,142 4,617
Director 3,860 2,000 3,860
-------------------------------- ----------------- ------------------ ----------------
Total interest bearing
loans and borrowings 43,990 50,511 49,296
-------------------------------- ----------------- ------------------ ----------------
Loans repayable in less
than one year 26,733 20,325 26,708
Loans repayable in more
than one year 17,257 30,186 22,588
-------------------------------- ----------------- ------------------ ----------------
Total interest bearing
loans and borrowings 43,990 50,511 49,296
-------------------------------- ----------------- ------------------ ----------------
International Bank of Azerbaijan
Agitation leaching plant loan
In 2012 and 2013, the Group borrowed $49.5 million under a
series of loan agreements to finance the construction of its
agitation leaching plant. The interest rate for each agreement is
12 per cent. The repayment of principal begins two years from the
withdrawal date for each agreement. The loans were partially repaid
by the proceeds of a refinancing loan from Amsterdam Trade Bank.
The loan agreements are repayable commencing in 31 March 2015 and
finishing in 30 June 2018.
Loan facilities
During 2014, the Group entered into a credit facility for $1.5
million for a period of one year at an interest rate of 12 per
cent. The repayment date of the credit facility was extended in
2015 and the loan was repaid in July 2016.
In January and March 2016, the Group entered into two credit
facilities for AZN1.0 million and $1.5 million respectively. Both
loans are repayable in equal monthly installments over a period of
one year and have an interest rate of 18 and 12 per cent.
respectively.
Amsterdam Trade Bank
During 2013, the Group entered into a loan agreement for $37.0
million to refinance its agitation leaching plant loan from the
International Bank of Azerbaijan. The interest rate is 8.25 per
cent. per annum plus LIBOR. Principal is repayable in 15 equal
quarterly installments of $2,467,000. The first payment of
principal commenced in February 2015 with the final installment
payable in August 2018. The Group has pledged to the bank its
present and future claims against MKS Finance SA, the Group's sole
refiner of gold doré and buyer of gold and silver bullion until
termination of the loan agreement.
Atlas Copco
The amount outstanding is in respect of two vendor equipment
financing contracts. It comprises EUR324,000 which was repaid in
August 2016 and EUR1,104,500 which was a new financing in 2016 for
underground equipment. The 2016 financing carries an interest rate
of 8.14 per cent. per annum and is repayable in 8 equal annual
installments commencing in August 2016 with the final repayment in
May 2018.
Yapi Credit Bank, Azerbaijan
The amount outstanding is in respect of 2 letters of credit. The
interest rate for the letters of credit is 10 per cent. and both
are repayable within 12 months of drawdown.
Pasha Bank
Letters of credit for flotation plant construction
In 2014, the Group entered into a facility for $2.5 million to
finance a letter of credit for the construction of its flotation
plant. The facility carries an interest rate of 6 per cent. for the
unused portion of, and 6.8 per cent. plus one month LIBOR for the
used portion of the credit facility. In 2015, an additional
facility was entered into for $1.0 million which carries an
interest rate of 6.2 per cent. for the unused portion and 7.05 per
cent. plus one month LIBOR for the used portion of the credit
facility. The total amount outstanding under the two facilities at
30 June 2016 was $1,837,000 (31 December 2015: $3,233,000). The
total amount outstanding under the two facilities is repayable in
November 2016.
Letters of credit for cyanide purchases
On 4 July 2014, the Group entered into a credit facility to
finance letters of credit with a total amount of $3,059,000 (ANZ
2.4 million) for the purchase of cyanide. This facility was
extended in 2015 to 7 July 2017 for a total amount of $3 million at
an interest rate of 3 per cent. The amount outstanding under these
facilities as 30 June 2016 was $1,324,000 (31 December 2015:
$1,384,000). The amounts outstanding are all repayable within 12
months of the balance sheet date.
Director
On 20 May 2015, the chief executive of Anglo Asian Mining PLC
provided a $4 million loan facility to the Group. Any loan from the
facility was initially repayable on 8 January 2016 at an interest
rate of 10 per cent. On 8 January, 2016 the repayment date for the
loan facility was extended till 8 July 2016 with all other terms
remaining the same. The loan has been subsequently extended a
further six months on identical terms.
As Reza Vaziri, the chief executive of Anglo Asian Mining PLC is
a director of the Company, the loan constitutes a related party
transaction pursuant to AIM rule 13. The independent directors
(being Khosrow Zamani, Richard Round, John H. Sununu and John
Monhemius) consider, that having consulted with the Company's
nominated adviser, SP Angel Corporate Finance LLP, that the terms
of the loan are fair and reasonable insofar as its shareholders are
concerned.
11 Share capital
shares US$000
------------------------------- ------------ -------
Ordinary shares issued and
fully paid:
1 January 2015 111,683,972 1,978
Shares issued in lieu of cash
payment 977,052 15
31 December 2015 and 30 June
2016 112,661,024 1,993
------------------------------- ------------ -------
12 Contingencies and commitments
The Group undertakes its mining operations in the Republic of
Azerbaijan pursuant to the provisions of the agreement on the
exploration, development and production sharing for the prospective
gold mining areas: Gedabek, Gosha, Ordubad Group (Piazbashi,
Agyurt, Shakardara, Kiliyaki), Soutely, Kyzilbulag and Vejnali
deposits dated 20 August 1997 (the "PSA"). The PSA contains various
provisions relating to the obligations of the R.V. Investment Group
Services LLC ("RVIG"), a wholly owned subsidiary of the Company,
with regards to the exploration and development programme,
preparation and timely submission of reports to the Government,
compliance with environmental and ecological requirements, etc. The
directors believe that RVIG is in compliance with the requirements
of the PSA. The Group has submitted a development and production
programme to the Ministry of Ecology and Natural Resources of the
Government of Azerbaijan in accordance with the PSA
requirements.
The mining licence of Gedabek expires in March 2022, with
options to extend the licence by ten years conditional upon
satisfaction by RVIG of certain requirements stipulated in the
PSA.
RVIG is also required to comply with the clauses contained in
the PSA relating to environmental damage. The directors believe
RVIG is substantially in compliance with the environmental clauses
contained in the PSA.
There were no operating lease commitments at 30 June 2016.
On 20 January 2012, the Group entered into a non-cash credit
line agreement in the amount of $3,000,000 for letter of credits
with YapiKredi Bank Azerbaijan. A new pledge agreement was signed
with YapiKredi Bank Azerbaijan for guarantee of letters of credit
opened under the above mentioned agreement. According to this
pledge agreement, movable equipment for the amount of $3,402,000
was pledged to guarantee letters of credit opened under the
agreement.
13 Related party transactions
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation and are not
disclosed in this note. Transactions between the Group and other
related parties are disclosed below.
Trading transactions
During the period, there were no trading transactions between
group companies and related parties who are not members of the
Group.
Other related party transactions
a) Total payments in the 6 months to 30 June 2016 of $778,000 (6
months to 30 June 2015: $544,000 ) were made for equipment and
spare parts purchased from Proses Muhendislik Danismanlik Inshaat
veTasarim Anonim Shirket ("PMDI"), the entity in which the chief
technical officer of Azerbaijan International Mining Company has a
direct ownership interest. There is an outstanding advance payment
to PMDI at 30 June 2016 of $138,000 (30 June 2015: $71,000 and 31
December 2015: $65,000).
b) On 22 July 2015, 977,052 ordinary shares were issued to three
directors to settle certain fees and expenses of those directors.
The total amount of fees and expenses settled was $115,054 and
$1,962 respectively.
c) On 20 May 2015, the chief executive made a $4 million loan
facility available to the Group. The interest accrued and unpaid at
30 June 2016 was $394,000 (30 June 2015: $22,000 and 31 December
2015: $195,000). Details of the loan are disclosed in note 10 -
"Interest-bearing loans and borrowings".
14 Approval of condensed group financial statements
The condensed group financial statements of Anglo Asian Mining
plc and its subsidiaries for the six month period ended 30 June
2016 were authorised for issue in accordance with a resolution of
the directors on 9 September 2016.
**ENDS**
For further information please visit www.angloasianmining.com or
contact:
Anglo Asian Mining Tel: +994 12 596
Reza Vaziri plc 3350
-------------------- ------------------- ------------------
Anglo Asian Mining Tel: +994 502 910
Bill Morgan plc 400
-------------------- ------------------- ------------------
Ewan Leggat SP Angel Corporate Tel: +44 (0) 20
Finance LLP 3470 0470
Nominated Adviser
and Broker
-------------------- ------------------- ------------------
Laura Harrison SP Angel Corporate Tel + 44 (0) 20
Finance LLP 3470 0470
-------------------- ------------------- ------------------
Lottie Brocklehurst St Brides Partners Tel: +44 (0) 20
Ltd 7236 1177
-------------------- ------------------- ------------------
Susie Geliher St Brides Partners Tel: +44 (0) 20
Ltd 7236 1177
-------------------- ------------------- ------------------
Competent Person Statement
The information in the announcement that relates to exploration
results is based on information compiled by Stephen Westhead who is
Director of Geology at the Anglo Asian Mining group and a member of
the Geological Society of London and a Chartered Geologist.
Stephen Westhead has sufficient experience, relevant to the
style of mineralisation and type of deposit under consideration and
to the activity, which he is undertaking, to qualify as a qualified
person as defined by the AIM rules. Stephen Westhead has reviewed
the exploration results included in this announcement.
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 developed Azerbaijan's first operating
gold/copper/silver mine, Gedabek, which commenced gold production
in May 2009. Gedabek is an open cast mine with a series of
interconnected pits. The Company is also mines high grade ore from
the Gadir underground mine which is co-located at the Gedabek site.
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.
Gold production for the year ended 31 December 2015 from Gedabek
totaled 72,032 ounces with 969 tonnes of copper also produced.
Gedabek is a polymetallic deposit and its ore has a high copper
content, and as a result the Company produces copper concentrate
from its Sulphidisation, Acidification, Recycling, and Thickening
(SART) plant. Anglo Asian also produces a copper and precious metal
concentrate from its flotation plant, which commenced production in
the last quarter of 2015.
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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SSFFDUFMSEFU
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