TIDMAAZ
RNS Number : 3403R
Anglo Asian Mining PLC
21 September 2017
Anglo Asian Mining plc / Ticker: AAZ / Index: AIM / Sector:
Mining
21 September 2017
Anglo Asian Mining plc
Interim Results for the six-month period to 30 June 2017
Commencement of Gold and Silver production from the Ugur open
pit mine at Gedabek licence area, Azerbaijan
Anglo Asian Mining plc ("Anglo Asian" or the "Company"), the AIM
listed gold, copper and silver producer focused in Azerbaijan, is
pleased to announce its interim results for the six-month period
ended 30 June 2017 ("H1 2017"). Note that all references to "$" are
to United States dollars.
In addition, the Company has included a summary update on its
latest mine, the Ugur open pit mine ("Ugur"), located within the
Company's Gedabek licence area ("Gedabek"). Ugur, as announced
earlier this month, has commenced gold and silver production. It
will be an important contributor to the Company's production whilst
other optimisation and expansion initiatives continue until the end
of 2017 at the main Gedabek open pit and Gadir underground
mines.
An updated corporate presentation on the Company's H1 2017
financial results will be available later today, Thursday 21
September 2017 on the Anglo Asian web-site:
http://www.angloasianmining.com.
H1 2017 Production Overview
-- H1 2017 results confirmed anticipated increased copper and
decreased gold bullion production due to optimisation and expansion
initiatives undertaken during the period which will significantly
enhance the Company's long term outlook:
o Gold production for H1 2017 totalled 23,218 ounces - 18,389
ounces contained within gold doré, 9 ounces from SART processing
and 4,820 ounces from flotation (H1 2016: total 33,837 ounces)
o Copper production for H1 2017 increased to 1,322 tonnes - 397
tonnes from SART processing and 925 tonnes from flotation (H1 2016:
total 969 tonnes)
o Silver production for H1 2017 totalled 85,087 ounces - 5,713
ounces contained within gold doré, 10,240 ounces from SART
processing and 69,134 ounces from flotation (H1 2016: total 90,782
ounces)
o Total production for H1 2017 expressed as gold equivalent
ounces of 28,489 ounces (H1 2016: 36,729 gold equivalent
ounces)
-- Target production for the 12 months to 31 December 2017
expressed as gold equivalent ounces remains at between 64,000 and
72,000 ounces compared to FY 2016 actual total production of 72,304
gold equivalent ounces
Sales overview
-- Increased sales of copper concentrate offsetting reduced sales of gold bullion:
o H1 2017 gold bullion sales of 15,689 ounces at an average of
$1,238 per ounce (H1 2016: 27,804 ounces at an average of $1,230
per ounce)
o H1 2017 copper concentrate shipments to the customer totalled
5,396 dry metric tonnes ("dmt") with a sales value of $10.3 million
(excluding Government of Azerbaijan production share) (H1 2016:
2,901 dmt with a sales value of $5.1 million)
Financial overview
-- Revenue decreased to $29.8 million (H1 2016: $39.3 million)
due to lower gold bullion sales partially offset by higher sales of
copper concentrate
-- All in sustaining cost ("AISC") of production per ounce of
gold (including the Government of Azerbaijan's share) of $564 per
ounce, a decrease of 20 per cent. compared to H1 2016 of $703 per
ounce
-- Loss before taxation of $1.3 million (H1 2016: profit of $3.5
million) due to the planned lower production as a result of
optimisation and expansion initiatives carried out during the
period
-- Cash generated from operations of $10.8 million (H1 2016: $16.9 million)
-- Capital expenditure of $3.4 million (H1 2016: $6.6 million)
mainly on deferred stripping ($1.6 million), the water treatment
plant ($0.8 million) and Ugur development ($0.6 million)
-- Decreased net debt of $29.0 million as at 30 June 2017 (31 December 2016: $34.6 million)
-- Cash of $1.5 million as at 30 June 2017 (31 December 2016: $1.4 million)
Operational overview
-- Ugur JORC (2012) total resource of 199,000 ounces of gold and 1,049,000 ounces of silver
-- Mining of Ugur deposit commenced in September 2017 with first
production of gold doré from ore - average daily gold production as
doré from 1 to 10 September 2017 of 212 ounces more than doubled
compared to the previous eight months
-- Water treatment plant became operational in August 2017
-- Six metre raise of tailings dam wall currently underway
Chairman's statement
Review of 2017 to date
The period under review has been a busy one in developing your
Company into a sustainable and long term mining business. The
strategic review earlier in the year set down clear objectives for
2017. These included bringing the new Ugur gold deposit into
production by the final quarter of 2017 together with other
production and optimisation initiatives. These objectives have now
been broadly executed, and I am especially pleased to report the
completion of the JORC (2012) resource in August and the
commencement of gold doré production from Ugur's open pit mine
earlier this month.
The Company made a loss before taxation of $1.3 million in the
period due to the planned lower production arising from the
optimisation initiatives. However, cash generation continued to be
strong with $10.8 million generated from operations and net debt
decreased by a further $5.6 million in the period. Total production
of gold of 23,218 ounces was reduced from 33,837 ounces in the
corresponding period of 2016. This was due to the production
optimisation initiatives which inevitably, and as anticipated,
resulted in a temporary reduction in the level of gold production.
However, copper production increased to 1,322 tonnes from 969
tonnes in 2016 and continues to be an increasingly significant
proportion of our revenue. Production of gold as doré since the
beginning of September has also increased significantly with the
commencement of mining from Ugur.
The increase in precious metal prices which we saw last year has
continued into 2017 and we sold our gold bullion at an average
selling price of $1,238 per ounce compared to $1,230 per ounce in
the corresponding period in H1 2016. The Company has not carried
out any sales hedging in 2017. The increase in the price of gold
has accelerated since the end of June with the gold price now
around $1,300 per ounce. The increasing price of copper from its
low of $4,350 per tonne in January 2016 to its current price in the
region of $6,500 per tonne has also been very beneficial for the
Company given its increasing copper production.
The Group produced gold at an all in sustaining cost ("AISC") of
$564 per ounce and cash generated from operations was $10.8
million. We continued to service our debts on time and net debt
reduced from $34.6 million at 31 December 2016 to $29.0 million at
30 June 2017.
During the period under review, the Company initially produced
gold doré and copper concentrate by using crushed ore as feedstock
for its agitation leaching plant and then treating the tailings
produced by flotation. This configuration was reversed from early
February with crushed ore feedstock initially treated by flotation.
This was to treat the high copper content ore stockpiles whilst
production optimisation was carried out. The configuration was
changed yet again with the commencement of mining from Ugur. The
Ugur oxide-rich ores are treated by agitation leaching but the
tailings are not treated by flotation as Ugur ore does not contain
copper. The flotation plant is now independently processing 300 to
400 tonnes per day of mainly high sulphide stockpiled ore using its
own mills. The variety of methods available to us to utilise our
processing facilities, and the fact that changes to their
configuration were carried out without any significant lapses in
production, demonstrate their high versatility.
The completion of the JORC (2012) resource estimation for the
Ugur gold deposit in August 2017 and the commencement of production
from the deposit this month was a significant achievement for the
Company and all the employees involved. Ugur's total JORC (2012)
mineral resource of 199,000 ounces of gold is a valuable addition
to the Company's resources and will further advance the
sustainability of the Company.
The water purification plant at Gedabek is now operational and
produces potable (drinking quality) water which can be used either
in the Company's processing facilities or discharged into the
environment. The Company is also constructing a six metre raise of
the tailings dam wall, which is expected to be complete by the end
of 2017. The tailings dam will then have adequate capacity for the
next two to three years.
The Company continues to place special emphasis on Health,
Safety and Environment ("HSE") issues. The Company's HSE department
was increased in June 2017 from three to seven staff and the lost
time injury ("LTI") rate continued to decrease.
Outlook
I continue to look forward with optimism. In the period under
review, a number of key initiatives were completed which will
enhance the sustainability and long term future of the Company's
mining operations. As anticipated, our production and hence
profitability was modestly impacted by these initiatives in the
period. However, the positive impact of these initiatives is
already evident and they will deliver significant value during the
remainder of the year and into 2018 and beyond.
With the above in mind, I am pleased to reconfirm our total
production target for 2017 at between 64,000 to 72,000 ounces
compared to 72,304 ounces in 2016. This target is stated in gold
equivalent ounces ("GEOs") given the increasing proportion of
copper in our production
Appreciation
I would like to take this opportunity to thank our Anglo Asian
employees, our partners, the Government of Azerbaijan, advisers and
fellow directors for their continued support as we continue to
build the Company into a leading and profitable gold, copper and
silver producer in Azerbaijan and Caucasia. I would also like to
especially thank our shareholders for their invaluable support as
we look forward to a successful completion of 2017 and beyond.
Khosrow Zamani
Non-executive Chairman
20 September 2017
Strategic review
Gebabek - mining and production
The Gedabek mining operation is located in a 300-square
kilometre contract area ("Gedabek Licence") in the Lower Caucasus
mountains in western Azerbaijan on the Tethyan Tectonic Belt, one
of the world's most significant copper and gold-bearing geological
structures. Within the Gedabek Licence are the majority of the
Group's open pit and underground mines and its processing
facilities.
The principal mining operation ("Main Open Pit") within the
Gedabek Licence is conventional open cast mining from several
contiguous open pits. Ore is also mined from the Gadir underground
mine, which is located approximately one kilometre away, from the
Main Open Pit. Gosha, which is approximately 50 kilometers away
from the Gedabek Licence, is the Company's second underground mine
and ore mined at Gosha is transported to Gedabek for processing.
The main ore body at Gedabek is a polymetallic deposit from which
Anglo Asian produces gold, copper and silver. In 2016, the Company
discovered the Ugur gold deposit which is located three kilometres
north-west from the Company's processing facilities at Gedabek. A
JORC (2012) total resource of 199,000 ounces of gold and 1,049,000
ounces of silver was published in August 2017 and mining of an
oxide-rich ore at Ugur, commenced in September 2017, by
conventional open cast mining.
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 a copper concentrate which also
includes gold and silver. The Company's processing facilities are
flexible. Crushed ore can either be initially treated by agitation
leaching and the tailings from this process treated by flotation to
fully recover the metals or vice versa. The agitation leaching and
flotation plants can also be run at the same time as separate
stand-alone plants using different feedstock. The methodology
employed will depend upon the chemical composition of the ores to
be treated.
In early 2017, a wide-ranging strategic review of Gedabek was
completed in response to the discovery of the Ugur gold deposit and
the decreasing gold grade and higher percentage of copper of ore
mined in the Main Open Pit. As a result of this strategic review,
several initiatives were undertaken to ensure sustainable long-term
production at Gedabek. Ore production from both the Main Open Pit
and the Gadir underground mine was temporarily reduced so that
exploration, ore zone definition and production optimisation could
be carried out. The Company also started to process its 1.1 million
tonnes of high copper content stockpiles during this period of
reduced ore mining to maintain production. Exploration and
development of the Ugur deposit was maintained throughout the
period so that mining could commence from an open pit by the final
quarter of 2017. This was achieved ahead of schedule at the
beginning of September 2017 as announced on 13 September.
The Company also changed its processing of ore during the period
in response to the strategic review. Until early February 2017, ore
was crushed and then initially processed by the Company's agitation
leaching plant and the tailings from the plant fed to the flotation
plant for processing to recover any remaining metal. In early
February 2017, due to the higher percentage of copper in the
stockpiled ores being processed, ore was crushed and initially
processed by flotation and the tailings from the flotation plant
treated by agitation leaching. This processing methodology was
maintained until late August 2017. The configuration was then
changed again with the commencement of mining from Ugur. The Ugur
oxide-rich ores do not contain copper and are treated by agitation
leaching but the tailings are not treated by flotation. The
flotation plant is now independently processing stockpiled ore
using its own mills.
During H1 2017, the Company mined 542,936 dry tonnes of ore from
its Gedabek open pit (H1 2016: 835,381 tonnes). Continued mining
was made possible during the quarter due to careful utilisation of
equipment and human resources. In H1 2017, 25,573 dry tonnes of
high grade ore with an average content of 3.85 grammes per tonne
was mined from its Gadir underground mine (H1 2016: 55,488 tonnes
with an average content of 5.84 grammes per tonne) in conjunction
with its exploration programme.
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 combined agitation leaching and flotation
plants.
During H1 2017, Anglo Asian stacked 272,495 tonnes of dry
crushed ore on to heap leach pads with an average gold content of
1.03 grammes per tonne (H1 2016: 201,652 tonnes with an average
gold content of 1.40 grammes per tonne). The Company also heap
leached uncrushed (Run of Mine - "ROM") ore. During H1 2017, Anglo
Asian stacked 219,181 tonnes of ROM ore on to heap leach pads with
an average gold content of 0.88 grammes per tonne (H1 2016: 377,940
tonnes with an average gold content of 0.80 grammes per tonne).
During H1 2017, the Company processed 360,872 tonnes of ore with
an average gold content of 1.64 grammes per tonne through the
combined agitation leaching and flotation plants (H1 2016: 184,074
tonnes of ore with an average gold content of 1.52 grammes per
tonne). Of the ore processed in H1 2017, 209,268 tonnes were mined
from the open pit and the Gadir and Gosha underground mines and
152,604 tonnes were from the Company's stockpiles.
During H1 2017, the Company produced gold doré containing 18,389
ounces of gold and 5,713 ounces of silver at Gedabek (H1 2016:
31,309 ounces of gold and 4,941 ounces of silver). The agitation
leaching plant produced 10,114 and 2,993 ounces of gold and silver,
respectively, and the heap leach operations produced 8,275 and
2,720 ounces of gold and silver, respectively. The decreased gold
doré production in H1 2017 compared to H1 2016 was due to lower
gold grade of processed ores and the production optimisation
initiatives undertaken during the period.
During H1 2017, the flotation plant processed 275,581 tonnes of
ore in the form of feed-stock of both milled ore and tailings from
the agitation leaching plant. The gross metal contained within this
feed-stock was 10,317 ounces of gold, 149,588 ounces of silver and
1,340 tonnes of copper. Copper concentrate of 5,585 dmt was
produced containing 925 tonnes of copper and 4,820 ounces of gold.
SART processing produced 846 dmt of copper concentrate containing
397 tonnes of copper and 9 ounces of gold.
The following table summarises gold doré production and sales at
Gedabek for FY 2016 and H1 2017:
Gold produced* Silver Gold sales** Gold Sales
(ounces) Produced* (ounces) price
(ounces) ($/ounce)
Quarter ended
31 March 2016 13,383 1,958 12,143 1,184
30 June 2016 17,926 2,983 15,661 1,265
H1 2016 31,309 4,941 27,804 1,230
30 Sept 2016 15,407 2,502 12,567 1,332
31 Dec 2016 14,221 2,845 12,995 1,227
H2 2016 29,628 5,347 25,562 1,278
FY 2016 60,937 10,288 53,366 1,253
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
-------------- -------------- ----------- ------------- ----------
* 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
2016 and H1 2017:
Concentrate Copper Gold Silver
production* content* content* content*
2016 (dmt) (tonnes) (ounces) (ounces)
Quarter ended 31
March
SART processing 363 181 12 7,789
Flotation** 1,458 200 607 19,055
Total 1,821 381 619 26,844
Quarter ended 30
June
SART processing 373 195 4 10,047
Flotation** 1,988 302 1,445 39,184
Total 2,361 497 1,449 49,231
Quarter ended 30
Sept
SART processing 418 225 4 7,291
Flotation 1,426 260 1,123 24,106
Total 1,844 485 1,127 31,397
Quarter ended 31
December
SART processing 445 219 7 6,751
Flotation 2,059 359 1,255 40,620
Total 2,504 578 1,262 47,371
2017
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 418 187 4 4,717
Flotation 3,273 529 3,005 37,735
Total 3,691 716 3,009 42,452
------------------ ------------ --------- --------- ---------
* 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 copper concentrate production and
sales at Gedabek for FY 2016 and H1 2017. 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
2016 1,821 381 619 26,844 1,319 2,137
30 June
2016 2,361 497 1,449 49,231 1,582 2,977
H1 2016 4,182 878 2,068 76,075 2,901 5,114
30 Sept
2016 1,844 485 1,127 31,397 1,782 3,612
31 Dec
2016 2,504 578 1,262 47,371 2,147 3,865
H2 2016 4,348 1,063 2,389 78,768 3,929 7,477
FY 2016 8,530 1,941 4,457 154,843 6,830 12,591
31 March
2017 2,740 606 1,820 36,922 2,230 4,220
30 June
2017 3,691 716 3,009 42,452 3,166 6,104
H1 2017 6,431 1,322 4,829 79,374 5,396 10,324
---------- ------------ --------- --------- --------- ------------- --------------
* including Government of Azerbaijan's share
** excludes Government of Azerbaijan's share
Gebabek - operational update
The Company's membrane water filtration plant, that produces
water of sufficient purity from water in the tailings dam that it
can be discharged into the environment, recently commenced
operation. A by-product concentrate will also be produced from
which metal and cyanide can be recovered. This will improve the
water balance of the site and save costs as it will reduce the
tailings dam capacity required. It will also enable the recovery of
metal currently in the tailings dam.
The Company has recently commenced a six metre raise of the wall
of its tailing dam. 700 cubic metres of material is being moved to
raise the wall and it is expected that the earthworks will be
completed by the end of November and the wall lined and completed
by the end of the year. This wall raise is expected to give the dam
an additional two to three years of storage capacity.
Gedabek - Ugur
Update on Ugur development
Anglo Asian's in-house exploration team defined a new mineral
occurrence in 2016 named "Ugur" (meaning "good luck" or "success"
in the Azeri language) from geological mapping and surface sampling
methods. Ugur is located three kilometres north-west from the
Company's processing facilities at its Gedabek Licence.
The deposit comprises an oxide gold-rich zone to a depth varying
between 50 to 60 metres. The area covered by drilling and the
proposed open pit outline is 350 metres (east-north-east) by 250
metres (north-north-west).
Throughout the period under review, the Company has extensively
explored the Ugur deposit to define its resource and reserves and
has also undertaken the development work necessary to bring the
deposit into production as an open cast mine.
The development work included the construction of a 4.6
kilometre road between the Ugur gold deposit and the Company's
processing facilities. Work is nearing completion on constructing
all necessary infra-structure. This includes the mine, geology and
medical and HSE offices, hygiene facilities, mechanical workshop,
lubricants and spares stores, a weighbridge and diesel store. The
weighbridge will be located at the intersection of the mine access
road and the haul road to the plant, while other building
infrastructure will be located about 500 metres from the open pit
boundary designated in accordance with blasting regulations.
Pre-stripping of the top soil has been carried out. Mining by
conventional shovel and truck haulage to an Ugur stockpile near the
processing facilities started mid-August 2017. Production of gold
dorè from Ugur ore started at the beginning of September 2017 as
announced on 13 September 2013.
JORC (2012) Mineral Resources and Ore Reserves Statements
The mineral resource and reserves are prepared in accordance
with JORC (2012) which is the current edition of the JORC Code
published in 2012. After a transition period, the 2012 edition came
into mandatory operation from 1 December 2013.
Mineral Resource
Mineral Resource
Gold Silver
Tonnage Grade Grade Gold Silver
(millions) (g/t)* (g/t)* (ounces) (ounces)**
Measured 4.12 1.2 6.3 164,000 841,000
Indicated 0.34 0.8 3.9 8,000 44,000
Measure and
Indicated 4.46 1.2 6.2 172,000 884,000
Inferred 2.50 0.3 2.1 27,000 165,000
Total 6.96 0.9 4.7 199,000 1,049,000
* grammes per tonne
** due to rounding, does not add.
Mineral Reserves
Gold Silver
Tonnage Grade Grade Gold Silver
Mineral Reserves (millions) (g/t)* (g/t)* (ounces) (ounces)
Proved 3.37 1.3 7.2 142,000 779,000
Probable 0.22 0.8 4.1 5,000 29,000
Proved and
probable 3.59 1.3 7.0 147,000 808,000
The Proved and Probable Ore Reserves estimate is based on that
portion of the Measured and Indicated Mineral Resource of the
deposit within the scheduled mine designs that may be economically
extracted, considering all "Modifying Factors" in accordance with
the JORC (2012) Code.
Mineral Resource and Reserve Estimation
Anglo Asian, together with the mining and geological consulting
group Datamine International, prepared the JORC (2012) resource and
reserves estimation of the Ugur deposit. This was following the
completion of 55 "phase one" reverse circulation ("RC") drill holes
totalling 1,842 metres, 50 core drill holes totalling 6,355 metres,
and 33 infill RC drill holes totalling 2,766 metres that
supplemented initial surface outcrop and channel sampling. The
detailed mineral resource and reserves estimates and a glossary of
terminology related to the mineral resource and reserves estimate
has been announced by the Company on 14 August 2017 and is
available on its web site at:
http://www.angloasianmining.com/scripts/php/rns_viewer.php?id=26308910.
A full JORC report will be available on the Company website by
the end of September 2017.
Corporate and social responsibility
Our health, safety, social and environmental ("HSE") performance
forms a central part of our philosophy of continuous commitment to
best in class practice. The Company continues to provide additional
resources to improve its safety and environmental record and during
the period four additional HSE officers were recruited. The number
of HSE officers at 30 June 2017 was seven compared to three at the
beginning of the period. The success of the Company's efforts at
improving safety is shown by the decreasing lost time injury
("LTI") rate. This was 1.21 per one million man hours in the period
compared to 3.06 in 2016 and 6.92 in 2015.
There was one lost time injury in the period. This was burns to
an employee due to a chemical spill in the SART plant. Action was
taken to prevent future chemical spills including additional staff
training and physical measures to further confine chemicals within
the SART plant.
Various actions to improve safety were taken in the period in
addition to increasing the staff within the HSE department.
Approximately 300 hours of safety training was given to employees,
contractors and visitors. Various items of emergency response
equipment such as fire-fighting and emergency breathing equipment,
vehicle extraction equipment and a portable defibrillator were also
purchased in the period.
Financial review
Revenue of $29.8 million was generated from the sales of Anglo
Asian's share of gold and silver bullion, refined from gold doré
bars, and copper and precious metal concentrate in the six months
ended 30 June 2017. Sales of gold and silver bullion were $19.5
million which comprised 15,689 ounces of gold and 5,020 ounces of
silver sold at an average price of $1,238 and $17 per ounce
respectively. Sales of copper and precious metal concentrate were
$10.3 million. No hedging of gold bullion sales was undertaken in
the six months to 30 June 2017.
Total cost of sales for the six months ended 30 June 2017
decreased by $4.0 million to $25.9 million compared to $29.9
million in 2016. Cash cost of sales decreased by $2.1 million to
$20.5 million compared to $22.6 million in 2016. For the six months
ended 30 June 2017, reagents costs were lower by $1.2 million and
mining costs were lower by $0.9 million compared to 2016. This was
due to reduced mining and production as a result of the
optimisation initiatives. Depreciation decreased by $2.9 million
from $9.9 million in 2016 to $7.0 million in 2017 due to lower gold
production.
Administrative expenses for the six months ended 30 June 2017
decreased to $2.3 million compared to $2.5 million in 2016.
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 listing
on the AIM market.
The finance costs for the six months ended 30 June 2017 of $1.9
million comprise interest on loans and letters of credit of $1.7
million and accretion expense on the rehabilitation provision of
$0.2 million. Finance costs were lower in the period due to lower
average borrowings in the period. There were no borrowing costs
capitalised in the six months ended 30 June 2017.
Income tax for the six months ended 30 June 2017 of $1.4 million
represents 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
2017.
The Group produced gold bullion at an all in sustaining cost
("AISC") for the six months ended 30 June 2017 of $564 per ounce
compared to $703 per ounce for the six months ended June 2016 and
$616 for the full year 2016. AISC for the period ended 30 June 2017
was lower than 2016 due to lower costs of sustaining capital and
higher by-product sales. There are no royalty costs included in the
Company's AISC calculation as the Production Sharing Agreement with
the Government of Azerbaijan is structured as a revenue sharing
arrangement. Therefore, the Company's AISC is calculated using a
cost of sales which is the cost of producing 100 per cent. of the
gold and such costs are allocated to total gold production
including the Government of Azerbaijan's share.
The Company had cash at 30 June 2017 of $1.5 million and total
debt at amortised cost of $30.5 million, giving net debt of $29.0
million. The joint Amsterdam Trade Bank ("ATB") and Gazprombank
(Switzerland) Ltd ("GPBS") loan has a debt service cover ratio
("DSCR") covenant of 1.25, and for the six months ended 30 June
2017, the DSCR was 1.00. The Company obtained waiver of the
covenant from ATB and GPBS prior to the end of period. The Company
had unutilised credit facilities of $0.95 million at 30 June
2017.
Capital expenditure of $3.4 million for the six months ended 30
June 2017 represented capitalised deferred stripping costs of $1.6
million; expenditure on the water treatment plant of $0.8 million,
Ugur development of $0.6 million and miscellaneous equipment and
other items of $0.4 million.
Capitalised exploration and evaluation expenditure of $0.1
million was incurred in the six months ended 30 June 2017 which 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 equalling
approximately $0.58 during the six months ended 30 June 2017. In
addition, the Company's revenues and the majority of its
interest-bearing debt are denominated in US dollars. The Company
currently does not have any significant exposure to foreign
exchange fluctuations and the situation is kept under review.
Anglo Asian Mining plc
Condensed group income statement
Six months ended 30 June 2017
6 months 6 months
to to
30 June 30 June
2017 2016
(unaudited) (unaudited)
Notes $000 $000
------------------------- ------ ---------------------------- ------------------
Revenue 29,838 39,323
Cost of sales (25,928) (29,960)
------------------------- ------ ---------------------------- ------------------
Gross profit 3,910 9,363
Other income 8 78
Administrative expenses (2,316) (2,524)
Other operating expense (996) (883)
Operating profit 606 6,034
Finance costs (1,930) (2,546)
------------------------- ------ ---------------------------- ------------------
(Loss) / profit before
tax (1,324) 3,488
Income tax 3 (1,418) (3,064)
------------------------- ------ ---------------------------- ------------------
(Loss) / profit after
tax (2,742) 424
------------------------- ------ ---------------------------- ------------------
(Loss) / profit per
share for the period
attributable to the
equity holders of
the parent (2,742) 424
------------------------- ------ ---------------------------- ------------------
Basic (US cents per
share) 4 (2.44) 0.38
------------------------- ------ ---------------------------- ------------------
Anglo Asian Mining plc
Condensed group statement of comprehensive income
Six months ended 30 June 2017
6 months 6 months
to to
30 June 30 June
2017 2016
(unaudited) (unaudited)
$000 $000
---------------------------- ------------ -------------
(Loss) / profit for the
period (2,742) 424
---------------------------- ------------ -------------
Total comprehensive (loss)
/ profit for the period (2,742) 424
---------------------------- ------------ -------------
Attributable to the equity
holders of the parent
company (2,742) 424
---------------------------- ------------ -------------
Anglo Asian Mining plc
Condensed group statement of financial position
30 June 2017
30 June 30 June 31 December
2017 2016 2016
(unaudited) (unaudited) (audited)
Notes $000 $000 $000
------------------------------ ------ -------------- -------------- -------------
Non-current assets
Intangible assets 5 16,283 17,553 16,848
Property, plant
and equipment 6 94,012 104,141 98,476
Inventory 7 - 2,595 -
Other receivables 8 1,272 1,113 1,084
------------------------------ ------ -------------- -------------- -------------
111,567 125,402 116,408
------------------------------ ------ -------------- -------------- -------------
Current assets
Inventory 7 34,229 27,087 34,018
Trade and other
receivables 8 18,421 10,209 16,250
Cash and cash equivalents 1,527 3,262 1,379
------------------------------ ------ -------------- -------------- -------------
54,177 40,558 51,647
------------------------------ ------ -------------- -------------- -------------
Total assets 165,744 165,960 168,055
------------------------------ ------ -------------- -------------- -------------
Current liabilities
Trade and other
payables 9 (26,534) (15,595) (21,833)
Interest-bearing
loans and borrowings 10 (26,047) (26,733) (26,165)
------------------------------ ------ -------------- -------------- -------------
(52,581) (42,328) (47,998)
------------------------------ ------ -------------- -------------- -------------
Net current assets
/ (liabilities) 1,596 (1,770) 3,649
------------------------------ ------ -------------- -------------- -------------
Non-current liabilities
Provision for rehabilitation (9,138) (8,800) (9,416)
Interest-bearing
loans and borrowings 10 (4,466) (17,257) (9,765)
Deferred tax liability (19,648) (18,498) (18,230)
------------------------------ ------ -------------- -------------- -------------
(33,252) (44,555) (37,411)
------------------------------ ------ -------------- -------------- -------------
Total liabilities (85,833) (86,883) (85,409)
------------------------------ ------ -------------- -------------- -------------
Net assets 79,911 79,077 82,646
------------------------------ ------ -------------- -------------- -------------
Equity
Share capital 11 1,993 1,993 1,993
Share premium account 32,325 32,325 32,325
Share-based payment
reserve 161 292 154
Merger reserve 46,206 46,206 46,206
Retained (loss)
/ earnings (774) (1,739) 1,968
Total equity 79,911 79,077 82,646
------------------------------ ------ -------------- -------------- -------------
Anglo Asian Mining plc
Condensed group cash flow statement
Six months ended 30 June 2017
6 months 6 months
to to
30 June 30 June
2017 2016
(unaudited) (unaudited)
$000 $000
------------------------------------- --- ------------- -------------
(Loss) / profit before taxation (1,324) 3,488
Adjustments for:
Finance costs 1,930 2,546
Depreciation of property, plant
and equipment 7,290 9,844
Amortisation of mining rights
and other intangible assets 673 954
Share-based payment expense 7 9
Write down of unrecoverable
inventory 107 78
------------------------------------------ ------------- -------------
Operating cash flow before
movements in working capital 8,683 16,919
Decrease / (increase) in trade
and other receivables 1,391 (1,372)
Increase in inventories (318) (1,020)
Increase in trade and other
payables 1,029 2,388
------------------------------------------ ------------- -------------
Cash generated from operations 10,785 16,915
Income tax paid - -
------------------------------------- --- ------------- -------------
Net cash generated from operating
activities 10,785 16,915
------------------------------------------ ------------- -------------
Investing activities
Expenditure on property, plant
and equipment and mine development (3,404) (6,576)
Investment in exploration and
evaluation activities (109) (134)
Net cash used in investing
activities (3,513) (6,710)
------------------------------------------ ------------- -------------
Financing activities
Proceeds from borrowing 6,651 6,105
Repayment of borrowings (12,283) (11,468)
Interest paid (1,492) (1,829)
------------------------------------------ ------------- -------------
Net cash outflow from financing
activities (7,124) (7,192)
------------------------------------------ ------------- -------------
Net increase in cash and cash
equivalents 148 3,013
Cash and cash equivalents at
beginning of period 1,379 249
------------------------------------------ ------------- -------------
Cash and cash equivalents at
end of the period 1,527 3,262
------------------------------------------ ------------- -------------
Anglo Asian Mining plc
Condensed group statement of changes in equity
Six months ended 30 June 2017
(Unaudited)
Share-based
Share Share payment Merger Retained Total
earnings
capital premium reserve reserve / (loss) equity
$000 $000 $000 $000 $000 $000
---------------- ----------- -------- ------------ -------- ---------- --------
1 January 2017 1,993 32,325 154 46,206 1,968 82,646
Loss for the
period - - - - (2,742) (2,742)
Share based
payment - - 7 - - 7
---------------- ----------- -------- ------------ -------- ---------- --------
30 June 2017 1,993 32,325 161 46,206 (774) 79,911
---------------- ----------- -------- ------------ -------- ---------- --------
Six months ended 30 June 2016
(Unaudited)
Share-based
Share Share payment Merger Retained Total
capital premium reserve reserve earnings 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
---------------- ----------- -------- ------------ -------- --------- -------
Anglo Asian Mining plc
Notes to the condensed group financial statements
Six months ended 30 June 2017
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 ending 30 June 2017 have been prepared in accordance with
IAS 34 'Interim Financial Reporting' as issued by the International
Accounting Standards Board. The information for the half year ended
30 June 2017 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 2016 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 and "AZN" is a
reference to the Azerbaijan Manat.
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
IAS 34 'Interim Financial Reporting' as issued by the International
Accounting Standards Board and adopted by the European Union.
The accounting policies adopted in the 2017 half-yearly
condensed group financial statements are the same as adopted in the
2016 annual report and accounts, other than those in respect of new
and revised standards that became effective from 1 January 2017 as
follows:
- IAS 7 - 'Statement of Cash Flows'
- IAS 12 - 'Recognition of Deferred Tax Assets for Unrealised
Losses - Amendments to IAS 12'
The adoption of these standards has had no material impact on
the 2017 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
forecast cash position for the period to 30 September 2018 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
market conditions in which the Group is operating. In the six
months to 30 June 2017, the price of gold averaged $1,238 per ounce
with a high of $1,293 per ounce and a low of $1,149 per ounce.
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
other than by advance agreement with certain banks to defer
payment.
The Group's loan agreements with the Amsterdam Trade Bank
("ATB") and Gazprombank (Switzerland) Ltd ("GPBS") contain a debt
service cover ratio ("DSCR") covenant of 1.25. This ratio is
calculated twice a year from its published financial statements.
The Group has received a waiver of the DSCR covenant from ATB and
GPBS for the six months to 30 June 2017. Based on current
forecasts, the Directors recognise that the Group may not be
compliant with the DSCR covenant for the full year to 31 December
2017. Should the DSCR covenant not be met for this period, the
Directors would request a further waiver from ATB/GPBS which the
Directors believe would be obtained on the basis that all debts
continue to be serviced on time. Given the decreased indebtedness
of the Group, and that the ATB/GPBS loans are scheduled to be fully
repaid by August 2018, the Directors also believe that the Group
has options to refinance or otherwise settle the ATB/GPBS loans
before the end of their term.
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 its 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, the Group would look to
defer non-essential capital expenditure and administrative costs in
order to preserve cash. The Group also has access to additional
local sources of short term finance if required.
The Group's assumptions are neither overly aggressive or overly
conservative and 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 Company and the Group have adequate resources
to continue in operational existence for the foreseeable future.
Accordingly, the Group continues to adopt the going concern basis
in preparing the condensed group 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
open cast and underground mines located at the Gedabek and Gosha
licence areas, which account 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
The income taxation charge or credit during the period
represents the change in deferred tax liability during the period
incurred by the representative office registered in Azerbaijan of
RV Investment Group Services LLC (a wholly owned subsidiary of the
Company).
The deferred taxation asset or liability is calculated at the
taxation rates that are expected to apply in the period when the
liability is settled or the asset is realised. Deferred taxation 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 taxation is also dealt with in equity.
Deferred taxation assets and liabilities are offset when there
is a legally enforceable right to offset current taxation assets
against current taxation liabilities and when they relate to income
taxes levied by the same taxation authority and the Group intends
to settle its current taxation assets and liabilities on a net
basis.
The deferred taxation liability increased in the 6 months to 30
June 2017 due to a decrease of unused taxation losses during the
period as the representative office of RV Investment Group Services
LLC (a wholly owned subsidiary of the Company) in Azerbaijan
incurred taxable profits in the period.
.
At the statement of financial position date, the Group has
unused taxation losses within the Company and a subsidiary (Anglo
Asian Operations Limited) available for offset against future
profits. No deferred taxation asset has been recognised in respect
of such losses due to the unpredictability of future profit
streams. Unused taxation losses may be carried forward
indefinitely.
4 (Loss) / profit per ordinary share
6 months 6 months
to to
30 June 30 June
2017 2016
(unaudited) (unaudited)
(Loss) / profit per $000 $000
ordinary share
(Loss) / profit after
tax for the period (2,742) 424
Basic (loss) / profit
per share (US cents) (2.44) 0.38
Diluted (loss) /
profit per share
(US cents) (2.43) 0.38
------------- -------------
Weighted average Number Number
number of shares
----------------------- --- ------------- -------------
For basic earnings
per share 112,661,024 112,661,024
5 Intangible assets
Exploration Exploration Other
& evaluation & evaluation Mining intangible
Gedabek Ordubad rights assets Total
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
$000 $000 $000 $000 $000
------------------- ------------- -------------- ------------- ------------- ---------------
Cost
1 January 2016 - 3,860 41,925 498 46,283
Additions 191 168 - - 359
31 December 2016 191 4,028 41,925 498 46,642
Additions 9 99 - - 108
------------------- ------------- -------------- ------------- ------------- ---------------
30 June 2017 200 4,127 41,925 498 46,750
------------------- ------------- -------------- ------------- ------------- ---------------
Amortisation
and impairment
1 January 2016 - - 27,626 284 27,910
Charge for year - - 1,843 41 1,884
31 December 2016 - - 29,469 325 29,794
Charge for period - - 654 19 673
------------------- ------------- -------------- ------------- ------------- ---------------
30 June 2017 - - 30,123 344 30,467
------------------- ------------- -------------- ------------- ------------- ---------------
Net book value
31 December 2016 191 4,028 12,456 173 16,848
------------------- ------------- -------------- ------------- ------------- -------------
30 June 2017 200 4,127 11,802 154 16,283
------------------- ------------- -------------- ------------- ------------- -------------
6 Property, plant and equipment
Plant
and
equipment
and Assets
motor Producing under
vehicles mines construction Total
(unaudited) (unaudited) (unaudited) (unaudited)
$000 $000 $000 $000
----------------------- ------------- ------------- -------------- -------------
Cost
1 January 2016 19,666 175,062 477 195,205
Additions 1,799 4,404 3,556 9,759
Transfer to producing
mines - 3,598 (3,598) -
Increase in provision
for
rehabilitation - 369 - 369
31 December 2016 21,465 183,433 435 205,333
Additions 74 1,856 1,405 3,335
Transfer to producing
mines - 208 (208) -
(Decrease) in
provision for
rehabilitation - (509) - (509)
30 June 2017 21,539 184,988 1,632 208,159
----------------------- ------------- ------------- -------------- -------------
Depreciation
and impairment
1 January 2016 12,642 74,135 - 86,777
Charge for year 2,014 18,066 - 20,080
31 December 2016 14,656 92,201 - 106,857
Charge for period 875 6,415 - 7,290
----------------------- ------------- ------------- -------------- -------------
30 June 2017 15,531 98,616 - 114,147
----------------------- ------------- ------------- -------------- -------------
Net book value
31 December 2016 6,809 91,232 435 98,476
----------------------- ------------- ------------- -------------- -------------
30 June 2017 6,008 86,372 1,632 94,012
----------------------- ------------- ------------- -------------- -------------
7 Inventory
30 June 30 June 31 December
2017 (unaudited) 2016 2016
Non-current assets $000 (unaudited) (audited)
$000 $000
--------------------------- ------------------ -------------- -------------
Cost
Ore stockpiles - 2,595 -
--------------------------- ------------------ -------------- -------------
Current assets
--------------------------- ------------------ -------------- -------------
Cost
Finished goods
- bullion 1,264 680 903
Finished goods
- metal in concentrate 755 507 240
Metal in circuit 13,763 12,618 12,119
Ore stockpiles 7,921 5,040 9,784
Spare parts and
consumables 10,526 8,242 10,972
--------------------------- ------------------ -------------- -------------
Total current inventories 34,229 27,087 34,018
--------------------------- ------------------ -------------- -------------
Total inventories 34,229 29,682 34,018
--------------------------- ------------------ -------------- -------------
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
31 December
2016
30 June 30 June (audited)
2017 (unaudited) 2016
Non-current assets $000 (unaudited)
$000 $000
--------------------------- ------------------ ---------------- ---------------- ---
Advances for fixed asset
purchases 1,228 1,018 989
Loans 44 95 95
--------------------------- ------------------ ---------------- ---------------- ---
1,272 1,113 1,084
--------------------------- ------------------ ---------------- ---------------- ---
Current assets
--------------------------- ------------------ ---------- ---- ------- -------
Gold held due to the
Government of Azerbaijan 13,640 5,093 10,078
VAT refund due 217 319 339
Other tax receivable 908 789 926
Trade receivables 1,159 1,820 639
Prepayments and advances 2,409 2,138 4,218
Loans 88 50 50
18,421 10,209 16,250
--------------------------- ------------------ ---------- ---- ------- -------
The directors consider that 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
2017 (unaudited) 2016
$000 30 June
2016 (unaudited) (audited)
$000 $000
--------------------------------- ----------------- ------------------ ------------
Accruals and other payables 3,626 4,349 3,111
Derivative liability - 262 -
Trade creditors 6,931 4,711 7,815
Gold held due to the Government
of Azerbaijan 13,640 5,093 10,078
Payable to the Government
of Azerbaijan from copper
concentrate joint sale 2,337 1,180 829
--------------------------------- ----------------- ------------------ ------------
26,534 15,595 21,833
--------------------------------- ----------------- ------------------ ------------
Trade creditors primarily comprise amounts outstanding for trade
purchases and ongoing costs. Trade creditors are non-interest
bearing. Accruals and other payables mainly consist of accruals
made for accrued but not paid salaries, bonuses, related payroll
taxes and social contributions, accrued interest on borrowings, and
services provided but not billed to the Group by the end of the
reporting period. The directors consider that the carrying amount
of trade and other payables approximates to their fair value.
The amount payable to the Government of Azerbaijan from copper
concentrate joint sale represents the portion of cash received from
the customer for the government's portion from the joint sale of
copper concentrate.
10 Interest-bearing loans and borrowings
Amortised cost
30 June 30 June 31 December
2017 (unaudited) 2016 (unaudited) 2016 (audited)
$000 $000 $000
---------------------------------- ----------------- ------------------ ----------------
International Bank of Azerbaijan
- agitation leaching plant
loan 3,875 8,700 5,385
International Bank of Azerbaijan
- loan facilities 510 3,320 970
Gazprombank (Switzerland) 6,180 -
Ltd -
Amsterdam Trade Bank 6,180 22,186 17,307
Atlas Copco - vendor financing 550 1,390 801
Yapi Kredit Bank 2,623 1,373 672
Pasha Bank 6,190 3,161 5,935
Kapital Bank 545 - 1,000
Director 3,860 3,860 3,860
---------------------------------- ----------------- ------------------ ----------------
Total interest bearing
loans and borrowings 30,513 43,990 35,930
---------------------------------- ----------------- ------------------ ----------------
Loans repayable in less
than one year 26,047 26,733 26,165
Loans repayable in more
than one year 4,466 17,257 9,765
---------------------------------- ----------------- ------------------ ----------------
Total interest bearing
loans and borrowings 30,513 43,990 35,930
----------------
International Bank of Azerbaijan ("IBA")
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 annual interest rate for each
agreement is 12 per cent. The repayment of principal began 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 loans 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 annual 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 2016, the Group entered into two further credit facilities
with IBA:
-- AZN1 million at an annual interest rate of 18 per cent. The
interest and principal were repayable on a reducing balance basis
in 12 equal monthly installments of AZN92,000. The final
installment was repaid in January 2017.
-- $1.5 million at an annual interest rate of 12 per cent. The
interest and principal are repayable on a reducing balance basis in
24 equal monthly installments of $71,000 and the final installment
is payable in February 2018.
Amsterdam Trade Bank ("ATB") and Gazprombank (Switzerland) Ltd
("GPBS")
During 2013, the Group entered into a loan agreement for $37.0
million to refinance its agitation leaching plant loan from IBA.
The annual interest rate is 8.25 per cent. 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
ATB its present and future claims against MKS Finance SA, the
Group's sole buyer of gold doré until termination of the loan
agreement.
On 15 February 2017, a transaction was finalised to transfer 50
per cent. of the balance of the loan being $8.6 million to GPBS.
The terms of the loan and security remained unchanged and ATB will
act as agent to administer the loan on behalf of ATB and GPBS.
The total gross amount outstanding to ATB and GPBS at 30 June
2017 was $12.3 million (30 June 2016: $22.2 million; 31 December
2016: $17.3 million).
Atlas Copco
The amounts outstanding are in respect of vendor equipment
financing. The amount outstanding at 31 December 2015 was repaid in
July 2016. In 2016, the Group entered into further vendor equipment
financing for Euro 1.1 million at an annual interest rate of 8.14
per cent. The principal is repayable quarterly in 8 equal
installments which commenced on 31 August 2016 with the final
repayment on 31 May 2018. Interest is payable quarterly with the
principal.
Yapi Credit Bank, Azerbaijan ("YCBA")
The Group has entered into several credit facilities with YCBA.
The annual interest rate for each facility is 10 to 11 per cent.
and each facility is repayable in 12 equal monthly installments on
a reducing balance basis starting one month after drawdown. In
2016, new credit facilities were entered into totaling $1,488,000
(2015: $1,929,000).
In the 6 months to 30 June 2017, the Group entered into further
credit facilities with YCBA. These totaled $2.7 million and the
interest rate for each loan was 9.5 per cent. One loan for $0.5
million, which commenced in January 2017, is repayable in 12 equal
monthly installments. The remaining loans totaling $2.2 million are
all for a duration of 12 months with repayment of principal at the
end of the loan with interest payable monthly.
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 carried an annual 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 2016, an additional
facility was entered into for $1.2 million which carried an annual
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 facilities were repaid in two equal installments of
$1.8 million in May and November 2016.
Loans
The Group entered into loans with Pasha Bank in 2016 at annual
interest rates and maturities as in the following table.
Loan value Term Interest Principal repayment
$000 (months) rate
(per cent.)
----------- ---------- ------------- ------------------------------
2 equal installments in March
1,000 18 7 and September 2017
----------- ---------- ------------- ------------------------------
1,500 12 9 November 2017
----------- ---------- ------------- ------------------------------
7 equal installments, 2017
916 24 7 - $525,000 2018 - $391,000
----------- ---------- ------------- ------------------------------
2 equal installments January
2,100 2 14 and February 2017
----------- ---------- ------------- ------------------------------
2 equal installments January
416 2 18 and February 2017
----------- ---------- ------------- ------------------------------
In the 6 months to 30 June 2017, the Group entered into an
additional loan of $3.0 million with Pasha Bank. The interest rate
is 8.5 per cent. and the tenor is 12 months. The principal is
repayable at the end of the loan and interest is payable monthly.
The loan for $916,000 was also increased by $534,000 with the
remaining terms remaining unchanged.
No principal repayment was made in respect of any of these loans
in 2016. In the six months to 30 June 2017, principal repayments
were made totaling $0.3 million.
Kapital Bank
In December 2016, the Group entered into a working capital
credit facility for $1 million with Kapital Bank. The facility is
for one year with an annual interest rate of 7 per cent. Interest
is payable monthly and the principal is repayable by 4 equal
quarterly monthly installments commencing March 2017.
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. The loan has been subsequently extended on the
same terms till 8 January 2018.
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 2016, 31 December
2016 and 30 June 2017 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.
The principal provisions are regarding the exploration and
development programme, preparation and timely submission of reports
to the Government and compliance with environmental and ecological
requirements. The directors believe that RVIG is in compliance with
the requirements of the PSA. The Group has announced a discovery on
the Gosha Mining Property in February 2011, and submitted the
development programme to the Government according to the PSA
requirements, which was approved in 2012. In April 2012, the Group
announced a discovery on the Ordubad Group of Mining Properties and
submitted the development programme to the Government for review
and approval according to 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.
In accordance with a pledge agreement signed on 24 July 2013,
the Group is a guarantor for one of its suppliers,
Azerinterpartlayish-X MMC for a loan from the International Bank of
Azerbaijan in the amount of AZN500,000 for an initial 36 months.
The pledge agreement was extended in 2016 till 1 July 2018. The
amount of the loan at outstanding at 30 June 2017 was AZN271,000
(30 June 2016: AZN483,000 and 31 December 2016: AZN364,026).
There were no significant operating lease and no capital lease
commitments at 30 June 2017 (30 June 2016 and 31 December 2016:
none).
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 2017 of $442,000 (6
months to 30 June 2016: $778,000) were made for equipment and spare
parts purchased from Proses Muhendislik Danismanlik Inshaat ve
Tasarim Anonim Shirket ("PMDI"), an 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 of $35,000 at 30 June 2017 (30 June 2016: $138,000 and 31
December 2016: $34,000).
b) 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 2017 was $672,000 (30 June 2016: $394,000 and 31 December
2016: $385,000). 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
2017 were authorised for issue in accordance with a resolution of
the directors on 20 September 2017.
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 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
-------------- ------------------- ------------------
Soltan Tagiev SP Angel Corporate Tel + 44 (0) 20
Finance LLP 3470 0470
-------------- ------------------- ------------------
Susie Geliher St Brides Partners Tel: +44 (0) 20
Ltd 7236 1177
-------------- ------------------- ------------------
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 also operates the high grade 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. The Company has also started production in
September 2017 from its Ugur open pit mine, a recently discovered
gold ore deposit at Gedabek.
Gold production for the year ended 31 December 2016 from Gedabek
totalled 65,394 ounces with 1,941 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 is processing tailings
from the agitation leach 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SESFISFWSEEU
(END) Dow Jones Newswires
September 21, 2017 02:00 ET (06:00 GMT)
Anglo Asian Mining (LSE:AAZ)
Historical Stock Chart
From Mar 2024 to Apr 2024
Anglo Asian Mining (LSE:AAZ)
Historical Stock Chart
From Apr 2023 to Apr 2024
