Hot Features
Premium
Trade like a pro: Leverage real-time discussions and market-moving ideas to outperform.
Anglo Asian Mining (LSE:AAZ), a gold producer in Azerbaijan, has announced that it has entered into a loan facility agreement (‘Facility Agreement’) with Amsterdam Trade Bank N.V. (‘ATB’).
Under the terms of the Facility Agreement, ATB has agreed to provide a committed term loan facility of up to US$37 million (the ‘ATB Facility’) to Azerbaijan International Mining Company LLP (‘AIMC’), a wholly owned subsidiary of Anglo Asian.
The Board intends to draw down the full amount immediately as the ATB Facility attracts a lower interest rate. The proceeds shall be used to reduce the Company’s existing loan facility with the International Bank of Azerbaijan (‘IBA’) which was used for the construction of an Agitation Leaching Plant at its flagship gold/copper/silver mine, Gedabek, and to pay certain fees and expenses in relation to the arrangement of the ATB Facility.
Anglo Asian CEO Reza Vaziri said, “Our existing loan with the IBA enabled us to construct an Agitation Leaching Plant at our flagship Gedabek gold production project which was commissioned US$7 million under budget at US$45 million in June 2013. Thanks to this injection of US$37million from the Amsterdam Trade Bank we can now pay down our existing loan at a reduced interest rate.
“With lower operating costs and improved gold recoveries of both oxide and sulphide ores coming from Gedabek since the commission of the plant, as was expected, we look forward to the remainder of the year as we progress towards our FY2013 gold production target of 60,000oz” said Dr Vaziri.
The ATB Facility has a term of 58 months and attracts a quarterly interest rate of LIBOR* plus 8.25 per cent. The first repayment instalment commences on the 25th day of the 16th month from the draw down date and the outstanding amount shall be repaid in equal quarterly instalments.
Prepayments are permitted, subject to certain fees and conditions. The Facility Agreement also includes certain representations and warranties from AIMC. The ATB Facility is secured at the Company level.
The use of proceeds of Anglo Asian’s existing loan facility from the IBA was to construct an Agitation Leaching plant at the Company’s flagship Gedabek gold project in order to improve gold recovery and reduce operation costs. The plant was commissioned in June 2013, US$7 million under budget at US$45 million.
With the plant now in operation and following record gold production of 7,600 ounces for the month of August 2013, the Gedabek gold production remains on target for FY 2013 remains at 60,000oz Au (c.20% increase from FY 2012 gold production of 50,125oz), with lower operating costs of US$450-500 per ounce.
The company’s existing loan facility with the IBA stands at US$48.2 million. There is no penalty for early repayment of the IBA loan facility. The outstanding balance of the IBA loan facility following the payment using the proceeds from the ATB Facility will be approximately US$11.6 million.
The outstanding balance of the IBA loan facility will continue to attract a quarterly interest rate of 12 per cent.
