Q2 & H1 2024 Production and Operations Review

Anglo Asian Mining PLC

18 July 2024

 

18 July 2024

Anglo Asian Mining plc

Q2 & H1 2024 Production and Operations Review

Anglo Asian Mining plc ("Anglo Asian" or the "Company"), the AIM listed gold, copper and silver producer focused in Azerbaijan, provides the following production, sales and operational review for the three months to 30 June 2024 ("Q2 2024"or the "Quarter") and six months to 30 June 2024 ("H1 2024" or the "Half Year").

The Company expects the administrative formalities relating to the tailings dam wall raise to be completed imminently, while production during the Half Year continued to be significantly reduced due to operations remaining partially shut down. Gold production from heap leaching and copper production from SART continued throughout the Half Year.

Operational highlights

·    All technical and environmental approvals now received for the raise of the tailings dam wall

·    AzerGold CJSC has now become the party to the Group's production sharing agreement ("PSA")

·    $5 million prepayment advance for concentrate sales agreed with Trafigura with $3 million received in June

Q2 and H1 2024 Production update

·    Total Q2 2024 production of 2,707 gold equivalent ounces ("GEOs") (Q2 2023: 12,422 GEOs)

o Copper production of 46 tonnes (Q2 2023: 1,014 tonnes)

o Gold production of 2,438 ounces (Q2 2023: 7,870 ounces)

o Silver production of 6,341 ounces (Q2 2023: 22,010 ounces)

·    Total H1 2024 production of 5,270 GEOs (H1 2023: 23,391 GEOs)

o Copper production of 100 tonnes (H1 2023: 1,870 tonnes)

o Gold production of 4,704 ounces (H1 2023: 14,623 ounces)

o Silver production of 12,740 ounces (H1 2023: 44,696 ounces)

H1 2024 Sales and cash update

·    Total gold bullion sales of 6,000 ounces at an average of $2,174 per ounce (H1 2023: 10,506 ounces at an average of $1,939 per ounce)

·    The Group has maintained a strong focus on cash and strict cost control, with a net debt position of $12.1 million at 30 June 2024 (31 December 2023: $10.2 million)

·    Net cash outflow (before receipt of advance from Trafigura) in the Half Year of only $4.9 million due to sale of opening inventory along with strong cost control. Net cash outflow including offset of the advance from Trafigura of $3.0 million of $1.9 million

·    Inventory valued at $3.6 million at 30 June 2024 (31 March 2024: 1,550 ounces of gold valued at $3.5 million and copper concentrate valued at $0.7 million)

The Company expects to issue annual production guidance for 2024 in due course, following the resumption of full production.

Anglo Asian CEO Reza Vaziri commented:

"Despite the ongoing challenges faced by the Company, I am pleased with the substantial progress we have made, including amendments to our PSA and delivering all necessary technical and environmental approvals for the tailings dam wall raise, a critical step towards resuming full production of our operations.

"We expect to conclude all formalities imminently, enabling us to fully capitalise on the current robust metal prices to the benefit of our shareholders. We look forward to returning to normal operations and production shortly, and providing production guidance for the year."

Note that all references to "$" are to United States dollars.

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, which was incorporated into UK law by the European Union (Withdrawal) Act 2018, until the release of this announcement.

For further information please contact:

Anglo Asian Mining plc
Reza Vaziri, Chief Executive Officer	Tel: [phone]
Bill Morgan, Chief Financial Officer	Tel: [phone]
Stephen Westhead, Vice President	Tel: [phone]
SP Angel Corporate Finance LLP (Nominated Adviser and Broker) Ewan Leggat Adam Cowl	Tel: [phone]
Hudson Sandler (Financial PR) Charlie Jack Harry Griffiths	Tel: [phone]

Notes to editors

Anglo Asian Mining plc (AIM:AAZ) is a gold, copper and silver producer with a high-quality portfolio of production and exploration assets in Azerbaijan. The Company produced 31,821 gold equivalent ounces ("GEOs") for the year ended 31 December 2023. 

On 30 March 2023, the Company published its strategic plan for growth which shows a clearly defined path for the Company to transition to a multi-asset, mid-tier, copper and gold producer by 2028, by which time copper will be the principal product of the Company, with forecast production of around 36,000 copper equivalent tonnes. It plans to achieve this growth by bringing into production four new mines during the period 2024 to 2028 at Zafar, Gilar, Xarxar and Garadag. 

https://www.angloasianmining.com/

Q2 2024 Production overview

·    Gold production of 2,438 ounces (Q2 2023: 7,870 ounces):

o 2,433 ounces contained within gold doré

o 5 ounces from sulphidisation, acidification, recycling and thickening ("SART") processing

·    Copper production of 46 tonnes (Q2 2023: 1,014 tonnes) from SART processing

·    Silver production totalled 6,341 ounces (Q2 2023: 22,010 ounces):

o 1,532 ounces contained within gold doré

o 4,809 ounces from SART processing

Q2 2024 Sales overview

·    Total gold bullion sales of 2,075 ounces at an average of $2,350 per ounce (Q2 2023: 4,787 ounces at an average of $1,992 per ounce)

·    Total concentrate sales of 260 dry metric tonnes ("dmt") with a value of $1.0 million (Q2 2023: 5,501 dmt with a value of $7.7 million)

Q2 2024 Financials overview

·    Cash of $7.8 million ($9.8 million at 31 March 2024) including restricted cash

·    Debt of $19.9 million ($20.7 million at 31 March 2024)

·    Net debt of $12.1 million ($10.9 million at 31 March 2024)

·    $3 million advance payment received from Trafigura in June 2024

·    Unsold gold doré and copper concentrate inventory of $3.6 million at 30 June 2024

The Company mined the following ore during FY 2023 and the six months to 30 June 2024:

	12 months to  31 December 2023		3 months to 31 March 2024		3 months to 30 June 2024
Mine	Ore mined	Average gold grade	Ore mined	Average gold grade	Ore mined	Average gold grade
	(tonnes)	(g/t)	(tonnes)	(g/t)	(tonnes)	(g/t)
Open pit	1,180,695	0.38	186,122	0.81	101,199	0.74
Gadir - u/g	109,320	1.64	50,964	2.18	43,326	1.33
Gedabek - u/g	-	-	-	-	-	-
Total	1,290,015	0.49	237,086	1.10	144,525	0.92

The Company processed the following amounts and grades of ore by leaching for FY 2023 and the six months to 30 June 2024:

Quarter ended	Ore processed			Gold grade of ore processed
	Heap leach pad crushed ore (tonnes)	Heap leach pad ROM ore (tonnes)	Agitation leaching plant* (tonnes)	Heap leach pad crushed ore (g/t)	Heap leach pad ROM ore (g/t)	Agitation leaching plant* (g/t)
31 March 2023	94,518	196,595	62,006	0.74	0.49	1.30
30 June 2023	56,522	202,788	105,213	0.75	0.46	1.40
30 September 2023	25,690	34,621	-	0.83	0.45	-
31 December 2023	-	-	-	-	-	-
FY 2023	176,730	434,004	167,219	0.76	0.48	1.40
31 March 2024	120,528	-	-	0.68	-	-
30 June 2024	32,441	-	-	0.59	-	-
H1 2024	152,969	-	-	0.66	-	-

* includes previously heap leached ore.

The Company processed the following amounts of ore and contained metal by flotation for FY 2023 and the six months ended 30 June 2024:

Quarter ended	Ore processed	Gold content	Silver content	Copper content
	(tonnes)	(ounces)	(ounces)	(tonnes)
31 March 2023	192,516	1,487	19,787	1,133
30 June 2023	190,593	1,033	10,380	1,191
30 September 2023	62,369	478	4,358	363
31 December 2023	-	-	-	-
FY 2023	445,478	2,998	34,525	2,687
31 March 2024	-	-	-	-
30 June 2024	-	-	-	-
H1 2024	-	-	-	-

The following table summarises gold doré production and sales at Gedabek for FY 2023 and the six months 30 June 2024:

Quarter ended	Gold produced* (ounces)	Silver produced* (ounces)	Gold sales** (ounces)	Gold Sales price ($/ounce)
31 March 2023	5,965	2,841	5,719	1,895
30 June 2023	7,375	3,593	4,787	1,992
30 September 2023	4,001	1,488	2,900	1,949
31 December 2023	2,975	1,610	2,416	2,004
FY 2023	20,316	9,532	15,822	1,951
31 March 2024	2,259	1,512	3,925	2,080
30 June 2024	2,433	1,532	2,075	2,350
H1 2024	4,692	3,044	6,000	2,174

Note

* including Government of Azerbaijan's share

** excluding Government of Azerbaijan's share

The gold and silver production from agitation and heap leaching for FY 2023 and the six months 30 June 2024 is as follows:

Quarter ended	Gold			Silver
	Agitation leaching (ounces)	Heap leaching (ounces)	Total (ounces)	Agitation leaching (ounces)	Heap leaching (ounces)	Total (ounces)
31 March 2023	2,105	3,860	5,965	1,077	1,764	2,841
30 June 2023	3,463	3,912	7,375	1,735	1,858	3,593
30 Sept 2023	-	4,001	4,001	-	1,488	1,488
31 Dec 2023	-	2,975	2,975	-	1,610	1,610
FY 2023	5,568	14,748	20,316	2,812	6,720	9,532
31 March 2024	-	2,259	2,259	-	1,512	1,512
30 June 2024	-	2,433	2,433	-	1,532	1,532
H1 2024	-	4,692	4,692	-	3,044	3,044

The following table summarises copper concentrate production from both the Company's SART and flotation plants at Gedabek for FY 2023 and the six months ended 30 June 2024:

	Concentrate	Copper	Gold	Silver
	production*	content*	content*	content*
	(dmt)	(tonnes)	(ounces)	(ounces)
2023
Quarter ended 31 March
SART processing	364	191	26	8,750
Flotation	4,544	665	762	11,095
Total	4,908	856	788	19,845
Quarter ended 30 June
SART processing	272	145	16	10,316
Flotation	5,613	869	479	8,101
Total	5,885	1,014	495	18,417
Quarter ended 30 September
SART processing	85	43	4	2,194
Flotation	1,316	207	151	1,974
Total	1,401	250	155	4,168
Quarter ended 31 December
SART processing	29	18	4	1,264
Flotation	-	-	-	-
Total	29	18	4	1,264
2024
Quarter ended 31 March
SART processing	89	54	7	4,893
Flotation	-	-	-	-
Total	89	54	7	4,893
Quarter ended 30 June
SART processing	77	46	5	4,809
Flotation	-	-	-	-
Total	77	46	5	4,809

Note

* including Government of Azerbaijan's share.

Certain amounts for SART and flotation production may differ to those previously disclosed due to final reconciliation of production.

The following table summarises total copper concentrate production and sales for FY 2023 and six months to 30 June 2024. 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 2023	4,908	856	788	19,845	1,147	2,743
30 June 2023	5,885	1,014	495	18,417	5,501	7,678
30 September 2023	1,401	250	155	4,168	2,358	3,066
31 December 2023	29	18	4	1,264	2,186	2,306
FY 2023	12,223	2,138	1,442	43,694	11,192	15,793
31 March 2024	89	54	7	4,893	71	295
30 June 2024	77	46	5	4,809	260	1,002
H1 2024	166	100	12	9,702	331	1,297

* including Government of Azerbaijan's share

** excludes Government of Azerbaijan's share

H1 2024 Financial review

The Company's net debt increased from $10.2 million at 1 January 2024 to $12.1 million at 30 June 2024 as follows:

	Q1 2024		Q2 2024
	$m	$m	$m	$m
1 Jan / 31 March 2024		(10.2)		(10.9)
Revenue	8.6		6.0
VAT refund	1.3		0.6
Interest income	0.2
Operating costs	(9.6)		(9.7)
Capital expenditure	(0.7)		(0.8)
Debt servicing	(0.5)		(0.3)
Trafigura advance	-		3.0
Outflow in the quarter		(0.7)		(1.2)
31 March / 30 June 2024		(10.9)		(12.1)

Note the $3 million advance from Trafigura has been treated as a prepayment and not included in net debt.

 

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