REG - Anglo Asian Mining - 2024 Full Year Results
Thu 07:00
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RNS Number : 7592J Anglo Asian Mining PLC 22 May 2025
22 May 2025
Anglo Asian Mining PLC
2024 Full Year Results
Anglo Asian Mining PLC ("Anglo Asian", the "Company" or the "Group"), the AIM
listed gold, copper and silver producer focused in Azerbaijan, announces its
final audited results for the year ended 31 December 2024 ("FY 2024").
Financial overview
· Revenues declined to $39.6 million (2023: $45.9 million) as stronger metal
prices partially offset lower production, with agitation leaching and
flotation processing being suspended during most of 2024.
o Grades of gold ore processed were lower as mining was only conducted at the
Gedabek open pit and Gadir underground mines, both of which are nearing the
end of their lives.
· Loss before taxation reduced to $21.3 million (2023: loss of $32.0 million)
and an operating loss of $18.8 million (2023: loss of $24.8 million) due to
careful cost control and two material impairments in the prior year.
· Net debt (excluding lease liabilities) increased by only $4.4 million to $14.7
million as at 31 December 2024 (31 December 2023: $10.3 million) due to
careful cost control and management of working capital throughout the year.
o Operating cash outflow before movements in working capital of $6.6 million
(2023: outflow of $1.0 million)
Operational and production overview
· Total production of 16,760 gold equivalent ounces ("GEOs") in line with
guidance of 15,000 to 19,500 GEOs (2023: 31,821 GEOs)
· Gold bullion sales of 15,251 ounces (FY 2023: 15,822 ounces) completed at an
average of $2,432 per ounce (FY 2023: $1,951 per ounce)
· Copper concentrate shipments totalling 1,519 dry metric tonnes ("dmt") with a
sales value of $2.5 million (excluding Government of Azerbaijan production
share) (FY 2023: 11,192 dmt with a sales value of $15.8 million)
· Considerable progress made towards increasing the Group's resources
o JORC mineral resources estimates published for Xarxar and Garadag confirming
significant mineralisation
o The Group now has a total JORC standard mineral resources of 328,000 ounces of
gold and over one million tonnes of copper
· Meaningful progress also made in executing the Group's medium-term growth
strategy and within its developmental asset portfolio
o Substantially completed the development of the Gilar mine, with the mine
having started production in May 2025
o Obtained access to the Demirli contract area in 2024, sufficient resource
identified to commence operations, with production expected to commence during
the second half of 2025
· First stage of two-stage raise of Gedabek tailings dam wall was completed in
2024 with stage two scheduled for completion in the second half of 2025
Outlook
The Company achieved a good operational performance and strong progress in its
development during 2024. This was despite severely curtailed production due to
the temporary shutdown of operations at the Gedabek plant which has now
returned to full operations.
Anglo Asian has made an encouraging start to 2025, with 8,085 gold equivalent
ounces ("GEOs") produced in the first quarter and is now operating at its
previous levels across the portfolio. The Gilar mine started production during
May 2025, which will contribute significant production in the year. Access has
been obtained to Demirli, which holds significant potential, and is expected
to enter production during the second half of 2025.
The Group's current assets, in addition to the Xarxar and Garadag mines which
are scheduled to enter production by 2028, provide the board with confidence
that Anglo Asian is positioned well to execute its medium term growth strategy
to become a mid-tier copper focused miner and deliver meaningful shareholder
value.
The Company will provide updated full year 2025 guidance later in the year
after it has started operations at Demirli.
Reza Vaziri, Chief Executive Officer of Anglo Asian, commented:
"Despite a number of challenges during 2024, Anglo Asian delivered a robust
performance with production in line with guidance and net debt only increasing
by $4.4 million to $14.7 million following the temporary shutdown of our
Gedabek agitation leaching and flotation processing operations.
"We are pleased to have made a strong start to 2025, with our quarter one
production of 8,085 gold equivalent ounces, and have made considerable
progress across our developmental portfolio. As a result of this progress, the
Gilar mine has entered production in May and Demirli will enter production in
the second half of 2025. We continue to make progress with Garadag and Xarxar.
"I look forward to providing further updates on our progress during the year,
including our updated 2025 guidance which will include Demirli."
Note that all references to "$" are to United States dollars, "CAN$" are to
Canadian dollars, "£" and "pence" are to the United Kingdom pound sterling
and AZN are to the Azerbaijan New Manat.
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: +994 12 596 3350
Bill Morgan, Chief Financial Officer Tel: +994 502 910 400
Stephen Westhead, Vice President Tel: +994 502 916 894
SP Angel Corporate Finance LLP (Nominated Adviser and Broker) Tel: +44 (0) 20 3470 0470
Ewan Leggat
Adam Cowl
Hudson Sandler (Financial PR) Tel: +44 (0) 20 7796 4133
Charlie Jack
Harry Griffiths
Competent Person Statement
The information in the announcement that relates to exploration results,
minerals resources and ore reserves is based on information compiled by
Dr Stephen Westhead, who is a full-time employee of the Group with the
position of Vice-President, who is a Fellow of The Geological Society of
London, a Chartered Geologist, Fellow of the Society of Economic Geologists,
Fellow of the Institute of Materials, Minerals and Mining and a Member of
the Institute of Directors.
Stephen Westhead has sufficient experience that is relevant to the style of
mineralisation and type of deposit under consideration and to the activity
being undertaken to qualify as a Competent Person as defined in the 2012
Edition of the 'Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves'. Stephen Westhead consents to the
inclusion in the announcement of the matters based on his information in the
form and context in which it appears.
Stephen Westhead has sufficient experience, relevant to the style of
mineralisation and type of deposit under consideration and to the activity
that he is undertaking, to qualify as a "competent person" as defined by the
AIM rules. Stephen Westhead has reviewed the mineral resources included in
this announcement. For the avoidance of doubt, resources and economically
extractable copper figures in this notification are not based on a Standard
for the reporting of reserves and resources, such as JORC, as defined in the
AIM Rules for Companies.
Chairman's statement
Although 2024 was a challenging year for Anglo Asian Mining, we have now
started our transition to a mid-sized mining company. We are looking forward
to the future with confidence and have made a strong start to 2025.
Production from agitation leaching and flotation was suspended in the first
nine months of the year, whilst authorisation from the Government of
Azerbaijan to raise the wall of the Gedabek tailings dam was obtained. The
quality and integrity of the design and construction of our tailings dam wall
were confirmed by external international consultants, and this difficult
period is well behind us. We have completed the first of a two-stage raise of
the tailings dam wall, and both agitation and flotation processing were fully
restarted in the last quarter of 2024.
The Company continued to make progress on its growth plans. The expansion of
our mineral resources was confirmed with the publication of the maiden Xarxar
JORC mineral resources estimate in February 2024, followed by the maiden
Garadag JORC mineral resources estimate, which was published on 24 September
2024. The first ore was extracted from the Gilar mine in March 2025 and
production of ore from the mine started in May 2025. We now have access to
Demirli, and have established a significant operation at the property, with a
view to restarting production in the second half of 2025. We also took steps
to strengthen our Environmental Social and Governance ('ESG') credentials,
including the formation of a sustainability committee.
Production
Our production in the year continued to be severely impacted by the partial
suspension of processing in the first three quarters of the year, resulting in
total production for the full year of only 16,760 gold equivalent ounces
("GEOs"). This comprised predominantly 377 tonnes of copper and 15,073 ounces
of gold. This was a major reduction compared to 2023, which included a full
six months of agitation leaching and flotation processing, before operations
were curtailed in the second half of 2023. However, we delivered a much
stronger fourth quarter in 2024, with production of 8,450 GEOs as operations
were fully restarted.
Raise of the Gedabek tailings dam wall
On 5 August 2024, due to the hard work of the many parties involved, we
received authorisation from the Government of Azerbaijan to raise the wall of
our Gedabek tailings dam. The first phase of construction, a 2.5 metre raise
of the dam wall, was completed in November 2024. The second phase of the wall
raise, which will raise it to its maximum design height, is on schedule to be
completed in the second half of 2025.
Strategic growth plan
Our medium-term growth strategy remains intact, with the Gilar mine having
started full production in May 2025. Production from Gilar will be a
significant milestone towards the Company becoming a mid-tier, primarily
copper producer, as it is the first new mine the Company will open since the
Gedabek underground mine in 2020. Gilar will enable the Company to reverse the
declining production of the last few years from its existing mines which are
approaching the end of their lives. The Demirli mine is now also included in
our strategic growth plan.
Demirli
The Group obtained access to the Demirli copper mine and production facility
in 2024 and has now established a significant operation at the site and is
working towards restarting production. A copper resource sufficient to justify
restarting production has been identified. Various technical and logistical
challenges need to be overcome in order to restart operations, including
ensuring the mine and plant are fully operational and there is sufficient
secure storage for its tailings. Demirli is a brownfield site which had been
deliberately damaged and accordingly, as you would expect, unforeseen
difficulties are being encountered. However, the Group is confident that
production can be restarted in the second half of 2025.
Commitment to sustainability
We remain committed to operating responsibly and upholding the highest
industry standards of sustainability. During the year, we established a
sustainability committee which oversees the development of our strategy and
activities related to sustainable development and social responsibility. I
would like to thank non-executive director Professor John Monhemius for
chairing the committee, which will be instrumental in delivering real value
through our activities inside and outside the Company.
We continue to prioritise environmental stewardship, community engagement and
robust Environmental, Social and Governance ("ESG") practices. For the second
year, we are disclosing our climate-related risks and opportunities in line
with the Task Force on Climate-related Financial Disclosures ('TCFD')
reporting framework. This reflects our commitment to sustainable operations
and is in line with best practice reporting standards for UK-listed companies.
Revision of the Production Sharing Agreement
During the year, our production sharing agreement ("PSA") was revised, with
AzerGold Closed Joint Stock Company ("AzerGold CJSC") replacing the Ministry
of Ecology and Natural Resources as the local party to the PSA. Our
collaboration with AzerGold CJSC, with their extensive local experience and
contacts and expertise, is already benefiting the Company.
Libero Copper & Gold Corporation ("Libero")
Our shareholding in Libero remained unchanged throughout the year. However,
our interest in Libero was significantly diluted in early 2024 following a
major fund raising in which we did not participate. Libero ceased to be an
associate company after the fund raising and is now classified as an equity
investment. We still believe Libero has the ability to create shareholder
value.
Dividend and going concern
The Company continued to make losses in the year due to the partial suspension
of operations and therefore does not intend to pay a final dividend. The
directors fully intend to resume dividend payments once conditions allow.
Given that the Group is now back in full production and its operations are
cash generative, the financial statements do not contain any material
uncertainties as to going concern.
Annual General Meeting ("AGM")
We encourage shareholders to attend our AGM for 2025, details of which are set
out below, and are also in our annual report for 2024 and available on our
website. The directors welcome all shareholders to attend and look forward to
meeting as many of you as possible. At the AGM for 2024, we gave shareholders
a detailed presentation about the Company. We believe this presentation was
well received and a further such presentation will be made at the AGM for
2025.
Rectification of technical issues regarding distributable reserves
Certain administrative technical issues have come to light with the Company's
distributable reserves following receipt of a letter from the Financial
Reporting Council, none of which have any impact on the Company's current
trading or dividend policy. These issues can only be resolved after the
shareholders approve the Group's annual financial statements for 2024. Full
details will be contained in a circular and notice of general meeting which
will be sent to shareholders as soon as practicable after the conclusion of
the AGM for 2025.
Summary and outlook
With the significant challenges of the last two years behind us, the board is
confident Anglo Asian Mining will now enter a period of sustained growth and
value creation. Our strong pipeline of assets, expanding copper production and
disciplined financial management provide a solid foundation for delivering
long-term shareholder value.
2025 will be a much better year for the Company. We have made a strong start
to the year. The Gilar mine has started production and our production guidance
for 2025 underscores this with copper output expected to increase considerably
to between 6,500 and 6,800 tonnes together with 28,000 to 33,000 ounces of
gold. We are working to restart production at Demirli later this year, and
production from Demirli in 2025 will be in addition to our already published
guidance.
Appreciation
I would like to extend my gratitude to all Anglo Asian Mining employees,
partners and the Government of Azerbaijan for their continued support. I would
also like to thank our shareholders for their unwavering commitment to Anglo
Asian Mining during what has been a challenging time. We are now delivering on
our strategic goals, and I look forward to a much better 2025.
Khosrow Zamani
Non-executive chairman
21 May 2025
President and chief executive's review
I am pleased to report our results for 2024, a year in which we have overcome
many challenges and laid the foundation for future growth. Our operation
produced a respectable performance given the circumstances, reflecting the
resilience of the Company in the face of the challenges. While the partially
suspended operations severely reduced our production in 2024, we were
delighted to achieve a full restart of operations during November and deliver
a strong fourth quarter performance.
Operational review
Total production for the year was 16,760 gold equivalent ounces ("GEOs"),
compared to 31,821 GEOs in 2023. Copper production totalled 377 tonnes,
compared with 2,138 tonnes in 2023, while gold production totalled 15,073
ounces, compared with 21,758 ounces in 2023.
We took the opportunity of the shutdown of agitation leaching and flotation
processing to undertake extensive renovation and refurbishment of our plants.
This proved beneficial to our operations and no significant issues have arisen
with our flotation and agitation leaching processing plants since their
restart in the fourth quarter of 2024.
Development of the Gilar mine continued throughout 2024. The tunnelling
encountered worse ground conditions than anticipated, which required the use
of shotcrete and reinforced roof supports which unfortunately delayed its
development. However, we were very pleased that the first ore was extracted in
March 2025 and the mine started full production in May 2025. The surface
infrastructure is now complete and includes a heavy equipment maintenance
workshop. Our new Caterpillar mining fleet is now fully operational.
We made important progress with our development portfolio. In February 2024,
the maiden JORC mineral resources estimate of Xarxar was published. This
confirmed that Xarxar contains 24.9 million tonnes of mineralisation with
average grades of 0.48 per cent. copper which equates to over 100,000 tonnes
of copper in the ground. On 24 September 2024, the maiden JORC mineral
resources estimate of Garadag was published which showed the deposit contains
285 million tonnes of mineralisation with an average grade of 0.32 per cent.
copper. This is approximately 900,000 tonnes of copper. The Group now has, in
total, a JORC minerals resource of over one million tonnes of copper. Xarxar
and Garadag are significant pillars in our ability to transition to a copper
focused producer.
We obtained restricted access to Demirli in 2024 and a significant operation
has been established at the site. We are progressing well towards restarting
production at Demirli.
We decided not to take part in Libero Copper & Gold Corporation's
("Libero") fundraise in January 2024. This decision reflected the Company's
priorities and cash requirements. Our shareholding as a result reduced to 5.7
per cent., with Michael Sununu resigning from Libero's board in February 2024.
Tailings storage and the restart of production
We received, on 5 August 2024, authorisation from the Government of Azerbaijan
to raise our tailings dam wall at Gedabek. The first raise of 2.5 metres was
completed in November with the full raise on schedule to be completed in the
second half of 2025. We have also returned to full production with the
agitation leaching processing plant and flotation processing fully restarting
in the fourth quarter. The plants are processing ore from our existing mines
and stockpiles until ore is available from Gilar.
Financial review
Revenues in the year were $39.6 million compared to $45.9 million in 2023.
Revenues include gold bullion sales of 15,251 ounces at an average price of
$2,432 per ounce and total copper concentrate sales of 1,519 dry metric tonnes
valued at $2.5 million.
The Company did not hedge any of its gold bullion production in the year.
1,600 ounces of gold in respect of hedges entered into in 2023 were closed in
the year, resulting in a small loss compared to the spot price of gold at the
date of closure of the hedges.
The Company incurred a loss before tax of $21.3 million compared with a loss
in 2023 of $32.0 million. This loss was incurred due to the partial suspension
of processing throughout most of the year and higher finance costs.
The Group will not report an All-In Sustaining Cost ("AISC") of gold produced
for 2024. The Group's costs in 2024 include substantial non-production costs,
such as maintaining the idle plant and Gedabek site, and the cost of the
Gedabek workforce, many of whom were placed on administrative leave. The AISC
metric is therefore not meaningful for 2024.
Following a refinancing by Libero in early 2024, in which Anglo Asian Mining
did not participate, our holding in Libero fell to 5.7 per cent. in February
2024 and it ceased to be an associate company. Since February 2024, Libero has
been accounted for as an equity investment. A total net profit of $0.2 million
was recognised in the year in respect of Libero as an associate company and
trade investment.
The Company had net debt (excluding lease liabilities) of $14.7 million at 31
December 2024 and saleable inventory of 1,055 ounces of gold with a market
value of approximately $2.8 million.
In May 2024, the Company signed a vendor financing facility with Caterpillar
Financial Services Corporation to refinance $3.7 million of the purchase price
of the Caterpillar mining fleet purchased in 2023. The facility was fully
drawn down in August 2024. The Group also consolidated loans totalling $5.0
million with the International Bank of Azerbaijan into one loan which was
renewed for one year until May 2025.
In June 2024, the Company entered into a prepayment agreement with Trafigura
Pte Ltd ("Trafigura") for copper concentrate sales totalling $5.0 million. A
$3.0 million prepayment was received in June but was repaid before the end of
the year. A further $5.0 million prepayment was received in February 2025. We
are currently in negotiations to provide a copper concentrate sale prepayment
facility for the Demirli plant.
Revenues from production at Gedabek throughout the year continued to be
subject to an effective royalty of 12.75 per cent. through our production
sharing agreement with the Government of Azerbaijan. We anticipate that this
same royalty rate will continue to apply to at least the end of 2025 for our
operations at Gedabek.
Environmental, Social and Governance ("ESG")
Sustainability is deeply embedded across our operations. Our sustainability
activities are overseen by Anglo Asian Mining's sustainability committee,
chaired by Professor John Monhemius, which was established during the year.
The Committee ensures our operations are sustainable and produce value for all
stakeholders, including local communities. To this end, we appointed a new
community engagement manager during the year, who is strengthening the
communication and engagement between Anglo Asian Mining and local communities.
Anglo Asian Mining is one of the largest employers in Azerbaijan, with nearly
1,000 employees, and we recognise our wider responsibilities to them and the
local community by participating in community development through various
outreach programs, including medical assistance, food aid, and environmental
initiatives such as tree planting. We were pleased in the year to publish
updated policies for health and safety, business conduct, ethics and
anti-bribery, and environment and climate, which summarise and communicate our
strict sustainability and responsible business practices.
We are proud to be committed to implementing the Global Industry Standards on
Tailings Management ('GISTM') across our operations and we will continue to
work towards full alignment with these standards, aiming to confirm our full
compliance with these standards by the end of 2026.
Looking ahead
With Gilar having started full ore production in May 2025, and significant
progress being made in 2024 and 2025 to date across our developmental asset
portfolio, we remain confident that we are well placed to deliver growth in
the medium term, ultimately transitioning into a copper focused, mid-tier
miner. We have made a strong start to 2025.
We were delighted to provide guidance earlier this year, expecting 2025 to see
our highest ever copper production at 6,500 to 6,800 tonnes, and also
anticipate gold production of 28,000 to 33,000 ounces. This guidance contains
no production from Demirli and guidance will be updated once the operation is
restarted in 2025.
I would like to thank our teams for their commitment and hard work, which have
been instrumental in advancing our performance across all operations. I am
confident these efforts will enable us to achieve sustainable growth over the
coming year and beyond in line with our strategic growth plan.
We will continue to deliver meaningful value for our stakeholders and
attractive shareholder returns as we execute our growth strategy.
Reza Vaziri
President and chief executive
21 May 2025
Annual General Meeting for 2025
The Annual General Meeting of the Company for 2025 will be held on 25 June
2025 at 11:00am at The Washington Mayfair Hotel, 5 Curzon Street, London W1J
5HE, United Kingdom. All shareholders are warmly invited to attend.
Corporate governance and Section 172 (1) Statement
A statement of the Company's compliance with the ten principles of corporate
governance in the Quoted Companies Alliance Corporate Governance Code ('QCA
Code') will be included in the Company's annual report and accounts for 2024.
The Company's Section 172 (1) Statement is included within the strategic
report below.
Sustainability and TCFD climate related financial disclosures at Anglo Asian
Mining
A report on sustainability, including a detailed report on health and safety,
will be included in the Company's annual report and accounts for 2024. The
TCFD climate-related financial disclosures will also be included in the
Company's annual report and accounts for 2024.
Strategic report
Principal activities
Anglo Asian Mining PLC (the "Company"), together with its subsidiaries (the
"Group"), owns and operates gold, silver and copper producing properties in
the Republic of Azerbaijan ("Azerbaijan"). It also explores for, and develops,
gold and copper deposits in Azerbaijan.
The Group has a substantial portfolio of greenfield assets that lay the
foundation for future growth of the business. Gilar, Zafar, Xarxar and Garadag
all host significant ore deposits which contain total JORC mineral resources
(measured, indicated and inferred) of over one million tonnes of copper and
328,000 ounces of gold.
Production Sharing Agreement with the Government of Azerbaijan
The Group's mining concessions ("Contract Areas") in Azerbaijan are held under
a Production Sharing Agreement ("PSA") with the Government of Azerbaijan dated
20 August 1997. Amendments to the PSA which granted the Group additional
Contract Areas, were passed into law in Azerbaijan on 5 July 2022.
A further amendment was made to the PSA which replaced the local party to the
PSA, the Ministry of Ecology and Natural Resources, with AzerGold Closed
Joint Stock Company ("AzerGold CJSC"). Minor amendments were also made in
respect of the use of facilities for the Kyzlbulag, Demirli and Vejnaly
Contract Areas. These amendments were passed into law in Azerbaijan on 21 June
2024.
Contract Areas in Azerbaijan
The Group has eight Contract Areas covering a total of 2,544 square kilometres
in western Azerbaijan:
Ø Gedabek. The location of the Group's primary gold, silver and copper open pit
mine and the Gadir and Gedabek underground mines. Gilar, a major new
underground mine, extracted its first ore in March 2025 and started production
in May 2025. The Zafar deposit is also situated at Gedabek. Development of
Zafar started in 2023 but was stopped in mid-2023. The Group's processing
facilities are also located at Gedabek.
Ø Demirli. Located in Karabakh and is adjacent to the Kyzlbulag Contract Area
which it extends to the northeast. It hosts a copper and molybdenum mine and a
processing plant.
Ø Xarxar. Located adjacent to the Gedabek and Garadag Contract Areas and hosts
the Xarxar deposit. It is likely part of the same mineral system.
Ø Garadag. Located to the north of Gedabek and Xarxar and hosts the large
Garadag copper deposit.
Ø Gosha. Located approximately 50 kilometres from Gedabek and hosts a
narrow-vein gold and silver mine.
Ø Vejnaly. Situated in the Zangilan district of Azerbaijan and hosts the
Vejnaly deposit.
Ø Ordubad. An early-stage gold and copper exploration area located in the
Nakhchivan exclave of Azerbaijan.
Ø Kyzlbulag. Situated in Karabakh and hosts the Kyzlbulag mine.
The Gedabek, Xarxar, Garadag and Gosha Contract Areas form a contiguous
territory totalling 1,408 square kilometres. The Group currently has limited
access to the Demirli Contract Area and no access to the Kyzlbulag Contract
Area. The PSA will only commence in respect of these two Contract Areas upon
notification by the Government of Azerbaijan to the Group that it is safe to
grant full access to the district in which the Contract Areas are located.
Overview of 2024
The Group's strategy is to transition into a mid-tier, copper focused
producer, which will be achieved through developing its considerable assets.
Production from the Group's agitation leaching and flotation plants had been
suspended in late 2023 whilst permission was being obtained for a final raise
of the tailings dam wall. The suspension of these processing plants continued
into 2024. The permission to raise the tailings dam wall was obtained on 5
August 2024. Agitation leaching restarted production in September 2024 and
flotation processing restarted production in November 2024. Limited production
of gold doré and copper continued throughout 2024 by heap leach and SART
processing. Only limited mining took place but development of the Gilar mine
continued throughout the year.
Despite the limited production during the year and the associated strong focus
on cost control, the Group continued to make progress on its development and
in strengthening its Environment Social and Governance ('ESG') credentials. A
sustainability committee was established during 2024.
Gilar mine development
Gilar mine development continued throughout the year and was substantially
completed by the end of 2024. The surface infrastructure supporting the
tunnelling was also completed in 2024.
Commitment to Global Industry Standard on Tailings Management
In January 2024, the Group committed to implement the Global Industry Standard
on Tailings Management ("GISTM") at its operations at Gedabek.
Libero Copper & Gold Corporation ("Libero")
In February 2024, Michael Sununu, a non-executive director of the Company,
resigned from the board of Libero. This followed the Group's holding in Libero
decreasing to approximately 5.7 per cent. Libero also ceased to be an
associate company of the Group in February 2024.
Xarxar maiden JORC mineral resources estimate
On 20 February 2024, the maiden JORC mineral resources estimate for the
Group's Xarxar copper deposit was published, confirming 24.9 million tonnes of
mineralisation with average grades of 0.48 per cent. copper.
Establishment of a sustainability committee
In March 2024, a sustainability committee for the Group was established
chaired by Professor John Monhemius.
Vendor financing facility agreement with Caterpillar Financial Services
Corporation
In May 2024, the Group's subsidiary, Azerbaijan International Mining Company
Limited, signed a vendor financing facility agreement with Caterpillar
Financial Services Corporation for $3.7 million. On 26 August 2024, the
proceeds of the loan of $3.7 million were received.
Climate Change and Task Force on Climate-related Financial Disclosures
("TCFD")
In June 2024, the Group included in its annual report for 2023, its first
detailed report on climate-related risks and opportunities in accordance with
the TCFD recommendations. This report also contained detailed information
regarding the Group's energy use and greenhouse gas emissions.
Prepayment agreement for the sale of concentrate
In June 2024, the Group's subsidiary, Azerbaijan International Mining Company
Limited, entered into a prepayment agreement totalling $5.0 million in
respect of its sales of copper concentrate with Trafigura Pte Ltd. $3.0
million of the prepayment was drawn down in June 2024. The $3.0 million
prepayment was repaid shortly before 31 December 2024.
Production Sharing Agreement ("PSA")
In June 2024, the Group's production sharing agreement ("PSA") was revised,
with AzerGold CJSC replacing the Ministry of Ecology and Natural Resources as
the local party to the PSA. Various other minor amendments were also made to
the PSA.
Access to Demirli
In June 2024, limited access to the Demirli mine and plant in Karabakh was
obtained. The Group started extensive studies of the property with a view to
restarting production.
Authorisation to raise the wall of the tailings dam
On 5 August 2024, the Group received authorisation from the Government
of Azerbaijan to raise the wall of the Gedabek tailings dam. Confirmation
was also received that the proposed construction work complied with all health
and safety requirements. Work on the wall raise started immediately. The first
stage of the two-stage wall raise was completed in November 2024.
Garadag maiden JORC mineral resources estimate
On 24 September 2024, the maiden JORC mineral resources estimate for the
Garadag copper deposit was published confirming a total resource (Indicated
and Inferred categories) of approximately 900,000 tonnes of copper metal
hosted in 285 million tonnes of mineralisation with average grades of 0.32 per
cent. copper.
Restart of agitation leaching and flotation production
In September 2024, production was restarted from the Group's agitation
leaching plant. In November 2024, production was restarted from its flotation
plant.
Production guidance for full year 2025 ("FY 2025")
The Group published its production guidance for FY 2025 on 26 February 2025 as
follows:
Full year 2024 Full year 2025
Unit actual production guidance*
Gold production Ounces 15,073 28,000 to 33,000
Copper production Tonnes 377 6,500 to 6,800
Turnover† $ million 39.6 110 to 125
EBITDA†† $ million $(5.4) 45 to 55
( )
The Group will no longer report headline production guidance in gold
equivalent ounces ("GEOs") as copper is becoming an increasingly significant
part of the Group's production. Significant movements in the ratio of the gold
to the copper price in the year can also make reported actual production
misleading compared to guidance.
To aid comparison, the Group's production guidance for FY 2025 calculated as
GEOs is as follows:
Metal Full year 2024 Full year 2025
Unit actual production production guidance*
Gold** Ounces 15,073 28,000 to 33,000
Copper** Tonnes 377 6,500 to 6,800
Total GEOs 16,760 49,000 to 55,000
*The Company does not forecast silver production as it is not material.
** The guidance and gold equivalent ounces have been computed using a gold
price of $2,800 per ounce and a copper price of $9,000 per tonne.
The above production guidance excludes any production in 2025 from Demirli.
†Turnover
Turnover is sale proceeds of the Group's share of production. The Group's
share of production is assumed to be 87.25 per cent. for 2025.
††EBITDA
EBITDA is defined as earnings before Interest, tax, depreciation and
amortisation.
Mineral resources and ore reserves
Key to the future development of the Group are the mineral resources and ore
reserves within its Contract Areas. Mineral resource and ore reserve estimates
are produced both in accordance with the JORC (2012) code ("JORC") and as
non-JORC compliant internal estimates.
Internal Group estimates have been prepared, in accordance with JORC
procedures, of the remaining mineralisation of the Gedabek open pit, the
Gedabek underground mine and the Gadir underground mine as at 1 January 2025.
These are set out in Tables 1 to 3 respectively.
A final JORC mineral resources estimate of the Zafar deposit at 30 November
2021 is set out in Table 4. A maiden JORC mineral resources estimate of the
Gilar deposit at 30 November 2023 was published on 11 December 2023 and is set
out in Table 5. A maiden JORC mineral resources estimate of copper in the
Xarxar deposit at January 2024 was published on 20 February 2024 and is set
out in Table 6.
The maiden JORC mineral resources estimate of copper in the Garadag deposit at
July 2024 was published on 24 September 2024 and is set out in Table 7. Table
8 sets out the Soviet mineral resources estimate for the Vejnaly deposit.
Table 9 sets out an internal Group estimate of the remaining mineral resources
of the Demirli deposit classified according to the JORC standard at 1 January
2025.
Table 1 - Internal Group estimate of the remaining mineralisation of the
Gedabek open pit in accordance with JORC at 1 January 2025
Tonnage In-situ grades Contained metal
(tonnes)
Gold Copper Silver Zinc Gold Copper Silver Zinc
(g/t) (%) (g/t) (%) (koz) (t) (koz) (t)
Measured and indicated 5,395,400 0.37 0.34 4.34 0.18 64 18,086 753 9,525
Inferred 226,575 0.55 0.17 2.58 0.09 4 388 19 208
Total 5,621,975 0.38 0.33 4.27 0.17 68 18,474 772 9,733
Some of the totals in the above table may not sum due to rounding
All tonnages reported are dry metric tonnes.
Table 2 - Internal Group estimate of the remaining mineralisation of the
Gedabek underground mine in accordance with JORC at 1 January 2025
Tonnage In-situ grades Contained metal
(tonnes)
Gold Copper Silver Zinc Gold Copper Silver Zinc
(g/t) (%) (g/t) (%) (koz) (t) (koz) (t)
Measured and indicated 348,933 1.33 0.05 13.46 0.44 15 191 151 1,539
Inferred 3,712 1.22 0.10 8.94 0.83 - 4 1 31
Total 352,645 1.33 0.06 13.41 0.45 15 195 152 1,570
Some of the totals in the above table may not sum due to rounding
All tonnages reported are dry metric tonnes.
Table 3 - Internal Group estimate of the remaining mineralisation of the Gadir
underground mine in accordance with JORC at 1 January 2025
Tonnage In-situ grades Contained metal
(tonnes)
Gold Copper Silver Zinc Gold Copper Silver Zinc
(g/t) (%) (g/t) (%) (koz) (t) (koz) (t)
Measured and indicated 15,483 2.38 0.64 23.97 0.52 1 99 12 81
Inferred - - - - - - - - -
Total 15,483 2.38 0.64 23.97 0.52 1 99 12 81
Some of the totals in the above table may not sum due to rounding
All tonnages reported are dry metric tonnes.
Table 4 - Final JORC mineral resources estimate of the Zafar deposit at 30
November 2021
Copper > 0.3 per cent. copper equivalent
Tonnage In-situ grades Contained metal
(million tonnes)
Copper Gold Zinc Copper Gold Zinc
(%) (g/t) (%) (kt) (kozs) (kt)
Measured and indicated 5.5 0.5 0.4 0.6 25 64 32
Inferred 1.3 0.2 0.2 0.3 3 9 3
Total 6.8 0.5 0.4 0.6 28 73 36
Some of the totals in the above table may not sum due to rounding
All tonnages reported are dry metric tonnes.
Table 5 - Maiden JORC mineral resources estimate of the Gilar deposit at 30
November 2023
Reporting cut-off >= 0.5 grammes per tonne of gold equivalent*
Tonnage In-situ grades Contained metal
(million tonnes)
Gold Copper Zinc Gold Copper Zinc
(g/t) (%) (%) (koz) (kt) (kt)
Measured 3.88 1.49 1.08 0.91 186.06 42.09 35.43
Indicated 2.02 1.00 0.56 0.48 64.80 11.30 9.77
Measured and indicated 5.90 1.32 0.90 0.77 250.86 53.39 45.20
Inferred 0.20 0.70 0.26 0.26 4.38 0.50 0.51
Total 6.10 1.30 0.88 0.75 255.24 53.89 45.72
Some of the totals in the above table may not sum due to rounding
All tonnages reported are dry metric tonnes.
*Gold equivalent calculation = Gold g/t plus (copper per cent.*1.49) plus
(zinc*0.46). The metal price assumptions used were Gold - $1,675 per ounce;
Copper - $8,000 per tonne; Zinc - $2,500 per tonne.
Table 6 - Maiden JORC mineral resources estimate of copper in the Xarxar
deposit at January 2024
Reporting cut-off >= 0.2 per cent. copper
Mineral resources estimate of copper in the Xarxar Deposit by oxidation domain
Domain
Indicated Inferred Indicated and inferred*
Tonnes Grade Metal Tonnes Grade Metal Tonnes Grade Metal
(mt) (%) (kt) (mt) (%) (kt) (mt) (%) (kt)
Oxide 5.2 0.55 28.5 0.8 0.66 5.2 5.9 0.57 33.7
Sulphide 16.8 0.46 77.9 2.1 0.35 7.6 18.9 0.45 85.5
Total 22.0 0.48 106.3 2.9 0.44 12.8 24.9 0.48 119.1
Some of the totals in the above table may not sum due to rounding
All tonnages reported are dry metric tonnes.
*Measured resources were nil due to insufficient third-party quality assurance
and quality control ("QAQC") drill core assays being carried out. Further QAQC
drill core assays will be carried out.
Table 7 - Maiden JORC mineral resources estimate of copper in the Garadag
deposit at July 2024 by domain
Domain Cut-off Indicated Inferred Indicated and inferred
Tonnes Grade Metal Tonnes Grade Metal Tonnes Grade Metal
(Mt) (Cu %) (kt) (Mt) (Cu %) (kt) (Mt) (Cu %) (kt)
0 (un-mineralised) 0.13% - - - - - - - - -
1 (leach) 0.13% - - - - - - - - -
3 (enriched) 0.13% 45.8 0.45 205.6 68.9 0.42 285.9 114.7 0.43 491.5
5 (primary) 0.13% 41.1 0.24 98.7 129.1 0.24 306.7 170.2 0.24 405.4
Total 86.9 0.35 304.3 198 0.30 592.6 284.9 0.32 896.9
Some of the totals in the above table may not sum due to rounding
All tonnages reported are dry metric tonnes.
Table 8 - Soviet mineral resources estimate of the Vejnaly deposit
Metal content
Units Category C1 Category C2 Total C1 and C2
Ore Tonnes 181,032 168,372 349,404
Gold Kilogrammes 2,148.5 2,264.2 4,412.7
Silver Kilogrammes 6,108.9 4,645.2 10,754.1
Copper Tonnes 1,593.6 1,348.8 2,942.4
Some of the totals in the above table may not sum due to rounding
Table 9 - Internal Group estimate of the remaining mineral resources of the
Demirli deposit classified according to the JORC standard at 1 January 2025.
Ore tonnage In-situ grades Contained metal
(tonnes) Copper Copper
(%) (tonnes)
Measured 5,500,000 0.46 25,300
Indicated 9,508,981 0.45 41,946
Inferred 27,779,596 0.37 102,722
Non-classified 15,559,433 0.44 68,998
Total 58,348,010 0.41 238,966
Some of the totals in the above table may not sum due to rounding
All tonnages reported are dry metric tonnes.
The above mineral resources estimate for Demirli is only in respect of the
mineral resources below the current open pit and does not include further
resources in the surrounding area.
Gedabek
Introduction
The Gedabek mining operation is located in a 300 square kilometre Contract
Area in the Lesser Caucasus mountains in western Azerbaijan on the Tethyan
Tectonic Belt, one of the world's most significant copper and gold-bearing
geological structures. Gedabek is the location of the Group's Gedabek open pit
mine, the Gadir and Gedabek underground mines and the Group's processing
facilities. Two new underground mines, Zafar and Gilar, are in the
developmental stage at Gedabek. The development of Gilar is almost complete
with its first ore extracted in March 2025 and production started in May 2025.
One portal of the Zafar mine has been constructed but no further development
is currently being carried out.
Gold production at Gedabek commenced in September 2009. Ore was initially
mined from an open pit, with underground mining commencing in 2015, when the
Gadir mine was opened. In 2020, underground mining commenced beneath the main
open pit (the "Gedabek underground mine"). The Gedabek and Gadir underground
mines now form one continuous underground system of tunnels.
Initial gold production was by heap leaching, with copper production beginning
in 2010 from the Sulphidisation, Acidification, Recycling and Thickening
("SART") plant. The Group's agitation leaching plant commenced production in
2013 and its flotation plant in 2015. From the start of production to 31
December 2024, approximately 825 thousand ounces of gold and 21 thousand
tonnes of copper have been produced at Gedabek.
Environmental study and Micon report
Micon International Co Limited ("Micon") undertook a health, safety and
environmental due diligence review of tailings management at Gedabek in July
2023. No significant environmental contamination was found. The final Micon
report contained various recommendations to improve some operational, social
and safety aspects of the Gedabek operations. In November 2023, the Group
agreed an action plan with the Government of Azerbaijan (the "Action Plan")
to address these recommendations.
The recommendations of the Action Plan included improving the Gedabek
emergency response capability, strengthening its environmental monitoring and
documentation and how the Group engages and communicates with local
communities. Implementation of the recommendations continued satisfactorily
during the year with all short-term recommendations completed in 2024. The
Government of Azerbaijan receives frequent updates on the status of the
recommendations.
Gedabek open pit and Gedabek and Gadir underground mines
The principal mining operation at Gedabek is conventional open-cast mining
using trucks and shovels from the Gedabek open pit (which comprises several
contiguous smaller open pits). Ore is also mined from the Gadir and Gedabek
underground mines. These two underground mines are connected, and form one
continuous underground network of tunnels, accessible from both the Gadir and
Gedabek portals. However, a significant fault structure separates the two
mines.
Zafar mine development
The Zafar deposit was discovered in 2021 and is located 1.5 kilometres
northwest of the existing Gedabek processing plant. Its final mineral
resources estimate was published in March 2022 and is set out in Table 4
above.
A mining scoping study for the Zafar mine was completed in February 2023 and
development commenced. Two tunnels are planned, one for haulage and a parallel
ventilation tunnel. One of the two portals required for the tunnels was
constructed close to the existing Gedabek processing facilities and about one
kilometre from the mineralisation. Five metres of haulage tunnel and 6.6
metres of ventilation tunnel had also been completed, prior to suspension of
development.
Development of the Zafar mine was stopped in mid-2023 and resources diverted
to development of the Gilar mine, following exceptional drill results from
Gilar.
Gilar mine development
Gilar is a mineral occurrence located approximately seven kilometres from the
Company's processing facilities and close to the northern boundary of the
Gedabek Contract Area. The Group commenced developing the Gilar underground
mine in late 2022 following exceptional drilling results in the south of the
area.
A maiden JORC mineral resources estimate was published on 11 December 2023 and
is set out in Table 5 above.
The Gilar mine comprises two underground tunnels, a main production tunnel and
a second tunnel for ventilation. A spiral accesses the ore body. The planned
lengths of the production and ventilation tunnels are 1,461 metres and 774
metres respectively. The walls of the tunnels are supported by steel arches
and shotcrete where necessary due to soft rock. Water encountered underground
is being pumped from the mine into a settling pond constructed near the
entrance to the mine. The development of Gilar was substantially completed in
the first quarter of 2025 and the first ore extracted in March 2025. Gilar
started production in May 2025.
Surface infrastructure comprises of a heavy equipment workshop, mine office
facilities and technical support and services offices and a canteen. Security
and safety fencing, a mine entrance area and power generator set foundations
have also been constructed.
In December 2023, the Company took delivery of a new underground mining fleet
supplied by Caterpillar for the mine. The fleet comprised three R1700 and two
980UMA underground loaders. This is the first time this type of underground
equipment has been deployed in Azerbaijan.
Ore mined in 2024
Table 10 sets out all the ore mined by the Group for the year ended 31
December 2024.
Table 10 - Ore mined at Gedabek for the year ended 31 December 2024
Total ore mined for the year ended
31 December 2024
Ore mined Average
gold grade
Mine
(tonnes) (g/t)
Gedabek open pit 443,611 0.73
Gadir - underground 167,121 1.58
Total for the year 610,732 0.96
Mining at Gedabek was considerably reduced compared to previous years as
agitation leaching and flotation processing were suspended for a substantial
part of 2024.
Processing operations
Ore is processed at Gedabek to produce either gold doré (an alloy of gold and
silver with small amounts of impurities, mainly copper) or a copper and
precious metal concentrate.
Gold doré is produced by cyanide leaching. Initial processing is to leach
(i.e. dissolve) the precious metal (and some copper) in a cyanide solution.
This is done by various methods:
1. Heap leaching of crushed ore. Crushed ore is heaped into permeable
"pads" onto which is sprayed a solution of cyanide. The solution dissolves the
metals as it percolates through the ore by gravity and it is then collected on
the impervious base under the pad.
2. Heap leaching of run of mine ("ROM") ore. The process is similar to
heap leaching for crushed ore, except the ore is not crushed, instead it is
heaped into pads as received from the mine (ROM) without further treatment or
crushing. This process is used for very low grade ores.
3. Agitation leaching. Ore is crushed and then milled in a grinding
circuit. The finely ground ore is placed in stirred (agitation) tanks
containing cyanide solution and the contained metal is dissolved in the
solution. Any coarse, free gold is separated using a centrifugal-type Knelson
concentrator.
Slurries produced by the above processes with dissolved metal in solution are
then transferred to a resin-in-pulp ("RIP") plant. In this plant, a synthetic
resin is used to selectively absorb the gold and silver from the slurry. The
metal-loaded resin is then "stripped" of its gold and silver by desorption
into another solution, from which the metals are recovered by electrolysis,
followed by smelting to produce the doré metal, which comprises an alloy of
gold and silver.
Copper and precious metal concentrates are produced by two processes, SART
processing and flotation.
1. Sulphidisation, Acidification, Recycling and Thickening ("SART"). The
cyanide solution after gold absorption by resin-in-pulp processing is
transferred to the SART plant. The pH of the solution is then changed by the
addition of reagents which precipitates the copper and any remaining silver
from the solution. The process also recovers cyanide from the solution, which
is recycled back to leaching.
2. Flotation. Finely ground ore is mixed with water to produce a slurry
called "pulp" and reagents are then added. This pulp is processed in flotation
cells (tanks), where the pulp is stirred and air introduced as small bubbles.
The sulphide mineral particles attach to the air bubbles and float to the
surface where they form a froth which is collected. This froth is dewatered to
form a mineral concentrate containing copper, gold and silver.
The Group's processing plants underwent extensive maintenance in 2023 and 2024
during the period when agitation leaching and flotation processing was
suspended. Extensive refurbishment of the agitation and flotation plants was
carried out, including installing a new hopper and redesigned pipework for the
agitation leach plant to improve ore feed. The ball mills were relined and
refurbished. Much of the work has improved safe working such as repairing
minor leaks, installing new floors and improving ladders and gantries. Roof
repairs have also been carried out where necessary. A substantial proportion
of the exterior of the plant has been cleaned by shot blasting and repainted.
Exterior pipework has also been cleaned or replaced as necessary.
Table 11 summarises the ore processed by leaching for the year ended 31
December 2024.
Table 11 - Ore processed by leaching at Gedabek for the year ended 31 December
2024
Quarter ended Ore processed (tonnes) Gold grade of ore processed (g/t)
Heap leach pad crushed ore Heap leach pad ROM Agitation leaching Heap leach pad crushed ore Heap leach pad ROM Agitation leaching
ore plant ore plant
31 March 2024 120,528 - - 0.68 - -
30 June 2024 110,225 9,698 - 0.59 0.52 -
30 September 2024 110,152 - 18,009 0.65 - 1.93
31 December 2024 79,835 - 128,387 0.53 - 1.54
Total for the year 420,740 9,698 146,396 0.61 0.52 1.58
Table 12 summarises ore processed by flotation for the year ended 31 December
2024.
Table 12 - Ore processed by flotation at Gedabek for the year ended 31
December 2024
Quarter ended Ore processed Gold content Silver content Copper content
(tonnes) (ounces) (ounces) (tonnes)
31 March 2024 - - - -
30 June 2024 - - - -
30 September 2024 - - - -
31 December 2024 73,990 285 3,985 363
Total for the year 73,990 285 3,985 363
Previously heap leached ore
Gold production at Gedabek from 2009 to 2013 was by heap leaching crushed ore
until the start-up of the agitation leaching plant in 2013. The heaps remain
in-situ and given the high grade of ore processed prior to the commencement of
agitation leaching, and the lower recovery rates, much of the early heap
leached ore contains significant amounts of gold. This is now being
reprocessed by agitation leaching. Table 13 sets out the previously heap
leached ore processed for the year ended 31 December 2024.
Table 13 - Previously heap leached ore processed for the year ended 31
December 2024
In-situ material Average gold grade
(tonnes) (g/t)
1 January 2024 311,988 0.8424
Processed in the year (30,249) 1.0458
31 December 2024 281,739 0.8206
The in-situ material is calculated at a standard cutoff grade of > 0.8
grammes per tonne of gold.
Production and sales
For the year ended 31 December 2024, gold production totalled 15,073 ounces,
which was a decrease of 6,685 ounces in comparison to the production of 21,758
ounces for the year ended 31 December 2023. Copper production for the year
ended 31 December 2024 was 377 tonnes compared to 2,138 tonnes for the year
ended 31 December 2023, a decrease of 1,761 tonnes. The lower production of
gold and copper in 2024 compared to 2023 arose due to the suspension of
agitation and flotation processing for a substantial part of 2024.
Table 14 summarises the gold and silver bullion produced from doré bars and
sales of gold bullion for the year ended 31 December 2024.
Table 14 - Gold and silver bullion produced from doré bars and sales of gold
bullion for the year ended 31 December 2024
Quarter ended Gold produced* Silver produced* Gold sales** Gold sales price
(ounces) (ounces) (ounces) ($/ounce)
31 March 2024 2,259 1,512 3,925 2,080
30 June 2024 2,433 1,532 2,075 2,350
30 September 2024 2,955 1,979 3,220 2,497
31 December 2024 7,280 6,984 6,031 2,655
Total for the year 14,927 12,007 15,251 2,432
* including the Government of Azerbaijan's share
** excluding the Government of Azerbaijan's share
Table 15 summarises the total copper, gold and silver produced as concentrate
by both SART and flotation processing for the year ended 31 December 2024.
Table 15 - Total copper, gold and silver produced as concentrate by both SART
and flotation processing for the year ended 31 December 2024
Copper (tonnes) Gold (ounces) Silver (ounces)
Quarter ended SART Flotation Total SART Flotation Total SART Flotation Total
31 March 2024 54 - 54 7 - 7 4,893 - 4,893
30 June 2024 46 - 46 5 - 5 4,809 - 4,809
30 September 2024 11 - 11 1 - 1 1,336 - 1,336
31 December 2024 17 249 266 2 131 133 3,549 1,664 5,213
Total for the year 128 249 377 15 131 146 14,587 1,664 16,251
Table 16 summarises the total copper concentrate (including gold and silver)
production and sales from both SART and flotation processing for the year
ended 31 December 2024.
Table 16 - Total copper concentrate (including gold and silver) production and
sales from both SART and flotation processing for the year ended 31 December
2024
Concentrate Copper Gold Silver Concentrate Concentrate
production* content* content* content* sales**† sales**†
Quarter ended (dmt) (tonnes) (ounces) (ounces) (dmt) ($000)
31 March 2024 89 54 7 4,893 71 295
30 June 2024 77 46 5 4,809 260 1,002
30 September 2024 19 11 1 1,336 - -
31 December 2024 1,672 266 133 5,213 1,173 1,493
Total for the year 1,857 377 146 16,251 1,504 2,790
* including the Government of Azerbaijan's share
** excluding the Government of Azerbaijan's share
† These are invoiced sales of the Group's share of production before any
accounting adjustments in respect of IFRS 15. The total for the year does not
therefore agree to the revenue disclosed in note 6 - "Revenue" to the Group
financial statements.
Infrastructure
The Gedabek Contract Area benefits from excellent infrastructure and access.
The site is located adjacent to the town of Gedabek, which is connected by
good metalled roads to the regional capital of Ganja. Baku, the capital of
Azerbaijan, is to the south and the country's border with Georgia to the
north, are each approximately a four to five hour drive over good quality
roads. The site is connected to the Azeri national power grid.
Water management
The Gedabek site has its own water treatment plant which was constructed in
2017 and which uses the latest reverse osmosis technology. In the last few
years, Gedabek town has experienced water shortages in the summer and this
plant reduces to the absolute minimum the consumption of fresh water required
by the Company.
Tailings (waste) storage
Tailings are stored in a purpose-built dam approximately seven kilometres from
the Group's processing facilities, topographically at a lower level than the
processing plant, thus allowing gravity assistance of tailings flow in the
slurry pipeline. Immediately downstream of the tailings dam is a reed bed
biological treatment system to purify any seepage from the dam before being
discharged safely into the nearby Shamkir river.
In the second half of 2023, the Group started working with the Government of
Azerbaijan to obtain approval for a final raise of the tailings dam wall. In
June 2024, the Government of Azerbaijan issued technical confirmation and a
positive environmental report stating that the tailing dam wall was suitable
for a final raise. On 5 August 2024, the Government of Azerbaijan issued
approval for the wall raise to go ahead. A further 6.0 metres wall raise was
authorised which will raise the wall to its final design height of 90 metres.
The wall raise is being carried out in two back-to-back stages, and the first
raise of 2.5 metres was completed in November 2024. The final wall raise of
3.5 metres is currently being carried out with completion expected in the
second half of 2025. The final raise of the wall will give the dam enough
capacity for the next two to three years of production.
Xarxar
The 464 square kilometre Xarxar Contract Area is located immediately north of
the Gedabek Contract Area which it borders. The Xarxar Contract Area was
acquired in 2022 together with historical geological and other data owned by
AzerGold CJSC, its previous owner.
The Xarxar Contract Area hosts the Xarxar copper deposit. The mineralisation
of the deposit is copper dominant and comprises mainly oxides and secondary
sulphides, with minerals such as malachite, azurite, pyrite, chalcocite and
bornite, together with some primary chalcopyrite, as common minerals in the
deposit, and minor barite and magnetite minerals are also recorded. The main
copper mineralisation lenses are located in the central part of the Xarxar
deposit, with approximate east-west orientations.
No geological fieldwork was carried out during 2024 at Xarxar. Analysis
continued of the drill core acquired from AzerGold CJSC. On 20 February 2024,
a maiden JORC mineral resources estimate was published for the Xarxar deposit,
which is set out in Table 6 above.
Gilar is situated close to the northern boundary of the Gedabek Contract Area.
Geological exploration indicates that this deposit trends to the north. The
Xarxar Contract Area extends the Gedabek Contract Area to the north and will
therefore enable the Gilar deposit to be fully mined.
Garadag
The 344 square kilometre Garadag Contract Area is situated four kilometres
north of Gedabek alongside the road from Gedabek to Shamkir. Garadag was first
explored during the Soviet era and has been extensively explored since then,
most recently by AzerGold CJSC, its previous owner. The roads built for drill
access are still accessible and serviceable on Garadag.
In 2022, the Group acquired historical geological and other data and
associated reports (the "Data") in respect of Garadag from AzerGold CJSC for
$3.3 million. The Data includes geochemical and geophysical data, including
maps and interpretative reports. Substantial core drilling and data
interpretations were carried out by Azergold CJSC and the Data includes 9,645
chemical assays taken from 23,454 metres of drill core, which have been
transferred to the Group. The Data also includes an initial mining scoping
study based on a preliminary mineral resource estimate with various options
for mine development, including open pit designs, initial mining schedules and
an outline metallurgical flow sheet. An environmental and socio-economic
baseline assessment has also been carried out and is included in the Data.
No drilling or other geological fieldwork was carried out at Garadag out in
2024. However, the Company continued to analyse the drill core obtained from
AzerGold CJSC.
On 24 September 2024, the Company published a maiden JORC mineral resources
estimate of the Garadag deposit at July 2024. This showed a total in-situ
mineral resource (indicated and inferred) of 285 million tonnes of
mineralisation containing 897 thousand tonnes of copper at an average grade of
0.32 per cent. This maiden JORC resource is set out in Table 7 above.
Gosha
The Gosha Contract Area is 300 square kilometres in size and is situated in
western Azerbaijan, 50 kilometres northwest of Gedabek. Gosha is regarded as
under-explored. Gosha is the location of a small, high grade, underground gold
mine. Ore mined at Gosha is transported by road to Gedabek for processing. No
mining was carried out in the Gosha mine in the year ended 31 December 2024.
Geological fieldwork has resulted in the discovery of additional
mineralisation adjacent to the existing underground mine. This includes
"Hasan", a sub-vertical high gold grade mineralised vein, immediately south of
the existing Gosha mine. Hasan can be accessed via a short tunnel from the
existing tunnelling at Gosha. A further vein close to Hasan called "Akir" is
also showing promising mineralisation.
The Group is also carrying out geological fieldwork at Asrikchay, a copper and
gold target situated within the Gosha Contract Area. Asrikchay is located in
the northeast corner of the Contract Area, about seven kilometres from the
Gosha mine, within the Asrikchay valley.
Vejnaly
Vejnaly is a 300 square kilometre Contract Area located in the Zangilan
district in southwest Azerbaijan. It borders Iran to the south and Armenia to
the west and hosts the Vejnaly deposit.
A thorough survey of the site has been carried out, which has found that the
main ore body was extensively mined during the Armenian occupation. There are
both open pit and underground workings at the location. There is also an
existing crusher and flotation processing plant at the mine, which will need
extensive renovation to recommence operations.
On 3 August 2023, staff were evacuated from Vejnaly on the instructions of the
Government of Azerbaijan due to the potential danger from landmines. At 31
December 2024, staff had still not received formal permission from the
Government of Azerbaijan to return to Vejnaly. Accordingly, no geological
fieldwork was carried out at the site in 2024.
Ordubad
The 462 square kilometre Ordubad Contract Area is located in the Nakhchivan
exclave, southwest Azerbaijan, and contains numerous targets. Limited
geological exploration work was carried out in the year ended 31 December
2024.
Kyzlbulag
The Kyzlbulag Contract Area is 462 square kilometres and is located in
Karabakh. It contains several mines and has excellent potential for
exploration, as indicated by the presence of many mineral deposits and known
targets in the region. There are indications that up to 35,000 ounces of gold
per year were extracted from the Kyzlbulag copper-gold mine, before the mine
was closed several years ago, indicating the presence of a gold mineralising
system.
No work was carried out at Kyzlbulag in the year ended 2024 as the Group had
no access to the Contract Area.
Demirli
The Demirli Contract Area is 74 square kilometres that extends to the
northeast by about 10 kilometres from the Kyzlbulag Contract Area and contains
the Demirli mining property. The Demirli mining property comprises an open pit
mine, a processing plant and power infrastructure. The processing plant
contains two rotary mills, a copper flotation plant and a molybdenum plant.
The plant is generally in good order although various sections need
replacement or refurbishment. The capacity of the plant is around 6.5 million
tonnes per annum. There is also an upstream tailings dam located close to the
plant.
The Group had restricted access to Demirli in the year ended 31 December 2024.
The Group has started a comprehensive study to determine the work required and
associated timeframe to bring the plant back into production. Various external
consultants have also visited the site to carry out an environmental
assessment and assessment of the suitability of the tailings dam for further
use. The Group now has a small team based permanently at Demirli. The Group is
also refurbishing the accommodation and laboratory facilities at the mine
site.
A reverse circulation drilling programme was completed at Demirli in 2024 to
determine the start-up resource of the mine. An internal Group estimate of the
remaining mineral resources classified in accordance with JORC was 58.3
million tonnes of ore with an average copper grade of 0.41 per cent. copper
containing 239 thousand tonnes of copper. This internal estimate is set out in
Table 9 above.
Geological exploration
Summary
· Minimal drilling was carried out in 2024 due to the strict cost control
exercised throughout the year.
o no exploration surface core drilling was carried out;
o 52 reverse circulation drill holes were completed totalling 4,241 metres at
the Gedabek open pit; and
o geological work commenced at Demirli.
§ 898 reverse circulation holes, drilled to a depth of 10 metres each, were
completed totalling 8,980 metres
§ 8 surface geotechnical drill holes were completed totalling 313 metres
§ the geological work at Demirli was substantially completed in 2024
· One underground geotechnical drill hole was completed with a total length 138
metres in the Gilar mine together with 443 metres of channel sampling of the
tunnel walls.
· Maiden JORC mineral resources estimate of the Xarxar deposit was published on
20 February 2024.
· Scanning of the existing drill core of the Xarxar and Garadag deposits was
carried out using TerraCore hyperspectral scanning technology. The results
will be used to prepare 3-D alteration models of the deposits and support
identification of the best metallurgical processes to treat the ore.
· Maiden JORC mineral resources estimate of the Garadag deposit at July 2024 was
published on 24 September 2024.
Gedabek
Gedabek open pit mine
52 reverse circulation drill holes were completed with a total length of 4,241
metres to further define the ore zone. The drilling was mostly located in Pits
4, 5, 6, 8, 11 and 12 of the main open pit. The results confirmed the further
extension of the gold-copper mineralisation.
Gedabek underground mine
A total of 706 metres of underground development with 250 channel samples was
completed in the area below Pit 4. The aim of the development is to target
production of ore between mining levels.
Gilar
The area hosts two styles of mineralisation, gold in quartz veins and
hydrothermal gold-copper. Three mineralisation bodies have been discovered.
One underground geotechnical core drill hole was completed with a total length
of 138 metres. Channel sampling of the walls of the tunnel was carried out
with 182 underground samples taken with a total length of 1,229 metres.
Zafar
The geology of the area is structurally complex, comprising mainly of Upper
Bajocian-aged volcanics. The mineralisation seems to be associated with a main
northwest to southeast trending structure, which is interpreted as post-dating
smaller northeast to southwest structures. In the southwest area, outcrops
with tourmaline have been mapped, which can be indicative of the potential for
porphyry-style mineral formation.
There was no geological exploration carried out at Zafar in 2024.
Comprehensive interpretation of the final results from the soil geochemical
sampling programme has revealed a second anomaly similar to the original Zafar
anomaly. This area has significant potential for future exploration.
Gosha
The Gosha mine was initially thought to consist of two narrow gold veins, zone
13 and zone 5. Mining has taken place from both veins. A further vein,
"Hasan", has also been discovered located immediately south of zone 5, which
it intersects at one point. The host rock mostly exhibits silicification and
kaolinisation alteration, which changes to quartz-haematite alteration in
andesite.
There was no geological exploration carried out at the Gosha mine in 2024.
Geological fieldwork activity was carried out at the Boyuk Gishlag
mineralisation occurrence within the Gosha Contract Area. A total of 228
samples were collected from intensive hydrothermal altered outcrops.
Xarxar
A maiden mineral resources estimate was published for the Xarxar deposit on 20
February 2024 and is set out in Table 6 above. This shows the deposit contains
approximately 25 million tonnes of copper ore.
Scanning of the existing Xarxar drill core was undertaken during 2024 using
TerraCore technology. After completion of the scans, a 3-D alteration model is
prepared to identify further mineralisation and help identify the best
metallurgical methods to process the ore. TerraCore scanning is hyperspectral
scanning which enables identification of anomalies not visible to the naked
eye. The scanning is being carried out by TerraCore staff in Azerbaijan using
a TerraCore scanner imported into Azerbaijan. This is the first time
hyperspectral scanning has been carried out in Azerbaijan.
Uluxanli
This is a new exploration area at Xarxar where a high-grade quartz gold vein
has been discovered. The initial exploration phase which started in 2023 was
completed in 2024. The results of the initial exploration phase were not
positive.
Garadag
No geological field work was carried out at Garadag in 2024. Scanning of the
existing Garadag drill core was also undertaken using TerraCore technology.
Extensive analytical work was also required for the preparation of the maiden
JORC mineral resources estimate of the Garadag deposit. This was published on
24 September 2024 and is set out in Table 7 above.
Cayir (Ashagi Cayir)
This is a new exploration area in the Garadag Contract Area. Geochemical
testing was carried out in 2024 with 897 soil samples and 50 rock samples
collected. 947 outcrop samples were also collected. Results indicate that the
area warrants further exploration with positive results for gold, silver and
occasionally copper. Alteration mapping and geophysical surveys were also
completed. The result so far indicate that the area warrants further
geological exploration.
Ordubad
1,470 metres of trenching were carried out in the Dirnis and Destabashi areas.
Trenches were dug with a depth of 10 metres. Results show that mineralisation
thickness increases by about 30 per cent. 10 metres below the surface.
Vejnaly
No geological fieldwork was carried out in 2024 as the Group did not have
access to the Contract Area.
A "WorldView-3" study was completed by an independent company, "Exploration
Mapping USA", and a map prepared identifying mineralisation targets. Once
access to the Contract Area is restored, in-house geological fieldwork will
start exploring known gold targets and targets identified by the "WorldView-3"
study.
Demirli
Geological evaluation of the deposit commenced in 2024. The Demirli mine
geological map was digitised and digitising historical drill hole data was
carried out.
A reverse circulation drill programme commenced in 2024. 898 reverse
circulation drill holes were completed to a depth of 10 metres each with a
total depth of 8,980 metres. The purpose of the programme was to determine the
remaining resource in the current open pit which will be the start-up
resource. The start-up resource size has been estimated to be 58.3 million
tonnes of ore with an average copper grade of 0.41 per cent. copper containing
239 thousand tonnes of copper. This internal estimate is set out in Table 9
above.
Sale of the Group's products
Important to the Group's success is its ability to transport its production to
market and sell them without disruption.
In the year ended 31 December 2024, the Group shipped all its gold doré to
Switzerland for refining by MKS Finance SA. The logistics of transport and
sale are well established and gold doré shipped from Gedabek arrives in
Switzerland within three to five days. The proceeds of the estimated 90 per
cent. of the gold content of the doré can be settled within one to two days
of receipt of the doré. The Group, at its discretion, can sell the resulting
refined gold bullion to the refiner.
The Gedabek mine site has good road transportation links and copper and
precious metal concentrate is collected by truck from the Gedabek site by the
purchaser. The Group sells its copper concentrate to three metal traders as
detailed in note 6 to the Group financial statements. The contracts with each
metal trader are periodically renewed and each new contract requires the
approval of the Government of Azerbaijan.
Libero Copper & Gold Corporation ("Libero")
The Company's shareholding in Libero was reduced to 5.7 per cent. in February
2024 following a refinancing in which the Company did not
participate. Michael Sununu also resigned from the Libero board in February
2024. Libero ceased to be an associated company from February 2024 and the
Group's interest is held as an equity investment.
Further information can be found at https://www.liberocopper.com/.
Section 172(1) Statement
Introduction
The board of directors of Anglo Asian Mining PLC (the "Board") considers that
it has adhered to the requirements of section 172 of the Companies Act 2006
(the "Act") and, in good faith, acted in a way that it considers would be most
likely to promote the success of the Company for the benefit of its
shareholders as a whole. In acting this way, the Board has recognised the
importance of considering all stakeholders and other matters as set out in
section 172(1) (a to f) of the Act in its decision making.
The Board members are directors of Anglo Asian Mining PLC, a holding company
for the Group. The Group carries out its business of mineral exploration and
mining in Azerbaijan and elsewhere through its wholly owned subsidiaries and
other investments. Given the nature and size of the Group, the Board considers
it reasonable that executive decision making for the entire Group, including
its subsidiaries in Azerbaijan, is the responsibility of the Board. The
section 172(1) statement has accordingly been prepared for the entire
Group.
The commentary and table below sets out the Company's section 172(1)
statement. This statement provides details of key stakeholder engagement
undertaken by the Board during the year and how this helps the Board to factor
in potential impacts on stakeholders in the decision making process.
General
The Group promotes the highest standards of governance as set out in Corporate
Governance in the Group's annual report. The principles of Corporate
Governance underpin how the Board conducts itself. The Board is very conscious
of the impact that the Group's business and decisions has on its direct
stakeholders as well as its societal impact. The Company operates to the
highest ethical standards as discussed in Corporate Governance section of the
Group's annual report.
Principal decisions and other key factors in maintaining shareholder value
For the year ended 31 December 2024, the Board considers that the following
are examples of the principal decisions that it made in the year:
· consideration and agreement of the Group's budget for the year ending
31 December 2024;
· committing to implement the Global Industry Standard on Tailings
Management ('GISTM') at its operations at Gedabek;
· establishment of a Group sustainability committee chaired by
Professor John Monhemius;
· entering into a $3.7 million vendor financing facility to part
refinance the purchase price of its Caterpillar underground mining fleet;
· refurbishing the production facility at Demirli with the aim of
restarting production following obtaining access to the Contract Area in
mid-2024;
· entering into a $5.0 million concentrate prepayment facility with a
metal trader;
· agreement to the Government of Azerbaijan revising the Group's
Production Sharing Agreement ("PSA") so that AzerGold Closed Joint Stock
Company became the local party to the PSA;
· fully restarting production at the Gebabek production plant following
obtaining permission to raise the wall of its tailing dam;
· changing the auditors of the Group from Ernst & Young LLP to BDO
LLP for the year ending 31 December 2024
· issuing production guidance for 2024 following recommencement of full
production in late 2024; and
· continuing extensive investigation of the geological data obtained
for the Garadag resource and publication of a JORC mineral resources estimate
in September 2024.
The Group, like all companies operating in the extractive industries, is
required to continually replace and increase its mineral reserves to maintain
and improve the sustainability of its business. This concern is a high
priority of the Board. To address this priority, the Company has an active
geological exploration campaign at its Contract Areas to which it has access.
The Board monitors the campaign through regular reports and site visits by
directors whenever possible.
The Board, together with their immediate families, and senior managers of the
Company hold in total approximately 44 per cent. of the shares of the Company
with the remainder held by a wide range of individual and institutional
shareholders. The Board is extremely mindful that all shareholders must be
treated equally. This is reflected in the Board's behaviour to ensure
decisions do not disadvantage external shareholders compared to the interests
of directors and senior management and that external shareholders are fully
informed of all Company developments in a timely manner.
Engagement with key stakeholders
The table below sets out the Board's key stakeholders and provides examples of
how the Board engaged with them in the year as well as demonstrating
stakeholder consideration in the decision-making process. However, the Board
recognises that, depending on the nature of an issue, the interests of each
stakeholder group may differ. The Board seeks to understand the relative
interests and priorities of each stakeholder and to have regard to these, as
appropriate, in its decision making. However, the Board acknowledges that not
every decision it makes will necessarily result in a positive outcome for all
stakeholders.
Stakeholder How the Board has approached their engagement How the Board has taken their interests into account
Shareholders The Board aims to provide clear and timely information to its shareholders The Board maintains a dialogue with external shareholders and keeps them
which gives an honest and transparent view of the performance of the business. informed in a variety of ways as set out in the Corporate Governance section
of the annual report.
Customers The Board aims to maintain a mutually beneficial relationship based on trust Visits to its customers by senior staff are undertaken and visits are made by
through a continuous dialogue with each of its customers. customers to the Company in Azerbaijan to show them the Group's production
facilities.
The Company maintains a continuous dialogue with its customers regarding the
technical specifications of its products to ensure the most beneficial sales
terms are obtained for both parties.
Suppliers The Board has ensured an appropriately qualified and professional procurement All significant purchases are discussed with suppliers and prices and delivery
department is in place which maintains close contact with all suppliers. All terms agreed which are mutually beneficial to both parties.
procurement is carried out via a transparent tender process.
Technical staff work in close collaboration with suppliers of specialist
For specialised goods and services, senior management will maintain a dialogue services to ensure the supplier provides the highest quality service to the
with the supplier and report their engagement to the Board. Company within the commercial terms of the contract.
Employees The Board has mandated a mainly informal approach to engage with employees in The results of the employee survey have been reviewed and action taken to
light of their number and to ensure appropriate upward communication channels implement suggestions where appropriate.
exist for employees.
The health and safety committee considered all reportable safety incidents
Directors and senior management regularly visit Gedabek where the majority of during the year in consultation with employee representatives and all
the employees are located. appropriate actions were taken to prevent further occurrences in the future.
There are also two formal mechanisms for engaging with employees:
· An employee survey is carried out once a year and the results are
circulated to directors.
· The health and safety committee meet twice a year at Gedabek and the
meetings are attended by directors.
Community and environment The Board aims to build trust and conduct its operations in partnership with The Group has carried out significant community and social development in the
the communities at all locations where the Group operates whilst minimising region.
any adverse effect on the environment.
The Company together with officials of the Government of Azerbaijan held a
Board members regularly visit Gedabek and other locations and meet with the "town hall" meeting with local residents at Gedabek to discuss the
local administration and other community leaders to hear their views on environmental audit at Gedabek and future plans for tailings management.
community relations.
A community relations department has been established and a dedicated
Government affairs and community relations officer heads the department.
Government of Azerbaijan The Board has set up a formal mechanism for engaging with the Government of The Company has promptly complied with all requests from the Government of
Azerbaijan as set out in the Corporate Governance section of the annual Azerbaijan for information about the Company's business.
report.
An open relationship based on trust has been formed with the Government.
Directors also meet with high level Government officials on a regular basis.
Principal risks and uncertainties
Country risk in Azerbaijan
The Group's wholly owned operations are solely in Azerbaijan and are therefore
at risk of adverse changes to the regulatory or fiscal regime within the
country. However, Azerbaijan is outward looking and desirous of attracting
direct foreign investment and the Company believes the country will be
sensitive to the adverse effect of any proposed changes in the future. In
addition, Azerbaijan has historically had a stable operating environment and
the Company maintains very close links with all relevant authorities.
Operational risk
The Company currently produces all its products for sale at Gedabek. Planned
production may not be achieved as a result of unforeseen operational problems,
machinery malfunction or other disruptions. Operating costs and profits for
commercial production therefore remain subject to variation. The Group
monitors its production daily and has robust procedures in place to
effectively manage these risks.
Commodity price risk
The Group's revenues are exposed to fluctuations in the price of gold, silver
and copper and all fluctuations have a direct impact on the operating profit
and cash flow of the Group. Whilst the Group has no control over the selling
price of its commodities, it has very robust cost controls to minimise
expenditure to ensure it can withstand any prolonged period of commodity price
weakness. The Group actively monitors all changes in commodity prices to
understand the impact on its business. The directors keep under review the
potential benefit of hedging which it carries out from time to time.
Foreign currency risk
The Group reports in United States Dollars and a large proportion of its costs
are incurred in United States Dollars. It also conducts business in Euros,
Azerbaijan Manats and United Kingdom Sterling. The Group does not currently
hedge its exposure to other currencies, although it continues to review this
periodically.
Liquidity and interest rate risk
The Group utilised various credit lines from several banks in Azerbaijan
throughout 2024. This was primarily to provide working capital during the
partial suspension of the Group's operations. The banks loans were all at a
fixed rate of interest and therefore the Group had no interest rate risk in
respect of bank loans during 2024.
The Group also utilised a vendor financing facility which carries interest at
a rate of CME Term SOFR plus a margin of 2 per cent. Given the size of the
borrowing and relative stability of interest rates, the Group does not
consider that this variable rate presents any material interest rate risk to
the Group.
Russian invasion of Ukraine
The Company is unaffected directly by the Russian invasion of Ukraine or the
international sanctions levied against various private and governmental
Russian entities. However, the Company is subject to the global macro-economic
conditions resulting from the Russian invasion such as higher input costs.
Key performance indicators
The Group has adopted certain key performance indicators ("KPIs") which enable
it to measure its financial performance. These KPIs are as follows:
1 Profit before taxation. This is the key performance indicator used by
the Group. It gives insight into cost management, production growth and
performance efficiency.
2 Net cash provided by operating activities. This is a complementary
measure to profit before taxation and demonstrates conversion of underlying
earnings into cash. It provides additional insight into how we are managing
costs and increasing efficiency and productivity across the business in order
to deliver increasing returns.
3 Free cash flow ("FCF"). FCF is calculated as net cash from operating
activities, less expenditure on property, plant and equipment and mine
development, and Investment in exploration and evaluation assets including
other intangible assets.
Reza Vaziri
President and chief executive
21 May 2025
Financial review
Currency of financial review
References to "$" and "cents" are to United States dollars and cents.
References to "£" and "p" are to United Kingdom Sterling pounds and pence.
References to AZN are to the Azerbaijan New Manat.
Group statement of income
The Group generated revenues in 2024 of $39.6m (2023: $45.9m) from the sales
of gold and silver bullion and copper and precious metal concentrate.
The revenues in 2024 included $37.1m (2023: $31.0m) generated from the sales
of gold and silver bullion from the Group's share of the production of doré
bars. Bullion sales in 2024 were 15,251 (2023: 15,822) ounces of gold and
10,563 (2023: 7,080) ounces of silver at an average price of $2,432 (2023:
$1,951) per ounce and $29 (2023: $23) per ounce respectively. In addition, the
Group generated revenue in 2024 of $2.5m (2023: $14.8m) from the sale of 1,519
(2023: 11,192) dry metric tonnes of copper and precious metal concentrate. The
Group's revenue benefited in the year from a higher average price of gold at
$2,390 (2023: $1,943) per ounce and a higher average price of copper at $9,267
(2023: $8,523) per tonne. Production was lower in 2024 compared to 2023 due to
the partial suspension of processing throughout the first three quarters of
the year.
The Group incurred cost of sales in 2024 of $49.7m (2023: $50.3m) as follows:
2024 2023 B/(W)
$m $m $m
Cash cost of sales 30.8 40.0 9.2
Depreciation 10.0 9.8 (0.2)
Cash costs and depreciation 40.8 49.8 9.0
Capitalised costs (0.2) (1.2) (1.0)
Cost of sales before inventory movement 40.6 48.6 8.0
Inventory movement 9.1 1.7 (7.4)
Total cost of sales 49.7 50.3 0.6
The cost of sales in 2024 of $49.7m were $0.6m lower than the $50.3m in 2023.
Cash cost of sales in 2024 at $30.8m were $9.2m lower than $40.0m in 2023.
This was because agitation leaching, flotation processing and mining were
suspended from January to quarter four of 2024. Reagent costs, materials and
consumables including spare parts and fuel oil, and haulage and excavation
services were $1.6m, $3.0m and $3.7m lower respectively in 2024 compared to
2023. The charge for inventory movement of $9.1m (2023: $1.7m) primarily
resulted from a decrease of gold in circuit and the tailings dam of $6.7m and
bullion of $3.6m. The decrease in gold in circuit and tailings dam resulted
from lower production and lower gold in the tailings dam. The lower bullion
resulted from a delay in shipment of gold bullion at 31 December 2023.
Depreciation of owned assets in 2024 was higher at $10.5m compared to $9.7m in
2023. Accumulated mine development costs within producing mines are
depreciated and amortised on a unit-of-production basis over the economically
recoverable reserves of the mine concerned or by the straight-line method. The
depreciation and amortisation were higher in the year due to a change in
methodology in calculating the cost of the producing mines which are
depreciated. These costs now include future expected capital expenditure of
the cost of a second tailings dam at Gedabek which will be required to process
the economically recoverable reserves. This was partially offset by the lower
production in 2024.
Other operating income in 2024 was $1.3m (2023: $0.4m) The income in 2023 and
2024 was primarily the cancellation of amounts payable to contractors.
Administration expenses in 2024 were $6.6m (2023: $7.0m). Administration
expenses comprise the cost of the administrative staff and associated costs at
the Gedabek mine site, the Baku office and maintaining the Group's listing on
AIM. The majority of the administration costs are incurred in either
Azerbaijan New Manats, the United States dollar or United Kingdom pounds
sterling. The Azerbaijan New Manat was stable against the US dollar in 2024
compared to 2023 at an exchange rate of $1 equals AZN1.7. The United States
dollar to the United Kingdom pounds Sterling exchange rate was relatively
volatile in 2024 with a high of £1 equals $1.34 to a low of £1 equals $1.23.
Administration costs in 2024 were lower than 2023 primarily due to lower
consulting fees. 2023 administration costs included consulting costs arising
from the partial environmental shutdown.
Finance costs in 2024 were $3.0m (2023: $1.8m). Finance costs comprise
interest on borrowings and lease liabilities, interest on unwinding the
discount on provisions, interest on deposit received from a customer and
interest on the AzerGold CJSC creditor. Finance costs increased in 2024
compared to 2023 due to the Group's increase in borrowings in 2024.
The Group reversed of an impairment charge in 2024 of $0.4m (2023: charge of
$5.0m) in respect of its investment in Libero Copper & Gold Corporation
("Libero"). Libero was an associate company at 31 December 2023 but on 15
February 2024 was reclassified as a financial asset as the Group's interest
reduced to 5.7 per cent. in January 2024 and Michael Sununu resigned from the
board of Libero. The reversal of the impairment charge arose due to an
increase in the share price of Libero between 1 January and 15 February 2024.
The market value of the Group's shares in Libero at 31 December 2024 was
$475,000 and the investment was accordingly included at this value as a
non-current financial asset in the Group balance sheet at 31 December 2024.
The Group recorded an impairment charge in 2024 in respect of its historical
geological exploration expense of $1.3m (2023: $13.0m). This was in respect of
its Avshancli deposit in the Gedabek contract area.
The Group recorded a loss before taxation in 2024 of $21.3m (2023: $32.0m).
The loss was mainly due to the gross loss of $10.1m resulting from the partial
suspension of Gedabek processing in the first three quarters of 2024,
administration expenses of $6.6m and finance costs of $3.0m.
The Group had a taxation benefit in 2024 of $3.8m (2023: $7.7m). This
comprised a current income tax charge of $nil (2023: $nil) and a deferred tax
benefit of $3.8m (2023: $7.7m). R.V. Investment Group Services ("RVIG") in
Azerbaijan generated taxable losses in 2024 of $5.1m (2023: $17.3m). RVIG's
taxable profits are taxed at 32 per cent. (the corporation tax rate stipulated
in the Group's production sharing agreement). RVIG had tax losses available
for carry forward of $22.4m at 31 December 2024 (2023: $17.3m).
All-in sustaining cost of gold production
The Group will not report an AISC of gold produced in 2024. The Group's costs
in 2024 include substantial non-production costs such as maintaining the
entire Gedabek site together with the idle plant, and the cost of the Gedabek
workforce, a large proportion of whom were placed on administrative leave. The
AISC metric is therefore not meaningful for 2024.
Group statement of financial position
Assets
Non-current assets increased from $95.2m at the end of 2023 to $103.7m at the
end of 2024. Intangible assets decreased by $3.1m from $27.1m at the end of
2023 to $24.0m at the end of 2024 due to transfers of intangible assets to
assets under construction at Gedabek of $3.6m, amortisation of $0.4m and
impairment of $1.3m. This was partially offset by additions of $2.2m (2023:
$5.9m). Property, plant and equipment were higher by $6.8m due to additions of
$9.3m and transfer from intangibles of $3.6m partially offset by depreciation
of $10.5m. The rehabilitation provision also increased by $5.0m. Right of use
assets were $0.4m lower in 2024 compared to 2023. Additions of $0.4m were
partially offset by depreciation of $0.7m.
Current assets decreased by $16.6m to $42.9m at 31 December 2024 compared to
$59.5m at 31 December 2023. The main reason for the decrease was a decrease of
cash of $3.6m and inventories of $15.6m partially offset by an increase in
trade and other receivables of $2.6m. Current inventories decreased by $15.6m
due to a decrease in gold bullion of $3.6m, lower metal in circuit and in
tailings dam of $6.7m and lower ore stockpiles of $4.8m. There were 1,055
ounces of gold bullion in inventory at 31 December 2024 (31 December 2023:
3,359 ounces). Gold in the tailings dam was 217 ounces (2023: 3,114 ounces)
valued at $0.5m (2023: $4.9m). The decrease in the gold in the tailings dam
resulted from lower production. The lower ore stockpiles resulted from $5.7m
of ore being reclassified as non-current inventory. That the Group is now back
in full production and Gilar has started production means that this ore will
not be processed in 2025. Trade and other receivables increased by $2.6m due
to an increase of $5.5m of gold held on behalf of the Government of
Azerbaijan. This was 2,862 ounces of gold valued at the market price of gold
at 31 December 2024. This balance is offset by an other creditor of equal
amount.
The Group's cash balances at 31 December 2024 were $0.9m (31 December 2023:
$4.5m) and restricted cash of $6.0m (31 December 2023: $6.0m) which is not
available for use by the Group as it is security for a loan. Surplus cash
during the year was maintained in US dollars and was placed on fixed deposit
with banks in Azerbaijan at tenors of between one to three months at
interest rates of around 1.5 to 4.0 per cent.
Liabilities
Current liabilities at 31 December 2024 were $38.9m (31 December 2023:
$23.4m). Trade and other payables increased by $10.5m. Trade creditors
increased from $2.7m at 31 December 2023 to $5.5m at 31 December 2024 as a
result of actions to manage working capital. Gold held on behalf of the
Government of Azerbaijan increased from $2.0m to $7.5m as set out above in
current assets. Current liabilities at 31 December 2024 also included a $3.4m
(31 December 2023: $nil) creditor for geological data. This amount was
reclassified to current from non-current liabilities in 2024 as it is due for
payment in 2025.
The Group commenced borrowing in 2023 to finance the capital expenditure of
developing its assets and the partial suspension of processing operations from
August 2023. Total bank borrowings at fair value including interest at 31
December 2024 were $21.6m (31 December 2023: $20.7m). Three loans totalling
$5.0m from the International Bank of Azerbaijan ("IBA") which matured in
May 2024 were consolidated into one loan of $5.0m at 6 per cent. per annum and
extended till May 2025. In May 2025, it was further extended to May 2026. The
Group also had an existing $10.0m loan from IBA at 6.5 per cent. per annum of
which $7.9m was outstanding at 31 December 2024 (2023: $10.0m). The Group also
had a loan from Access Bank of $5.6m throughout the year which was secured
against a $6.0m cash deposit. The loan from Access Bank was extended to
November 2025.
The Group received the proceeds of a vendor financing facility
with Caterpillar Financial Services Corporation ("Caterpillar") in 2024 of
$3.7m. The interest rate is CME Term SOFR rate plus a margin of 2 per cent.
and repayment of capital is by 12 equal quarterly instalments. The amount
outstanding at 31 December 2024 was $3.1m. The loan is subject to net debt to
EBITDA and net worth covenants. The Group did not comply with these covenants
at 31 December 2024 and therefore in accordance with the amendments to IAS1,
the entire loan has been classified as a current liability. The net worth
covenant at 31 December 2024 had been waived by Caterpillar as part of the
terms of the loan. Subsequent to 31 December 2024, the Group was granted a
waiver by Caterpillar of the net debt to EBITDA covenant at 31 December 2024.
Non-current liabilities included trade and other payables of $0.5m (2023:
$4.2m). 2023 included $3.1m in respect of the purchase of historical
exploration data of Xarxar and Garadag. This liability is payable in 2025 and
has been included in current liabilities at 31 December 2024.
Net assets
Net current assets were $3.9m at the end of 2024 compared to $36.1m at the end
of 2023. The net current assets decreased due to an increase in current
liabilities of $15.6m and a decrease in current assets of $16.6m.
Net assets of the Group at the end of 2024 were $67.4m (2023: $84.8m). The net
assets were lower due to a decrease in retained earnings as a result of the
loss in 2024. There were no shares issued or bought back in 2024.
Equity
The Group's gearing ratio at 31 December 2023 and December 2024 was 27.4 per
cent. and 35.3 per cent. respectively. The calculation of the gearing ratio is
set out in note 25 - financial instruments to the Group financial statements.
There were no movements of the Group's share capital, merger reserve and share
premium account in 2024. The Group's holding company did not buy back any
ordinary shares in 2023 or 2024. 150,000 ordinary shares were bought back in
2022 which have not been cancelled and are held in treasury. No dividends were
paid in 2024.
Group cash flow statement
Operating cash outflow before movements in working capital for 2024 was $6.6m
(2023: $1.0m). Operating cash was severely reduced in the year due to the
lower production arising from the suspension of processing.
Working capital movements generated cash of $15.2m (2023: $2.0m) due to a
decrease in inventories which were lower by $9.9m (2023: higher by $0.1m) and
trade and other receivables which were lower by $3.4m (2023: $4.6m).
Cash from operations in 2024 was $8.6m compared to $1.0m in 2023 due to the
cash flow from working capital of $13.9m.
The Company paid corporation tax in 2024 of $nil (2023: $0.1m) in Azerbaijan
in accordance with local requirements as it incurred losses. The payment in
2023 was the final payment of its liability for the year ended 31 December
2022. The Group has tax losses carried forward in Azerbaijan at 31 December
2024 of $22.4m (2023:17.3m).
Expenditure on property, plant and equipment and mine development in 2024 were
$8.9m (2023: $18.0m). The main additions in 2024 were the development costs of
the Gilar mine and the cost of the first stage of the Gedabek tailings dam
wall raise.
Expenditure on intangible assets in 2024 was $2.1m (2023: $7.2m) which was
expenditure on exploration and evaluation. The main expenditure on exploration
and evaluation expenditure was $0.7m (2023: $2.1m), $0.5m (2023: $0.6m) and
$0.4m (2023: $0.1m) at Gedabek, Ordubad and Garadag respectively.
Expenditure on exploration and evaluation in 2024 was curtailed to conserve
funds due to the partial suspension of processing in the year.
Dividends
In respect of the year ended 31 December 2024, the Group did not pay an
interim dividend and no final dividend is proposed (2023: $nil).
A legal review was carried out in early 2025, of the distributions made to
shareholders by Anglo Asian Mining plc, following an enquiry from the United
Kingdom Financial Reporting Council in late 2024. The review found that the
Group's subsidiaries have ample distributable reserves, which can be
distributed to Anglo Asian Mining PLC, to pay dividends to shareholders and
buy back shares. However, certain technical provisions of the Companies Act
2006 had not been complied with in making those distributions. To rectify the
situation, various actions will be undertaken to correct the situation in 2025
following the Group's annual general meeting for 2025 including convening a
general meeting so shareholders can approve the required resolutions.
Production Sharing Agreement
Under the terms of the Production Sharing Agreement (the "PSA") with the
Government of Azerbaijan (the "Government"), the Group and the Government
share the commercial products of each mine. The Government's share is 51 per
cent. of "Profit Production". Profit Production is defined as the value of
production, less all capital and operating cash costs incurred during the
period when the production took place. Profit Production for any period is
subject to a minimum of 25 per cent. of the value of the production. This is
to ensure the Government always receives a share of production. The minimum
Profit Production is applied when the total capital and operating cash costs
(including any unrecovered costs carried forward from previous periods) are
greater than 75 per cent. of the value of production. All operating and
capital cash costs in excess of 75 per cent. of the value of production can be
carried forward indefinitely and set off against the value of future
production.
Profit Production and unrecovered costs are calculated separately for each
Contract Area from the total production and total costs for each Contract
Area. Costs incurred in one Contract Area cannot be offset against production
of a different Contract Area. Unrecovered costs can only be recovered against
future production from their respective contract area.
Profit Production for the Group has been subject to the minimum 25 per cent.
for all years since commencement of production including 2024 for the Gedabek
Contract Area. The Government's share of production in 2024 (as in all
previous years) was therefore 12.75 per cent. being 51 per cent. of 25 per
cent. with the Group entitled to the remaining 87.25 per cent. The Group was
therefore subject to an effective royalty on its revenues in 2024 of 12.75 per
cent. (2023: 12.75 per cent.) of the value of its production at Gedabek.
The Group produced gold and silver for the first time in 2021 from its Vejnaly
Contract Area and the metal produced was sold for a total of $1.6m in 2023.
The Government's share of this production was 32.0 per cent. This is because
the mine and other facilities were acquired at no cost and the only costs
available to offset the production were the administration costs of the site,
minor refurbishment capital expenditure, the cost of geological exploration
and Gedabek transport and processing costs. Mining costs were not available
for offset as the metal was produced from ore stockpiled at Vejnaly by the
previous owner.
The Group can recover the following costs in accordance with the PSA for each
Contract Area as follows:
· all direct operating expenses of the mine;
· all exploration expenses;
· all capital expenditure incurred on the mine;
· an allocation of corporate overheads - currently, overheads are
apportioned to Gedabek according to the ratio of direct capital and operating
expenditure at the Gedabek contract area compared with direct capital and
operational expenditure at the Gosha and Ordubad contract areas; and
· an imputed interest rate of United States Dollar LIBOR + 4 per cent.
per annum on any unrecovered costs.
The total unrecovered costs (operating costs and capital expenditure) for the
Group's eight contract areas are as follows:
Contract area Total unrecovered costs ($m)
31 December 2024 31 December 2023
Gedabek 82.0 64.2
Gosha 38.3 34.8
Ordubad 36.6 33.0
Vejnaly 2.3 1.9
Garadag* 1.4 1.2
Xarxar* 3.9 3.4
Demirli 0.3 -
Kyzlbulag - -
*The unrecovered costs include cash payments for historical geological data of
$0.8m and $0.2m in respect of Garadag and Xarxar respectively.
Foreign currency exposure
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 year ended 31
December 2024. The Company's revenues and its debt facility are also
denominated in US dollars. The Company does not currently have any significant
exposure to foreign exchange fluctuations and the situation is kept under
review.
Calculation of non-IFRS financial indicators
Net debt / cash
Calculated as the cash and cash equivalents minus current and non-current
interest-bearing loans and borrowings.
Free cash flow
Calculated as net cash from operating activities less expenditure on property,
plant and equipment and mine development and, Investment in exploration and
evaluation assets including other intangible assets.
Going concern
Preparation of financial statements on a going concern basis
The directors have prepared the Group financial statements on a going concern
basis after reviewing the Group's forecast cash position for the period to 30
June 2026 (the "going concern review period") and satisfying themselves that
the Group will have sufficient funds on hand to meet its obligations as and
when they fall due over the period of their assessment. Appropriate rigour and
diligence have been applied by the directors who believe the assumptions are
prepared on a realistic basis using the best available information.
Main business of the Group
The Group produces primarily gold and copper at its Gedabek mining concession
in northwestern Azerbaijan. Ore mined at Gedabek produces gold doré by heap
and agitation leaching and copper concentrate (which also contains gold and
silver) from SART and flotation processing. The Group's new Gilar underground
mine will also substantially increase production in 2025 as its ore is much
richer than from its current mines. The Gilar mine extracted its first ore in
March 2025 and started production in May 2025 with production ramping up to
50,000 to 60,000 tonnes per month.
The Group is also expecting to start copper production from its Demirli plant
in the going concern review period with first production expected in the
second half of 2025.
Curtailment of agitation leaching and flotation processing and tailings dam
wall raise in 2024
Agitation leaching and flotation processing was suspended throughout most of
2024 whilst permission was obtained from the Government of Azerbaijan (the
"Government") to raise the wall of its tailings dam. Permission was obtained
in August 2024, and the first raise of the tailings dam wall was completed in
November 2024. Agitation leaching recommenced in September 2024 and flotation
processing in November 2024. It is expected the second raise of the tailings
dam wall will be completed in the second half of 2025. This will give the
tailings dam enough capacity for production at Gedabek for the next two to
three years.
Start of production from Demirli
The Group's Demirli plant is expected to start production in the second half
of 2025. A $7.0 million loan is being finalised to finance the refurbishment
of the plant. The plant is expected to be cash generative once in production.
Any initial cash shortfalls as it commences production due to working capital
or other requirements can be met from the cash generated from the Group's
Gedabek operations. The Group is also finalising a contract with Trafigura Pte
Ltd. ("Trafigura") for the purchase of its copper concentrate produced at
Demirli. The contract will include a revolving prepayment facility of up to
$25 million at an interest rate of SOFR plus 4 per cent. per annum.
Financial condition and credit facilities available to the Group
The Group had cash reserves of $12.5 million (including $6.0 million
restricted cash) and debt of $21.3 million at 31 March 2025. The directors
have prepared a cash flow forecast for the Gedabek site that assumes
production is consistent with the business plan and a gold price of $2,600 to
$2,800 for 2025 and 2026.
The Gedabek site cash flow forecast shows the Group is able to fund its
working capital requirements from cash generated from its operations at
Gedabek. The cash flow also shows that the Group is able to fund its capital
expenditure requirements at Gedabek from its existing cash flow. The Group
generated $1.0 million of overall positive cash flow in the first quarter of
2025. A cash flow forecast has also been prepared for the Group's new Demirli
operation which shows that production will be cash positive from the start of
production.
The Group has in place an AZN 55 million ($32.3 million) General credit
agreement with the International Bank of Azerbaijan ("IBA") with minimal
conditions on drawdown. The Group has borrowed $10.0 million under this
facility of which $2.2 million was repaid in 2024. The balance is repayable
between May 2025 to May 2026. The Group has also borrowed $5.0 million under
the facility which was originally repayable in May 2024. The repayment of the
$5.0 million loan was extended by one year to May 2025, and in May 2025 was
further extended by one year to May 2026. The Group is currently finalising a
further $7.0 million loan under the General credit agreement. This loan of
$7.0 million will be used to fund the refurbishment of Demirli operation.
The Group also finances its operations using concentrate prepayment facilities
established with Trafigura and other offtakers. A 3-month revolving, $5.0
million to $10.0 million prepayment facility has been established with
Trafigura for concentrate produced at Gedabek. At 31 March 2025, $5.0 million
was outstanding under this facility. The Group is also finalising a contract
with Trafigura Pte Ltd. ("Trafigura") for the purchase of its copper
concentrate produced at Demirli. The contract will include a revolving
prepayment facility of up to $25 million at an interest rate of SOFR plus 4
per cent. per annum.
The Group closed a vendor refinancing in 2024 as part of the purchase
consideration of its Caterpillar mining fleet and received proceeds of $3.7
million. $2.8 million is outstanding at 31 March 2025 and the loan will be
repaid in quarterly instalments with the final instalment in July 2027. The
Group was in breach of the net worth and net debt to EBITDA covenants of the
loan at 31 December 2024. However, subsequent to 31 December 2024, the Group
was granted a waiver of the net debt to EBITDA covenant at 31 December 2024.
The net worth covenant was not in force at 31 December 2024.
Directors' going concern opinion
The Group's business activities, together with the factors likely to affect
its future development, performance and position, can be found within the
chairman's statement, the president and chief executive's review and the
strategic report above. The financial position of the Group, its cash flow,
liquidity position and borrowing facilities are discussed within the financial
review above. In addition, note 25 to the Group financial statements below
includes the Group's financial management risk objectives and details of its
financial instrument exposures to credit risk and liquidity risk.
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 directors continue to
adopt the going concern basis in preparing the annual report and financial
statements.
William Morgan
Chief financial officer
21 May 2025
Directors emoluments
Year ended 31 December 2024 Consultancy Fees Benefits Total
$ $ $ $
John Monhemius 14,157 58,329 - 72,486
John Sununu - 74,400 - 74,400
Michael Sununu - 54,000 - 54,000
Reza Vaziri 584,981 54,000 46,238 685,219
Khosrow Zamani - 123,600 - 123,600
599,138 364,329 46,238 1,009,705
Year ended 31 December 2023 Consultancy Fees Benefits Total
$ $ $ $
John Monhemius 9,817 56,898 - 66,715
John Sununu - 74,400 - 74,400
Michael Sununu - 54,000 - 54,000
Reza Vaziri 576,096 54,000 33,106 663,202
Khosrow Zamani - 123,600 - 123,600
585,913 362,898 33,106 981,917
Directors' fees and consultancy for 2023 and 2024 were paid in cash.
No director held or exercised any share options during the years ended 31
December 2023 and 31 December 2024.
Group statement of income
year ended 31 December 2024
2024 2023
Continuing operations Notes $000 $000
Revenue 6 39,585 45,855
Cost of sales (49,652) (50,317)
Gross loss (10,067) (4,462)
Other operating income 7 1,340 407
Administrative expenses (6,570) (7,008)
Other operating expenses 7 (1,694) (696)
Impairment charge of development assets 15 (534) -
Impairment of geological exploration 14 (1,314) (13,031)
Operating loss 8 (18,839) (24,790)
Finance costs 10 (2,973) (1,831)
Finance income 289 266
Other expense 7 (75) (39)
Share of loss of an associate company 11 (46) (541)
Reversal of impairment/(impairment loss) for investment in an associate 11 354 (5,035)
company
Loss before tax (21,290) (31,970)
Income tax benefit 12 3,788 7,728
Loss attributable to the equity holders of the parent (17,502) (24,242)
Loss per share attributable to the equity holders of the parent
Basic (US cents per share) 13 (15.32) (21.00)
Diluted (US cents per share) 13 (15.32) (21.00)
Group statement of comprehensive income
year ended 31 December 2024
2024 2023
Notes $000 $000
Loss for the year (17,502) (24,242)
Other comprehensive loss
Other comprehensive loss that may be reclassified to profit and loss in
subsequent years*:
Share of comprehensive loss of an associate company 11 - (1)
Net other comprehensive loss that may be reclassified to profit and loss in - (1)
subsequent year
Total comprehensive loss for the year attributable to the equity holders of (17,502) (24,243)
the parent*
* These are gross amounts and the tax effect is $nil
Group statement of financial position
31 December 2024
2024 2023
Notes $000 $000
Non-current assets
Intangible assets 14 23,998 27,126
Property, plant and equipment 15 71,606 64,775
Right of use assets 16 1,690 2,053
Investment in an associate company 11 - 242
Financial assets 17 475 -
Inventory 18 5,716 -
Other receivables 19 260 975
103,745 95,171
Current assets
Inventory 18 24,733 40,342
Trade and other receivables 19 11,262 8,654
Restricted cash 20 6,000 6,000
Cash and cash equivalents 20 886 4,477
42,881 59,473
Total assets 146,626 154,644
Current liabilities
Trade and other payables 21 (19,700) (9,200)
Interest-bearing loans and borrowings 22 (18,546) (13,629)
Lease liabilities 16 (691) (555)
(38,937) (23,384)
Net current assets 3,944 36,089
Non-current liabilities
Other payables 21 (476) (4,219)
Provision for rehabilitation 24 (18,826) (12,948)
Interest-bearing loans and borrowings 22 (3,083) (7,105)
Lease liabilities 16 (1,456) (1,916)
Deferred tax liability 12 (16,476) (20,264)
(40,317) (46,452)
Total liabilities (79,254) (69,836)
Net assets 67,372 84,808
Equity
Share capital 26 2,016 2,016
Share premium 27 33 33
Treasury shares 28 (145) (145)
Share-based payment reserve 29 576 571
Merger reserve 26 46,206 46,206
Foreign currency translation reserve (172) (233)
Retained earnings 18,858 36,360
Total equity 67,372 84,808
Group statement of cash flows
year ended 31 December 2024
2024 2023
Notes $000 $000
Cash flows from operating activities
Loss before tax (21,290) (31,970)
Adjustments to reconcile loss before tax to net cash flows:
Finance costs 10 2,973 1,831
Finance income (289) (266)
Unrealised loss on financial instruments 7 75 39
Gain on the modification of lease liabilities 7 (8) (71)
Gain on reversal of previously written off receivables 7 - (33)
Gain on reversal of cancellation of trade payables 7 (1,332) (303)
Depreciation of owned assets 15 10,544 9,707
Depreciation of leased assets 16 729 566
Amortisation of mining rights and other intangible assets 14 387 593
Share-based payment expense 29 5 147
Share of loss of an associate company 11 46 541
(Reversal of impairment)/impairment loss for investment in an associate 11 (354) 5,035
company
Impairment of development assets 15 534 -
Impairment of geological exploration 14 1,314 13,031
Foreign exchange loss 45 105
Operating cash outflow before movement in working capital (6,621) (1,048)
Decrease in trade and other receivables 3,366 4,607
Decrease/(increase) in inventories 9,897 (140)
Increase/(decrease) in trade and other payables 1,936 (2,429)
Cash from operations 8,578 990
Income taxes paid - (51)
Net cash flow generated from operating activities 8,578 939
Cash flows from investing activities
Expenditure on property, plant and equipment and mine development (8,917) (18,032)
Investment in exploration and evaluation assets including other intangible (2,147) (7,240)
assets
Increase in restricted cash 20 - (6,000)
Investment in an associate company 11 - (646)
Interest received 243 81
Net cash used in investing activities (10,821) (31,837)
Cash flows from financing activities
Dividends paid 30 - (4,603)
Proceeds from borrowings 22 3,708 20,650
Cash received from concentrate prepayments 1,681 -
Cash repaid from concentrate prepayments (1,681) -
Repayment of borrowings 22 (2,802) -
Interest paid - borrowings 22 (1,247) (280)
Interest paid - lease liabilities 16 (280) (275)
Repayment of lease liabilities 16 (682) (422)
Net cash (used in)/generated from financing activities (1,303) 15,070
Net decrease in cash and cash equivalents (3,546) (15,828)
Net foreign exchange difference (45) (105)
Cash and cash equivalents at the beginning of the year 20 4,477 20,410
Cash and cash equivalents at the end of the year 20 886 4,477
Group statement of changes in equity
year ended 31 December 2024
Notes Share Share Merger Total
capital premium reserve equity
$000 $000 Share-based $000 Foreign Retained $000
payment currency earnings
Treasury reserve translation $000
shares $000 reserve
$000 $000
1 January 2023 2,016 33 (145) 424 46,206 (233) 65,206 113,507
Loss for the year - - - - - - (24,242) (24,242)
Other comprehensive loss for the year
- - - - - - (1) (1)
Total comprehensive loss for the year
- - - - - - (24,243) (24,243)
Cash dividends paid 30 - - - - - - (4,603) (4,603)
Share-based payment 29
- - - 147 - - - 147
31 December 2023 2,016 33 (145) 571 46,206 (233) 36,360 84,808
Loss for the year - - - - - - (17,502) (17,502)
Foreign currency translation reserve 29 - - - - - 61 - 61
Share-based payment - - - 5 - - - 5
31 December 2024 2,016 33 (145) 576 46,206 (172) 18,858 67,372
Notes to the Group financial statements
year ended 31 December 2024
1 General information
Anglo Asian Mining PLC (the "Company") is a company incorporated and limited
by shares 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. The
Company is a holding company. The principal activities and place of business
of the Company and its subsidiaries (the "Group") are set out in note 31 below
and the chairman's statement, the president and chief executive's review and
the strategic report above.
2 Basis of preparation
The financial information for the year ended 31 December 2024 was approved by
the board of directors on 21 May 2024. The financial information has been
prepared in accordance with UK-adopted International accounting standards.
The financial information set out herein does not constitute the Group's
statutory financial statements for the year ended 31 December 2024, but is
derived from the Group's audited financial statements. The auditors have
reported on the 2024 financial statements and their reports were unqualified
and did not contain statements under s498(2) or (3) Companies Act 2006, nor
did they contain a material uncertainty in relation to going concern. The 2024
Annual Report was approved by the Board of Directors on 21 May 2025, and will
be mailed to shareholders in June 2025. The financial information in this
statement is audited but does not have the status of statutory accounts within
the meaning of Section 434 of the Companies Act 2006.
The financial information has been prepared using accounting policies set out
in note 4 which are consistent with all applicable IFRSs and with those parts
of the Companies Act 2006 applicable to companies reporting under IFRSs. For
these purposes, IFRSs comprises the standards issued by the International
Accounting Standards Board and interpretations issued by the International
Financial Reporting Interpretations Committee that have been endorsed by the
UK Endorsement Board.
The financial information has been prepared under the historical cost
convention except for the treatment of share-based payments, certain trade
receivables at fair value, financial assets at fair value through profit and
loss and gold owed to the Government of Azerbaijan. The financial information
is presented in United States Dollars ("$") and all values are rounded to the
nearest thousand except where otherwise stated. In the financial information
"£" and "pence" are references to the United Kingdom pound sterling and
"CAN$" and "CAN cents" are references to Canadian dollars and cents.
The functional currency of the Company and all the Group's subsidiaries is
United States Dollars. The financial statements of each entity including the
Company are prepared in United States Dollars (see accounting policy 4.23 -
'Foreign currencies').
Going concern
Preparation of financial statements on a going concern basis
The directors have prepared the Group financial statements on a going concern
basis after reviewing the Group's forecast cash position for the period to 30
June 2026 (the "going concern review period") and satisfying themselves that
the Group will have sufficient funds on hand to meet its obligations as and
when they fall due over the period of their assessment. Appropriate rigour and
diligence have been applied by the directors who believe the assumptions are
prepared on a realistic basis using the best available information.
Main business of the Group
The Group produces primarily gold and copper at its Gedabek mining concession
in northwestern Azerbaijan. Ore mined at Gedabek produces gold doré by heap
and agitation leaching and copper concentrate (which also contains gold and
silver) from SART and flotation processing. The Group's new Gilar underground
mine will also substantially increase production in 2025 as its ore is much
richer than from its current mines. The Gilar mine extracted its first ore in
March 2025 and started production in May 2025 with production ramping up to
50,000 to 60,000 tonnes per month.
The Group is also expecting to start copper production from its Demirli plant
in the going concern review period with first production expected in the
second half of 2025.
Curtailment of agitation leaching and flotation processing and tailings dam
wall raise in 2024
Agitation leaching and flotation processing was suspended throughout most of
2024 whilst permission was obtained from the Government of Azerbaijan (the
"Government") to raise the wall of its tailings dam. Permission was obtained
in August 2024, and the first raise of the tailings dam wall was completed in
November 2024. Agitation leaching recommenced in September 2024 and flotation
processing in November 2024. It is expected the second raise of the tailings
dam wall will be completed in the second half of 2025. This will give the
tailings dam enough capacity for production at Gedabek for the next two to
three years.
Start of production from Demirli
The Group's Demirli plant is expected to start production in the second half
of 2025. A $7.0 million loan is being finalised to finance the refurbishment
of the plant. The plant is expected to be cash generative once in production.
Any initial cash shortfalls as it commences production due to working capital
or other requirements can be met from the cash generated from the Group's
Gedabek operations. The Group is also finalising a contract with Trafigura Pte
Ltd. ("Trafigura") for the purchase of its copper concentrate produced at
Demirli. The contract will include a revolving prepayment facility of up to
$25 million at an interest rate of SOFR plus 4 per cent. per annum.
Financial condition and credit facilities available to the Group
The Group had cash reserves of $12.5 million (including $6.0 million
restricted cash) and debt of $21.3 million at 31 March 2025. The directors
have prepared a cash flow forecast for the Gedabek site that assumes
production is consistent with the business plan and a gold price of $2,600 to
$2,800 for 2025 and 2026.
The Gedabek site cash flow forecast shows the Group is able to fund its
working capital requirements from cash generated from its operations at
Gedabek. The cash flow also shows that the Group is able to fund its capital
expenditure requirements at Gedabek from its existing cash flow. The Group
generated $1.0 million of overall positive cash flow in the first quarter of
2025. A cash flow forecast has also been prepared for the Group's new Demirli
operation which shows that production will be cash positive from the start of
production.
The Group has in place an AZN 55 million ($32.3 million) General credit
agreement with the International Bank of Azerbaijan ("IBA") with minimal
conditions on drawdown. The Group has borrowed $10.0 million under this
facility of which $2.2 million was repaid in 2024. The balance is repayable
between May 2025 to May 2026. The Group has also borrowed $5.0 million under
the facility which was originally repayable in May 2024. The repayment of the
$5.0 million loan was extended by one year to May 2025, and in May 2025 was
further extended by one year to May 2026. The Group is currently finalising a
further $7.0 million loan under the General credit agreement. This loan will
be used to fund the refurbishment of Demirli operation.
The Group also finances its operations using concentrate prepayment facilities
established with Trafigura and other offtakers. A 3-month revolving, $5.0
million to $10.0 million prepayment facility has been established with
Trafigura for concentrate produced at Gedabek. At 31 March 2025, $5.0 million
was outstanding under this facility. The Group is also finalising a contract
with Trafigura Pte Ltd. ("Trafigura") for the purchase of its copper
concentrate produced at Demirli. The contract will include a revolving
prepayment facility of up to $25 million at an interest rate of SOFR plus 4
per cent. per annum.
The Group closed a vendor refinancing in 2024 as part of the purchase
consideration of its Caterpillar mining fleet and received proceeds of $3.7
million. $2.8 million is outstanding at 31 March 2025 and the loan will be
repaid in quarterly instalments with the final instalment in July 2027. The
Group was in breach of the net worth and net debt to EBITDA covenants of the
loan at 31 December 2024. However, subsequent to 31 December 2024, the Group
was granted a waiver of the net debt to EBITDA covenant at 31 December 2024.
The net worth covenant was not in force at 31 December 2024.
Directors' going concern opinion
The Group's business activities, together with the factors likely to affect
its future development, performance and position, can be found within the
chairman's statement, the president and chief executive's review and the
strategic report above. The financial position of the Group, its cash flow,
liquidity position and borrowing facilities are discussed within the financial
review above. In addition, note 25 to the Group financial statements below
includes the Group's financial management risk objectives and details of its
financial instrument exposures to credit risk and liquidity risk.
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 directors continue to
adopt the going concern basis in preparing the annual report and financial
statements.
3 Adoption of new and revised standards
3.1 New and amended standards and interpretations
The following standards and amendments were applicable for annual financial
statements beginning on or after 1 January 2024:
· Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback
· Amendments to IAS 1: Classification of Liabilities as Current or
Non-current
· Amendments to IAS 7 and IFRS 7 - Supplier Finance Agreements
The above standards and amendments had no impact on the consolidated financial
statements of the Group.
3.2 Standards issued but not yet effective
The new and amended standards and interpretations that are issued, but not yet
effective, up to the date of issuance of the Group's financial statements are
disclosed below. The Group intends to adopt these new and amended standards
and interpretations, if applicable, when they become effective.
Amendments to IAS 21: Lack of Exchangeability
In August 2023, the IASB issued amendments to IAS 21 - "The effects of changes
in foreign exchange rates - lack of exchangeability". The amendments are
effective from accounting periods beginning 1 January 2025. The Group only
uses freely exchangeable currencies for which there are well-developed spot
and forward markets. Accordingly, the Group believes that the amendments will
have no effect on its financial statements.
IFRS 18 Presentation and Disclosure in Financial Statements
In April 2024, the IASB issued IFRS 18, which replaces IAS 1 Presentation of
Financial Statements. IFRS 18 introduces new requirements for presentation
within the statement of profit or loss, including specified totals and
subtotals. Furthermore, entities are required to classify all income and
expenses within the statement of profit or loss into one of five categories:
operating, investing, financing, income taxes and discontinued operations,
whereof the first three are new.
It also requires disclosure of newly defined management-defined performance
measures, subtotals of income and expenses, and includes new requirements for
aggregation and disaggregation of financial information based on the
identified 'roles' of the primary financial statements (PFS) and the notes.
In addition, narrow-scope amendments have been made to IAS 7 Statement of Cash
Flows, which include changing the starting point for determining cash flows
from operations under the indirect method, from 'profit or loss' to 'operating
profit or loss' and removing the optionality around classification of cash
flows from dividends and interest. In addition, there are consequential
amendments to several other standards.
IFRS 18, and the amendments to the other standards, is effective for reporting
periods beginning on or after 1 January 2027, but earlier application is
permitted and must be disclosed. IFRS 18 will apply retrospectively. The Group
is currently working to identify the impacts the amendments will have on the
primary financial statements and notes to the financial statements.
IFRS 19 Subsidiaries without Public Accountability: Disclosures
In May 2024, the IASB issued IFRS 19, which allows eligible entities to elect
to apply its reduced disclosure requirements while still applying the
recognition, measurement and presentation requirements in other IFRS
accounting standards. To be eligible, at the end of the reporting period, an
entity must be a subsidiary as defined in IFRS 10, cannot have public
accountability and must have a parent (ultimate or intermediate) that prepares
consolidated financial statements, available for public use, which comply with
IFRS accounting standards.
IFRS 19 will become effective for reporting periods beginning on or after 1
January 2027, with early application permitted. As the Group's shares are
publicly traded, the Group believes that the new standard will have no effect
on its financial statements.
4 Material accounting policies
4.1 Basis of consolidation
The consolidated financial statements comprise the financial statements of the
Group and its subsidiaries as at 31 December 2024. Control is achieved when
the Group is exposed, or has rights, to variable returns from its involvement
with the investee and has the ability to affect those returns through its
power over the investee. Specifically, the Group controls an investee if, and
only if, the Group has:
· power over the investee (i.e. existing rights that give it the
current ability to direct the relevant activities of the investee);
· exposure, or rights, to variable returns from its involvement with
the investee; and
· the ability to use its power over the investee to affect its returns.
Generally, there is a presumption that a majority of voting rights result in
control. To support this presumption and when the Group has less than a
majority of the voting or similar rights of an investee, the Group considers
all relevant facts and circumstances in assessing whether it has power over an
investee, including:
· the contractual arrangement with the other vote holders of the
investee;
· rights arising from other contractual arrangements; and
· the Group's voting rights and potential voting rights.
The Group reassesses whether or not it controls an investee if facts and
circumstances indicate that there are changes to one or more of the three
elements of control. Consolidation of a subsidiary begins when the Group
obtains control over the subsidiary and ceases when the Group loses control of
the subsidiary. Assets, liabilities, income and expenses of a subsidiary
acquired or disposed of during the year are included in the consolidated
financial statements from the date the Group gains control until the date the
Group ceases to control the subsidiary.
All intra-group transactions, balances, income and expenses are eliminated on
consolidation.
The financial statements of the subsidiaries are prepared for the same
reporting period as the parent company, using consistent accounting policies.
4.2 Revenue
The Group is principally engaged in the business of producing gold and silver
bullion and gold and copper concentrate. Revenue from contracts with customers
is recognised when control of the goods is transferred to the customer at an
amount that reflects the consideration to which the Group expects to be
entitled in exchange for those goods.
The Group has concluded that it is the principal in its revenue contracts
because it typically controls the goods before transferring them to the
customer.
I) Contract balances
a) Contract assets
A contract asset is the right to consideration in exchange for goods
transferred to the customer. If the Group performs by transferring goods to a
customer before the customer pays consideration or before payment is due, a
contract asset is recognised for the earned consideration that is
conditional. The Group does not have any contract assets as performance and
a right to consideration occurs within a short period of time and all rights
to consideration are unconditional.
b) Trade receivables
A trade receivable represents the Group's right to an amount of consideration
that is unconditional (i.e., only the passage of time is required before
payment of the consideration is due). Refer to accounting policy 4.14 for the
accounting policies for financial assets and accounting policy 4.15 for the
accounting policy for trade receivables.
c) Contract liabilities
A contract liability is the obligation to transfer goods to a customer for
which the Group has received consideration (or an amount of consideration is
due) from the customer. If a customer pays consideration before the Group
transfers goods to the customer, a contract liability is recognised when the
payment is made or the payment is due (whichever is earlier). Contract
liabilities are recognised as revenue when the Group performs under the
contract.
ii) Gold and silver sales to the refiner
For gold sales, these are sold under spot sales contracts with the Company's
gold refiners. The Group initially sends its unrefined doré to the refiner.
The refiner is contracted by the Company to perform two separate and distinct
functions, to process the doré into gold and silver bullion and to purchase
gold and silver. The gold contained in the doré may be purchased at two
different times at the discretion of the Company and instruction is given to
the refiner as to the method of sale on a shipment-by-shipment basis:
· Upon receipt of the doré. In this circumstance, the refiner will
purchase 90 per cent. of the estimated gold content of the doré. The balance
of the gold will be sold to the refiner as gold bullion following refining and
agreement of final gold content of the doré with the refiner.
· Following production of gold bullion by the refining process. During
the refining process ownership (i.e., control of the gold) does not pass to
the refiner, it is simply providing refining services to the Group.
There is no formal sales agreement for each sale of gold. Instead, there is a
deal confirmation, which sets out the terms of the sale including the
applicable spot price and this is considered to be the enforceable contract.
The only performance obligation is the sale of gold within the doré or as
bullion.
Silver is only sold to the refiner as silver bullion following the refining
process. The process of sale of the silver bullion is the same as for gold
bullion. Revenue is recognised at a point in time when control passes to the
refiner. As the gold and silver is at this time already on the premises of the
refiner, physical delivery has already taken place when the sales are made.
There are no advance payments received from the refiner and therefore no
conditional rights to consideration.
A trade receivable is recognised at the date of sale and there are only
several days between recognition of revenue and payment. The contract is
entered into and the transaction price is determined at outturn by virtue of
the deal confirmation and there are no further adjustments to this price.
Also, given each spot sale represents the enforceable contract and all
performance obligations are satisfied at that time, there are no remaining
performance obligations (unsatisfied or partially unsatisfied) requiring
disclosure. Refer to note 19 - 'Trade and other receivables' for details of
payment terms.
iii) Gold and copper in concentrate (metal in concentrate) sales
For gold and copper in concentrate (metal in concentrate) sales, the
enforceable contract is each purchase order, which is an individual,
short-term contract. The performance obligation is the delivery of the
concentrate to the customer.
The Group's sales of metal in concentrate allow for price adjustments based on
the market price at the end of the relevant quotational period ("QP")
stipulated in the contract. These are referred to as provisional pricing
arrangements and are such that the selling price for metal in concentrate is
based on prevailing spot prices on a specified future date (or average of
future spot prices over a defined period, usually a week) after shipment to
the customer. Adjustments to the sales price occur based on movements in
quoted market prices up to the end of the QP. The period between provisional
invoicing and the end of the QP can be between one and four months.
Revenue is recognised when control passes to the customer, which occurs at a
point in time when the metal in concentrate is physically delivered to the
customer at the mine site. The revenue is measured at the amount to which the
Group expects to be entitled, being the estimate of the price expected to be
received at the end of the QP, i.e., the forward price, and a corresponding
trade receivable is recognised.
For these provisional pricing arrangements, any future change that occur over
the QP is an embedded derivative within the provisionally priced trade
receivables and are, therefore, within the scope of IFRS 9 and not within the
scope of IFRS 15. The Group does not separately account for the embedded
derivative in each transaction as the short transaction cycle of one to four
months would result in any changes to the Group's financial statements being
immaterial. Any difference between the provisional and final price is adjusted
through revenue from contracts with customers. Changes in fair value over, and
until the end of, the QP, are estimated by reference to updated forward market
prices for gold and copper as well as taking into account relevant other fair
value considerations as set out in IFRS 13, including interest rate and credit
risk adjustments. See accounting policy 4.12 for further discussion on fair
value. Refer to note 19 - 'Trade and other receivables' for details of
payments terms for trade receivables.
As noted above, as the enforceable contract for most arrangements is the
purchase order, the transaction price is determined at the date of each sale
(i.e., for each separate contract) and, therefore, there is no future
variability within scope of IFRS 15 and no further remaining performance
obligations under those contracts.
iv) Interest revenue
Interest revenue is recognised as it accrues, using the effective interest
rate method.
4.3 Production sharing agreement
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 year ended 20 August 1997 (the "PSA"). The PSA was
revised in 2022 and 2024.
In accordance with the PSA, the Group and the Government of the Republic of
Azerbaijan (the "Government") physically share the commercial products of each
mine. The Group does not have ownership of the Government's share of
production and transfers gold bullion produced to the Government to settle its
obligations to the Government. For silver and copper production, the Group
purchases gold bullion to the value of the Government's share of the
production which is then also transferred to the Government. There is no
royalty payable to the Government.
The Government's share is 51 per cent. of "Profit Production". Profit
Production is defined as the value of production, less all capital and
operating cash costs incurred during the period when the production took
place. Profit Production for any period is subject to a minimum of 25 per
cent. of the value of the production.
All of the costs of production are incurred and recorded by the Group. The
Government does not bear any of the costs of production.
The PSA mandates corporation tax at a rate of 32 per cent. on the profits of
the mining operations undertaken under the PSA.
Profit Production and unrecovered costs are calculated separately for each
contract area and costs incurred at one contract area cannot be offset against
production at another. Unrecovered costs can only be recovered against future
production from their respective contract area.
Accounting for the Government's share of production
As the Group does not own the Government's share of production, the revenue
from its sale or otherwise disposal is not recorded in the Group's revenue.
The revenue disclosed in the profit and loss account is therefore only that
which arises from the sale of the Group's share of production.
Gold held due to the Government of Azerbaijan
Gold held due to the Government of Azerbaijan comprises the following at each
balance sheet date:
· The Government's share of refined gold bullion which is included
within the Group's gold account maintained with its gold refinery; and
· The Government's share of gold contained within physical gold doré
inventory.
As the Group has a legal obligation under the PSA to transfer the gold to the
Government, the gold held on behalf of the Government is included in the
Group's balance sheet as an other current receivable. A corresponding equal
and opposite liability for the gold is included in other current payables
reflecting the liability to the Government. The gold is valued at the market
price of gold at each balance sheet date. The asset and liability are
derecognised when the Government either takes physical delivery of, or sells,
the gold bullion.
Calculation of Corporation tax of the Azerbaijan companies
The corporation tax liabilities (and associated deferred tax assets and
liabilities) are calculated at 32 per cent. and not the prevailing rate of
corporation taxation in Azerbaijan. The corporation taxation rate of 32 per
cent. is the rate stipulated the Group's production sharing agreement.
4.4 Leases
The Group assesses at contract inception, all arrangements to determine
whether they are, or contain, a lease. That is, if the contract conveys the
right to control the use of an identified asset for a period of time in
exchange for consideration. The Group is not a lessor in any transactions, it
is only a lessee.
i) Group as a lessee
The Group applies a single recognition and measurement approach for all
leases, except for short term leases. The Group recognises lease liabilities
to make lease payments and right of use assets representing the right to use
the underlying assets.
a) Right of use assets
The Group recognises right of use assets at the commencement date of the lease
(i.e., the date when the underlying asset is available for use). Right of use
assets are measured at cost, less any accumulated depreciation and impairment
losses, and adjusted for any remeasurement of lease liabilities. The cost of
right of use assets includes the amount of lease liabilities recognised,
initial direct costs incurred, and lease payments made at or before the
commencement date less any lease incentives received. Right of use assets are
depreciated on a straight line basis over the shorter of the lease term and
the estimated useful lives of the assets, as follows:
· Plant and equipment - six years
· Motor vehicles - four years
· Land and buildings - eight years
If ownership of the leased asset transfers to the Group at the end of the
lease term or the cost reflects the exercise of a purchase option,
depreciation is calculated using the estimated useful life of the asset.
The right of use assets are also subject to impairment. Refer to the
accounting policies in note 4.11 - "Impairment of tangible and intangible
assets".
b) Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities
measured at the present value of lease payments to be made over the lease
term. The lease payments include fixed payments less any lease incentives
receivable, variable lease payments that depend on an index or a rate, and
amounts expected to be paid under residual value guarantees.
In calculating the present value of lease payments, the Group uses its
incremental borrowing rate at the lease commencement date because the interest
rate implicit in the lease is generally not readily determinable. After the
commencement date, the amount of lease liabilities is increased to reflect the
accretion of interest and reduced for the lease payments made. In addition,
the carrying amount of lease liabilities is remeasured if there is a
modification, a change in the lease term or a change in the lease payments.
The Group's lease liabilities are separately disclosed in the Group statement
of financial position.
c) Short-term leases
The Group applies the short term lease recognition exemption to its short term
leases of equipment and other assets (i.e., those leases that have a lease
term of 12 months or less from the commencement date and do not contain a
purchase option). Lease payments on short term leases are recognised as an
expense on a straight line basis over the lease term.
d) Lease modifications
Where the terms of a lease are varied during its term which results in a
revised carrying amount of the lease, the change to the carrying amount is
accounted for as "Lease Modifications".
4.5 Taxation
i) Current and deferred income taxes
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the Group financial
statements and the corresponding tax bases used in the computation of taxable
profit and is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised for all deductible
temporary differences, carry forward of unused tax assets and unused
tax losses. Deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible
temporary differences and the carry forward of unused tax credits and unused
tax losses can be utilised.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset is realised, based on tax
rates (and tax laws) that have been enacted or substantively enacted at the
reporting date. Deferred tax relating to items recognised in the Group income
statement is charged or credited in the Group income statement. Deferred tax
relating to items recognised outside the Group income statement is recognised
outside the Group income statement and items are recognised in correlation to
the underlying transaction either in the Group statement of comprehensive
income or directly in equity.
Deferred tax assets are not recognised in respect of temporary differences
relating to tax losses where there is insufficient evidence that the asset
will be recovered. Unrecognised deferred tax assets are reassessed at each
reporting date and are recognised to the extent that it has become probable
that future taxable profits will allow the deferred tax asset to be
recovered. Deferred tax assets and liabilities are classified as non-current
assets and liabilities.
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in the Group income statement
because it excludes items of income or expense that are taxable or deductible
in other years and it further excludes items that are never taxable or
deductible. The Group's liability for current tax is calculated using tax
rates that have been enacted or substantively enacted at the reporting date.
The tax expense represents the sum of the tax currently payable and deferred
tax.
ii) Value-added taxes ("VAT")
The Group pays VAT on purchases made in both the Republic of Azerbaijan and
the United Kingdom. Under both jurisdictions, VAT paid is refundable.
Azerbaijani jurisdiction permits offset of an Azerbaijani VAT credit against
other taxes payable to the state budget.
4.6 Transactions with related parties
For the purposes of these Group financial statements, parties are considered
to be related:
· where one party has the ability to control the other party or
exercise significant influence over the other party in making financial or
operational decisions;
· entities under common control; and
· key management personnel
In considering each possible related party relationship, attention is directed
to the substance of the relationship, not merely the legal form.
Related parties may enter into transactions which unrelated parties might not
and transactions between related parties may not be effected on the same
terms, conditions and amounts as transactions between unrelated parties.
It is the nature of transactions with related parties that they cannot be
presumed to be carried out on an arm's length basis.
4.7 Borrowing costs
Borrowing costs directly relating to the acquisition, construction or
production of a qualifying capital project under construction are capitalised
and added to the project cost during construction until such time the assets
are considered substantially ready for their intended use i.e. when they are
capable of commercial production. Where funds are borrowed specifically to
finance a project, the amount capitalised represents the actual borrowing
costs incurred. Where surplus funds are available for a short term out
of money borrowed specifically to finance a project, the income generated
from the temporary investment of such amounts is also capitalised and deducted
from the total capitalised borrowing cost. Where the funds used to finance a
project form part of general borrowings, the amount capitalised is calculated
using a weighted average of rates applicable to relevant general borrowings of
the Group during the period. All other borrowing costs are recognised in the
Group income statement in the period in which they are incurred.
Even though exploration and evaluation assets can be qualifying assets, they
generally do not meet the 'probable economic benefits' test. Any related
borrowing costs are therefore generally recognised in the Group income
statement in the period they are incurred.
4.8 Intangible assets
i) Exploration and evaluation assets
The costs of exploration properties and leases, which include the cost of
acquiring prospective properties and exploration rights and costs incurred in
exploration and evaluation activities, are capitalised as intangible assets as
part of exploration and evaluation assets.
Exploration and evaluation assets are carried forward during the exploration
and evaluation stage and are assessed for impairment in accordance with the
indicators of impairment as set out in IFRS 6 - 'Exploration for and
Evaluation of Mineral Resources'.
In circumstances where a property is abandoned, the cumulative capitalised
costs relating to the property are written off in the period. No
amortisation is charged prior to the commencement of production.
Once commercially viable reserves are established and development is
sanctioned, exploration and evaluation assets are transferred to assets under
construction.
Upon transfer of Exploration and evaluation costs into Assets under
construction, all subsequent expenditure on the construction, installation or
completion of infrastructure facilities is capitalised within Assets under
construction.
When commercial production commences, exploration, evaluation and development
costs previously capitalised are amortised over the commercial measured and
indicated reserves of the mining property on a units-of-production basis.
Exploration and evaluation costs incurred after commercial production start
date in relation to evaluation of potential mineral reserves and resources
that are expected to result in increase of reserves are capitalised as
Evaluation and exploration assets within intangible assets. Once there is
evidence that reserves are increased, such costs are tested for impairment and
transferred to producing mines.
ii) Mining rights
Mining rights are carried at cost to the Group less any provisions for
impairments which result from evaluations and assessments of potential
mineral recoveries and accumulated depletion. Mining rights are depleted on
the units-of-production basis over the total reserves of the relevant area.
iii) Other intangible assets
Other intangible assets are mainly software and mining rights.
Intangible assets with finite lives are amortised over the useful economic
life and assessed for impairment whenever there is an indication that the
intangible asset may be impaired. The amortisation period and the amortisation
method for an intangible asset with a finite useful life is reviewed at least
at each reporting date. Changes in the expected useful life or the expected
pattern of consumption of future economic benefits embodied in the asset are
accounted for by changing the amortisation period or method, as appropriate,
and are treated as changes in accounting estimates. The amortisation expense
on intangible assets with finite lives is recognised in the Group income
statement in the expense category consistent with the function of the
intangible asset.
Gains or losses arising from derecognition of an intangible asset are measured
as the difference between the net disposal proceeds and the carrying amount of
the asset and are recognised in the Group income statement when the asset is
derecognised.
4.9 Property, plant and equipment and mine properties
Upon completion of mine construction, the assets initially charged to 'Assets
under construction' are transferred into 'Plant and equipment and motor
vehicles' or 'Producing mines'. Items of 'Plant and equipment and motor
vehicles' and 'Producing mines' are stated at cost, less accumulated
depreciation and accumulated impairment losses.
During the production period expenditures directly attributable to the
construction of each individual asset are capitalised as 'Assets under
construction' up to the period when asset is ready to be put into operation.
When an asset is put into operation it is transferred to 'Plant and
equipment and motor vehicles' or 'Producing mines'. Additional capital costs
incurred subsequent to the date of commencement of operation of the asset are
charged directly to 'Plant and equipment and motor vehicles' or 'Producing
mines', i.e. where the asset itself was transferred.
The initial cost of an asset comprises its purchase price or construction
cost, any costs directly attributable to bringing the asset into operation,
the initial estimate of the rehabilitation obligation and, for qualifying
assets, borrowing costs. The purchase price or construction cost is the
aggregate amount paid and the fair value of any other consideration given to
acquire the asset.
When a mine construction project moves into the production stage, the
capitalisation of certain mine construction costs ceases and costs are either
regarded as inventory or expensed, except for costs which qualify for
capitalisation relating to mining asset additions or improvements, underground
mine development or mineable reserve development.
i) Depreciation and amortisation
Accumulated mine development costs within producing mines are depreciated and
amortised on a units-of-production basis over the economically recoverable
reserves of the mine concerned, except in the case of assets whose useful life
is shorter than the life of the mine, in which case the straight line method
is applied. Economically recoverable reserves include the proved and probable
reserves of each mine. Economically recoverable reserves also include a
proportion of measured and indicated resources which are expected to be
converted to reserves in future. The unit of account for run of mine ("ROM")
costs and for post-ROM costs is recoverable ounces of gold. The
units-of-production rate for the depreciation and amortisation of mine
development costs takes into account expenditures incurred to date plus future
field development costs required to recover the commercial reserves remaining.
Changes in the estimates of commercial reserves or future field development
costs are dealt with prospectively.
Other plant and equipment such as mobile mine equipment is generally
depreciated on a straight line basis over their estimated useful lives as
follows:
· Temporary buildings -
eight years (2023: eight years)
· Plant and equipment -
eight years (2023: eight years)
· Motor vehicles
- four years (2023: four years)
· Office equipment -
four years (2023: four years)
· Leasehold improvements - the lower
of eight years (2023: eight years) and the remaining term of the
relevant lease
An item of property, plant and equipment, and any significant part initially
recognised, is derecognised upon disposal or when no future economic benefits
are expected from its use or disposal. Any gain or loss arising on
derecognition of the asset (calculated as the difference between the net
disposal proceeds and the carrying amount of the asset) is included in the
Group income statement when the asset is derecognised.
The asset's residual values, useful lives and methods of depreciation and
amortisation are reviewed at each reporting date and adjusted prospectively
if appropriate.
ii) Major maintenance and repairs
Expenditure on major maintenance refits or repairs comprises the cost of
replacement assets or parts of assets and overhaul costs. Where an asset or
part of an asset that was separately depreciated and is now written off is
replaced, and it is probable that future economic benefits associated with the
item will flow to the Group through an extended life, the expenditure
is capitalised.
Where part of the asset was not separately considered as a component, the
replacement value is used to estimate the carrying amount of the replaced
assets which is immediately written off. All other day-to-day maintenance
costs are expensed as incurred.
4.10 Investment in associate companies
An associate company is an entity over which the Group has significant
influence. Significant influence is the power to participate in the financial
and operating policy decisions of the investee but is not control or joint
control over those policies.
The considerations made in determining significant influence are similar to
those necessary to determine control over subsidiaries. The Group's investment
in its associate company is accounted for using the equity method.
Under the equity method, the investment in an associate company is initially
recognised at cost. The carrying amount of the investment is adjusted to
recognise changes in the Group's share of net assets of the associate company
since the acquisition date. Goodwill relating to the associate company, that
existed at the initial recognition date, is included in the carrying amount of
the investment and is not tested for impairment separately as subsequent
goodwill is treated differently.
The statement of profit or loss reflects the Group's share of the results of
operations of the associate company. Any change in other comprehensive income
of those investees is presented as part of the Group's comprehensive income.
In addition, when there has been a change recognised directly in the equity of
the associate company, the Group recognises its share of any changes, when
applicable, in the statement of changes in equity.
The aggregate of the Group's share of profit or loss of the associate company
is shown on the face of the statement of profit or loss outside operating
profit and represents profit or loss after tax and non- controlling interests
in the subsidiaries of the associate company.
The financial statements of the associate company are prepared for the same
reporting period as the Group. When necessary, adjustments are made to bring
the accounting policies in line with those of the Group.
After application of the equity method, the Group determines whether it is
necessary to recognise an impairment loss on its investment in its associate
company. At each reporting date, the Group determines whether there is
objective evidence that the investment in the associate company is impaired.
If there is such evidence, the Group calculates the amount of impairment as
the difference between the recoverable amount of the associate company and its
carrying value, and then recognises the loss in the statement of profit or
loss.
Upon loss of significant influence, the Group measures and recognises any
retained investment at its fair value. Any difference between the carrying
amount of the associate company upon loss of significant influence and the
fair value of the retained investment and proceeds from disposal is recognised
in profit or loss.
4.11 Impairment of tangible and intangible assets
The Group conducts annual internal assessments of the carrying values of
tangible and intangible assets. The carrying values of capitalised exploration
and evaluation expenditure, mine properties and property, plant and equipment
are assessed for impairment when indicators of such impairment exist or at
least annually. In such cases an estimate of the asset's recoverable amount is
calculated. The recoverable amount is determined as the higher of the fair
value less costs to sell for the asset and the asset's value in use. This is
determined for an individual asset, unless the asset does not generate cash
inflows that are largely independent of those from other assets or groups of
assets. If this is the case, the individual assets are grouped together into
cash-generating units ("CGUs") for impairment purposes. Such CGUs represent
the lowest level for which there are separately identifiable cash inflows
that are largely independent of the cash flows from other assets or other
groups of assets. This generally results in the Group evaluating its
non‑financial assets on a geographical or licence basis.
If the carrying amount of the asset exceeds its recoverable amount, the asset
is impaired and an impairment loss is charged to the Group income statement
so as to reduce the carrying amount to its recoverable amount (i.e. the higher
of fair value less cost to sell and value in use).
Impairment losses related to continuing operations are recognised in the Group
income statement in those expense categories consistent with the function of
the impaired asset.
For assets excluding the intangibles referred to above, an assessment is made
at each reporting date as to whether there is any indication that previously
recognised impairment losses may no longer exist or may have decreased. If
such indication exists, the Group makes an estimate of the recoverable amount.
A previously recognised impairment loss is reversed only if there has been a
change in the estimates used to determine the asset's recoverable amount since
the last impairment loss was recognised. If this is the case, the carrying
amount of the asset is increased to its recoverable amount. The increased
amount cannot exceed the carrying amount that would have been determined, net
of depreciation or amortisation, had no impairment loss been recognised for
the asset in prior years. Such reversal is recognised in the consolidated
statement of other comprehensive income. Impairment losses recognised in
relation to indefinite life intangibles are not reversed for subsequent
increases in its recoverable amount.
4.12 Fair value measurement
The Group measures financial instruments at fair value at each balance sheet
date. Fair value disclosures for financial instruments measured at fair value,
or where fair value is disclosed, are summarised in the following notes:
· Note 19 - 'Trade and other receivables';
· Note 20 - 'Restricted cash and cash and cash equivalents';
· Note 17 - 'Financial assets';
· Note 21 - 'Trade and other payables'; and
· Note 22 - 'Interest-bearing loans and borrowings'
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date. The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the liability takes place
either:
· in the principal market place for the asset or the liability; or
· in the absence of a principal market, the most advantageous market
for the asset or liability.
The fair value of an asset or liability is measured using the assumptions that
market participants would use when pricing the asset or liability, assuming
that market participants act in their economic best interest.
The Group uses valuation techniques that are appropriate in the circumstances
and for which sufficient data is available to measure fair value, maximising
the use of relevant observable inputs and minimising the unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in
the financial statements are categorised within the fair value hierarchy,
described as follows, based on the lowest level input that is significant to
the fair value measurement as a whole.
· Level 1 - Quoted (unadjusted) market prices in active markets for
identical assets or liabilities.
· Level 2 - Valuation techniques for which the lowest level input that
is significant to the fair value measurement is directly or indirectly
observable.
· Level 3 - Valuation techniques for which the lowest level input that
is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognised in the financial statements on
a recurring basis, the Group determines whether transfers have occurred
between levels in the hierarchy by re-assessing categorisation (based on the
lowest level input that is significant to the fair value measurement as a
whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Group has determined classes of
assets and liabilities on the basis of the nature, characteristics and risks
of the asset or liability and the level of the fair value hierarchy as set out
above.
4.13 Provisions
i) General
Provisions are recognised when the Group has a present obligation (legal or
constructive) as a result of a past event, it is probable that an outflow of
resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the
obligation. When the Group expects some or all of a provision to be
reimbursed, for example, under an insurance contract, the reimbursement is
recognised as a separate asset, but only when the reimbursement is virtually
certain. The expense relating to a provision is presented in the statement of
profit or loss net of any reimbursement.
ii) Rehabilitation provision
The Group records the present value of estimated costs of legal and
constructive obligations required to restore operating locations in the period
in which the obligation is incurred. The nature of these restoration
activities includes dismantling and removing structures, rehabilitating mines
and tailings dams, dismantling operating facilities, closure of plant and
waste sites and restoration, reclamation and revegetation of affected areas.
The obligation generally arises when the asset is installed or the ground or
environment is disturbed at the production location. When the liability is
initially recognised, the present value of the estimated cost is capitalised
by increasing the carrying amount of the related mining assets to the extent
that it was incurred prior to the production of related ore. Over time, the
discounted liability is increased for the change in present value based on the
discount rates that reflect current market assessments and the risks specific
to the liability.
The periodic unwinding of the discount is recognised in the Group income
statement as a finance cost. Additional disturbances or changes in
rehabilitation costs will be recognised as additions or charges to the
corresponding assets and rehabilitation liability when they occur. Any
reduction in the rehabilitation liability and therefore any deduction from the
rehabilitation asset may not exceed the carrying amount of that asset. If it
does, any excess over the carrying value is taken immediately to the Group
income statement.
If the change in estimate results in an increase in the rehabilitation
liability and therefore an addition to the carrying value of the asset, the
Group is required to consider whether this is an indication of impairment of
the asset as a whole and test for impairment in accordance with IAS 36. If,
for mature mines, the revised mine assets net of rehabilitation provisions
exceeds the recoverable value, that portion of the increase is charged
directly to expense.
For closed sites, changes to estimated costs are recognised immediately
in the Group income statement. Also, rehabilitation obligations that arose
as a result of the production phase of a mine should be expensed as incurred.
4.14 Financial instruments - initial recognition and subsequent measurement
A financial instrument is any contract that gives rise to a financial asset of
one entity and a financial liability or equity instrument of another entity.
a) Financial assets
i) Initial recognition and measurement
Financial assets are classified, at initial recognition, and subsequently
measured at amortised cost, fair value through other comprehensive income
("OCI"), or fair value through profit or loss.
The classification of financial assets at initial recognition that are debt
instruments depends on the financial asset's contractual cash flow
characteristics and the Group's business model for managing them. With the
exception of trade receivables that do not contain a significant financing
component or for which the Group has applied the practical expedient, the
Group initially measures a financial asset at its fair value plus, in the case
of a financial asset not at fair value through profit or loss, transaction
costs. Trade receivables that do not contain a significant financing component
or for which the Group has applied the practical expedient for contracts that
have a maturity of one year or less, are measured at the transaction price
determined under IFRS 15. Refer to the accounting policy 4.2 - 'Revenue from
contracts with customers'
In order for a financial asset to be classified and measured at amortised cost
or fair value through OCI, it needs to give rise to cash flows that are
'solely payments of principal and interest ("SPPI") on the principal amount
outstanding. This assessment is referred to as the SPPI test and is performed
at an instrument level. Financial assets with cash flows that are not SPPI are
classified and measured at fair value through profit or loss, irrespective of
the business model.
The Group's business model for managing financial assets refers to how it
manages its financial assets in order to generate cash flows. The business
model determines whether cash flows will result from collecting contractual
cash flows, selling the financial assets, or both.
ii) Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in
four categories:
· Financial assets at amortised cost (debt instruments);
· Financial assets at fair value through OCI with recycling of
cumulative gains and losses (debt instruments);
· Financial assets designated at fair value through OCI with no
recycling of cumulative gains and losses upon derecognition (equity
instruments); and
· Financial assets at fair value through profit or loss.
iii) Financial assets at amortised cost (debt instruments)
This category is the most relevant to the Group. The Group measures financial
assets at amortised cost if both of the following conditions are met:
· The financial asset is held within a business model with the
objective to hold financial assets in order to collect contractual cash flows;
and
· The contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
Financial assets at amortised cost are subsequently measured using the
effective interest rate ("EIR") method and are subject to impairment. Interest
received is recognised as part of finance income in the statement of profit or
loss and other comprehensive income. Gains and losses are recognised in profit
or loss when the asset is derecognised, modified or impaired.
The Group's financial assets at amortised cost include trade receivables (not
subject to provisional pricing) and other receivables. Refer below to
'Financial assets at fair value through profit or loss' for a discussion of
trade receivables (subject to provisional pricing).
iv) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets
held for trading, e.g., derivative instruments, financial assets designated
upon initial recognition at fair value through profit or loss, e.g., debt or
equity instruments, or financial assets mandatorily required to be measured at
fair value, i.e., where they fail the SPPI test. Financial assets are
classified as held for trading if they are acquired for the purpose of selling
or repurchasing in the near term. Derivatives, including separated embedded
derivatives, are also classified as held for trading unless they are
designated as effective hedging instruments. Financial assets with cash flows
that do not pass the SPPI test are required to be classified and measured at
fair value through profit or loss, irrespective of the business model.
Notwithstanding the criteria for debt instruments to be classified at
amortised cost or at fair value through OCI, as described above, debt
instruments may be designated at fair value through profit or loss on initial
recognition if doing so eliminates, or significantly reduces, an accounting
mismatch.
Financial assets at fair value through profit or loss are carried in the
statement of financial position at fair value with net changes in fair value
recognised in the profit or loss account.
A derivative embedded in a hybrid contract with a financial liability or
non-financial host, is separated from the host and accounted for as a separate
derivative if: the economic characteristics and risks are not closely related
to the host; a separate instrument with the same terms as the embedded
derivative would meet the definition of a derivative; and the hybrid contract
is not measured at fair value through profit or loss. Embedded derivatives are
measured at fair value with changes in fair value recognised in profit or
loss. Reassessment only occurs if there is either a change in the terms of the
contract that significantly modifies the cash flows that would otherwise be
required or a reclassification of a financial asset out of the fair value
through profit or loss category.
As IFRS 9 now has the SPPI test for financial assets, the requirements
relating to the separation of embedded derivatives is no longer needed for
financial assets. An embedded derivative will often make a financial asset
fail the SPPI test thereby requiring the instrument to be measured at fair
value through profit or loss in its entirety. This is applicable to the
Group's trade receivables (subject to provisional pricing). These receivables
relate to sales contracts where the selling price is determined after delivery
to the customer, based on the market price at the relevant QP stipulated in
the contract. This exposure to the commodity price causes such trade
receivables to fail the SPPI test. As a result, these receivables are measured
at fair value through profit or loss from the date of recognition of the
corresponding sale, with subsequent movements where material being recognised
in 'fair value gains/losses on provisionally priced trade receivables' in the
statement of profit or loss and other comprehensive income.
The Group does not currently account separately for embedded derivatives in
its trade receivables subject to provisional pricing. The short one to four
month transaction cycle would result in any change to the Group's financial
statements being immaterial. Any adjustment to the trade receivable subsequent
to initial recording is adjusted through revenue.
v) Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part
of a group of similar financial assets) is primarily derecognised (i.e.,
removed from the Group's consolidated statement of financial position) when:
· The rights to receive cash flows from the asset have expired; or
· The Group has transferred its rights to receive cash flows from the
asset or has assumed an obligation to pay the received cash flows in full
without material delay to a third party under a 'pass-through' arrangement;
and either (a) the Group has transferred substantially all the risks and
rewards of the asset, or (b) the Group has neither transferred nor retained
substantially all the risks and rewards of the asset, but has transferred
control of the asset.
When the Group has transferred its rights to receive cash flows from an asset
or has entered into a pass-through transferred nor retained substantially all
of the risks and rewards of the asset, nor transferred control of the asset,
the Group continues to recognise the transferred asset to the extent of its
continuing involvement. In that case, the Group also recognises an associated
liability. The transferred asset and the associated liability are measured on
a basis that reflects the rights and obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred
asset is measured at the lower of the original carrying amount of the asset
and the maximum amount of consideration that the Group could be required to
repay.
vi) Impairment of financial assets
Further disclosures relating to impairment of financial assets are also
provided in the following notes:
· Disclosure of significant
assumptions: accounting policy 4.24
· Trade and other
receivables:
accounting policy 4.15 and note 19
The Group recognises an allowance for expected credit loss ("ECL") for all
debt instruments not held at fair value through profit or loss. ECLs are based
on the difference between the contractual cash flows due in accordance with
the contract and all the cash flows that the Group expects to receive,
discounted at an approximation of the original EIR. The expected cash flows
will include cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has
not been a significant increase in credit risk since initial recognition, ECLs
are provided for credit losses that result from default events that are
possible within the next 12-months (a 12-month ECL). For those credit
exposures for which there has been a significant increase in credit risk since
initial recognition, a loss allowance is required for credit losses expected
over the remaining life of the exposure, irrespective of the timing of the
default (a lifetime ECL).
For trade receivables (not subject to provisional pricing) and other
receivables due in less than 12 months, the Group applies the simplified
approach in calculating ECLs, as permitted by IFRS 9. Therefore, the Group
does not track changes in credit risk, but instead, recognises a loss
allowance based on the financial asset's lifetime ECL at each reporting date.
For any other financial assets carried at amortised cost (which are due in
more than 12 months), the ECL is based on the 12-month ECL. The 12-month ECL
is the proportion of lifetime ECLs that results from default events on a
financial instrument that are possible within 12 months after the reporting
date. However, when there has been a significant increase in credit risk since
origination, the allowance will be based on the lifetime ECL. When determining
whether the credit risk of a financial asset has increased significantly since
initial recognition and when estimating ECLs, the Group considers reasonable
and supportable information that is relevant and available without undue cost
or effort. This includes both quantitative and qualitative information and
analysis, based on the Group's historical experience and informed credit
assessment including forward-looking information.
The Group considers a financial asset in default when contractual payments are
90 days past due. However, in certain cases, the Group may also consider a
financial asset to be in default when internal or external information
indicates that the Group is unlikely to receive the outstanding contractual
amounts in full before taking into account any credit enhancements held by the
Group. A financial asset is written off when there is no reasonable
expectation of recovering the contractual cash flows and usually occurs when
past due for more than one year and not subject to enforcement activity.
At each reporting date, the Group assesses whether financial assets carried at
amortised cost are credit- impaired. A financial asset is credit-impaired when
one or more events that have a detrimental impact on the estimated future cash
flows of the financial asset have occurred.
b) Financial liabilities
i) Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial
liabilities at fair value through profit or loss, loans and borrowings,
payables, or as derivatives designated as hedging instruments in an effective
hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the
case of loans and borrowings and payables, net of directly attributable
transaction costs.
The Group's financial liabilities include trade and other payables and loans
and borrowings including bank overdrafts and vendor financing facility.
ii) Subsequent measurement
The measurement of financial liabilities depends on their classification, as
described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial
liabilities held for trading and financial liabilities designated upon initial
recognition as at fair value through profit or loss.
Financial liabilities are classified as held for trading if they are incurred
for the purpose of repurchasing in the near term. This category also includes
derivative financial instruments entered into by the Group that are not
designated as hedging instruments in hedge relationships as defined by IFRS 9.
Gains or losses on liabilities held for trading are recognised in the
statement of profit or loss and other comprehensive income.
Loans and borrowings and trade and other payables
After initial recognition, interest-bearing loans and borrowings and trade and
other payables are subsequently measured at amortised cost using the EIR
method. Gains and losses are recognised in the statement of profit or loss and
other comprehensive income when the liabilities are derecognised, as well as
through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR
amortisation is included as finance costs in the statement of profit or loss
and other comprehensive income.
This category generally applies to interest-bearing loans and borrowings and
trade and other payables
iii) Derecognition of financial liabilities
A financial liability is derecognised when the associated obligation is
discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability
are substantially modified, such an exchange or modification is treated as the
derecognition of the original liability and the recognition of a new
liability. The difference in the respective carrying amounts is recognised in
profit or loss and other comprehensive income.
c) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is
reported in the consolidated statement of financial position if there is a
currently enforceable legal right to offset the recognised amounts and there
is an intention to settle on a net basis, to realise the assets and settle the
liabilities simultaneously.
d) Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash
at banks and on hand and short- term deposits with an original maturity of
three months or less.
For the purpose of the consolidated statement of cash flows, cash and cash
equivalents consist of cash and short- term deposits as defined
above.
Cash deposits which are pledged as security for borrowings from financial
institutions such as banks, and cannot be accessed, are classified in the
balance sheet as restricted cash.
4.15 Trade and other receivables
The Group presents trade and other receivables in the statement of financial
position based on a current or non-current classification. A trade and other
receivable is classified as current as follows:
· expected to be realised or intended to be sold or consumed in the
normal operating cycle;
· held primarily for the purpose of trading; and
· expected to be realised within 12 months after the date of the
statement of financial position.
Gold bullion held on behalf of the Government of Azerbaijan is classified as a
current asset and valued at the current market price of gold at the statement
of financial position date. A current liability of equal amount representing
the liability of the gold bullion to the Government of Azerbaijan is also
established. Refer to accounting policy 4.3 - 'Production sharing agreement'.
Advances made to suppliers for fixed asset purchases are recognised as
non-current prepayments until the fixed asset is delivered when they are
capitalised as part of the cost of the fixed asset.
4.16 Inventories
Metal in circuit consists of in-circuit material at properties with milling or
processing operations and doré awaiting refinement, all valued at the lower
of average cost and net realisable value. In-process inventory costs consist
of direct production costs (including mining, crushing and processing and site
administration costs) and allocated indirect costs (including depreciation,
depletion and amortisation of producing mines and mining interests).
Ore stockpiles consist of stockpiled ore, ore on surface and crushed ore, all
valued at the lower of average cost and net realisable value. Ore stockpile
costs consist of direct production costs (including mining, crushing and site
administration costs) and allocated indirect costs (including depreciation,
depletion and amortisation of producing mines and mining interests).
Metal in tailings dam consists of the gold within solution in the tailings
dam. This solution is recirculated around the gold processing plant and
circuits.
Inventory costs are charged to operations on the basis of ounces of gold sold.
The Group regularly evaluates and refines estimates used in determining the
costs charged to operations and costs absorbed into inventory carrying values
based upon actual gold recoveries and operating plans.
Finished goods consist of doré bars that have been refined and assayed and
are in a form that allows them to be sold on international bullion markets and
metal in concentrate. Finished goods are valued at the lower of average cost
and net realisable value. Finished goods costs consist of direct production
costs (including mining, crushing and processing; site administration costs;
and allocated indirect costs, including depreciation, depletion and
amortisation of producing mines and mining interests).
Spare parts and consumables consist of consumables used in operations, such as
fuel, chemicals, reagents and spare parts, valued at the lower of average
cost and replacement cost and, where appropriate, less a provision for
obsolescence.
4.17 Equity instruments
Equity instruments issued by the Company are recorded at the proceeds
received, net of direct issue costs, or value of services received net of any
issue costs.
4.18 Treasury shares
Own equity instruments that are reacquired (treasury shares) are recognised at
cost and deducted from equity. No gain or loss is recognised in profit or loss
on the purchase, sale, issue or cancellation of the Group's own equity
instruments. Any difference between the carrying amount and the consideration,
if reissued, is recognised in the share premium.
4.19 Deferred stripping costs
The removal of overburden and other mine waste materials is often necessary
during the initial development of a mine site, in order to access the
mineral ore deposit. The directly attributable cost of this activity is
capitalised in full within mining properties and leases, until the point at
which the mine is considered to be capable of commercial production. This is
classified as expansionary capital expenditure, within investing cash flows.
The removal of waste material after the point at which a mine is capable of
commercial production is referred to as production stripping.
When the waste removal activity improves access to ore extracted in the
current period, the costs of production stripping are accounted for as part of
the cost of producing those inventories.
Where production stripping activity both produces inventory and improves
access to ore in future periods the associated costs of waste removal are
allocated between the two elements. The portion which benefits future ore
extraction is capitalised within stripping and development capital
expenditure. If the amount to be capitalised cannot be specifically identified
it is determined based on the volume of waste extracted compared with expected
volume for the identified component of the orebody. Components are specific
volumes of a mine's orebody that are determined by reference to the life of
mine plan.
In certain instances significant levels of waste removal may occur during the
production phase with little or no associated production.
All amounts capitalised in respect of waste removal are depreciated using the
unit of production method based on the ore reserves of the component of the
orebody to which they relate.
The effects of changes to the life of mine plan on the expected cost of waste
removal or remaining reserves for a component are accounted for prospectively
as a change in estimate.
4.20 Employee leave benefits
Liabilities for wages and salaries, including non-monetary benefits and
accrued but unused annual leave, are recognised in respect of employees'
services up to the reporting date. They are measured at the amounts expected
to be paid when the liabilities are settled.
4.21 Retirement benefit costs
The Group does not operate a pension scheme for the benefit of its employees
but instead makes contributions to their personal pension policies. The
contributions due for the period are charged to the Group income statement.
4.22 Share-based payments
The Group has applied the requirements of IFRS 2 - 'Share-based Payment'. IFRS
2 has been applied to all grants of equity instruments.
The Group issues equity-settled share-based payments to certain employees.
Equity-settled share-based payments are measured at fair value (excluding the
effect of non market-based vesting conditions) at the date of grant. The fair
value determined at the grant date of the equity-settled share-based payments
is expensed on a straight line basis over the vesting period, based on
the Group's estimate of shares that will eventually vest and adjusted for the
effect of non market-based vesting conditions.
The fair value of share options is calculated using the assumption that they
will only be exercised if the share price prevailing at the date of exercise
is equal to, or above, the price at which the options were granted. This
methodology approximates to valuing the share options using a Black-Scholes
model. The expected life used in the model has been calculated using
management's best estimate of the effects of non-transferability, exercise
restrictions and behavioural considerations. The vesting condition
assumptions are reviewed during each reporting period to ensure they reflect
current expectations.
4.23 Foreign currencies
The presentation and functional currency of the Group is United States
Dollars. The individual financial statements of each company in the Group are
also prepared in United States Dollars. In preparing the financial statements
of the individual entities, transactions in currencies other than the entity's
functional currency (foreign currencies) are recognised at the rates of
exchange prevailing at the dates of the transactions. At the end of each
reporting period, monetary items denominated in foreign currencies are
retranslated at the rates prevailing at that date. Non-monetary items carried
at fair value that are denominated in foreign currencies are retranslated at
the rates prevailing at the date when the fair value was determined.
Non-monetary items that are measured in terms of historical cost in a foreign
currency are translated using exchange rates at the date of the transaction.
4.24 Significant accounting judgements
The preparation of the Group financial statements in conformity with IFRS
requires management to make judgements that affect the reported amounts of
assets, liabilities and contingent liabilities at the date of the Group
financial statements and reported amounts of revenues and expenses during the
reporting period.
i) Exploration and evaluation expenditure (note 14)
The application of the Group's accounting policy for exploration and
evaluation expenditure requires judgement. For each reporting period, the
Group assesses whether there are indictors of impairment. These include
whether the right to explore has expired, the results of geological
exploration results and whether further exploration is planned, the likelihood
that commercial exploitation will go ahead and whether it will result in
recovery of the carrying value of the exploration expenditure. If information
becomes available suggesting that the recovery of expenditure is unlikely, the
amount capitalised is written off in the consolidated statement of profit or
loss in the period when the new information becomes available.
ii) Impairment of intangible and tangible assets (notes 14,15 and 16)
The assessment of tangible and intangible assets for any internal and external
indications of impairment involves judgement. For each reporting period, the
Group assesses whether there are indicators of impairment, if indicated then a
formal estimate of the recoverable amount is performed and an impairment loss
recognised to the extent that the carrying amount exceeds recoverable amount.
Recoverable amount is determined as the value in use. Determining whether the
projects are impaired requires an estimation of the recoverable value of the
individual areas to which value has been ascribed. The value in use
calculation requires the entity to estimate the future cash flows expected to
arise from the projects in order to calculate present value.
The Group considered whether there are any impairment indicators of its only
operating cash generating unit ("CGU") which are its mines together with their
associated processing facilities at Gedabek ("Mining Operations"). The
significant assumptions made to perform this calculation are: production
volumes, precious metal and copper prices, discount rates and operating and
capital expenditure, all of which are discussed within the significant
accounting estimates note 4.25. The Group has determined that there are no
indicators of impairment.
iii) Production start date (note 15)
The Group assesses the stage of each mine under construction to determine when
a mine moves into the production stage. The criteria used to assess the start
date are determined based on the unique nature of each mine construction
project, such as the complexity of a plant and its location. The Group
considers various relevant criteria to assess when the mine is substantially
complete, ready for its intended use and is reclassified from Assets under
construction to Producing mines and Property, plant and equipment. Some of the
criteria will include, but are not limited to, the following:
· the level of capital expenditure compared to the construction cost
estimates;
· completion of a reasonable period of testing of the mine plant and
equipment;
· ability to produce metal in saleable form (within specifications);
and
· ability to sustain ongoing production of metal.
When a mine construction project moves into the production stage, the
capitalisation of certain mine construction costs ceases and costs are either
regarded as inventory or expensed, except for costs that qualify for
capitalisation relating to mining asset additions or improvements, underground
mine development or mineable reserve development. This is also the point at
which the depreciation/amortisation recognition commences.
iv) Leases (note 16)
IFRS 16 requires the Group to make judgements as to whether any contract
entered into by the Group contains a lease. In making this judgement, the
Group looks at a number of factors including the broader economics of each
contract. Once a contract has been determined to contain a lease, the Group
is required to make judgements and estimates that affect the measurement of
right to use assets and lease liabilities which have been considered in more
detail in the significant accounting estimates disclosure below in note 4.25.
In determining the lease term, the Group considers all facts and circumstances
that determine the likely total length of time the asset will be leased.
Estimates are required to determine the appropriate discount rates used to
measure lease liabilities.
v) Renewal of Production Sharing Agreement ("PSA") (note 32)
The Group operates its mines and processing facilities on contract areas
licenced under a PSA with the Government of Azerbaijan. The majority of the
Group's fixed assets, including its processing facilities and its main
producing mines, are located on the Gedabek contract area which initially had
a mining licence expiring in March 2022. The PSA contains an option to extend
the Gedabek licence for a further ten years from March 2022, conditional upon
satisfaction of certain requirements stipulated in the PSA, and the first of
the two five-year extensions allowed under the PSA to March 2027 has been
obtained. The directors have judged that the requirements to renew the licence
for the second five-year extension from March 2027 to March 2032 will be
satisfied. The Group depreciates each tangible fixed asset over its estimated
useful life subject to no asset having a life extending beyond March 2032.
4.25 Significant accounting estimates
The preparation of the Group financial statements in conformity with IFRS
requires management to make estimates that affect the reported amounts of
assets, liabilities and contingent liabilities at the date of the Group
financial statements and reported amounts of revenues and expenses during the
reporting period. Estimates are continuously evaluated and are based on
management's experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances. However,
actual outcomes can differ from these estimates. In particular, information
about significant areas of estimation uncertainty considered by management in
preparing the Group financial statements is described below.
i) Impairment of intangible and tangible assets (notes 14,15 and 16)
Once an intangible or tangible asset has been determined to have an indicator
of impairment, an estimate is made of its recoverable amount. Recoverable
amount is determined as the higher of fair value less costs to sell and value
in use. Determining whether the projects are impaired requires an estimation
of the recoverable value of the individual areas to which value has been
ascribed. The value in use calculation requires the entity to estimate the
future cash flows expected to arise from the projects and a suitable discount
rate in order to calculate present value. The assessment was carried out in
2023 as there were indicators of impairment. Assessments of the recoverable
amounts of the Group's intangible assets were made for 2023 and 2024. For both
years, it was determined that there were indicators of impairment. Impairment
charges were made in both 2023 and 2024 as set out in note 14 - 'Intangible
assets'.
ii) Ore reserves and resources (notes 14 and 15)
Ore reserves are estimates of the amount of ore that can be economically and
legally extracted from the Group's mining properties. The Group estimates its
ore reserves and mineral resources, based on information compiled by
appropriately qualified persons relating to the geological data on the size,
depth and shape of the ore body and requires complex geological judgements to
interpret the data. The estimation of recoverable reserves is based upon
factors such as estimates of foreign exchange rates, commodity prices, future
capital requirements and production costs along with geological assumptions
and judgements made in estimating the size and grade of the ore body. Changes
in the reserve or resource estimates may impact upon the carrying value of
exploration and evaluation assets, mine properties, property, plant and
equipment, provision for rehabilitation and depreciation and amortisation
charges.
iii) Inventory (note 18)
Net realisable value tests are performed at least annually and represent the
estimated future sales price of the product based on prevailing spot metals
prices at the reporting date, less estimated costs to complete production and
bring the product to sale.
Stockpiles are measured by estimating the number of tonnes added and removed
from the stockpile, the number of contained gold ounces based on assay data
and the estimated recovery percentage based on the expected processing method.
Stockpile tonnages are verified by periodic surveys. The ounces of gold sold
are compared to the remaining reserves of gold for the purpose of charging
inventory costs to operations.
iv) Mine rehabilitation provision (note 24)
The Group assesses its mine rehabilitation provision annually. Significant
estimates and assumptions are made in determining the provision for mine
rehabilitation as there are numerous factors that will affect the ultimate
liability payable. These factors include estimates of the extent and costs of
rehabilitation activities, technological changes, regulatory changes and
changes in discount rates. Those uncertainties may result in future actual
expenditure differing from the amounts currently provided. The provision at
the reporting date represents management's best estimate of the present value
of the future rehabilitation costs required. Changes to estimated future costs
are recognised in the Group statement of financial position by either
increasing or decreasing the rehabilitation liability and rehabilitation asset
if the initial estimate was originally recognised as part of an asset measured
in accordance with IAS 16 'Property, Plant and Equipment'. Expenditure on mine
rehabilitation is expected to take place between 2028 and 2030. The Group has
performed a sensitivity analysis of reasonable possible changes in the
significant assumptions taking into account historical experience; however,
the estimates may verify by greater amounts. A 2 per cent. increase or
decrease in the discount rate would result in a decrease of $1,696,000 and an
increase of $1,906,000 respectively in the provision for the asset retirement
obligation. A 2 per cent. increase or decrease in the inflation rate would
result in an increase of $776,000 or a decrease of $755,000 respectively in
the provision for the asset retirement obligation. A 20 per cent. increase in
cost would result in an increase of $6,471,000 in the provision for the asset
retirement obligation.
4.26 Other accounting estimates
i) Recovery of deferred tax assets (note 12)
Judgement is required in determining whether deferred tax assets are
recognised within the Group statement of financial position. Deferred tax
assets, including those arising from unutilised tax losses, require management
to assess the likelihood that the Group will generate taxable earnings in
future periods, in order to utilise recognised deferred tax assets. Estimates
of future taxable income are based on forecast cash flows from operations and
the application of existing tax laws in each jurisdiction. To the extent that
future cash flows and taxable income differ significantly from estimates, the
ability of the Group to realise the net deferred tax assets recorded at the
reporting date could be impacted.
ii) Leases (note 16)
The implementation of IFRS 16 requires the Group to make estimates that affect
the measurement of right to use assets and lease liabilities. In determining
the lease term, the Group considers all facts and circumstances that determine
the likely total length of time the asset will be leased. Estimates are
required to determine the appropriate discount rates used to measure lease
liabilities.
5 Segment information
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 statement of
income and Group statement of financial position on this basis. Accordingly,
the Group has only one operating segment, mining operations. The Group's
mining operations mainly comprise its producing assets, the Gedabek and Gadir
mines and related exploration and development at its Gedabek mining
concession. The majority of the Group's revenues and its cost of sales,
depreciation and amortisation are generated at Gedabek.
The majority of the Group's exploration and all of its development and
production activities are carried out by its wholly-owned subsidiaries in
Azerbaijan. The Group's associate company at 31 December 2023, Libero Copper
& Gold Corporation ("Libero") explores for minerals in North and South
America. Libero has no revenue. Libero ceased to be an associate company of
the Group from 15 February 2024.
6 Revenue
The Group's revenue consists of sales to third parties of:
· gold contained within doré and gold and silver bullion to the
Group's refiners; and
· gold and copper concentrate.
2024 2023
$000 $000
Gold within doré and gold bullion 36,784 30,869
Silver bullion 302 165
Gold and copper concentrate 2,499 14,821
39,585 45,855
All revenue from sales of gold within doré and gold and silver bullion and
gold and copper concentrate is recognised at the time when control passes to
the customer.
Sales of gold within doré and gold and silver bullion in 2024 and 2023 were
made to the Group's gold refiner, MKS Finance S.A., based in Switzerland. The
total sales to MKS Finance SA in 2024 were $37,086,000 (2023: $31,034,000).
The gold and copper concentrate was sold in 2024 to Industrial Minerals SA and
Trafigura PTE Ltd (2023: Industrial Minerals SA, Trafigura PTE Ltd and
Metal-Kim Metalurgi Ve Kimya Tarim Sanayi Tic Ltd Sti). The total sales to
Industrial Minerals SA and Trafigura PTE Ltd in 2024 were $1,010,000 and
$1,489,000 respectively (2023: $2,821,000 and $11,427,000 respectively).
7 Other operating income and expenses and other expense
Other operating income
2024 2023
$000 $000
Gain on the modifications of lease liabilities 8 71
Gain on cancellation of trade payables 1,332 303
Reversal of previously written off receivables - 33
1,340 407
Other operating expenses
2024 2023
$000 $000
Transportation and refining costs 217 220
Foreign exchange loss 45 105
Staff costs 19 -
VAT write off 392 -
Impairment of receivables 215 -
Fee payable on cancellation of equipment purchase - 100
Mine planning and resource determination 448 -
Research costs 358 271
1,694 696
Other expense
2024 2023
$000 $000
Fair value loss on financial assets 75 39
8 Operating loss
Notes 2024 2023
$000 $000
Operating loss is stated after charging:
Depreciation on property, plant and equipment - owned 15 10,544 9,707
Depreciation on property plant and equipment - right of use assets 16 729 566
Amortisation of mining rights and other intangible assets 14 387 593
Impairment charge of development assets 15 534 -
Impairment of intangible assets 14 1,314 13,031
Employee benefits and expenses 9 11,221 10,806
Foreign currency exchange net loss 45 105
Inventory expensed during the year 13,865 20,166
Fees payable to the Company's auditor for:
The audit of the Group's annual accounts 200 277
The audit of the Group's subsidiaries pursuant to legislation 100 149
Audit related assurance services - half year review 3 3
Total audit services 303 429
Amounts paid to auditor for other services:
Tax compliance services - 10
Total non-audit services - 10
Total 303 439
The audit fees for the parent company were $120,000 (2023: $170,000).
9 Staff numbers and costs
The average number of staff employed by the Group (including directors) during
the year, analysed by category, was as follows:
2024 2023
Management and administration 46 43
Exploration 44 45
Mine operations 849 832
939 920
The aggregate payroll costs of these persons were as follows:
2024 2023
$000 $000
Wages and salaries 10,748 10,578
Social security costs 2,443 2,314
Costs capitalised as exploration (1,970) (2,086)
11,221 10,806
The Group does not make any contributions to either individual or collective
staff pension plans.
Remuneration of key management personnel
The remuneration of the key management personnel of the Group, is set out
below in aggregate:
2024 2023
$ $
Share based payment expense 5,450 146,664
Short-term employee benefits 2,172,754 2,396,952
2,178,204 2,543,616
The key management personnel of the Group comprise the chief executive
officer, the vice president of procurement, HR and IT, the chief operating
officer, the two vice presidents of Azerbaijan International Mining Company
and the chief financial officer. The key management personnel receive no
post-employment benefits or other long term benefits. The disclosure of the
remuneration of the directors as required by the Companies Act 2006 is given
above.
10 Finance costs
2024 2023
$000 $000
Interest charged on interest-bearing loans and borrowings 1,323 364
Finance charges on letters of credit - 1
Interest on deposit 270 -
Interest expense on lease liabilities 280 275
Unwinding of discount on provisions 850 959
Interest on creditor: geological data 250 232
2,973 1,831
11 Investment in an associate company
Libero Copper & Gold Corporation ("Libero") is a minerals exploration
company listed on the TSX Venture Exchange (ticker: LBC) in Canada and owns
the Mocoa copper property in Colombia.
From 1 January 2023 to 15 February 2024, Libero was an associate company of
the Group which held an interest ranging from 18.29 per cent. at 1 January
2023 to 13.11 per cent. at 15 February 2024. A Group director was also a
director of Libero and the Group's vice president, technical services was a
member of the technical committee of Libero. There were no restrictions on the
ability of the Group to transfer funds to Libero and for Libero to transfer
funds to the Group.
On 22 January 2024, Libero announced a non-brokered private placement for
aggregate gross proceeds of up to CAN $3 million. The private placement
completed on 15 February 2024. The Group did not participate in the private
placement and its interest in Libero reduced to approximately 5.7 per cent
following completion of the private placement. Michael Sununu resigned from
the board of directors of Libero on 15 February 2024 and Libero ceased to be
an associate company of the Group from that date.
The loss recognised for Libero as an associate company for the year ended 31
December 2024, is the Group's share of the loss of Libero for the period 1
January 2024 to 15 February 2024. Subsequent to 15 February 2024, the Group's
interest in Libero has been accounted for as a financial asset. The Group's
holding in Libero from 15 February 2024 has been valued at each balance sheet
date as the market value of its shares which corresponds to the fair value.
The recoverable value of Libero was estimated at 31 December 2023 at the
market value of its shares of $242,000 at that date. This value at 31 December
2023 was lower than its carrying value as an associate company which was
regarded as an indication of impairment. This gave rise to an impairment
charge in the year ended 31 December 2023 of $5.0 million. This was the
difference between its carrying value as an associate company and the market
value of its shares.
On 15 February 2024 (the date Libero ceased to be an associate company),
Libero's carrying value as an associate company was $196,000 and the market
value of the Libero shares was $550,000. Accordingly, a release of the
impairment provision was made of $354,000 being the difference between the
market of Libero's shares and its carrying value as an associate company on 15
February 2024. Libero was reclassified as a financial asset at fair value
through profit and loss at a value of $550,000. Accordingly, no profit or loss
was therefore recognised when Libero was reclassified. At 31 December 2024
Libero was classified in the Group's balance sheet as a financial asset (note
17 - 'Financial assets').
The financial statements of Libero are made up to 31 December of each year.
The financial information about Libero, included in these Group financial
statements, has been taken from their audited financial statements for the
year ended 31 December 2023 dated 25 April 2024 and their unaudited financial
statements for the three months ended 31 March 2024 dated 28 May 2024.
The following tables illustrates the summarised financial information of the
Group's investment in Libero:
Balance sheet of Libero at 31 December 2023
2023
$000
Current assets 696
Non-current assets 1,323
Current liabilities (1,486)
Non-current liabilities (142)
Equity 391
Reconciliation to carrying value in the Group balance sheet at 31 December
2023
2023
$000
Equity of Libero 391
Share based payment expense (977)
Exploration expense 9,052
Equity recognised by the Group 8,466
Group's share in equity - 13.11 per cent. 1,110
Goodwill 4,167
Impairment charge (5,035)
Group carrying value of associate company 242
Profit and loss account of Libero for the year ended 31 December 2023 and from
1 January to 15 February 2024
1 January to 15 February 2024 2023
$000 $000
Expenses 513 3,934
Other expenses 63 1,582
Loss before taxation 576 5,516
Taxation - (94)
Loss for the year 576 5,422
Other comprehensive loss - (7)
Total comprehensive loss for the year 576 5,415
Libero has no revenue and all losses are from continuing operations.
Reconciliation to loss of associate in the Group profit and loss account for
the year ended 31 December 2023 and from 1 January to 15 February 2024
1 January to 15 February 2024 2023
$000 $000
Loss for the year 576 5,422
Exploration expense (236) (2,333)
Loss for the year as an associate company 340 3,089
Group's share of the loss at 13.11 per cent. (2023: 19.8 and 15.2 per cent.) 46 551
Profit on deemed disposal - (10)
Loss recognised as an associate company 46 541
Reconciliation of the movement in associate company in the years ended 31
December
2024 2023
$000 $000
1 January 242 5,172
Additions - 646
Share of loss of the associate (46) (541)
Impairment benefit/(charge) 354 (5,035)
Transfer to non-current financial assets (550) -
31 December - 242
Libero had no contingent liabilities or capital commitments on 31 December
2023. The Group had no contingent liabilities relating to Libero.
12 Taxation
Corporation tax is calculated at 32 per cent. (as stipulated in the production
sharing agreement for R.V. Investment Group Services LLC ("RVIG")) in the
Republic of Azerbaijan, the entity that contributes the most significant
portion of loss before tax in the Group financial statements of the estimated
assessable loss for the year. Taxation for other jurisdictions is calculated
at the rates prevailing in the respective jurisdictions. Deferred income taxes
arising in RVIG are recognised and fully disclosed in these Group financial
statements. RVIG's unutilised tax losses at 31 December 2024 were $22,384,000
(2023: $17,334,000).
The major component of the income tax benefit for the year ended 31 December
are:
2024 2023
$000 $000
Deferred tax
Benefit relating to origination and reversal of temporary differences (3,788) (7,728)
Income tax benefit for the year (3,788) (7,728)
Deferred income tax at 31 December relates to the following:
Statement Income statement
of financial position
2024 2023 2024 2023
$000 $000 $000 $000
Deferred income tax liability
Property, plant and equipment and intangible assets - accelerated depreciation (23,329) (20,205) (3,124) 2,172
Right of use assets - accelerated depreciation (541) (657) 116 99
Non-current other receivables (83) (312) 229 (312)
Trade and other receivables (144) (954) 810 1,553
Inventories (9,744) (11,471) 1,727 (45)
Deferred income tax liability (33,841) (33,599)
Deferred income tax asset
Tax losses brought forward 7,163 5,548 1,615 5,548
Trade and other payables and provisions * 3,491 2,854 637 (231)
Lease liabilities 687 791 (104) (76)
Asset retirement obligation * 6,024 4,142 1,882 (980)
Deferred income tax asset 17,365 13,335
Deferred income tax benefit 3,788 7,728
Net deferred tax liability (16,476) (20,264)
* Deferred income tax assets have been recognised for the trade and
other payables and provisions, asset retirement obligation and lease
liabilities based on local tax basis differences expected to be utilised
against future taxable profits.
A reconciliation between the accounting loss and the total taxation benefit
for the year ended 31 December is as follows:
2024 2023
$000 $000
Loss before tax (21,290) (31,970)
Tax charge at statutory rate of 32 per cent. for RVIG* (6,813) (10,230)
Effects of different tax rates for certain Group entities 340 338
Tax effect of items which are not deductible or assessable for taxation
purposes:
- Items not deductible or assessable 2,685 2,164
Income tax benefit for the year (3,788) (7,728)
* This is the tax rate stipulated in RVIG's production sharing agreement.
The Group has a consolidated turnover below Euro 750 million. Therefore, the
OECD Pillar Two model rules do not apply to the Group.
Deferred tax 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 assets and liabilities have been offset for deferred taxes
recognised for RVIG since there is a legally enforceable right to set off
current tax assets against current tax liabilities and they relate to income
taxes levied by the same taxation authority. The Group intends to settle its
current tax assets and liabilities on a net basis in the Republic of
Azerbaijan.
At 31 December 2024, the Group had total unused tax losses available for
offset against future profits of $57,409,000 (2023: $50,139,000). Unused tax
losses in the Republic of Azerbaijan at 31 December 2024 were $22,384,000
(2023: $17,334,000) and unused tax losses in the United Kingdom were
$35,025,000 (2023: $32,805,000). The tax losses in the Republic of
Azerbaijan and the United Kingdom can be carried forward indefinitely. No
deferred tax assets have been recognised in respect of jurisdictions other
than the Republic of Azerbaijan due to the uncertainty of future profit
streams.
13 Loss per share
The calculation of basic and diluted loss per share is based upon the retained
loss for the financial year of $17,502,000 (2023: $24,242,000).
The weighted average number of ordinary shares for calculating the basic loss
and diluted loss per share after adjusting for the effects of all dilutive
potential ordinary shares relating to share options and treasury shares are as
follows:
2024 2023
Basic 114,242,024 114,335,175
Diluted 114,242,024 114,335,175
At 31 December 2024 there were no unexercised share options that could
potentially dilute basic earnings per share (2023: nil).
14 Intangible assets
Exploration and evaluation
Other intangible assets
Mining rights $000
Gedabek Gosha Ordubad Vejnaly Xarxar Garadag Demirli $000 Total
$000 $000 $000 $000 $000 $000 $000 $000
Cost
1 January 2023 21,010 2,713 6,106 517 1,613 2,772 - 41,925 726 77,382
Additions 2,131 254 627 961 1,901 62 - - - 5,936
Transfer to assets under construction
(3,802) - - - - - - - (3,802)
31 December 2023 19,339 2,967 6,733 1,478 3,514 2,834 - 41,925 726 79,516
Additions 764 - 524 259 201 361 59 - - 2,168
Transfer to assets under construction (3,574) - - - - - - - - (3,574)
31 December 2024 16,529 2,967 7,257 1,737 3,715 3,195 59 41,925 726 78,110
Amortisation and impairment*
1 January 2023 - - - - - - - 38,249 517 38,766
Charge for the year - - - - - - - 566 27 593
Impairment 5,086 2,967 4,978 - - - - - - 13,031
31 December 2023 5,086 2,967 4,978 - - - - 38,815 544 52,390
Charge for the year - - - - - - - 387 21 408
Impairment 1,314 - - - - - - - - 1,314
31 December 2024 6,400 2,967 4,978 - - - - 39,202 565 54,112
Net book value
31 December 2023 14,253 - 1,755 1,478 3,514 2,834 - 3,110 182 27,126
31 December 2024 10,129 - 2,279 1,737 3,715 3,195 59 2,723 161 23,998
*121,000 ounces of gold at 1 January 2024 were used to determine depreciation
of mining rights and other intangible assets (2023: 143,000 ounces). A 5 per
cent. increase or decrease in the ounces of gold used to compute the
amortisation of intangible assets would result in a decrease in amortisation
of $18,000 (2023: $27,000) and an increase in amortisation of $20,000 (2023:
$30,000) respectively.
The Group's strategy is to focus on growing its production in the next five
years by exploiting the deposits of Gilar, Zafer, Xarxar and Garadag.
Accordingly, the Group's focus has shifted away from its other exploration
areas. It is unlikely that the Group will expend significant resources in
developing these other exploration areas in the next five years. However, the
Group is still conducting exploration around its existing open pit to further
extend its resource. It is also exploring at its Ordubad and Vejnaly contract
areas.
The Group's accounting policy requires judgement to determine whether future
economic benefits are likely to be derived from exploration areas through
either future exploitation or sale of properties or whether activities have
reached a stage that permits a reasonable assessment of the existence of
reserves.
Given its poor mineral resources, it is considered exploitation of the
Avshancli deposit is unlikely in the next five years. This is regarded as an
indicator of impairment.
Given the above, the directors have concluded that historical expenditure on
exploration and evaluation for its Avshancli deposit in its Gedabek contract
area is above the amount that is likely to be realised in the foreseeable
future. Accordingly, an impairment of $1.3 million (2023: $13.0 million) was
made related to the write-off of costs associated with exploration licenses
where future exploration is neither budgeted or planned, or future resources
are deemed uncommercial or not viable. In making this assessment, the
directors have made certain assumptions about future events and circumstances,
particularly, whether an economically viable extraction operation can be
achieved. Any such estimates and assumptions may change as new information
becomes available.
15 Property, plant and equipment
Plant and
equipment and Producing Assets under construction
motor vehicles mines Total
$000 $000 $000 $000
Cost
1 January 2023 28,590 236,330 2,181 267,101
Additions 7,700 4,637 10,117 22,454
Decrease in provision for rehabilitation - (4,017) - (4,017)
31 December 2023 36,290 236,950 12,298 285,538
Additions 1,399 1,167 6,741 9,307
Transfer to producing mines - 1,044 (1,044) -
Transfer from intangibles - - 3,574 3,574
Increase in provision for rehabilitation - 5,028 - 5,028
31 December 2024 37,689 244,189 21,569 303,447
Depreciation and impairment*
1 January 2023 24,195 186,861 - 211,056
Charge for the year 1,142 8,565 - 9,707
31 December 2023 25,337 195,426 - 220,763
Charge for the year 2,011 8,533 - 10,544
Impairment of development assets - 534 - 534
31 December 2024 27,348 204,493 - 231,841
Net book value
31 December 2023 10,953 41,524 12,298 64,775
31 December 2024 10,341 39,696 21,569 71,606
*121,000 ounces of gold at 1 January 2024 were used to determine
depreciation of producing mines (2023: 143,000 ounces). A 5 per cent. increase
or decrease in the ounces of gold used to compute the depreciation of property
plant and equipment would result in a decrease in depreciation of $281,000
(2023: $505,000) and an increase in depreciation of $311,000 (2023: $589,000)
respectively.
Impairment assessment of the Group's fixed assets
The Group assesses at each balance sheet date whether any indicators of
impairment exist for each asset or cash generating unit ("CGU"). The Group has
only one operating CGU. This is the Group's mines together with their
associated processing facilities at Gedabek ("Mining Operations"). If any such
indications of impairment exist, a formal estimate of the recoverable amount
is performed.
In assessing whether an impairment is required, the carrying value of Mining
Operations is compared with its recoverable amount. The recoverable amount is
the higher of the fair value less costs of disposal ("FVLCD") and value in use
("VIU"). Given the nature of the Group's activities, information on the fair
value less costs to disposal of Mining Operations is difficult to obtain
unless negotiations with potential purchasers or similar transactions are
taking place. Consequently, the VIU recoverable amount for Mining Operations
is estimated based on the discounted future estimated cash flows (expressed in
nominal terms) expected to be generated from its continued use using
market-based commodity price assumptions, estimated quantities of recoverable
minerals, production levels, operating costs and capital requirements based on
the Group's strategic growth plan and life of mine plan. The cash flows are
discounted using a nominal discount rate before taxation that reflects current
market assessments of the time value of money and the risks specific to Mining
Operations.
Indication of impairment during the year ended 31 December
The determination of the recoverable amount of Mining Operations is most
sensitive to the following key assumptions:
· Production volumes
· Precious metal and copper prices
· Discount rates
· Operating and capital expenditure
The Group is planning to increase the production from its agitation leaching
and flotation plants in 2025 with the opening of the Gilar mine. The gold
price has increased significantly in 2024 and is at, or around, record highs.
At around $10,000 per tonne, copper prices, although more volatile in 2024,
are still reasonably high considering their history over the last 5 years.
Interest rates have also remained stable. The Group's plants are mature which
only require minimal sustaining capital expenditure and operating costs have
remained stable. The management have therefore assessed that there were no
indicators of impairment at 31 December 2024. Accordingly, no impairment
analysis was performed for property, plant and equipment in the Group's
balance sheet at 31 December 2024.
Capital commitments
The capital commitments by the Group have been disclosed in note 32.
16 Leases
Right of use assets
Plant and
equipment and Land and Total
motor vehicles buildings
$000 $000 $000
Cost
1 January 2023 3,074 1,153 4,227
Additions 682 - 682
Lease modifications (593) - (593)
31 December 2023 3,163 1,153 4,316
Additions 443 - 443
Lease modifications (37) (48) (85)
31 December 2024 3,569 1,105 4,674
Depreciation
1 January 2023 1,345 519 1,864
Charge for the year 401 165 566
Lease modifications (167) - (167)
31 December 2023 1,579 684 2,263
Charge for the year 572 157 729
Lease modifications (8) - (8)
31 December 2024 2,143 841 2,984
Net book value
31 December 2023 1,584 469 2,053
31 December 2024 1,426 264 1,690
Lease liabilities
2024 2023
$000 $000
1 January 2,471 2,708
Additions 443 682
Lease modifications (85) (497)
Interest expense 280 275
Repayment (962) (697)
31 December 2,147 2,471
Current liabilities 691 555
Non-current liabilities 1,456 1,916
2,147 2,471
Amount recognised in the profit and loss account
2024 2023
$000 $000
Depreciation expense of right of use assets 729 566
Gain on lease modifications (8) (71)
Interest expense 280 275
Expenses relating to short term leases 132 280
1,133 1,050
The amount of future lease commitments for short-term leases at 31 December
2023 and 2024 are similar to the amounts expensed in 2023 and 2024
respectively as the level of leasing activity has not changed. As these
amounts are not dissimilar to the expense for the respective years, the
amounts of the lease commitments have not been disclosed.
The total cash outflow related to leases in the year ended 31 December 2024
was $1,139,000 (2023: $1,023,000).
17 Financial assets
2024 2023
Non-current $000 $000
Financial assets at fair value through profit or loss
Listed equity instruments 475 -
At 31 December 2024, the Company held 2,130,000 shares in Libero, a company
which is listed on the Toronto Ventures Stock Exchange in Canada. Libero was
an associate company of the Group at 31 December 2023 and ceased to be an
associate from 15 February 2024 (note 11 - 'Investment in an associate
company'). Therefore, the Group's interest was diluted and Libero was
reclassified as a financial asset at fair value through profit and loss.
Libero was transferred at a value of $550,000, the market value of the shares
on the day of transfer. The value of the shares at 31 December 2024 was
$475,000 and the unrealised loss of $75,000 was debited to profit and loss
account as other expense (note 7 - 'Other operating income and expenses and
other expense').
18
Inventory
Cost
Non-current assets 2024 2023
$000 $000
Ore stockpiles 5,716 -
2024 2023
Current assets $000 $000
Finished goods - bullion 2,295 5,922
Finished goods - metal in concentrate 411 53
Metal in circuit 3,162 5,480
Metal in tailings dam 455 4,870
Ore stockpiles 953 5,745
Spare parts and consumables 17,457 18,272
Total current inventories 24,733 40,342
Total inventories at the lower of cost and net realisable value 30,449 40,342
The Group has capitalised mining costs related to high grade sulphide ore
stockpiled during the year. Such stockpiles are expected to be utilised as
part of the flotation processing. Inventory is recognised at lower of cost or
net realisable value.
19 Trade and other receivables
2024 2023
Non-current $000 $000
Other receivables - 195
Advances for purchases
Loans to an employees* 260 780
260 975
Current
Trade and other receivables 7,471 1,988
Gold held due to the Government of Azerbaijan
VAT refund due 808 1,609
Loan to employee* 527 -
Other tax receivable 1,247 734
Trade receivables - fair value** 44 637
Prepayments and advances 1,165 3,686
11,262 8,654
*See 33 - "Related party transactions"
**Trade receivables subject to provisional pricing.
Trade receivables (not subject to provisional pricing) are for sales of gold
and silver to the refiner and are non interest-bearing and payment is usually
received one to two days after the date of sale.
Trade receivables (subject to provisional pricing) are for sales of gold and
copper concentrate and are non-interest bearing, but as discussed in
accounting policy 4.2, are exposed to future commodity price movements over
the quotational period ("QP") and, hence, fail the 'solely payments of
principal and interest' test and are measured at fair value up until the date
of settlement. These trade receivables are initially measured at the amount
which the Group expects to be entitled, being the estimate of the price
expected to be received at the end of the QP. Approximately 90 per cent. of
the provisional invoice (based on the provisional price) is received in cash
within one to two weeks from when the concentrate is collected from site,
which reduces the initial receivable recognised under IFRS 15. The QPs can
range between one and four months post shipment and final payment is due
between 30-90 days from the end of the QP. Refer to accounting policy 4.12 for
details of fair value measurement.
The Group does not consider any trade or other receivable as past due or
impaired. All receivables at amortised cost have been received shortly after
the balance sheet date and therefore the Group does not consider that there is
any credit risk exposure. No provision for any expected credit loss has
therefore been established in 2023 or 2024.
The VAT refund due at 31 December 2024 and 2023 relates to VAT paid on
purchases.
Gold bullion held and transferable to the Government 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. A corresponding liability to the
Government is included in trade and other payables as disclosed in note 21 -
'Trade and other payables'.
20 Restricted cash, cash and cash equivalents
Restricted cash comprises of a bank deposit in Azerbaijan which has been
pledged as security for a $5,650,000 loan from the bank. Details of the loan
are set out in note 22 - 'Interest-bearing loans and borrowings'.
Cash and cash equivalents consist of cash on hand and held by the Group within
financial institutions that are available immediately. The carrying amount of
these assets approximates their fair value.
The Group's cash on hand and cash held within financial institutions at 31
December 2024 (including short-term cash deposits) comprised $15,000 and
$871,000 respectively (2023: $9,000 and $4,468,000).
The Group's cash and cash equivalents are mostly held in United States
Dollars.
21 Trade and other payables
2024 2023
Current $000 $000
Trade and other payables 2,330 3,610
Accruals and other payables
Trade creditors 5,503 2,721
Gold held due to the Government of Azerbaijan 7,471 1,988
Geological data 3,379 -
Payable to the Government of Azerbaijan from copper concentrate joint sale 1,017 881
19,700 9,200
2024 2023
Non-current $000 $000
Other payables - 3,129
Geological data
Other payables 476 1,090
476 4,219
Trade creditors primarily comprise amounts outstanding for trade purchases and
ongoing costs. Trade creditors are non-interest bearing and the creditor days
were 65 (2023: 20). Accruals and other payables mainly consist of accruals for
salaries, bonuses, related payroll taxes and social contributions, 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.
In the year ended 31 December 2022, the Group contracted with AzerGold CJSC to
pay $4.0 million for the historical geological data AzerGold CJSC owned in
respect of the Garadag and Xarxar Contract Areas. The consideration was
apportioned as $3.3 million for Garadag data and $0.7 million for Xarxar data.
$1.0 million (25 per cent.) was paid in 2022 with the remaining $3.0 million
(75 per cent.) payable after three years, or if earlier for each respective
deposit, the balance of the purchase price on the approval of the Group's
development and production programme for the deposit in accordance with the
Group's Production Sharing Agreement. The creditor has been discounted at a
rate of 8 per cent. being the risk-free rate. The repayment dates of the
creditor are the directors' best estimation of when repayment will occur. The
undiscounted amount of the creditor at 31 December 2024 is $3.0 million (2023:
$3.0 million). The discounted amounts outstanding at each balance sheet date
have been grossed up by the VAT liability at a rate of 18 per cent. The amount
outstanding under the contract at 31 December 2024 has been classified as a
current liability (2023: non-current liability).
22 Interest-bearing loans and borrowings
Interest rate 2024 2023
(per cent.) Final $000 $000
maturity date
$1,000,000 bank loan 5.5 per annum May 2024 - 1,002
$2,500,000 bank loan 5.5 per annum May 2024 - 2,505
$1,500,000 bank loan 5.5 per annum May 2024 - 1,504
$5,000,000 bank loan 6.0 per annum May 2025 5,002 -
$5,650,000 bank loan 0.5 per month November 2025 5,684 5,678
$3,708,000 vendor financing SOFR + 2.0 per annum July 2027 3,093 -
$10,000,000 bank loan 6.5 per annum May 2026 7,850 10,045
21,629 20,734
Loans repayable in less than one year 18,546 13,629
Loans repayable in more than one year 3,083 7,105
21,629 20,734
The directors consider that the carrying amount of interest-bearing loans and
borrowings approximates to their fair value.
$1,000,000 bank loan
The loan is unsecured and was repayable in full on 11 May 2024. On 19 April
2024, it was consolidated into a $5 million loan which was renewed for a
period to 11 May 2025 at an interest rate of 6.0 per cent. per annum.
$2,500,000 bank loan
The loan is unsecured and was repayable in full on 11 May 2024. On 19 April
2024, it was consolidated into a $5 million loan which was renewed for a
period to 11 May 2025 at an interest rate of 6.0 per cent. per annum.
$1,500,000 bank loan
The loan is unsecured and was repayable in full on 11 May 2024. On 19 April
2024, it was consolidated into a $5 million loan which was renewed for a
period to 11 May 2025 at an interest rate of 6.0 per cent. per annum.
$5,000,000 bank loan
This loan is the consolidated loan of the $1 million, $2.5 million and $1.5
million bank loans above. It is unsecured and is repayable in full on 11 May
2025. It carries an interest rate of 6 per cent. per annum and interest is
payable monthly. The loan was renewed for a further term of one year till 11
May 2026 at an interest rate of 8.5 per cent. per annum.
$5,650,000 bank loan
The loan is secured against a $6 million deposit maintained with the lender.
The principal was repayable in 2 instalments of $2,818,659 and $2,831,341 in
March 2024 and April 2024 respectively. On 1 March 2024, the term of the loan
was extended for one year, with five instalments until 3 March 2025. The loan
was further extended on 31 October 2024 on the same terms, with a new maturity
date of 3 November 2025. The $6 million deposit has been disclosed as
restricted cash in the Group balance sheet at 31 December 2024 and 31 December
2023.
$3,708,000 vendor financing
On 2 May 2024, Azerbaijan International Mining Company (a wholly owned
subsidiary of the Group) agreed and signed a vendor financing facility (the
"Facility") with Caterpillar Financial Services Corporation ("Cat
Financial"). On 26 August 2024 the Group received the full proceeds of
$3,708,000 from its vendor financing loan with Cat Financial. The loan is
secured against the underground mining equipment purchased under the agreement
for the Group's Gilar mine. The underground fleet cost $4.6 million which had
already been paid by the Group at 31 December 2023. $3,708,000 of the
purchase price was refinanced through the Facility. Other principal terms of
the facility were as follows:
· Guarantor: Anglo Asian Mining PLC
· Interest rate: CME Term SOFR rate plus a margin of 2 per cent.
· Repayment of interest: quarterly
· Repayment of capital: 12 equal quarterly installments
· Net debt to EBITDA and net worth covenants
· Prepayment: allowed subject to a fee
The Group was in breach of its covenants on the Facility at 31 December 2024.
Accordingly, the entire loan has been classified as a current liability in the
2024 balance sheet. The Group subsequently obtained a waiver for the breach of
the covenant (see note 34 - 'Subsequent events').
$10,000,000 bank loan
The loan is unsecured. The borrowing commenced on 6 November 2023. The loan
had a 6 month capital repayment grace period during which only interest of
$54,167 per month was payable. From May 2024 to November 2024, 6 equal monthly
repayments of principal and interest totalling $413,306 were made by the
Group. On 14 October 2024, a new capital repayment grace period was determined
from November 2024 to May 2025, 13 equal monthly repayments of principal and
interest totalling $624,297 will be made to repay the principal on a monthly
reducing balance basis. A final repayment of principal and interest of
$624,297 will also be made in May 2026.
23 Changes in liabilities arising from financing activities
2024
1 January Cash flows Other 31 December
$000 $000 $000 $000
Interest bearing loans and borrowings 20,734 (342) 1,237 21,629
Lease liabilities 2,471 (962) 638 2,147
Total liabilities from financing activities 23,205 (1,304) 1,875 23,776
2023
1 January Cash flows Other 31 December
$000 $000 $000 $000
Interest bearing loans and borrowings - 20,370 364 20,734
Lease liabilities 2,708 (697) 460 2,471
Total liabilities from financing activities 2,708 19,673 824 23,205
24 Provision for rehabilitation
2024 2023
$000 $000
1 January 12,948 16,006
Increase/(Decrease) 5,028 (2,866)
Accretion expense 850 959
Effects of passage of time and changes in discount rate - (1,151)
31 December 18,826 12,948
The Group has a liability for restoration, rehabilitation and environmental
costs arising from its mining operations. Estimates of the cost of this work
including reclamation costs, close down and pollution control are made on an
ongoing basis, based on the estimated life of the mine. The provision
represents the net present value of the best estimate of the expenditure
required to settle the obligation to rehabilitate any environmental
disturbances caused by mining operations. The undiscounted liability for
rehabilitation at 31 December 2024 was $22,365,000 (2023: $19,115,000). The
undiscounted liability was discounted using a risk-free rate of 6.57 per cent.
(2023: 6.57 per cent.). Expenditures on restoration and rehabilitation works
are expected between 2028 and 2030 (2023: between 2028 and 2030).
25 Financial instruments
Financial risk management objectives and policies
The Group's principal financial instruments at 31 December 2024 comprised cash
and cash equivalents and borrowings. The main purpose of these financial
instruments is to finance the Group operations. The Group has other financial
instruments, such as certain of its trade and other receivables and trade and
other payables, which arise directly from its operations. Surplus cash within
the Group is put on deposit, the objective being to maximise returns on such
funds whilst ensuring that the short-term cash flow requirements of the Group
are met.
The Group's only financial instrument which is valued at fair value through
profit and loss is its investment in Libero Copper & Gold Corporation at
31 December 2024. It is valued using level 1 inputs. The investment is valued
at its market price in an active market without adjustment.
The main risks that could adversely affect the Group's financial assets,
liabilities or future cash flows are capital risk, market risk, interest rate
risk, foreign currency risk, liquidity risk and credit risk. Management
reviews and agrees policies for managing each of these risks which are
summarised below.
The following discussion also includes a sensitivity analysis that is intended
to illustrate the sensitivity to changes in market variables on the Group's
financial instruments and show the impact on profit or loss and shareholders'
equity, where applicable. Financial instruments affected by market risk
include bank loans and overdrafts, accounts receivable, accounts payable
and accrued liabilities.
The sensitivity has been prepared for the years ended 31 December 2024 and
2023 using the amounts of debt and other financial assets and liabilities held
as at those reporting dates.
Capital risk management
The capital structure of the Group at 31 December 2024 consists cash and cash
equivalents, bank borrowings, lease liabilities and equity attributable to
equity holders of the parent, comprising issued share capital, reserves and
retained earnings as disclosed in the consolidated statement of changes in
equity. The Group may enter into bank and other loans and letters of credit in
the future. The Group has sufficient capital to fund ongoing production and
exploration activities, with capital requirements reviewed by the Board on a
regular basis. Capital has been sourced through share issues on the AIM, part
of the London Stock Exchange, and loans from banks in Azerbaijan and
elsewhere. In managing its capital, the Group's primary objective is to ensure
its continued ability to provide a consistent return for its equity
shareholders through capital growth. In order to achieve this objective, the
Group seeks to maintain a gearing ratio that balances risk and returns at an
acceptable level and also to maintain a sufficient funding base to enable the
Group to meet its working capital and strategic investment needs. In 2024,
the Group entered into a vendor financing facility with Caterpillar Financial
Services Corporation in 2024 of $3.7 million. The loan is subject to a net
debt to EBITDA and a net worth covenant.
The Group is not subject to externally imposed capital requirements and
monitors capital using a gearing ratio. The Group's policy is to keep the
gearing ratio below 70 per cent. The Group calculates its gearing ratio as
total debt divided by total equity and multiplying the result by 100 to
express the gearing ratio as a percentage. At 31 December 2024, the Group's
gearing ratio was 35.3 per cent. (2023: 27.4 per cent.) as follows:
2024 2023
$000 $000
Current liabilities
Interest-bearing loans and other borrowings 18,546 13,629
Lease liabilities 691 555
Non-current liabilities
Interest-bearing loans and other borrowings 3,083 7,105
Lease liabilities 1,456 1,916
TOTAL DEBT 23,776 23,205
TOTAL EQUITY 67,372 84,808
Total debt / total equity X 100 (per cent.) 35.3 27.4
Interest rate risk
The Group's cash deposits are at a fixed rate of interest. The Group's bank
borrowings during the year ended 31 December 2024 were at a fixed rate of
interest. The Group would expect any future bank borrowings and letters of
credit to be at a fixed rate of interest. The Group also utilised supplier
financing at a variable rate of interest during the year ended 31 December
2024. The variable rate applicable to the Group's interest-bearing supplier
financing exposes the Group to fluctuations in interest payments due to
changes in the SOFR.
The Group manages the risk by maintaining fixed rate instruments, with
approval from the directors required for all new borrowing facilities.
The Group has not used any interest rate swaps or other instruments to manage
its interest rate profile during 2024 and 2023.
Liquidity risk
Ultimate responsibility for liquidity risk management rests with the board of
directors, which has built an appropriate liquidity risk management framework
for the management of the Group's short, medium and long-term funding and
liquidity management requirements. The Group manages liquidity risk by
maintaining adequate reserves, banking facilities and reserve borrowing
facilities by continuously monitoring forecast and actual cash flows and
matching the maturity profiles of financial liabilities. The Group has access
to local sources of both short and long-term finance should this be required.
The tables below summarise the maturity profile of the Group's financial
liabilities. The cash flows presented are the contractual undiscounted cash
flows and accordingly certain amounts differ from the amounts included in the
statement of financial position.
Year ended 31 December 2024
On Less than 3 to 12 1 to 5 >5 Total
demand 3 months months years years $000
$000 $000 $000 $000 $000
Lease liabilities 79 159 714 1,634 - 2,586
Interest-bearing loans and borrowings - 73 18,473 3,083 - 21,629
Trade and other payables - 4,925 14,936 476 - 20,337
79 5,157 34,123 5,193 - 44,552
Year ended 31 December 2023
On Less 3 to 12 1 to 5 >5 Total
demand than Months years years $000
$000 3 months $000 $000 $000
$000
Lease liabilities - 139 416 1,916 - 2,471
Interest-bearing loans and borrowings - 2,903 10,726 7,105 - 20,734
Trade and other payables - 9,200 - 4,219 - 13,419
- 12,242 11,142 13,240 - 36,624
Credit risk
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss to the Group. The maximum
credit risk exposure relating to financial assets is represented by their
carrying value as at the consolidated statement of financial position date.
The Group has adopted a policy of only dealing with creditworthy banks and has
cash deposits held with reputable financial institutions. These usually have a
lower to upper medium grade credit rating. Trade receivables consist of
amounts due to the Group from sales of gold and silver and copper and precious
metal concentrates. Sales of gold and silver bullion are made to MKS Finance
SA, Switzerland-based gold refinery, and copper concentrate is sold to
Industrial Minerals SA and Trafigura PTE Ltd. Due to the nature of the
customers, the board of directors does not consider that a significant credit
risk exists for receipt of revenues. The board of directors continually
reviews the possibilities of selling gold to alternative customers and also
the requirement for additional measures to mitigate any potential credit risk.
Foreign currency risk
The presentational currency of the Group is United States Dollars. The Group
is exposed to currency risk due to movements in foreign currencies relative
to the US Dollar affecting foreign currency transactions and balances.
The carrying amounts of the Group's foreign currency denominated monetary
assets and monetary liabilities at 31 December are as follows:
Liabilities Assets
2024 2023 2024 2023
$000 $000 $000 $000
UK Sterling 249 477 198 149
Azerbaijan Manats 10,481 8,905 1,917 2,392
Other 1,879 2,519 17 1
Foreign currency sensitivity analysis
The Group is mainly exposed to the currency of the United Kingdom (UK
Sterling), the currency of the European Union (Euro) and the currency of the
Republic of Azerbaijan (Azerbaijan Manat).
The following table details the Group's sensitivity to a 9.16 per cent., 8.69
per cent. and 2.00 per cent. (2023: 10.44 per cent., 10.24 per cent.
and 10.00 per cent.) increase and a 10.32 per cent., 5.57 per cent., and 2.00
per cent. (2023: 10.44 per cent., 10.24 per cent. and 10.00 per cent.)
decrease in the United States Dollar against United Kingdom Sterling, Euro and
Azerbaijan Manat, respectively. These are the sensitivity rates used when
reporting foreign currency risk internally to key management personnel and
represents management's assessment of the reasonably possible change in
foreign exchange rates. The sensitivity analysis includes only outstanding
foreign currency denominated monetary items and adjusts their translation at
the period end for respective change in foreign currency rates. A positive
number below indicates an increase in profit and other equity where the United
States Dollar strengthens by the mentioned rates against the relevant
currency. Weakening of the United States Dollar against the relevant currency,
there would be an equal and opposite impact on the profit and other equity,
and the balances below would be reversed.
UK Sterling impact Azerbaijan Manat impact Euro Impact
2024 2023 2024 2023 2024 2023
$000 $000 $000 $000 $000 $000
Increase - loss before tax 5 34 171 651 162 258
Decrease - loss before tax (5) (34) (171) (651) (104) (258)
Market risk
The Group's activities primarily expose it to the financial risks of changes
in gold, silver and copper prices which have a direct impact on revenues. The
management and board of directors continuously monitor the spot price of these
commodities. The forward prices for these commodities are also regularly
monitored. The majority of the Group's production is sold by reference to the
spot price on the date of sale. However, the board of directors will enter
into forward and option contracts for the purchase and sale of commodities
when it is commercially advantageous.
A 10 per cent. decrease in gold price in the year ended 31 December 2024 would
result in a reduction in revenue of $3.7 million (2023: $3.3 million). and a
10 per cent. increase in gold price would have the equal and opposite effect A
10 per cent. decrease in silver price would result in a reduction in revenue
of $0.08 million (2023: $0.06 million) and a 10 per cent. increase in silver
price would have an equal and opposite effect. A 10 per cent. decrease in
copper price would result in a reduction in revenue of $0.3 million (2023:
$1.4 million) and a 10 per cent. increase in copper price would have an equal
and opposite effect.
26 Share capital and merger reserve
2024 2023
Number £ Number £
Authorised
Ordinary shares of 1 pence each 600,000,000 6,000,000 600,000,000 6,000,000
Shares $000 Shares $000
Ordinary shares issued and fully paid
1 January and 31 December 114,392,024 2,016 114,392,024 2,016
Fully paid ordinary shares carry one vote per share and carry the right to
dividends. 150,000 ordinary shares were bought back during the year ended 31
December 2022 and are now held in treasury (note 28 - 'Treasury shares').
Share options
The Group has share option scheme under which options to subscribe for the
Company's shares have been granted to certain executives and senior employees
(note 29 - 'Share based payment').
Merger reserve
The merger reserve was created in accordance with the merger relief provisions
under Section 612 of the Companies Act 2006 (as amended) relating to
accounting for Group reconstructions involving the issue of shares at a
premium. In preparing Group consolidated financial statements, the amount by
which the base value of the consideration for the shares allotted exceeded the
aggregate nominal value of those shares was recorded within a merger reserve
on consolidation, rather than in the share premium account.
27 Share premium
2024 2023
$000 $000
1 January and 31 December 33 33
28 Treasury shares
2024 2023
Number $000 Number $000
1 January and 31 December 150,000 145 150,000 145
The Company bought back the following ordinary shares in the year ended 31
December 2022:
Price per share pence Total cost Total cost
Date of buyback Number of shares £ $000
21 July 2022 50,000 81.75 40,875 49
10 August 2022 50,000 89.50 44,750 54
16 September 2022 50,000 73.00 36,500 42
150,000 81.42* 122,125 145
* Average cost
29 Share-based payment
The Group operates a share option scheme for directors and senior employees of
the Group. The period during which share options can be exercised is
determined by the board of directors for each individual grant of share
options subject to exercise not taking place later than the tenth anniversary
of their issue. Options are exercisable at a price equal to the closing quoted
market price of the Group's shares on the date of the board of directors
approval to grant options. Options are forfeited if the employee leaves the
Group and the options are not exercised within three months from leaving date.
The number and weighted average exercise prices ("WAEP") of, and movements in,
share options during the year were as follows:
2024 2023
WAEP WAEP
Number pence Number pence
Outstanding at 1 January and 31 December 380,000 113 380,000 113
Exercisable at 31 December 380,000 113 300,000 114
The weighted average remaining contractual life of the share options
outstanding at 31 December 2024 was 2.5 years (2023: 3.5 years) and their
exercise price was 113 pence (2023: 113 pence).
There were no share options issued in the year ended 31 December 2024.
Share options are valued using the assumption that they will only be exercised
if the share price prevailing at the date of exercise is equal to, or above,
the price at which the options were granted. This methodology approximates to
valuing the share options using a Black-Scholes model.
The Group recognised total expense related to equity-settled share-based
payment transactions for the year ended 31 December 2024 of $5,000 (2023:
$147,000).
30 Distributions paid
2024 2023
$000 $000
Cash dividends on ordinary shares declared and paid
Final dividend for 2022: 4.0 US cents per share - 4,603
- 4,603
Cash dividends are declared in US dollars but paid in a combination of US
dollars and pounds Sterling. Dividends paid in pounds Sterling are converted
into pounds Sterling using a five-day average of the sterling closing
mid-price published by the Bank of England at 4pm each day for a specified
week prior to payment of the dividend.
The rates used to convert the US dollars into pounds Sterling for the
dividends paid in pounds Sterling and the corresponding sterling amount of
dividend are as follows:
Conversion Dividend
rate pence
Final dividend for 2022: 4.0 US cents per share 1.2730 3.1421
31 Subsidiary undertakings and associate company
Anglo Asian Mining PLC is the parent and ultimate parent of the Group.
The Company's subsidiaries included in the Group financial statements at 31
December 2023 and 31 December 2024 are as follows:
Name Country of incorporation Primary Percentage
place of business of holding
per cent.
Anglo Asian Operations Limited England and Wales United Kingdom 100
Holance Holdings Limited British Virgin Islands Azerbaijan 100
Anglo Asian Cayman Limited Cayman Islands Azerbaijan 100
R.V. Investment Group Services LLC Delaware, USA Azerbaijan 100
Azerbaijan International Mining Company Limited Cayman Islands Azerbaijan 100
There has been no change in subsidiary undertakings since 1 January 2024.
The Company's listed equity investment included in the Group financial
statements at 31 December 2023 is as follows. Libero Copper & Gold
Corporation ceased to be an associate company of the Group on 15 February
2024.
Name Registered address Primary place Percentage
of business of holding
per cent.
Libero Copper & Gold Corporation Suite 905 - 111 West Hastings, Vancouver The Americas 13.11
British Columbia, Canada, V6E 2JE
32 Contingencies and commitments
The Group undertakes its mining operations in the Republic of Azerbaijan
pursuant to the provisions of an Agreement on the Exploration, Development and
Production Sharing for Prospective Gold Mining Areas ("PSA"). The original
agreement was dated 20 August 1997 and granted the Group mining rights over
the following contract areas containing mineral deposits: Gedabek, Gosha,
Ordubad Group (Piyazbashi, Agyurt, Shakardara, Kiliyaki), Soutely, Kyzilbulag
and Vejnali. On 5 July 2022, amendments to the PSA were ratified by
the Parliament of the Republic of Azerbaijan granting the Group three new
contract areas with a combined area of 882 square kilometres and which
relinquished the Soutely contract area. The parliamentary ratification was
signed into law on 5 July 2022 by the President of the Republic of
Azerbaijan.
The PSA contains various provisions relating to the obligations of 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, 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 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 Group and the Government are still discussing the
formal approval of the development programme.
The initial period of the mining licence for Gedabek was until March 2022. The
Company has the option to extend the licence for two five-year periods (ten
years in total) conditional upon satisfaction of certain requirements in the
PSA. The first of the five year extensions was obtained by the Company in
April 2021 and accordingly the mining licence is now to March 2027 with a
further five year extension permitted.
RVIG is also required to comply with the clauses contained in the PSA relating
to environmental damage. The Directors believe RVIG is in compliance with the
environmental clauses contained in the PSA.
33 Related party transactions
Trading transactions
During the years ended 31 December 2023 and 2024, there were no trading
transactions between Group companies.
Other 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.
a) Remuneration paid to directors is disclosed above.
b) During the year ended 31 December 2024, total payments of $333,000 (2023:
$4,173,000) were made for processing equipment and supplies purchased from
Proses Muhendislik Danismanlik Inshaat ve Tasarim Anonim Shirket, an entity in
which the chief operating officer (formerly the vice president of technical
services) of Azerbaijan International Mining Company, has a direct ownership
interest.
At 31 December 2024 there is a payable in relation to the above related party
transaction of $282,000 (2023: $33,000).
c) During the year ended 31 December 2024, no payment (2023: $282,000) was
made for processing equipment and supplies purchased from F&H Group LLC
"F&H"), an entity in which the chief operating officer of Azerbaijan
International Mining Company has a direct ownership interest.
d) On 30 June 2022, a loan of $500,000 was made to the chief
operating officer of Azerbaijan International Mining Company. The loan carries
an interest rate of 4 per cent. and was repayable on 30 June 2023 with earlier
repayment permissible. The loan is secured on the Anglo Asian Mining plc
shares owned by the vice president of technical services of Azerbaijan
International Mining Company. The loan was guaranteed by the president and
chief executive officer of Anglo Asian Mining plc. In June 2023, the loan was
renewed on the same terms as previously except the term of the loan was
extended for 3 years from the date of the original advance and the interest
rate was increased to 6 per cent. On 21 May 2024, a loan repayment of $40,000
was made, which was deducted from accrued interest up to the date of
repayment.
e) During 2023, Ilham Khalilov was promoted to Vice President,
Azerbaijan International Mining Company ("AIMC") and become a member of the
key management personnel of the Group. On 1 October 2020, AIMC lent $245,000
to Ilham Khalilov for a period of 3 years. On 1 October 2023, the loan was
extended until 31 December 2026 at an interest rate of 6 per cent. No
repayment was made during the year ended 31 December 2024.
34 Subsequent events
Renewal of $5 million term loan with the International Bank of Azerbaijan
On 7 May 2025, the $5 million loan from the International Bank of Azerbaijan
to a Group subsidiary which matured on 11 May 2025, was renewed for another
year till 11 May 2026. The loan was renewed on the same terms except the
interest rate was increased to 8.5 per cent. per annum.
Receipt of waiver of loan covenant from Caterpillar Financial Services
Corporation ("Cat Financial")
On 25 April 2025, the Group received a waiver for the breach of the Net debt
to EBITDA ratio at 31 December 2024 loan covenant included in its vendor
financing facility. The Group did not require a waiver for the net worth
covenant as that covenant was not in force at 31 December 2024.
Concentrate offtake agreement
In January 2025, a concentrate purchase agreement which includes a $5.0
million to $10.0 million prepayment facility was entered into with Trafigura
Pte. Ltd.
**ENDS**
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 16,760 gold equivalent ounces for the year ended 31
December 2024. Production was severely restricted in 2024 due to a partial
environmental shutdown but was fully restarted by the end of the year.
The Company's strategic plan for growth shows a clearly defined path for the
Company to transition to a multi-asset, mid-tier, copper and gold producer by
2029, by which time copper will be the principal product of the Company, with
forecast production of around 50,000 to 55,000 copper equivalent tonnes. It
plans to achieve this growth by bringing into production four new mines during
the period 2025 to 2029 at Zafar, Gilar, Xarxar and Garadag. The first of
these new mines, Gilar started production in May 2025.
https://www.angloasianmining.com/ (https://www.angloasianmining.com/)
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