REG - Anglo Asian Mining - Q4 and FY 2021 Operations and production review

Anglo Asian MiningAnnouncement

13/01/2022 07:05

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RNS Number : 2768Y  Anglo Asian Mining PLC  13 January 2022

 

Anglo Asian Mining plc / Ticker: AAZ / Index: AIM / Sector: Mining

13 January 2022

 

Anglo Asian Mining plc

Q4 and FY 2021 Operations and production review

FY 2021 Production of 64,610 gold equivalent ounces

Strategic investment in Libero Copper & Gold Corporation - first
investment outside of Azerbaijan

Ore from Vejnaly stockpiles processed at Gedabek

 

Anglo Asian Mining plc ("Anglo Asian" or the "Company"), the AIM listed gold,
copper and silver producer primarily operating in Azerbaijan, is pleased to
provide an operations and production review for the three and twelve months to
31 December 2021 ("Q4 2021" and "FY 2021" respectively).

 

Note that all references to "US$" are to United States dollars and "CAN$"
are to Canadian dollars. An exchange rate of US$1 = CAN$1.29 has been used
throughout.

 

Overview

·    FY 2021 production within guidance of 64,610 gold equivalent ounces
("GEOs") (FY 2020: 67,249 GEOs)

·    Private placement to acquire a strategic interest of 19.9 per cent.
in Libero Copper & Gold Corporation ("Libero") completed in December 2021:

o 9.9 per cent. acquired immediately upon closing the subscription agreement
for CAN$2.8 million (US$2.2 million)

o 10.0 per cent. providing a total of 19.9 per cent. to be acquired for
CAN$3.5 million (US$2.7 million) following approval of the TSX Venture
Exchange expected in Q1 2022

·    Assessment of the Vejnaly contract area commenced in December 2021:

o A technical study is underway to determine the commercial viability of
commencing production from the existing Vejnaly underground mine in H2 2022

o 10,957 dry metric tonnes of stockpiled ore grading 3.91 grammes per tonne of
gold and 0.27 per cent. copper were transported to Gebabek, and processed by
agitation leaching, in December 2021 with gold recoveries of 95 per cent.
producing 1,308 ounces of gold

·    Cash of US$37.5 million at 31 December 2021 (30 September 2021:
US$30.9 million)

o Free cash flow for FY 2021 within the guidance of US$10 million to US$15
million given in September 2021

o Interim dividend for 2021 totalling US$5.2 million paid in November 2021

o CAN$2.8 million (US$2.2 million) paid for 9.9 per cent. of Libero in
December 2021

 

Anglo Asian CEO Reza Vaziri commented:

"I am very pleased with Anglo Asian's operating performance in 2021,
comfortably meeting our guidance for the year with total production of 64,610
gold equivalent ounces. This was achieved despite the logistical difficulties
and other disruption due to the COVID-19 pandemic in the first half of the
year.

 

"It has been an exciting year for the Company. We are developing new
opportunities to grow both in Azerbaijan and abroad, with the three additional
contract areas in Azerbaijan, and our recent strategic investment in Libero
Copper & Gold Corporation.

 

We enter 2022 in a strong financial position and will continue to execute our
planned growth strategy. I look forward to providing an update on our
technical study of the Vejnaly underground mine, with a view to commencing
production later this year."

 

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:

 Reza Vaziri       Anglo Asian Mining plc          Tel: +994 12 596 3350
 Bill Morgan       Anglo Asian Mining plc          Tel: +994 502 910 400
 Stephen Westhead  Anglo Asian Mining plc          Tel: +994 502 916 894
 Ewan Leggat       SP Angel Corporate Finance LLP  Tel: +44 (0) 20 3470 0470

 Adam Cowl         Nominated Adviser and Broker
 Charlie Jack      Hudson Sandler                  Tel: +44(0) 20 7796 4133

 Elfie Kent

 

Notes to editors

 

Anglo Asian Mining plc (AIM:AAZ) is a gold, copper and silver producer
in Central Asia with a broad portfolio of production and exploration assets
in Azerbaijan. The Company produced 64,610 gold equivalent ounces ("GEOs")
for the year ended 31 December 2021.

 

In September 2021, the Company announced a transaction with the Government of
Azerbaijan which grants it three additional concessions with a combined area
of 882 square kilometres, including the Garadagh porphyry copper deposit, with
a Soviet classified resource of over 300,000 tonnes of copper. The transaction
is subject to ratification by the parliament of Azerbaijan.

 

In December 2021, the Company completed a private placement to acquire 19.9
per cent. of Libero Copper & Gold Corporation ("Libero"). Libero is listed
on the TSX Venture Exchange in Canada and owns, or has the option to acquire,
several copper exploration properties in North and South America, including
Mocoa in Colombia, one of the world's largest undeveloped copper-molybdenum
resources.

https://www.angloasianmining.com/ (https://www.angloasianmining.com/)

 

Production overview

 

Q4 2021

·    Total production of 15,949 GEOs (Q4 2020: 16,593 GEOs)

·    Gold production of 11,589 ounces (Q4 2020: 13,534 ounces):

o 10,561 ounces contained within gold doré

o 16 ounces from sulfidisation, acidification, recycling and thickening
("SART") processing

o 1,012 ounces from flotation processing

·    Copper production totalled 743 tonnes (Q4 2020: 696 tonnes):

o 193 tonnes from SART processing

o 550 tonnes from flotation processing

·    Silver production totalled 38,673 ounces (Q4 2020: 32,979 ounces):

o 5,430 ounces contained within gold doré

o 16,414 ounces from SART processing

o 16,829 ounces from flotation processing

 

FY 2021

·    Total production of 64,610 GEOs (FY 2020: 67,249 GEOs)

·    Gold production of 48,680 ounces (FY 2020: 56,864 ounces)

·    Copper production totalled 2,649 tonnes (FY 2020: 2,591 tonnes)

·    Silver production totalled 154,564 ounces (FY 2020: 122,962 ounces)

 

Sales

·    Q4 2021 gold bullion sales of 13,153 ounces at an average of US$1,825
per ounce (Q4 2020: 18,072 ounces sold at an average of US$1,884 per ounce)

·    Q4 2021 copper concentrate shipments totalled 4,132 dry metric tonnes
("dmt") with a sales value of US$8.9 million (excluding Government of
Azerbaijan profit share) (Q4 2020: 4,211 dmt with a sales value of US$6.3
million)

 

Company financials

·    Cash of US$37.5 million at 31 December 2021 (30 September 2021:
US$30.9 million)

o Free cash flow for FY 2021 within the guidance of US$10 million to US$15
million given in September 2021

o Interim dividend for 2021 of US$5.2 million paid in November 2021

o CAN$2.8 million (US$2.2 million) paid for 9.9 per cent. of Libero in
December 2021

 

Strategic investment of 19.9 per cent. in Libero Copper & Gold Corporation

 

In December 2021, the Company completed a Private Placement to acquire 19.9
per of Libero. Libero is listed on the TSX Venture Exchange ("TSXV") in Canada
(ticker: LBC). 9.9 per cent. of Libero was acquired immediately with the
remaining 10 per cent. to be acquired following the approval of the TSXV which
is expected in Q1 2022. The total cost of the acquisition will be CAN$6.3
million (US$4.9 million).

 

Libero has an extremely attractive portfolio of exploration assets in
mining-friendly jurisdictions in North and South America including Mocoa in
Colombia, Big Bulk and Big Red in British Columbia, Canada, and Esperanza in
Argentina. Mocoa is one of the world's largest undeveloped Copper-Molybdeum
resources. Libero has a very experienced and seasoned board of directors and
management team. Its Executive Chairman is Ian Slater, who has founded
numerous companies and been involved in the Mining industry for 25 years. The
Company's management team is led by Ian Harris, Chief Executive Officer and
President, who is a mining engineer with over 20 years' experience leading
mining projects worldwide including over 10 years working and living in
South America. Further information can be found at
 https://www.liberocopper.com/ (https://www.liberocopper.com/)

 

Anglo Asian has been granted a comprehensive package of participation rights
over future share issues of Libero to avoid any dilution of its shareholding.
It has also been granted "piggyback" rights, which become effective on the
fifth anniversary of the initial subscription and will enable the Company to
sell its shares to the public as a secondary offering should Libero sell
future shares by way of a prospectus. Anglo Asian will appoint a director to
the board of Libero. A technical committee, which will include one Anglo Asian
appointee, is being formed to determine the future direction of Libero's
exploration programme.

 

Assessment of the Vejnaly contract area and processing of ore stockpiles

 

Members of the Company's senior management including Reza Vaziri, Chief
Executive Officer and President, travelled to Zangilan in early December 2021
to assess its newly-restored Vejnaly contract area, including the existing
underground mine at the site.

 

Initial investigations of the site have been carried out and surveying of ore
stockpiles has been completed. A technical study is underway to determine the
commercial viability of commencing production from the existing underground
mine in the second half of 2022. The handover of the surface properties and
infrastructure in the Vejnaly contract area and related documents etc. from
the Government of Azerbaijan is also ongoing. A contract has recently been
signed with a de-mining company and work has already started to find and
destroy any land mines, or other abandoned munitions from the recent conflict,
on the access road to the mine, in the surrounding areas and the underground
mine itself, to ensure safety of the whole area prior to the start-up of
operations.

 

10,957 dry metric tonnes of stockpiled Vejnaly ore grading 3.91 grammes per
tonne of gold and 0.27 per cent. copper were transported to Gebabek and
processed by agitation leaching in December 2021 with gold recoveries of 95
per cent. producing 1,308 ounces of gold.

 

Final Mineral Resource estimation for Zafar

 

The final Mineral Resource estimation for Zafar deposit is now scheduled to be
released in Q1 2022.

 

Gedabek - mining, detailed production and sales

 

Anglo Asian continued to mine its existing sites during the period following
the exhaustion of the Ugur open pit in late 2020, in line with the previously
announced guidance for the year. Ore stockpiled at Vejnaly was also
transported and processed at Gedabek in Q4 2021.

 

The Company mined the following amounts and grades of ore in the 12 months to
31 December 2021:

 

                9 months to              3 months to             12 months to

                30 September 2021        31 December 2021         31 December 2021
 Mine           Ore mined   Average      Ore mined  Average      Ore mined   Average

                            gold grade              gold grade               gold grade
                (tonnes)    (g/t)        (tonnes)   (g/t)        (tonnes)    (g/t)
 Open pit       1,290,670   0.78         525,187    0.64         1,815,857   0.74
 Gadir - u/g    85,333      1.96         30,610     1.76         115,943     1.91
 Gedabek - u/g  154,026     1.52         94,766     1.25         248,792     1.42
 Total          1,530,029   0.92         650,563    0.78         2,180,592   0.80

 

 

The Company processed the following amounts and grades of ore by leaching for
FY 2020 and 2021:

 

 Quarter ended      Ore processed                                                       Gold grade of ore processed
                    Heap leach pad crushed ore  Heap leach pad ROM  Agitation leaching  Heap leach pad crushed ore  Heap leach pad ROM  Agitation leaching

                    (tonnes)                    ore                 plant*              (g/t)                       ore                 plant*

                                                (tonnes)            (tonnes)                                        (g/t)               (g/t)
 31 March 2020      132,731                     258,121             163,379             0.84                        0.49                2.53
 30 June 2020       139,752                     134,675             161,079             0.79                        0.44                1.95
 30 September 2020  168,945                     149,031             181,200             0.87                        0.50                2.09
 31 December 2020   107,852                     172,206             177,487             0.89                        0.59                1.81
 FY 2020            549,280                     714,033             683,145             0.85                        0.51                2.17
 31 March 2021      110,612                     258,097             154,373             0.90                        0.61                1.92
 30 June 2021       154,619                     177,369             164,288             0.81                        0.59                1.64
 30 September 2021  154,112                     194,816             171,029             0.79                        0.51                1.65
 31 December 2021   113,623                     309,374             151,701             0.68                        0.49                1.53
 FY 2021            532,966                     939,656             641,391             0.80                        0.54                1.68

 

* includes previously heap leached ore.

 

The Company processed the following amounts of ore and contained metal by
flotation for FY 2020 and 2021:

 Quarter ended      Ore processed  Gold content  Silver content  Copper content
                    (tonnes)       (ounces)      (ounces)        (tonnes)
 31 March 2020      126,354        1,860         28,831          622
 30 June 2020       132,848        1,459         18,354          762
 30 September 2020  123,440        1,565         15,530          741
 31 December 2020   110,772        859           8,660           693
 FY 2020            493,414        5,743         71,375          2,818
 31 March 2021      111,060        920           15,782          652
 30 June 2021       116,910        1,251         23,870          596
 30 September 2021  121,283        1,231         19,939          519
 31 December 2021   129,384        1,856         28,480          762
 FY 2021            478,637        5,258         88,071          2,529

 

 

The following table summarises gold doré production and sales at Gedabek for
FY 2020 and 2021:

 

                Gold produced*       Silver          Gold sales**      Gold Sales price

                (ounces)             produced*       (ounces)          ($/ounce)

                                     (ounces)
 Quarter ended

 31 March 2020  15,034               3,852           11,236            1,577
 30 June 2020   11,455               3,562           12,743            1,713
 H1 2020        26,489               7,414           23,979            1,649
 30 Sept 2020   14,945               5,487           6,599             1,947
 31 Dec 2020    13,276               4,614           18,072            1,884
 H2 2020        28,221               10,101          24,671            1,901
 FY 2020        54,710               17,515          48,650            1,777

 31 March 2021  11,541               4,916           5,635             1,697
 30 June 2021   11,789               5,921           13,947            1,808
 H1 2021        23,330               10,837          19,582            1,776
 30 Sept 2021   12,314               5,473           6,828             1,815
 31 Dec 2021    10,561               5,430           13,153            1,825
 H2 2021        22,875               10,903          19,981            1,821
 FY 2021        46,205               21,740          39,563            1,799
 Note

* including Government of Azerbaijan's share

** excluding Government of Azerbaijan's share

 

The following table summarises copper concentrate production from both the
Company's SART and flotation plants at Gedabek for FY 2020 and 2021:

 

                            Concentrate  Copper    Gold      Silver
                            production*  content*  content*  content*
 2020                       (dmt)        (tonnes)  (ounces)  (ounces)
 Quarter ended 31 March
 SART processing            221          114       8         12,895
 Flotation                  2,773        445       825       17,895
 Total                      2,994        559       833       30,790

 Quarter ended 30 June
 SART processing            267          151       7         10,857
 Flotation                  2,904        497       573       9,542
 Total                      3,171        648       580       20,399

 Quarter ended 30 Sept
 SART processing            301          165       7         17,148
 Flotation                  2,965        523       476       8,416
 Total                      3,266        688       483       25,564

 Quarter ended 31 December
 SART processing            421          196       15        21,279
 Flotation                  2,929        500       243       7,086
 Total                      3,350        696       258       28,365

 2021
 Quarter ended 31 March
 SART processing            473          276       13        19,850
 Flotation                  2,375        362       353       10,599
 Total                      2,848        638       366       30,449

 Quarter ended 30 June
 SART processing            512          301       12        22,428
 Flotation                  2,652        394       539       15,216
 Total                      3,164        695       551       37,644

 Quarter ended 30 Sept
 SART processing            503          265       13        19,526
 Flotation                  2,600        308       517       11,913
 Total                      3,103        573       530       31,439

 Quarter ended 31 December
 SART processing            338          193       16        16,414
 Flotation                  3,584        550       1,012     16,829
 Total                      3,922        743       1,028     33,243

Note

 * including Government of Azerbaijan's share.

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

 

The following table summarises total copper concentrate production and sales
for FY 2020 and 2021. Note that sales of concentrates are initially recorded
at provisional amounts until agreement of final assay:

 

                Concentrate  Copper    Gold      Silver    Concentrate

                                                                        Concentrate
                production*  content*  content*  content*  sales**      sales**
                (dmt)        (tonnes)  (ounces)  (ounces)  (dmt)        ($000)
 Quarter ended

 31 March 2020  2,994        559       833       30,790    2,018        2,863
 30 June 2020   3,171        648       580       20,399    3,526        4,707
 H1 2020        6,165        1,207     1,413     51,189    5,544        7,570

 30 Sept 2020   3,266        688       483       25,564    2,084        3,377
 31 Dec 2020    3,350        696       258       28,365    4,211        6,763
 H2 2020        6,616        1,384     741       53,929    6,295        10,140
 FY 2020        12,781       2,591     2,154     105,118   11,839       17,710

 31 March 2021  2,848        638       366       30,499    -            -
 30 June 2021   3,164        695       551       37,644    3,467        9,066
 H1 2021        6,012        1,333     917       68,143    3,467        9,066

 30 Sept 2021   3,103        573       530       31,439    3,549        5,712
 31 Dec 2021    3,922        743       1,028     33,243    4,132        8,941
 H2 2021        7,025        1,316     1,558     64,682    7,681        14,653
 FY 2021        13,037       2,649     2,475     132,825   11,148       23,719

* including Government of Azerbaijan's share

** excludes Government of Azerbaijan's share

 

Cash

The Company had cash of US$37.5 million at 31 December 2021 (US$30.9 million
at 30 September 2021) and no debt.

 

 

 

**ENDS**

 

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