Anglo Asian Mining Reports Lower Gold Output Than Expected

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on Jul 17, 2012

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Anglo Asian Mining Reports Lower Gold Output Than Expected

On 13 July 2012, the mining and mining investment news website Mineweb wrote that the gold and copper mining company Anglo Asian Mining Plc (AAZ) reported that production figures for the first half of 2012 were marginally below the company management’s internal estimates. The company, which focuses within three primary areas in Azerbaijan, recorded reduced gold production in the country to 21,641 ounces in the reported period, relative to 28,610 ounces produced a year earlier.

The company attributed the lower output to an “unreasonably harsh winter” and according to the company statement, there was an improvement in gold production in the Gedabek mine during the second quarter of 2012. As noted in the Mineweb article, the production reported for the second quarter at Gedabek was 11,716 ounces of gold, up from 9,925 ounces produced during the first quarter. Silver ore production on the other hand fell to 4,504 ounces, down from 7,670 ounces produced during the first quarter of 2012.

!m[](/uploads/story/169/thumbs/pic1_inline.png)Although the gold output results were lower than the production estimates, as noted in the Anglo Asian’s statement, the company is determined to maintain its annual production targets of 54,000 ounces of gold and 26,000 ounces of silver. The company management expects that the remaining quarters of 2012 will be stronger in terms of production levels on account of revised processing targets. In addition, Anglo

Asian has ambitious long-term targets, with Mineweb reporting that the company plans to increase gold production in Azerbaijan to 300,000 ounces per year by 2015. This target will be achieved by way of exploration of seven mines in western Azerbaijan with estimated gold reserves of 430 tonnes.
Mineweb reports that Anglo Asian Mining, which started gold production at the Gedabek copper and gold mine in Azerbaijan in July 2009, is listed on the London Stock Exchange and is controlled by R.V. Investment Group Services, with the Azeri government owning 49 percent.

The company is planning to extract a total of 22 tonnes of gold from Gedabek. It, however, reduced its gold production in Azerbaijan by 15 percent year-on-year to 57,068 ounces in 2011 from 67,267 ounces in 2010.
In January 2012, Anglo Asian announced that it was planning to start producing gold from the Gosha mine. The 300 sq km Gosha contract area, which is situated 50 km north-west of Gedabek, has more than six kilometres of exploration adits from the Soviet era. According to the company website, currently, extensive exploration programmes are underway so as to confirm gold deposits with production potential, with Soviet-era studies indicating that Gosha has a resource of eight tonnes of gold. Yet, since production from the Gosha mine is scheduled to start in 2013, the company will have to rely mostly on increased gold output from the Gedabek mine to achieve its 2012 target. Anglo Asian also holds the rights to three areas located within occupied territories, however, due to the geopolitical situation, the company does not attribute any value to the projects in question.