- adds broker comment
Anglo Asian Mining’s (LON:AAZ) Gedabek gold mine in Azerbaijan has the potential to produce one million ounces over the next fifteen years, its broker said today.
Shares in Anglo Asian rose today after the Azerbaijan miner reported increased gold production and a strong selling price in the last three months of 2011.
The miner produced 15,292 oz of gold from Gedabek in Azerbaijan in the quarter to December.
That was the highest quarterly output in 2011 and up from 13,166 ounces in the previous three months.
House broker Fairfax said: “The Gedabek gold mine is performing ahead of expectations and is performing well in terms of costs and cash generation.
“Mined grades are been better than forecast and we anticipate a decent upgrade in the calculated JORC gold resource for the year on the back of the recent drilling and evaluation program.”
“We expect the JORC resource to define a portion of what we see as a much larger ore body and we see this as a first step to proving that this mine could eventually produce around 1moz of gold from its inception over the next 10-15 years,” Fairfax added.
Total production for the year was 57,068 oz gold, with Anglo achieving an average sale price of US,573. In the fourth quarter the average price it received was US,688.
The cash cost of production was US5 per oz excluding the Azerbaijan government’s share and US0 per oz with it.
Chief executive Reza Vaziri said: “Solid gold production and a favourable gold price has provided for a strong performance in 2011 for Anglo Asian.”
“Our strong operational performance has enabled us to accelerate the repayment of loans, reduce debt ahead of schedule and build a strong cash position, which stood at US.8 million at 31 December 2011.”
Total net debt at the year-end was US3.2 million, down from US25.6 million at the same time in the previous year.
Vaziri added: “We are also focused on increasing the company’s total resource base, which based on data available at June 2010 stood at 791,000 oz of gold, 49,300 tonnes of copper and 7,597,000 oz of silver for all categories, by the first quarter 2012 and in turn to calculate a JORC compliant reserve estimate thereafter.”
During the final quarter, Anglo Asia transferred 190,737 tonnes of dry ore onto the leach pad with an average gold content of 3.22 g/t. Over the year, it transferred 842,751 tonnes of dry ore with an average gold content of 3.29 g/t.
Anglo Asia added that due to changes in the physical characteristics of the ore being transferred to the leach pad it had accelerated waste removal and was crushing the ore finer and stacking the ore lower to increase the leaching rate.
Fairfax added that a new agitation leach process is being considered to boost gold recovery rates. The agitation leach tanks should also shorten residence times while also enabling mining of ore from the area underneath the heap leach pads, the broker added.
Silver dore production in the fourth quarter was 6,841 oz and for 2011 totalled 39,086 oz.
Copper concentrate production from the Anglo’s Sulphidisation, Acidification, Recycling, and Thickening (‘SART’) plant was 611 tonnes, with 134,240 oz silver and 200 oz of gold.
Shares added 1p to 35.75p.
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