Anglo Asian Mining shares soar as production outlook improves
03 February 2010
AIM listed emerging gold producer Anglo Asian Mining produced a record 3,483 ounces of gold in January 2010 from its Gedabek gold/copper mine in Azerbaijan. The figures represent the sixth successive monthly increase in production since gold started to flow from Gedabek back in July last year. In total, the mine has now produced 14,838 ounces.
The news was enough to send Anglo Asian’s shares 30% higher to 14p as investors felt some relief from months of concern over how quickly the Gedabek mine would reach full production.
Last November, the company was forced to take a US$3 million loan to cover interest payments on other debts totalling US$40.9 million, with repayments due to start in April 2010. That news came as Anglo Asian warned that if operating costs increased significantly or that ramp-up was delayed further or if revenues otherwise fell short of expectations, it may run out of cash without the help of further financing. It couldn’t have come at a worse time for the company, which had already seen mechanical problems cause production to dip during September and October.
Nevertheless, today there was much better news. In terms of processing, during November and December 2009, 27,000 tonnes and 62,000 tonnes of dry ore with an average gold content of 4.59 grams per ton (g/t) and 4.04 g/t were crushed and transferred to the leach pad respectively. In January 2010, a further 59,000 tonnes of dry ore was transferred onto the leach pad with an average gold content of 4.7 g/t.
Anglo Asian anticipates that it will see ongoing increases in production during 2010. As a result, it is hoping to exceed its revised production target for the first 12 months of operation to June 30, 2010 of 25,000 ounces of gold while simultaneously benefiting from the buoyant gold price.
Anglo Asian runs the mine under a production sharing agreement with the Government of Azerbaijan, which currently receives 12.75% of all gold produced. Once the miner has recovered its capital, operating and financing costs in full, the Government will take a 51% share of profits.
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