TIDMAAZ
RNS Number : 5142Z
Anglo Asian Mining PLC
15 September 2022
Anglo Asian Mining plc / Ticker: AAZ / Index: AIM / Sector:
Mining
15 September 2022
Anglo Asian Mining plc
Interim Results for the six-months to 30 June 2022
FY 2022 Production Guidance at 54,000 to 58,000 gold equivalent
ounces
Interim Dividend for 2022 of US 4 cents per ordinary share
Anglo Asian Mining plc ("Anglo Asian", the "Company" or the
"Group"), the AIM-listed copper, gold, and silver producer in
Azerbaijan, is pleased to announce its interim results for the
six-months ended 30 June 2022 ("H1 2022"). The Group has achieved
encouraging progress in a difficult external environment. Anglo
Asian is pleased to announce its full year 2022 ("FY 2022")
production guidance of 54,000 to 58,000 gold equivalent ounces
("GEOs").
The Company also announces its 2022 interim dividend of US 4
cents per ordinary share payable on 3 November 2022 to shareholders
on record on 30 September 2022.
Financial highlights
-- Total revenues of $31.5 million (H1 2021: $43.5 million)
o Lower gold doré sales of 11,273 ounces (H1 2021: 19,582
ounces) partially offset by higher average gold sales price of
$1,901 per ounce (H1 2021: $1,776 per ounce)
o Unsold gold inventory on 30 June 2022 of $13.0 million valued
at the market price on that date
-- Profit before taxation of $5.7 million (H1 2021: $5.9 million)
o Profit before taxation includes a total charge of $1.6 million
in respect of Libero Copper & Gold Corporation ("Libero") which
became an associate company of the Group in January 2022
-- All-in sustaining cost ("AISC") of gold production increased
to $983 per ounce (H1 2021: $848 per ounce)
o Total costs were broadly flat as higher electricity and
material costs were offset by lower cyanide usage but lower gold
production resulted in a higher AISC per ounce
-- Free cash flow was a net outflow of $13.2 million (H1 2021:
$0.4 million) due to an increase in working capital of $17.2
million mainly due to unsold gold inventory at 30 June 2022
-- Cash of $21.2 million as at 30 June 2022 (31 December 2021:
cash of $37.5 million) and the Company remains debt free
-- 2022 interim dividend declared of US 4 cents per ordinary share
o Dividend modestly increases the pay-out in Sterling at current
exchange rates due to the depreciation in the value of the pound
Sterling against the US dollar
Operational highlights
-- Total production of 28,772 GEOs (H1 2021: 32,171 GEOs) due to lower gold grades at Gedabek
o Gold production of 20,906 ounces (H1 2021: 24,247 ounces)
o Copper production of 1,283 tonnes (H1 2021: 1,333 tonnes)
o Silver production of 99,499 ounces (H1 2021: 78,980
ounces)
-- Gold bullion sales of 11,273 ounces (H1 2021: 19,582 ounces)
completed at an average price of $1,901 per ounce (H1 2021: $1,776
per ounce)
-- Excellent progress made at Zafar towards commencing mining next year
o Final JORC ore resource published in March 2022
o Location of portal established and acquisition of the mining
fleet underway
o First new centrifugal flotation cell for zinc production line
under test
-- Good progress at Vejnaly and Gosha
o Mine camp now established at Vejnaly and activity ramping
up
o Underground tunnelling towards new Hasan vein at Gosha nearing
completion
-- FY 2022 production guidance of between 54,000 to 58,000 gold equivalent ounces
o Production from Hasan and Vejnaly should result in production
at the upper end of the guidance range, rather than increasing the
upper end of the potential total production
Post-period highlights
-- The Company's revised production sharing agreement became law
in Azerbaijan, granting the Company three new contract areas
o The new Garadagh, Xarxar and Demirli contract areas underpin
the Company's growth strategy and ambition to become a mid-tier,
copper-focused miner
o A detailed review of the previous exploration and other data
for Garadagh and Xarxar is underway and will be published as part
of our 3 to 5 year growth strategy
o New portal constructed at Xarxar and tunnelling commenced
immediately
-- Share buyback of 100,000 shares bought at an average price of 85.625 pence per share
-- Further investment in Libero of $0.8 million during a
fundraise which maintained our shareholding at 19.9 per cent.
-- With great sadness and regret the Company announces the first
fatality in its history at the Xarxar contract area
o An external investigation has cleared the Company of any blame
for the accident and mining and exploration activities have not
been affected by this tragic incident
Anglo Asian CEO Reza Vaziri commented:
"I am pleased to report these interim results for 2022. The
Company produced 28,722 gold equivalent ounces during the period,
down slightly versus last year, although this was expected due to
lower gold grades at Gedabek. We are pleased to announce our full
year production guidance of 54,000 to 58,000 gold equivalent
ounces. We are expecting a modest amount of production from Vejnaly
and the Hasan vein at Gosha this year so anticipate an outcome at
the upper end of the guidance. I am also very pleased to announce
an interim dividend of four United States cents per share. For the
majority of our shareholders, who are based in the United Kingdom,
this will be an increase in their Sterling interim dividend at
current exchange rates.
"We made significant progress in the development of our
portfolio with excellent progress made at Zafar, Vejnaly and Hasan,
all of which will enter production in the next 3 to 12 months. This
will ease our reliance on production from Gedabek as they are set
to produce meaningful quantities of ore next year.
"This is an exciting time for Anglo Asian Mining, with the
acquisition of our three new contract areas. These will transform
our business and are substantial drivers for growth. We are in the
process of further developing our growth strategy which I look
forward to publishing later in 2022."
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:
Tel: +994 12 596
Reza Vaziri Anglo Asian Mining plc 3350
Tel: +994 502 910
Bill Morgan Anglo Asian Mining plc 400
--------------------------- ---------------------
Tel: +994 502 916
Stephen Westhead Anglo Asian Mining plc 894
--------------------------- ---------------------
Ewan Leggat SP Angel Corporate Finance Tel: +44 (0) 20 3470
Adam Cowl LLP 0470
Nominated Adviser and
Broker
--------------------------- ---------------------
Charlie Jack Hudson Sandler Tel: +44(0) 20 7796
Harry Griffiths 4133
--------------------------- ---------------------
Chairman's Statement
Dear Shareholders
I am delighted to present our Interim Results for 2022. Our
operations delivered a solid performance in the period, with total
production of 28,772 GEOs, in line with our expectations.
Production was slightly weaker than last year due to lower gold
grades at Gedabek.
Our full year production guidance is now reaffirmed at the upper
end of the range between 54,000 to 58,000 gold equivalent ounces
and the Company remains in a strong financial position.
Accordingly, the board is pleased to declare an interim dividend
for 2022 of US 4 cents per ordinary share, reflecting our
underlying confidence in the business and its growth prospects.
We have made significant progress in the year despite the
adverse environment. We were delighted that our revised production
sharing agreement was passed into law in July 2022 with the
resulting acquisition of Xarxar, Garadagh and Demirli. This is a
major milestone for the Company and now underpins our growth plans.
We subsequently acquired the historical geological and other data
for Garadagh and Xarxar, which is currently being analysed.
We also made considerable progress with our other mining
properties. We have established a mine camp at Vejnaly and mining
will commence later this year. The final JORC mineral resource for
Zafar was published, mine planning is proceeding at pace and mining
will commence next year. Our exploration programme continues to
yield results with the announcement of another new discovery in the
year, "Hasan", a narrow gold vein accessible from our existing
Gosha mine.
We increased our investment in Libero in January 2022 which
became an associate company of the Group. Libero is a mineral
exploration company that holds a portfolio of exciting porphyry
copper deposits throughout the Americas. This is the first
international investment the Group has completed and reflects our
ambition of mid-tier copper status and to operate beyond
Azerbaijan. We have so far been encouraged by the developments
across Libero's portfolio and Anglo Asian will provide invaluable
expertise in developing their projects.
The Company's Annual General Meeting ("AGM") took place on 23
June 2022, and we were delighted to hold this in-person. The
directors were pleased to have the opportunity to meet shareholders
again and we look forward to continuing to engage with all
stakeholders throughout the rest of the year and into 2023.
We executed share buybacks following approval by shareholders at
the Company's recent AGM and General Meeting. We aim to
opportunistically buy back shares when we believe they are
undervalued by the market. The shares will be held in treasury and
be available for resale. This will enable institutional investors
to acquire a meaningful investment in the Company. This is
currently very difficult in the open market due to the very low
liquidity of our shares. To date, 100,000 shares have been acquired
at an average price of 85.625 pence.
It is with great sadness and regret that I must announce that
the Company experienced its first employee fatality in early July.
An employee lost control of a loader he was driving up a hill at
Xarxar and was killed in the resulting accident. An external
investigation has cleared the Company of any blame for the
incident. Anglo Asian remains committed to the upmost standards of
health and safety for all our employees, and we continue to offer
our full support to the family of the bereaved to whom we extend
our deepest condolences.
Our strategy for the Group remains unchanged. Our near-term
focus continues to be increasing production at our currently active
contract areas of Gedabek, Gosha and Vejnaly. Longer-term Garadagh,
Demirli and Libero have significantly increased our exposure to
copper and are key growth drivers. We have made considerable
progress with this strategy during the year, and we look forward to
advancing this progress in the coming months and years.
I would like to extend my sincere gratitude to all Anglo Asian
employees, partners and the Government of Azerbaijan for their
continued support in what continue to be challenging times. I also
wish to thank our shareholders for their unwavering support of
Anglo Asian Mining.
Khosrow Zamani
Non-executive chairman
14 September 2022
Chief Executive Officer's Review
I am pleased to report the results on Anglo Asian's 2022 interim
performance. We held cash on 30 June 2022 of $21.2 million, with
revenues of $31.5 million and profit before taxation of $5.7
million. I am particularly pleased with the progress across our
portfolio of assets during the year with significant exploration
and development milestones reached.
Operational Review
Total production during the period was 28,772 gold equivalent
ounces, which was a decline compared to 2021, but this was
expected, due to lower grades at Gedabek. Our existing mines at
Gedabek are currently our main operational assets, but we look
forward shortly to bringing additional mines into production to
counteract the declining production of these older mines.
In March, we announced the discovery of Hasan at Gosha, a new
sub-vertical gold vein discovered by surface drilling towards the
south of the main mine. There are significant operational synergies
to be realised, as the vein is easily accessible from the existing
network of underground tunnels at Gosha. Activity at Vejnaly has
also ramped up, with land clearance activities now completed and
staff permanently based on site. Production at Hasan and Vejnaly is
due to commence before the end of the year and will provide
meaningful quantities of ore from 2023.
The final JORC Mineral Resource for Zafar was released during
the period, confirming 6.8 million tonnes of mineralisation. This
contains 28,000 tonnes of copper, 73,000 ounces of gold and 36,000
tonnes of zinc. Encouragingly, the upper part of the resource has
been defined as more massive and continuous, which will result in
more efficient and cost-effective operations in the early stages of
exploitation. Considerable progress has been made towards starting
production at Zafar next year. The location of the mine's portal
close to our production facilities has been established and the
mining fleet is being acquired. A new flotation line will be built
to produce zinc concentrate using centrifugal flotation cells and
the first of these new flotation cells is currently under test at
Gedabek. We anticipate total capital costs to bring Zafar into
production will be approximately $15 million.
In January 2022, Anglo Asian announced that it had completed its
investment in Libero, our first ever investment completed outside
of Azerbaijan. Libero holds significant copper deposits across
North and South America at the developmental stage. We acquired a
19.8 per cent. interest through a private placing in January and in
July, we followed up with a further investment to maintain our
holding. In January, Michael Sununu was appointed to Libero's board
of directors, and a technical committee was established. Farhang
Hedjazi was appointed to the technical committee and visited
Libero's properties in Argentina and Colombia.
In July, Anglo Asian was delighted to receive parliamentary
ratification for its three new contract areas. This ratification is
a testament to our strong, ongoing relationship with the Government
of Azerbaijan. These assets are transformational for the Company
and underpin our strategy to transition into a copper-focused miner
with mid-tier production status. Having recently acquired
geological and other data for Garadagh and Xarxar, an assessment is
now underway to determine how best to develop these assets. Once
complete, this will form a key component of our growth strategy.
Xarxar already has an existing portal and exploration tunnel
developed during the Soviet period. Part of the old tunnel has
collapsed near the portal, and so Company has opened a new portal
and is developing a parallel tunnel to access the rest of the
original tunnel to the deposit.
Financial Review
Anglo Asian performed in keeping with expectations with a
half-year revenue of $31.5 million, down from $43.5 million in
2021. This includes $21.7 million generated from sales of gold and
silver bullion versus $35.0 million in 2021. Both these decreases
were expected, given the previously indicated decreasing rate of
production at the existing mines at Gedabek and the higher
inventory at 30 June 2022.
Free cash flow from operations was an outflow of $13.2 million
compared to $0.4 million in H1 2021 due to an increase in
inventories of $12.1 million arising primarily from an increase in
unsold gold to 7,167 ounces.
The Group managed costs satisfactory during the period, amid a
challenging macro-economic backdrop. We were subject to higher
input costs such as energy, reagent and consumables due to cost
inflation and the indirect impact of the Russian invasion of
Ukraine. However, decreased use of reagents and in particular
cyanide, resulted in our costs being broadly flat. Due to the lower
gold production, our all-in sustaining cost of gold production
increased in H1 2022 to $983 per ounce compared to $848 in H1
2021.
Our balance sheet remains strong, with cash of $21.2 million at
period end. This leaves us well positioned to pursue our growth
strategy and any potential investment opportunities that we deem
attractive, as well as maintain our dividend.
The board are pleased to recommend an interim dividend of US 4
cents per ordinary share payable to shareholders on the register at
the record date of 30 September 2022. This dividend modestly
increases our dividend pay-out in Sterling at current exchange
rates for our shareholders, the majority of who are based in the
United Kingdom.
Environmental, social and governance ("ESG")
Anglo Asian is in the process of completing an ESG review,
ascertaining the priorities of our stakeholders for the Company so
we can ensure that these are fully included. This forms part of our
strong commitment to ESG and delivering these for our shareholders,
endeavoring to achieve relevant best-in-class standards and ensure
we always maintain our social license to operate.
Outlook
We will continue our strategy of focusing on organic growth
opportunities to maintain and increase our production in the near
future. Longer-term, our planning has now started to exploit our
new contract areas. We will continue to prioritise maintaining
attractive returns for shareholders and are proud of our position
as one of AIM's reliable dividend payers.
Reza Vaziri
President and chief executive
14 September 2022
Dividend
An interim dividend, in respect of the year ending 31 December
2022, of US 4 cents per ordinary share will be paid gross on 3
November 2022 to shareholders that are on the shareholders record
at the record date of 30 September 2022. The shares will go
ex-dividend on 29 September 2022. All dividends will be paid in
cash and a scrip dividend or other dividend reinvestment plan will
not be offered by the Company.
The dividend will be payable in pounds sterling. The dividend
will be converted to pounds sterling using the average of the
sterling closing mid-price using the exchange rate published by the
Bank of England at 16:00 BST each day from the 3 to 7 October
2022.
Corporate Governance
A statement of the Company's compliance with the ten principles
of corporate governance in the Quoted Companies Alliance Corporate
Governance Code ('QCA Code') can be found on the Company's website
at
http://www.angloasianmining.com/media/pdf/CORPORATE_GOVERNANCE.pdf
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 Anglo Asian Mining 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'; who is a Member or Fellow of a 'Recognised Professional
Organisation' (RPO) included in a list that is posted on the ASX
website from time to time (Chartered Geologist and Fellow of the
Geological Society and Fellow of the Institute of Material,
Minerals and Mining).
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 resources and reserves
included in this announcement and consents to the inclusion in the
announcement of the matters based on his information in the form
and context in which it appears.
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 owns multiple exploration and development
stage gold and copper deposits in Azerbaijan.
In January 2022, the Group completed its first investment
outside of Azerbaijan, acquiring 19.8 per cent. of Libero Copper
& Gold Corporation ("Libero"), which is listed on the TSX
Venture Exchange in Toronto. Libero owns several significant copper
exploration properties in North and South America, including Mocoa
in Colombia, one of the world's largest undeveloped
copper-molybdenum resources.
Mining concessions in Azerbaijan
The Group's mining concessions in Azerbaijan are held under a
Production Sharing Agreement with the Government of Azerbaijan
("PSA") dated 20 August 1997. Amendments to the PSA granting the
Group three new mining concessions became law in Azerbaijan on 5
July 2022.
The Group's mining concessions are called "Contract Areas" and
the original PSA in 1997 granted the Group six Contract Areas. The
amended PSA on 5 July 2022 granted the Group three additional
Contract Areas (Garadagh, Xarxar and Demirli). In return for the
new Contract Areas, the Group relinquished access to the Soutely
Contract Area.
The Group now has eight Contract Areas covering a total of 2,544
square kilometres in western Azerbaijan:
-- Gedabek . The location of the Group's primary gold, silver
and copper open pit mine and the Gadir and Gedabek underground
mines. The Group's processing facilities are also located at
Gedabek.
-- Gosha . Located approximately 50 kilometres from Gedabek and
hosts a narrow vein gold and silver mine.
-- Ordubad. An early-stage gold and copper exploration project located in the Nakhchivan exclave.
-- Garadagh. Located to the north of Gedabek and hosts the
Garadagh deposit which contains 168,000 and 150,700 tonnes of
copper in Soviet resource classifications C1 and C2, respectively,
totalling 318,700 tonnes of copper.
-- Xarxar. Adjacent to Garadagh and shows significant potential
as it is likely part of the same mineral system.
-- Kyzlbulag. Situated in Karabakh. Hosts the Demirli deposit, a
copper/molybdenum mine and a processing plant.
-- Demirli. Adjacent to the Kyzlbulag Contract Area and expands
this Contract Area to the north-east.
-- Vejnaly. Situated in the Zangilan district of Azerbaijan and
hosts the Vejnaly deposit.
There is currently no access to the Kyzlbulag and Demirli
contract areas in Karabakh and the PSA will only commence in
respect of these two contract areas upon notification by the
Government of Azerbaijan to the Company of the cessation of all
hostilities and that it is safe to access the district.
Overview of H1 2022
The Company's strategy is to transition into a mid-tier
copper-focused producer, which will be achieved through progressing
its significant development and exploration assets, with the aim to
create considerable shareholder value. This will favourably
position Anglo Asian for the upcoming electrification and
decarbonization era.
In January 2022, the Group announced the acquisition of the
remaining 10 per cent. of its investment in Libero, taking it to
19.8 per cent. Michael Sununu was appointed to Libero's Board of
Directors and a technical committee was established to which
Farhang Hedjazi was appointed as Anglo Asian's representative. In
July 2022, Anglo Asian announced a follow-on investment in Libero
via another private placement, to slightly increase its
shareholding to 19.9 per cent. This was part of a fundraising by
Libero to develop its Big Red porphyry copper project in British
Columbia.
In March 2022, the Group announced the discovery of a
significant new sub-vertical gold vein, "Hasan", at Gosha. Mining
is planned to commence at Hasan in Q4 2022. Also in March 2022, the
final Mineral Resource estimate for the Zafar deposit was released.
Planning for the new Zafar mine continued at pace throughout H1
2022.
Activity was steadily increased at Vejnaly throughout H1 2022
following access being obtained in late 2021. A camp has been
established and staff are now permanently located at Vejnaly, where
mining operations are planned to commence, also in Q4 2022.
Production target for FY 2022
The Group has a production target for the year to 31 December
2022 of 40,000 ounces to 43,000 ounces of gold and 2,400 tonnes to
2,500 tonnes of copper. The total production target for the year to
31 December 2022 expressed as gold equivalent ounces ("GEOs") is
between 54,000 GEOs and 58,000 GEOs, compared to total production
for the year to 31 December 2021 of 64,610 GEOs. The decrease in
production is due to declining ore grades at the Gedabek mine.
Silver and copper production were converted into GEOs using the
following budget metal prices:
Price of metal Gold equivalent
ounces of metal
Metal Unit Actual Budget Actual Budget
2022
31 December 31 December 2022
2021 2021
$ Ounces Ounces
$
----------- -------------- -------------- ---------
Gold per ounce 1,790.43 1,750.00 1.000 1.000
----------- -------------- --------- -------------- ---------
Silver per ounce 22.53 23.00 0.013 0.013
----------- -------------- --------- -------------- ---------
Copper per tonne 9,692.00 9,300.00 5.413 5.314
----------- -------------- --------- -------------- ---------
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, the Zafar deposit and the Company's
processing facilities.
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 have now been connected to form one continuous underground
system of tunnels.
Initial gold production was by heap leaching, with copper
production beginning in 2010 when the Sulphidisation,
Acidification, Recycling and Thickening ("SART") plant was
commissioned. The Group's agitation leaching plant commenced
production in 2013 and its flotation plant in 2015. From the start
of production in 2009 to 30 June 2022, approximately 765 thousand
ounces of gold and 17.6 thousand tonnes of copper have been
produced at Gedabek.
Mineral resources and ore reserves
Key to the future development of the Company is our knowledge of
the mineral resources within the Company's Contract Areas. The
Group's most recent mineral resources and ore reserves estimates
for the Gedabek open pit and Gadir underground mine were published
on 2 November 2020. A final mineral resources statement for the
Zafar deposit was published on 21 March 2022. A summary of these
estimates as of 30 June 2020 are given in Tables 1 to 4 below
(amounts are in-situ before recovery).
Table 1 shows the Gedabek open pit mineral resources estimate
and Table 2 shows the Gedabek open pit ore reserves estimate. Table
3 shows the Gadir underground mine mineral resources estimate and
Table 4 shows the Gadir underground mine ore reserves estimate.
Table 5 shows the final Zafar mineral resources estimate at 30
November 2021. Table 6 shows the Soviet Resource for the Vejnaly
deposit.
Table 1 - Gedabek open pit mineral resources estimate at 30 June
2020
MINERAL RESOURCES (cut-off grade of 0.2 g/t gold)
In-situ grades Contained metal
-------- ---------------------------------- -----------------------------------
Tonnage Gold Copper Silver Zinc Gold Copper Silver Zinc
Mineral grade grade grade grade
Resources (Mt) (g/t) (%) (g/t) (%) (koz) (kt) (koz) (kt)
-------- ------- ------- ------- ------- ------- ------- -------- -------
Measured 15.8 0.66 0.12 2.58 0.24 335 19.0 1,311 37.9
-------- ------- ------- ------- ------- ------- ------- -------- -------
Indicated 12.0 0.56 0.12 2.31 0.16 216 14.4 891 19.2
-------- ------- ------- ------- ------- ------- ------- -------- -------
Measured
and
Indicated 27.8 0.62 0.12 2.46 0.21 551 33.4 2,202 57.1
------------ -------- ------- ------- ------- ------- ------- ------- -------- -------
Inferred 13.0 0.44 0.06 0.61 0.15 184 7.8 255 19.5
-------- ------- ------- ------- ------- ------- ------- -------- -------
TOTAL 40.8 0.56 0.10 1.87 0.19 735 41.2 2,457 76.6
------------ -------- ------- ------- ------- ------- ------- ------- -------- -------
Some of the totals above may not add due to rounding
ADDITIONAL MINERAL RESOURCES (additional to gold mineral resource)
(gold cut-off < 0.2 g/t and copper > 0.3 %
Gold Copper Silver Zinc Contained metal
------------------ ----------------- ----------------- ----------------- ---------------------------------
Tonnage Gold Tonnage Copper Tonnage Silver Tonnage Zinc Gold Copper Silver Zinc
grade grade grade grade
(Mt) (g/t) (Mt) (%) (Mt) (g/t) (Mt) (%) (koz) (kt) (koz) (kt)
--------- ------- -------- ------- -------- ------- -------- ------- ------ ------- ------- -------
Measured - - 2.15 0.43 0.08 16.4 1.86 0.53 - 9.2 42 9.9
--------- ------- -------- ------- -------- ------- -------- ------- ------ ------- ------- -------
Indicated - - 2.13 0.34 0.28 13.9 2.03 0.51 - 7.2 125 10.4
--------- ------- -------- ------- -------- ------- -------- ------- ------ ------- ------- -------
Measured
and
Indicated - - 4.28 0.39 0.36 14.5 3.89 0.52 - 16.5 167 20.2
----------- --------- ------- -------- ------- -------- ------- -------- ------- ------ ------- ------- -------
Inferred - - 2.85 0.40 0.15 19.4 7.04 0.54 - 11.4 94 38.0
--------- ------- -------- ------- -------- ------- -------- ------- ------ ------- ------- -------
TOTAL - - 7.10 0.39 0.51 15.9 10.9 0.50 - 27.9 261 58.2
----------- --------- ------- -------- ------- -------- ------- -------- ------- ------ ------- ------- -------
Some of the totals above may not add due to rounding
Mineral resource classifications are based on the gold
estimation confidence. Copper, silver, and zinc are reported within
these classifications.
Stockpiles included in Measured Resources and Ore Reserves
Measured Mineral Stockpile grades Contained metal
Resources
-------- ------------------------- -------------------------
Tonnage Gold Copper Silver Gold Copper Silver
grade grade grade
(Mt) (g/t) (%) (g/t) (koz) (kt) (koz)
-------- ------- ------- ------- ------- ------- -------
Agitation leach 0.02 1.87 0.24 17.79 1 - 10
-------- ------- ------- ------- ------- ------- -------
Flotation 0.14 0.90 0.53 11.71 4 0.7 53
-------- ------- ------- ------- ------- ------- -------
Heap leach (crushed) 0.06 0.81 0.11 7.71 2 0.1 16
-------- ------- ------- ------- ------- ------- -------
Heap leach (ROM) 0.61 0.73 0.21 10.23 14 4.3 201
-------- ------- ------- ------- ------- ------- -------
Stockpile Mineral
Resources 0.83 0.79 0.26 10.44 21 2.2 279
---------------------- -------- ------- ------- ------- ------- ------- -------
Some of the totals above may not add due to rounding
Table 2 - Gedabek open pit ore reserves estimate at 30 June
2020
In-situ grades Contained metal
Tonnage Gold Copper Silver Gold Copper Silver
grade grade grade
(Mt) (g/t) (%) (g/t) (koz) (kt) (koz)
------- ------- ------- ------- ------- -------
Proven 8.07 0.72 0.19 3.48 187 15.3 902
-------- ------- ------- ------- ------- ------- -------
Probable 3.65 0.64 0.23 4.87 75 8.5 572
-------- ------- ------- ------- ------- ------- -------
In-situ ore
reserves 11.72 0.70 0.20 3.91 263 24 1,474
---------------------- -------- ------- ------- ------- ------- ------- -------
Stockpile grades
-------- ------------------------- ------- ------- -------
Agitation leach 0.02 1.87 0.24 17.79 1 - 10
-------- ------- ------- ------- ------- ------- -------
Flotation 0.14 0.90 0.53 11.71 4 0.7 53
-------- ------- ------- ------- ------- ------- -------
Heap leach (crushed) 0.06 0.81 0.11 7.71 2 0.1 16
-------- ------- ------- ------- ------- ------- -------
Heap leach (ROM) 0.61 0.73 0.21 10.23 14 4.3 201
-------- ------- ------- ------- ------- ------- -------
Stockpile ore
reserves 0.83 0.79 0.26 10.44 21 2.2 279
---------------------- -------- ------- ------- ------- ------- ------- -------
TOTAL ORE RESERVES 12.55 0.70 0.21 4.34 284 26.0 1,754
---------------------- -------- ------- ------- ------- ------- ------- -------
Some of the totals above may not add due to rounding
Proved and probable ore reserves estimate is based on that
portion of the measured and indicated mineral resources of the
deposit within the scheduled mine designs that may be economically
extracted, considering all "Modifying Factors" in accordance with
the JORC (2012) Code .
Table 3 - Gadir underground mine mineral resources estimate at
30 September 2020
MINERAL RESOURCES (cut-off grade of 0.5 g/t gold)
In-situ grades Contained Metal
-------- ---------------------------------- -------------------------------------
Tonnage Gold Copper Silver Zinc Gold Copper Silver Zinc
Mineral grade grade grade grade
Resources (kt) (g/t) (%) (g/t) (%) (koz) (t) (koz) (t)
-------- ------- ------- ------- ------- ------- -------- ------- ---------
Measured 2,035 2.47 0.09 4.69 0.61 162 1,831 307 12,407
-------- ------- ------- ------- ------- ------- -------- ------- ---------
Indicated 966 1.59 0.02 0.63 0.33 49 193 20 3,188
-------- ------- ------- ------- ------- ------- -------- ------- ---------
Measured
and
Indicated 3,001 2.19 0.07 3.40 0.52 211 2,024 326 15,595
------------ -------- ------- ------- ------- ------- ------- -------- ------- ---------
Inferred 1,594 1.10 0.01 0.03 0.10 56 159 2 1,594
-------- ------- ------- ------- ------- ------- -------- ------- ---------
TOTAL 4,595 1.81 0.05 2.22 0.37 267 2,183 328 17,189
------------ -------- ------- ------- ------- ------- ------- -------- ------- ---------
Some of the totals above may not add due to rounding
Table 4 - Gadir underground mine ore reserves estimate at 30
September 2020
In-situ grades Contained metal
Tonnage Gold Copper Silver Gold Copper Silver
grade grade grade
(Mt) (g/t) (%) (g/t) (koz) (t) (koz)
------- ------- ------- ------- ------- -------
Proven 0.47 2.32 0.04 3.38 35 173 51
-------- ------- ------- ------- ------- ------- -------
Probable 0.19 2.20 0.01 0.74 14 18 5
-------- ------- ------- ------- ------- ------- -------
TOTAL ORE RESERVE 0.66 2.28 0.03 2.60 49 191 56
------------------- -------- ------- ------- ------- ------- ------- -------
Some of the totals in the above table do not sum due to
rounding
The above proved and probable ore reserves estimate is based on
that portion of the measured and indicated mineral resource of the
deposit within the scheduled mine designs that may be economically
extracted, considering all "Modifying Factors" in accordance with
the JORC (2012) Code. Zinc was not estimated as part of this
reserve as it is under study at resource level currently.
Table 5 - Zafar mineral resources estimate at 30 November
2021
Copper > 0.3 per cent. copper equivalent
Tonnage In-situ grades Contained metal
(Mt)
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
-------- --------- -------- ------- --------- --------- -------
Note that all tonnages reported are dry metric tonnes. Totals
may not add due to rounding.
Table 6 - Soviet resource of the Vejnaly deposit
Metal content
Units Category C1 Category C2 Total C1 and
C2
---------- ----------- ----------- ------------
Ore tonnes 181,032 168,372 349,404
---------- ----------- ----------- ------------
Gold content kilograms 2,148.5 2,264.2 4,412.7
---------- ----------- ----------- ------------
Silver content kilograms 6,108.9 4,645.2 10,754.1
---------- ----------- ----------- ------------
Copper content tonnes 1,593.6 1,348.8 2,942.4
---------- ----------- ----------- ------------
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 previously heap leached ore
contains significant amounts of gold. This is now being processed
by agitation leaching. Table 7 shows the amount of previously heap
leached ore processed in H1 2022.
Table 7 - Amount of previously heap leached ore processed in H1
2022
In-situ material Average gold
(t) grade
(g/t)
Total: 1 January
2022 1,586,313 1.36
Processed in H1
2022 (132,523) 1.27
----------------- -------------
Total: 30 June
2022 1,453,790 1.37
------------------ ----------------- -------------
Mining operations
The principal mining operation at the Gedabek contract area 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.
Table 8 shows the ore mined in the year ended 31 December 2021 and
the 6 months ended 30 June 2022 from all the Company's mines. There
was no mining at Gosha during these eighteen months.
Table 8 - Ore mined at Gedabek from all mines (including Gosha)
for the year ended 31 December 2021 and the six months to 30 June
2022
12 months to 3 months to 3 months to
31 December 2021 31 March 2022 30 June 2022
Average Average Average
Mine Ore mined gold grade Ore mined gold grade Ore mined gold grade
(tonnes) (g/t) (tonnes) (g/t) (tonnes) (g/t)
--------- ----------- --------- ----------- --------- -----------
Open pit 1,815,857 0.74 469,500 0.52 441,041 0.47
Gadir - u/g 115,943 1.91 30,712 1.44 36,295 1.43
Gedabek -
u/g 248,792 1.42 77,937 1.60 111,827 1.25
--------- ----------- --------- ----------- --------- -----------
Total 2,180,592 0.80 578,149 0.71 589,163 0.68
--------- ----------- --------- ----------- --------- -----------
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
cyanide solutions. 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 by 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.
This plant selectively absorbs then de-absorbs the gold and silver.
The gold and silver dissolved in the concentrated solution, which
is produced by the RIP plant, is recovered by electrolysis and then
smelted to produce the doré metal, comprising an alloy of mostly
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. Flotation is carried out in a separate flotation
plant. Ground ore is mixed with water to produce a slurry called
"pulp" and other 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.
Table 9 summarises the ore processed by leaching at Gedabek for
the year ended 31 December 2021 and 6 months ended 30 June 2022
Table 9 - Ore and its gold grade processed by leaching at
Gedabek for the year ended 31 December 2021 and the six months
ended 30 June 2022
Quarter ended Ore processed Gold grade of ore processed
---------------------------------- ---------------------------------
Heap Heap Heap Heap
leach leach Agitation leach leach Agitation
pad crushed pad ROM leaching pad crushed pad ROM leaching
ore ore plant* ore ore plant*
(tonnes) (tonnes) (tonnes) (g/t) (g/t) (g/t)
------------ ------------ -------- ---------
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
----------------- ------------ --------- --------- ------------ -------- ---------
31 March 2022 115,173 273,577 144,275 0.75 0.48 1.63
30 June 2022 82,814 299,168 162,239 0.78 0.53 1.4
------------ --------- --------- ------------ -------- ---------
H1 2022 197,987 572,745 306,514 0.76 0.51 1.48
----------------- ------------ --------- --------- ------------ -------- ---------
* includes previously heap leached ore.
Table 10 summarises ore processed by flotation for the year
ended 31 December 2021 and 6 months ended 30 June 2022.
Table 10 - Ore and its gold, silver and copper content processed
by flotation for the year ended 31 December 2021 and the six months
ended 30 June 2022
Quarter ended Ore processed Gold content Silver content Copper content
(tonnes) (ounces) (ounces) (tonnes)
------------- ------------ -------------- --------------
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
------------------ ------------- ------------ -------------- --------------
31 March 2022 104,475 1,921 33,522 577
30 June 2022 114,099 1,293 24,209 745
------------- ------------ -------------- --------------
H1 2022 218,574 3,214 57,731 1,322
------------------ ------------- ------------ -------------- --------------
Production and sales
For the 6 months ended 30 June 2022, gold production totalled
20,906 ounces, which was a decrease of 3,331 ounces in comparison
to the production of 24,247 ounces for the 6 months ended 30 June
2021.
Table 11 summarises the gold and silver bullion produced from
doré bars and sales of gold bullion for the year ended 31 December
2021 and 6 months ended 30 June 2022.
Table 11 - Gold and silver bullion produced from doré bars and
sales of gold bullion for the year ended 31 December 2021 and 6
months ended 30 June 2022
Quarter ended Gold produced* Silver Gold sales** Gold Sales
(ounces) produced* (ounces) price
(ounces) ($/ounce)
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 September
2021 12,314 5,473 6,828 1,815
31 December
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
-------------- ------------------ ------------ ------------ ------------
31 March 2022 8,963 7,574 7,519 1,904
30 June 2022 10,137 7,620 3,754 1,895
------------------ ------------ ------------ ------------
H1 2022 19,100 15,194 11,273 1,901
-------------- ------------------ ------------ ------------ ------------
Note
* including Government of Azerbaijan's share
** excluding Government of Azerbaijan's share
Table 12 summarises the total copper, gold and silver produced
as concentrate by both SART and flotation processing for the year
ended 31 December 2021 and 6 months ended 30 June 2022.
Table 12 - Total copper, gold and silver produced as concentrate
by both SART and flotation processing for the year ended 31
December 2021 and 6 months ended 30 June 2022
Concentrate Copper Gold Silver
production* content* content* content*
(dmt) (tonnes) (ounces) (ounces)
----------- -------- -------- --------
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 September
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
----------- -------- -------- --------
2022
Quarter ended 31 March
SART processing 330 188 12 25,108
Flotation 2,586 380 1,065 18,007
----------- -------- -------- --------
Total 2,916 568 1,077 43,115
----------- -------- -------- --------
Quarter ended 30 June
SART processing 316 168 14 25,548
Flotation 3,811 547 715 15,642
----------- -------- -------- --------
Total 4,127 715 729 41,190
----------- -------- -------- --------
Note
* including Government of Azerbaijan's share.
Table 12 summarises the total copper concentrate (including gold
and silver) production and sales from both SART and flotation
processing for the year ended 31 December 2021 and 6 months ended
30 June 2022.
Table 12 - Total copper concentrate (including gold and silver)
production and sales from both SART and flotation processing for
the year ended 31 December 2021 and six months ended 30 June
2022
Concentrate Copper Gold Silver Concentrate Concentrate
production* content* content* content* sales** sales**
(dmt) (tonnes) (ounces) (ounces) (dmt) ($000)
Quarter ended
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 September
2021 3,103 573 530 31,439 3,549 5,712
31 December
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
-------------- ----------- -------- -------- -------- ----------- -------------
31 March 2022 2,916 568 1,077 43,115 1,477 3,248
30 June 2022 4,127 715 729 41,190 4,642 8,127
----------- -------- -------- -------- ----------- -------------
H2 2022 7,043 1,283 1,806 84,305 6,119 11,375
-------------- ----------- -------- -------- -------- ----------- -------------
* including Government of Azerbaijan's share
** excludes Government of Azerbaijan's share
Infrastructure
The Gedabek Contract Area benefits from excellent infrastructure
and access. The site is located at 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. Wastewater evaporation equipment is also deployed in the
tailings dam.
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.
The wall of the tailings dam was raised by seven metres in 2020
increasing the capacity of the tailings dam to 6.0 million cubic
metres. The dam has now been reconfigured and has sufficient
capacity for tailings to approximately the end of 2023. There are
two pipelines from the Company's processing facilities to the
tailings dam to increase capacity and provide redundancy.
A site has been identified for a new tailings dam in the close
vicinity of the existing dam and final permissions are being
obtained for the land use. The necessary investigations to
determine the competency of the bedrock at the proposed site have
been successfully completed. The process of designing the new dam
and planning to transition to using it are currently underway.
Gosha
The Gosha Contract Area is 300 square kilometres in size and is
situated in western Azerbaijan, 50 kilometres north-west of
Gedabek. Gosha is the location of a 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 6
months ended 30 June 2022.
Geological field work in 2021 resulted in the discovery of a new
sub-vertical high gold grade mineralised vein ("Hasan") immediately
south of the existing Gosha mine. The new gold vein can be accessed
via a short tunnel from the existing tunnelling at Gosha. During H1
2022, geological sampling was carried out in the mine and
preparations made for the tunnelling towards the Hasan vein.
Production of Hasan is expected to commence in Q4 2022.
Ordubad
The 462 square kilometre Ordubad Contract Area is located in
Nakhchivan, south-west Azerbaijan, and contains numerous targets.
The Company carried out only very limited geological exploration
work at Ordubad in H1 2022 as normal access to the site could not
be obtained due to the COVID-19 pandemic.
Garadagh and Xarxar
Garadagh and Xarxar are situated 4.0 and 1.5 kilometres
respectively from the northern boundary of the Gedabek Contract
Area. They are easily accessible, being situated alongside the main
road from Gedabek to Shamkir. These two Contract Areas infill the
territory between Gedabek and Gosha to create a contiguous
territory totalling 1,408 square kilometres. The territory includes
areas to the north, north-east and west of the current Gedabek
Contract Area.
Legal ownership of the two Contract Areas was finally granted in
July 2022. Previously, extensive geological exploration and other
investigations had been carried out at both sites by their former
owners. Subsequent to 30 June 2022, all of the geological data and
associated other documents and reports resulting from the
geological exploration were acquired by the Company. This included
extensive geochemistry and geophysical data including 3D geological
models plus assays of core drilling. The physical core samples were
also handed over to the Company. In addition, extensive further
work had been carried out, including: the preparation of
metallurgical flowsheets; environmental and social studies and
preparatory mine plans and open pit designs based on a preliminary
mineral resource estimation. All of this further work was included
in the acquired package of documentation.
Xarxar has an existing portal and exploration tunnel developed
during the Soviet era. Part of the tunnel has collapsed, and the
Company has recently opened a new portal and is developing a
parallel tunnel to access the original tunnel and the deposit.
The Avshancli and Gilar discoveries are situated close to the
northern boundary of the Gedabek Contract Area. Geological
exploration of Avshancli and Gilar indicates that these discoveries
trend to the north towards Xarxar. The extension of the Contract
Area to the north will therefore enable these discoveries to be
fully incorporated into the Company's expansion plans. The Gilar,
Xarxar and Garadagh deposits are all situated in close proximity,
within a ten square kilometre area. This will provide operational
synergies and facilitate coordinated development.
No work was carried out at Garadagh and Xarxar in H1 2022 as the
Company only acquired the Contract Areas in July 2022.
Kyzlbulag and Demirli
The Kyzlbulag Contract Area in the Karabakh economic region
contains several mines and has excellent exploration potential, as
indicated by the presence of many mineral occurrences 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 likely presence of a significant gold mineralising
system.
The new Demirli Contract Area contains the Demirli mining
property. It is 74 square kilometres and extends the Kyzlbulag
Contract Area by about 10 kilometres to the north-east.
Russian peacekeepers are currently present in the region, but
the Government of Azerbaijan will take all reasonable measures to
ensure that the Company has access to the region to undertake
mineral exploration and exploitation.
No work was carried out at Kyzlbulag or Demirli in H1 2022 as
the Company had no access to the Kyzlbulag Contract Area in the
period and the rights to the Demirli Contract Area were only
acquired in July 2022.
Vejnaly
The Vejnaly contract area is 300 square kilometres in size and
is located close to the Iranian border in the Zangilan region in
south-west Azerbaijan. The Contract Area was acquired as part of
the original PSA in 1997,+ but access was only obtained in late
2021 as the region was previously occupied by Armenia. It contains
the Vejnaly deposit which has been operated illegally during the
time the Company could not access the Contract Area. There is an
existing open pit and underground mine and processing plant.
During H1 2022, the Company ramped up its operations at Vejnaly.
A camp facility for 24 people has been established and surface
access roads have been widened and cleaned. Around 10 people are
currently living on-site. The existing laboratory at the camp has
been refurbished and equipment has been ordered. Warehouse
facilities to store explosives have been constructed and a permit
obtained for their use. A new low loader for the underground mine
has been purchased and will shortly arrive at Vejnaly. Mine
planning is underway with mining and surface drilling planned to
commence in Q4 2022.
The ownership of the physical assets at the site was transferred
to the Company at no cost.
Geological exploration
Summary
-- New mineral deposit discovery "Zafar" at Gedabek
o Final Mineral Resource published on 21 March 2022
o In-situ Mineral Resource of 28,000 tonnes of copper, 73,000
ounces of gold and 36,000 tonnes of zinc
o Further drilling carried out in H1 2022
-- New sub-vertical gold vein, "Hasan", discovered at Gosha
o Located to the immediate south of the existing Gosha mine
o Vein can be accessed from existing underground mine
workings
-- Surface core and reverse circulation drilling to define the
Gedabek open pit ore zone carried out in H1 2022
o Seven surface core drill holes completed with a total length
of 1,503 metres
o 85 reverse circulation drill holes completed with a total
length of 9,384 metres
-- Exploration tunnelling carried out beneath the Gedabek open pit
o 470 metres of tunnelling completed
o 9 core drill holes completed with a total length of 1,125
metres
o Positive assay results returned for gold, silver and
copper
-- Exploration continued in H1 2022 in the continuous Gedabek
and Gadir underground tunnel system
o Six core drill holes completed with a total length of 944
metres
o 1,141 metres completed of sidewall and roof mapping
-- New mineralisation body discovered at Gilar
o Ore body is a south-west continuation of the deposit
o Considerable exploration activity carried out in H1 2022
-- No geological field work was carried out at Ordubad during H1
2022 due to COVID-19 travel restrictions
-- Work commenced at the Vejnaly deposit
o Soviet reserve of the Vejnaly deposit shows 142,000 ounces of
gold and 2,942 tonnes of copper
o Existing galleries have been mapped and vein sampling and ore
modelling now being carried out
Gedabek
Zafar deposit
The discovery of a new mineral deposit "Zafar" was announced in
early 2021. The deposit is located 1.5 kilometres north-west of the
existing Gedabek processing plant.
The geology of the area is structurally complex, comprising
mainly of Upper Bajocian-aged volcanics. The mineralisation seems
to be associated with a main north-west to south-east trending
structure, which is interpreted as post-dating smaller north-east
to south-west structures. In the south-west area, outcrops with
tourmaline have been mapped, which can be indicative of the
potential for porphyry-style mineral formation. The exploration
area is located along the regional Gedabek-Shekarbek fault system,
with Shekarbek being another target area known to host copper
mineralisation, situated in the north-west of the zone.
Six core drill holes with a total length of 3,295 metres were
completed at Zafar in H1 2022. Four drill holes returned grades
above reportable limits. One drill hole was for the purpose of
geotechnical and metallurgical test work. Grades of up to 1.5
grammes per tonne of gold and 3.95 per cent. copper were reported.
Bench scale X-ray diffraction ("XRD") analysis of drill core
samples was routinely used during H1 2022. This uses a portable XRD
machine to undertake geochemical analyses of core samples. The
results are obtained in "real time" without the need to wait for
laboratory analysis, which enables a better focused drill
programme.
The final Mineral Resource estimate for the Zafar deposit was
published on 21 March 2022 and is contained within table 5
above.
Gedabek open pit
Seven surface core drill holes were completed in H1 2022 with a
total length of 1,503 metres and 85 reverse circulation drill holes
completed with a total length of 9,384 metres to define the ore
zone. The majority of the gold grades returned were in the range
0.01 to 0.99 grammes of gold per tonne and copper grades of 0.01 to
0.49 per cent. of copper.
Gedabek open pit - underground
The Gedabek and Gadir 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. In H1 2022, an exploration
tunnel of 470 metres was constructed from the existing Gadir
underground mine to underneath the northern end of the Gedabek main
open pit. Nine core drill holes (HQ/NQ size) totalling 1,125 metres
were completed, along the length of the tunnel, which showed
significant mineralisation. The tunnelling will provide access for
further drill chambers to assess the mineralisation between Gadir
and the main open pit. The intersections have been modelled
independently and show continuous zones that can be considered for
further mining.
Gadir underground mine
During H1 2022, six underground exploration core drill holes
(HQ/NQ size) were completed with a total length of 944 metres.
1,140 metres of underground sidewall and tunnel roof mapping were
completed. This defined zones for continuation of mining and
extended the down dip footprint of the mineralisation. As part of
the mining activity, 15 core drill holes (HQ/NQ size) with a total
length of 2,056 metres were completed for ore zone definition.
Avshancli
Avshancli is a mineral district which is 10.5 kilometres
north-east of the Gedabek open pit. In H1 2022, four core drill
holes were completed totalling 1,316 metres. The geological work to
date at Avshancli-1 shows discontinuous surface mineralisation with
gold grades dropping off from the surface as the structures narrow
with depth. Given the distribution of mineralisation, economic
volumes of ore are likely to be small.
Gilar
Gilar is a mineral occurrence located approximately two
kilometres south of Avshancli-1. The area hosts two styles of
mineralisation, gold in quartz veins and hydrothermal gold-copper.
Three mineralisation bodies have been discovered at the occurrence.
30 surface core drill holes were completed in H1 2022 for a total
length of 9,581 metres. The Company continues to assess the
economic feasibility of tunnelling for further exploration at Gilar
to allow for underground drilling and bulk sampling.
Ugur open pit and Ugur Deeps
The Ugur pit has now been fully exhausted. In H1 2022, drilling
was carried out in the vicinity of the depleted open pit (Ugur
Deeps region) to locate possible extensions to the deposit. Two
core drill holes were completed with a total length of 515 metres
targeting high-grade copper-silver mineralisation. Five trenches of
length 65 metres were sampled, and 250,000 square metres of
lithological-alteration structural mapping was completed. No
significant results were obtained.
Gosha
The Gosha contract area, which hosts the Gosha mine, is located
next to the Armenian border. Surface core drilling which commenced
in 2021, resulted in the discovery of a new sub-vertical high gold
grade mineralised vein ("Hasan"), after surface mapping suggested
the presence of gold at the location. The discovery was announced
in March 2022. The new gold vein can be accessed via a short tunnel
from the existing tunnelling at Gosha.
The Gosha mine was previously thought to consist of two narrow
gold veins, zone 13 and zone 5 to the south. Mining has previously
taken place from both veins. Hasan is located immediately south of
the zone 5 and intersects it at one point. The host rock mostly
exhibits silicification and kaolinisation alteration, which changes
to quartz-haematite alteration in andesite.
There was no drilling activity in H1 2022 but preparatory work
was carried out for underground drilling. Sampling of the Hasan
vein continued from existing galleries and preparatory work was
undertaken for the development of existing underground tunnels
towards the new Hassan vein so that mining can commence in H2
2022.
Ordubad
Due to COVID-19 restrictions, drill access was proscribed during
H1 2022 and therefore very limited geological field work was
completed.
The Company is awaiting results from the samples collected by
the geological team from the Natural History Museum London as part
of their ongoing "From Arc Magmas to Ores" ("FAMOS") international
research project. This study is being carried out to determine
whether there are any indications of a porphyry system within the
Ordubad Contract Area. The results of this investigation have
unfortunately been delayed by the COVID-19 pandemic.
Vejnaly
The Vejnaly deposit is located within the volcanic-plutonic
structure of the Kafan structure formation and incorporates
twenty-five gold-bearing vein zones. Ore veins and zones of the
deposit are mainly represented by quartz-sulphide and, rarely, by
quartz-carbonate-sulphide veins and hydrothermally altered,
disintegrated and brecciated rocks. Sulphides are dominated by
pyrite with subordinate chalcopyrite. There are prospects for
porphyry, epithermal and skarn type deposits.
A Soviet resource for the deposit (table 6 above) shows a total
C1 and C1 resource of 141,000 ounces of gold and 2,942 tonnes of
copper.
A geological team was established at Vejnaly in H1 2022 and
commenced vein sampling and ore modelling.
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 H1 2022, the Group shipped all its gold doré to Switzerland
for refining by either MKS Finance SA or Argor-Heraeus SA. The
Group continually reviews which refiner offers the best commercial
terms, and based on this, decides to which refiner to ship each
consignment. 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 2 to the
condensed Group interim financial statements below. 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 is a minerals exploration company listed on the Toronto
TSX Venture Exchange (ticker LBC). Anglo Asian made a further
investment of 10 per cent. in Libero Copper & Gold Corporation
("Libero") in January 2022 to take its interest to 19.8 per cent.
and Michael Sununu was appointed to its board. A technical
committee was established and Farhang Hedjazi was appointed as the
Company's representative. Farhang Hedjazi visited Libero's
properties in Argentina and Colombia in H1 2022.
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.
Libero released the results of its first drill campaign at Mocoa
in H1 2022 which are highly encouraging. The first drill hole was
completed to a depth of 1,236 metres and complete assay results
have been reported. 1,229 metres of 0.58 per cent. copper
equivalent (0.42 per cent. copper and 0.047 per cent. molybdenum)
from 7 metres to 1,236 metres was returned. These assay results
confirm the exceptional grade, thickness, and strength of the
mineralisation present in the area. Nine new porphyry targets
indicating significant expansion potential at Mocoa have been
identified.
Subsequent to 30 June 2022, Libero initiated a drill programme
at its Big Red property to test for hydrothermal sources
immediately south-east of the Terry porphyry copper-gold
discovery.
Further information can be found at
https://www.liberocopper.com/ .
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 Group has previously
hedged against the future movement in the price of gold. The
directors keep under review the potential benefit of hedging.
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 Australian Dollars, 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
During H1 2022, the Group had no bank debt and only occasional
minor borrowings in connection with providing letters of credit to
suppliers. The Group did therefore not have any significant
interest rate risk during the year.
The Group had significant surplus cash deposits during H1 2022.
The Group places these on deposit in United States dollars with a
range of banks to both ensure it obtains the best return on these
deposits and to minimise counterparty risk. The amount of interest
received on these deposits is not material to the financial results
of the Company and therefore any decrease in interest rates would
not have any adverse effect.
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 global the macro-economic conditions resulting from the
Russian invasion such as higher input costs.
COVID-19 pandemic
The COVID-19 pandemic continued into H1 2022, but the intensity
of the pandemic decreased throughout the period. Most of the
restrictions put in place to combat the pandemic were lifted during
H1 2022. The COVID-19 pandemic remained a priority for the Group
throughout the period and the board continues to monitor the
situation closely.
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.
4 All-in sustaining cost ("AISC") per ounce . AISC is a widely
used, standardised industry metric and is a measure of how our
operation compares to other producers in the industry. AISC is
calculated in accordance with the World Gold Council's Guidance
Note on Non-GAAP Metrics dated 27 June 2013. The AISC calculation
includes a credit for the revenue generated from the sale of copper
and silver, which are classified by the Group as by-products. There
are no royalty costs included in the Company's AISC calculation as
the Production Sharing Agreement with the Government of Azerbaijan
is structured as a physical production sharing arrangement.
Therefore, the Company's AISC is calculated using a cost of sales,
which is the cost of producing 100 per cent. of the gold and such
costs are allocated to total gold production including the
Government of Azerbaijan's share.
Reza Vaziri
President and chief executive
14 September 2022
Financial Review
Group statement of income
The Group generated revenues in the six months ended 30 June
2022 ("H1 2022") of $31.5 million ("m") (H1 2021: $43.5m) from the
sales of gold and silver bullion and copper and precious metal
concentrate.
The revenues in H1 2022 included $21.7m (H1 2021: $35.0m)
generated from the sales of gold and silver bullion from the
Group's share of the production of doré bars. Bullion sales in H1
2022 were 11,273 ounces of gold and 11,169 ounces of silver (H1
2021: 19,582 ounces of gold and 7,616 ounces of silver) at an
average price of gold of $1,901 per ounce and an average price of
silver of $24 per ounce (H1 2021: $1,776 per ounce and $27 per
ounce respectively). In addition, the Group generated revenue in H1
2022 of $9.8m (H1 2021: $8.5m) from the sale of 9,094 dry metric
tonnes (H1 2021: 8,408 dry metric tonnes) of copper and precious
metal concentrate.
The Group did not hedge any metal sales during the year ending
31 December 2021 or the 6 months ending 30 June 2022.
The Group incurred cost of sales in H1 2022 of $20.4m (H1 2021:
$34.7m) as follows:
H1 2022 H1 2021 B/(W)*
($m) ($m) ($m)
Cash cost of sales** 27.4 27.8 0.4
Depreciation and amortisation 6.4 7.7 1.3
--------- --------- --------
Cash costs, depreciation and amortisation 33.8 35.5 1.7
Capitalised costs (1.2) (1.2) -
--------- --------- --------
Cost of sales before inventory movement 32.6 34.3 1.7
Inventory movement (12.2) 0.4 12.6
--------- --------- --------
Cost of sales per the Group statement
of income 20.4 34.7 14.3
------------------------------------------- --------- --------- --------
*B/(W) - Better or Worse
**Cash costs of sales are defined as cost of sales per the Group
statement of income less depreciation and amortisation plus
capitalised costs adjusted by the movement in the period of opening
and closing inventory. A reconciliation of cash cost of sales to
cost of sales per the Group income statement is given in the table
above.
The lower cash costs of sales in H1 2022 compared to H1 2021
were largely due to lower reagent costs offset by higher consumable
costs, electricity costs and haulage costs. Reagent costs decreased
by $1.3m due to lower cyanide costs due to the changing composition
of the ore feedstock. Consumables, electricity and haulage costs
increased by a total of $1.2m due to an increase in the price of
steel grinding balls, an 11 per cent. increase in electricity costs
and more ore hauled in the period. Depreciation decreased by $1.3m
from $7.7m in H1 2021 to $6.4m in H1 2022 due to lower gold
production. 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,
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. The unit of account for run of mine ("ROM") costs and for
post-ROM costs are recoverable ounces of gold. The $12.2m inventory
movement arose due to unsold gold at 30 June 2022 increasing to
7,167 ounces from 1,776 ounces at 31 December 2021.
Administrative expenses in H1 2022 were $3.1m compared to $2.6m
in H1 2021. The Group's administrative 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. Administrative costs increased in H1 2022 compared to H1 2021
primarily due to higher administrative salaries.
Finance costs in H1 2022 were $0.4m (H1 2021: $0.2m) and
comprise interest on letters of credit, interest on lease
liabilities and accretion expenses on the rehabilitation provision.
The finance costs were higher due to higher lease liabilities in H1
2022 compared to H1 2021. The Group had no bank debt during the
period 1 January 2021 to 30 June 2022.
Other expense in H1 2022 of $710,000 (H1 2021: $75,000) included
the decrease in the value of Libero Copper & Gold Corporation
("Libero") shares between 1 January to 26 January (the date it
became an associate company) of $221,000, a loss on the revaluation
of share options in Libero of $304,000 and expensing the forward
contract of $214,000 established in respect of the January 2022
Libero share acquisition. The other expense in H1 2021 was the loss
realised on the sale of 325,000 shares in Conroy Gold and Natural
Resources PLC.
The Group had a taxation charge in H1 2022 of $2.2m (H1 2021:
$2.4m). This comprised a current income tax charge of $nil (H1
2021: $1.8m) and a deferred tax charge of $2.2m (H1 2021: $0.6m).
R.V. Investment Group Services ("RVIG") in Azerbaijan incurred a
taxable loss of $9.4m in H1 2022 and these losses will be carried
forward and offset against future taxable profits. RVIG has no
other taxable losses available for offset against future
profits.
All-in sustaining cost of production
AISC is a widely used, standardised industry metric and is a
measure of how our operation compares to other producers in the
industry. AISC is calculated in accordance with the World Gold
Council's Guidance Note on Non-GAAP Metrics dated 27 June 2013. The
AISC calculation includes a credit for the revenue generated from
the sale of copper and silver, which are classified by the Group as
by-products. There are no royalty costs included in the Company's
AISC calculation as the Production Sharing Agreement with the
Government of Azerbaijan is structured as a physical production
sharing arrangement. Therefore, the Company's AISC is calculated
using a cost of sales, which is the cost of producing 100 per cent.
of the gold and such costs are allocated to total gold production
including the Government of Azerbaijan's share.
The Group produced gold at an all-in sustaining cost ("AISC")
per ounce of $983 in H1 2022 compared to $848 in H1 2021. The Group
reports its cash cost as an AISC calculated in accordance with the
World Gold Council's guidance which is a standardised metric in the
industry and includes the credit from the sales of silver and
copper.
The Company's cost of production was broadly flat in H1 2022
compared to H1 2021. The Company experienced some cost inflation in
H1 2022 notably in the price of steel grinding balls and
electricity. There was an 11 per cent. increase in the price of
electricity during the period. However, this was offset by lower
cyanide usage due to the lower amount of ore processed and its
changing composition. However, the AISC cost per ounce increased
due to the lower gold production in the period.
Group statement of financial position
Non-current assets increased from $95.1m at 31 December 2021 to
$ 96.0m at 30 June 2022. Libero became an associate company on 26
January 2022, following our further investment, with an acquisition
cost of $4.9m (see Libero Copper & Gold Corporation below).
Intangible assets increased from $30.3m at 31 December 2021 to
$32.2m at 30 June 2022 due to expenditure on geological exploration
and evaluation of $2.4m partially offset by amortisation of $0.5m
in respect of mining rights. Property, plant and equipment
(including leased assets) were lower by $2.1m due to depreciation
in the period.
Net current assets were $67.7m at 30 June 2022 compared to
$62.8m at 31 December 2021. The reason for the increase were
increases in inventories of $12.1m and trade and other receivables
(excluding the amount owed to the Government of Azerbaijan) of
$3.6m and a decrease in tax payable of $3.0m. These increases were
partially offset by lower cash of $16.3m. The increase in inventory
arose due to an increase in unsold gold of $8.5m to $10.5m at 30
June 2022 compared to 31 December 2021. There were 7,167 ounces of
unsold gold at 30 June 2022 compared to 1,776 ounces at 31 December
2021. Trade and other receivables increased due to an increase in
gold owed to the Government of Azerbaijan of $6.4m and an increase
in trade and miscellaneous receivables of $2.9m. The Group's cash
balances at 30 June 2022 were $21.2m (31 December 2021: $37.5m).
Surplus cash is mostly maintained in US dollars which is placed on
deposit with banks at interest rates of around 1 to 2 per cent.
Shareholders' equity of the Group at 30 June 2022 was $122.1m
(31 December 2021: $118.4m). The increase was due to the profit
retained in the period of $3.4m and share based payment expense
credited to reserves of $0.2m. There were no shares issued or
bought back in H1 2022.
The Group was financed only by equity at 31 December 2021 and 30
June 2022 as there has been no bank debt outstanding since 1
January 2021.
In June 2020, the Group entered into a three-year standby credit
facility with Pasha Bank OJSC. The facility was for $15m cash
borrowings and $3m to secure letters of credit. The interest rate
for cash borrowings is 4.75 per cent. per annum. The repayment date
for any tranche of borrowing is determined at the time of draw-down
and interest is payable monthly. The facility has not been utilised
to date.
Libero Copper & Gold Corporation
On 26 January 2022, the Company acquired a further 10 per cent.
of Libero which was then reclassified as an associate company of
the Group. Its acquisition cost was $4.9m as follows:
As at 26 January 2022 $k
Market value of the Company's existing 9.8 per
cent. trade investment 2,173
------
Cost of the 10 per cent. investment (7m shares
at CAD$ 0.50 / share) 2,776
------
Total acquisition cost of Libero as an associate
Company 4,949
------
A reconciliation of the acquisition cost to the net assets of
Libero is as follow:
Company's share of the net assets of Libero 1,456
Goodwill on acquisition 3,493
------
Total acquisition cost of Libero as an associate
Company 4,949
------
The acquisition of Libero resulted in a loss of $435,000, being
a loss on the revaluation of the Company's existing investment
between 31 December 2021 and 26 January 2022 of $221,000 and the
expensing of the derivative established at 31 December 2021 of
$214,000 for the forward purchase of the 10 per cent. investment
which was subsequently exercised in January 2022.
In the six months to 30 June 2022, our share of Libero's loss
for the period it was an associate was $949,000. This loss was
offset by a profit of $83,000, on the deemed disposal of 0.25 per
cent. of Libero following the issue of 743,302 shares to third
party investors, resulting in a net loss of $866,000. A net loss of
$34,000 was also recognised in other comprehensive income for
currency translation. The Company also revalued its options in
Libero to market value at 30 June 2022, resulting in a loss of
$304,000 mainly due to the share price of Libero decreasing from
CAD$0.54 at 31 December 2021 to CAD$0.24 at 30 June 2022.
Group statement of cash flow
Operating cash inflow before movements in working capital for H1
2022 was $14.6m (H1 2021: $14.0m).
Working capital movements in H1 2022 absorbed cash of $17.2m (H1
2021: $0.8m) largely due to an increase in trade and other debtors
of $3.7m (H1 2021: $3.4m) and an increase in inventories of $12.1m
(H1 2021: decrease of $1.0m). The increase in inventories was due
to an increase of unsold gold at 30 June 2022 of 5,391 ounces.
There was a cash outflow from operating activities in H1 2022 of
$6.0m compared to a cash inflow in H1 2021 of $5.8m. The cash
outflow was caused by cash absorbed by working capital in H1 2022
of $17.3m.
The Group paid corporation tax in H1 2022 of $3.4m (H1 2021:
$7.5m) in Azerbaijan. These were payments on account of RVIG's
liability for the year ending 31 December 2022 of $0.3m and a final
settlement in respect of the year ended 31 December 2021 of
$3.1m.
Expenditure on property, plant and equipment in H1 2022 was
$4.8m (H1 2021: $3.3m). The main items of expenditure in H1 2022
were deferred stripping costs of $1.1m, construction of a new heap
leach pad of $0.9m, miscellaneous plant and equipment of $0.9m and
Gedabek mine development costs of $1.2m.
Exploration and evaluation expenditure incurred and capitalised
in H1 2022 was $2.4m (H1 2021: $2.8m). This arose on exploration at
the Gedabek, Gosha, Ordubad and Vejnaly contract areas.
COVID-19 pandemic
By 1 January 2022, the Government of Azerbaijan had lifted most
of the restrictions imposed to restrict the spread of the
coronavirus. Management evaluated that the COVID-19 pandemic had no
material effect on the financial results for the six months ended
30 June 2022 due to lost production and increased costs.
Dividends
The Group paid an interim and final dividend in respect of the
year ended 31 December 2021 totalling $0.08 per share. The Group
declares its dividends in United States dollars but pays the
dividends in United Kingdom pounds sterling. The dividends declared
are converted into United Kingdom pounds sterling using a five-day
average of the daily sterling closing mid-price exchange rate
published by the Bank of England at 16:00 each day for a week prior
to the payment of each dividend. The week used for the averaging is
announced at the same time as the dividend.
The directors have declared an interim dividend of $0.040 per
share in respect of the financial year ending 31 December 2022. The
dividend will be paid on 3 November 2022 and will cost the Group
$4.6m but has not been accrued in the H1 2022 financial
statements.
Production sharing agreement
In accordance with the terms of the Production Sharing Agreement
("PSA") with the Government of Azerbaijan ("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 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 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. Profit Production for the
Group for all contract areas has been subject to the minimum 25 per
cent. since commencement of production including both the year to
31 December 2021 and the 6 months to 30 June 2022. The Government's
share of production in the six months to 30 June 2022 (as in all
previous periods) 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 the six months to 30 June 2022 of 12.75 per cent.
(six months to 30 June 2021: 12.75 per cent.) of the value of its
production.
The Group can recover the following costs in accordance with the
PSA for its Gedabek contract area (currently its main operating
site):
-- 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 for the Gedabek, Gosha and Vejnaly
contract areas at 30 June 2022 were $32.6m, $20.3m and $0.1m
respectively (31 December 2021: $29.7m, $19.7m and $nil
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 six months ended 30 June 2022. 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.
Going concern
The directors have prepared the condensed Group interim
financial statements on a going concern basis after reviewing the
Group's forecast cash position for the period to 30 September 2023
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.
The Group had cash balances of $21.2 million and no bank debt at
30 June 2022. The directors have prepared a base case cash flow
forecast that assumes production is consistent with the business
plan and a gold price of $1,750. The gold prices are lower than
that used for the impairment testing to add further conservatism to
the forecast. The base case cash flow forecast shows the Group is
able to fund its working capital requirements from cash generated
from its operations at Gedabek provided production is maintained
and finished products sold. The Group has access to local sources
of both short and long term finance should this be required and has
an $15 million standby credit facility with Pasha Bank as a
contingency measure which is available until April 2023 with no
conditions on drawdown.
By 1 January 2022, the Government of Azerbaijan had lifted
virtually all of the restrictions imposed to restrict the spread of
the coronavirus. The very few restrictions that remained were not
having any effect on the ability of the business to operate. The
directors believe that the ability of the Company to operate
throughout the COVID-19 pandemic demonstrates the resilience of the
business should further restrictions be imposed due to any future
intensification of the COVID-19 pandemic.
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 Chief Executive
Officer's review and the strategic report above. The financial
position of the Group, its cash flow, liquidity position and
borrowing facilities are discussed within this financial
review.
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 condensed Group interim financial statements
for the 6 months to 30 June 2022.
William Morgan
Chief financial officer
14 September 2022
Anglo Asian Mining plc
Condensed group statement of income
Six months ended 30 June 2022
6 months 6 months
to to
30 June
30 June 2022 2021
(unaudited) (unaudited)
Continuing operations Notes $000 $000
----------------------------------- --------- ------------------------ -------------------
Revenue 2 31,548 43,521
Cost of sales (20,426) (34,652)
----------------------------------- --------- ------------------------ -------------------
Gross profit 11,122 8,869
Other operating income - 52
Administrative expenses (3,058) (2,550)
Other operating expenses (511) (285)
Operating profit 7,553 6,086
Finance costs (359) (181)
Finance income 39 84
Other expense (710) (75)
Share of loss of an associate 3 (866) -
----------------------------------- --------- ------------------------ -------------------
Profit before tax 5,657 5,914
Income tax expense 4 (2,182) (2,359)
----------------------------------- --------- ------------------------ -------------------
Profit attributable to the
equity holders of the parent 3,475 3,555
----------------------------------- --------- ------------------------ -------------------
Profit per share attributable
to the equity holders of the
parent 3,475 3,555
----------------------------------- --------- ------------------------ -------------------
Basic (US cents per share) 5 3.04 3.11
Diluted (US cents per share) 5 3.04 3.11
----------------------------------- --------- ------------------------ -------------------
Anglo Asian Mining plc
Condensed group statement of comprehensive income
Six months ended 30 June 2022
6 months 6 months
to to
30 June 30 June
2022 2021
(unaudited) (unaudited)
$000 $000
------------------------------------- -------------- -------------
Profit for the period 3,475 3,555
Other comprehensive income
Other comprehensive income that
may be reclassified to profit
or loss in subsequent periods
(net of tax):
Exchange differences on translation
of foreign associate company (37) -
Share of comprehensive profit -
of an associate company 3
------------------------------------- -------------- -------------
Net other comprehensive profit
/ (loss) that may be reclassified (34) -
to profit or loss in subsequent
periods
------------------------------------- -------------- -------------
Total comprehensive income for
the period, net of tax 3,441 3,555
------------------------------------- -------------- -------------
Anglo Asian Mining plc
Condensed group statement of financial position
30 June 2022
30 June 31 December
2022 30 June 2021 2021
(unaudited) (unaudited) (audited)
Notes $000 $000 $000
------------------------------ ----- -------------- ------------- ------------
Non-current assets
Intangible assets 6 32,200 26,150 30,347
Property, plant and equipment 7 56,853 62,792 58,710
Leased assets 8 2,814 1,928 3,066
Investment in an associate 3 4,049 - -
Non-current financial
assets 9 80 - 2,777
Other receivables 10 - - 185
------------------------------ ----- -------------- ------------- ------------
95,996 90,870 95,085
------------------------------ ----- -------------- ------------- ------------
Current assets
Inventory 11 49,019 40,491 36,912
Trade and other receivables 10 29,784 15,322 19,752
Other current financial
assets 9 - - 214
Current income tax asset 300 - -
Cash and cash equivalents 21,152 36,640 37,453
------------------------------ ----- -------------- ------------- ------------
100,255 92,453 94,331
------------------------------ ----- -------------- ------------- ------------
Total assets 196,251 183,323 189,416
------------------------------ ----- -------------- ------------- ------------
Current liabilities
Trade and other payables 12 (32,131) (19,535) (28,024)
Income taxes payable - (594) (3,061)
Lease liabilities 8 (429) (520) (403)
------------------------------ ----- -------------- ------------- ------------
(32,560) (20,649) (31,488)
------------------------------ ----- -------------- ------------- ------------
Net current assets 67,695 71,804 62,843
------------------------------ ----- -------------- ------------- ------------
Non-current liabilities
Provision for rehabilitation (12,026) (11,833) (11,922)
Lease liabilities 8 (2,715) (1,541) (2,890)
Deferred tax liability 4 (26,881) (25,494) (24,699)
------------------------------ ----- -------------- ------------- ------------
(41,622) (38,868) (39,511)
------------------------------ ----- -------------- ------------- ------------
Total liabilities (74,182) (59,517) (70,999)
------------------------------ ----- -------------- ------------- ------------
Net assets 122,069 123,806 118,417
------------------------------ ----- -------------- ------------- ------------
Equity
Share capital 13 2,016 2,016 2,016
Share premium 14 33 33 33
Share-based payment reserve 223 - 12
Merger reserve 46,206 46,206 46,206
Foreign currency translation
reserve (34) - -
Retained earnings 73,625 75,551 70,150
Total equity 122,069 123,806 118,417
------------------------------ ----- -------------- ------------- ------------
Anglo Asian Mining plc
Condensed group statement of cash flows
Six months ended 30 June 2022
6 months 6 months
to to
30 June 30 June 2021
2022
(unaudited) (unaudited)
$000 $000
------------------------------------------------ ------------- -------------
Cash flows from operating activities
Profit before tax 5,657 5,914
Adjustments to reconcile profit before
tax to net cash flows:
Finance costs 359 181
Finance income (39) (84)
Unrealised loss on financial instruments 743 75
Depreciation of owned assets 5,945 7,092
Depreciation of leased assets 306 245
Share based payment 211 -
Share of loss of an associated company 866 -
Amortisation of mining rights and other
intangible assets 550 625
---------------------------------------------------- ------------- -------------
Operating cash flow before movements
in working capital 14,598 14,048
Increase in trade and other receivables (3,666) (2,479)
(Increase) / decrease in inventories (12,107) 966
(Decrease) / increase in trade and other
payables (1,461) 695
---------------------------------------------------- ------------- -------------
Cash (absorbed by) / generated from operations (2,636) 13,230
Income taxes paid (3,363) (7,482)
---------------------------------------------------- ------------- -------------
Net cash (used by) / provided by operating
activities (5,999) 5,748
---------------------------------------------------- ------------- -------------
Cash flows from investing activities
Expenditure on property, plant and equipment
and mine development (4,794) (3,299)
Investment in exploration and evaluation
activities (2,403) (2,810)
Proceeds from the sale of financial instruments - 110
Acquisition of an associated company (2,776) -
Interest received 38 84
---------------------------------------------------- ------------- -------------
Net cash used in investing activities (9,935) (5,915)
---------------------------------------------------- ------------- -------------
Cash flows from financing activities
Dividends paid - (1,711)
Interest paid - lease liabilities (164) (80)
Repayment of lease liabilities (203) (250)
---------------------------------------------------- ------------- -------------
Net cash used in financing activities (367) (2,041)
---------------------------------------------------- ------------- -------------
Net decrease in cash and cash equivalents (16,301) (2,208)
Cash and cash equivalents at beginning
of period 37,453 38,848
---------------------------------------------------- ------------- -------------
Cash and cash equivalents at end of the
period 21,152 36,640
---------------------------------------------------- ------------- -------------
Anglo Asian Mining plc
Condensed group statement of changes in equity
Six months ended 30 June 2022
(unaudited)
Foreign
Share-based currency
Share Share payment Merger translation Retained Total
capital premium reserve reserve reserve earnings equity
Notes $000 $000 $000 $000 $000 $000 $000
------------------------ ----------- ----------- --------------- ----------- ----------- --------- --------
1 January 2022 2,016 33 12 46,206 - 70,150 118,417
Profit for the
period - - - - - 3,475 3,475
Other comprehensive
loss for the period - - - - (34) - (34)
------------------------ ----------- ----------- --------------- ----------- ----------- --------- --------
Total comprehensive
income for the
period - - - - (34) 3,475 3,441
Share based payment - - 211 - - - 211
------------------------ ----------- ----------- --------------- ----------- ----------- --------- --------
30 June 2022 2,016 33 223 46,206 (34) 73,625 122,069
------------------------ ----------- ----------- --------------- ----------- ----------- --------- --------
Six months ended 30 June 2021
(unaudited)
Share-based
Share Share payment Merger Retained Total
capital premium reserve reserve earnings equity
Notes $000 $000 $000 $000 $000 $000
---------------------- --------- -------- ----------- -------- ---------- -------
-
-
1 January 2021 2,016 33 - 46,206 73,707 121,962
Profit for the period - - - - 3,555 3,555
Cash dividends paid
15 - - - - (1,711) (1,711)
30 June 2021 2,016 33 - 46,206 75,551 123,806
---------------------- --------- -------- ----------- -------- ---------- -------
Year ended 31 December 2021
(audited)
Share-based
Share Share payment Merger Retained Total
capital premium reserve reserve earnings equity
Notes $000 $000 $000 $000 $000 $000
-------------------- ---------- -------- ----------- -------- ---------- --------
1 January 2021 2,016 33 - 46,206 73,707 121,962
Profit for the year - - - - 7,361 7,361
Cash dividends paid
15 - - - - (10,918) (10,918)
Share-based payment - - 12 - - 12
-------------------- ---------- -------- ----------- -------- ---------- --------
31 December 2021 2,016 33 12 46,206 70,150 118,417
-------------------- ---------- -------- ----------- -------- ---------- --------
Anglo Asian Mining plc
Notes to the condensed Group interim financial statements
Six months ended 30 June 2022
1 General information
Anglo Asian Mining plc (the "Company") is a company incorporated
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 plc. The Company is a holding company. The principal
activity of the Company and its subsidiaries (the "Group") is
operating a portfolio of mining operations and metal production
facilities within Azerbaijan. The Group also invests in mining
businesses outside of Azerbaijan.
Basis of preparation
The condensed Group interim financial statements for the
six-month period ending 30 June 2022 have been prepared in
accordance with IAS 34 'Interim Financial Reporting' as issued by
the International Accounting Standards Board and IAS 34 as adopted
for use in the United Kingdom. The information for the half year
ended 30 June 2022 does not constitute statutory accounts as
defined in section 435 of the Companies Act 2006. A copy of the
statutory accounts for the year ended 31 December 2021 has been
delivered to the Registrar of Companies. The auditor's report on
those accounts was not qualified, did not include a reference to
any matters to which the auditor drew attention by way of an
emphasis of matter and did not contain a statement under sections
498(2) or 498(3) of the Companies Act 2006. The condensed Group
interim financial statements have not been audited.
The condensed Group interim financial statements have been
prepared under the historical cost convention except for the
treatment of share-based payments, certain trade receivables at
fair value, derivatives not designated as hedging instruments and
financial assets at fair value through profit and loss. The
condensed Group interim financial statements are presented in
United States dollars ("$") and all values are rounded to the
nearest thousand except where otherwise stated. In the condensed
Group interim financial statements "GBP" and "pence" are references
to the United Kingdom pound sterling, "CAN$" and "CAN cents" are
references to Canadian dollars and cents and "AZN" is a reference
to the Azerbaijan New Manat.
Accounting policies and new standards, interpretations and
amendments
The annual financial statements of Anglo Asian Mining plc are
prepared in accordance with IFRSs as issued by the International
Accounting Standards Board and in conformity with the requirements
of the Companies Act 2006. The condensed Group interim financial
statements included in this half-yearly financial report have been
prepared in accordance with IAS 34 'Interim Financial Reporting' as
issued by the International Accounting Standards Board and in
conformity with the requirements of the Companies Act 2006.
The accounting policies adopted in the preparation of the
half-yearly condensed Group interim financial statements for 2022
are consistent with those followed in the preparation of the
Group's annual report and accounts for 2021, except for the
adoption of new standards that became effective from 1 January
2022. The Group has not adopted any other standard, interpretation
or amendment that has been issued but is not yet effective.
Several amendments and interpretations apply for the first time
in 2022, but do not have an impact on the condensed Group interim
financial statements.
Investment in associate companies and joint ventures
The Group acquired an interest in an associate company in the 6
months ended 30 June 2022. Accordingly, the Group has adopted the
following accounting policy for associate companies and joint
ventures from 1 January 2022:
An a s s oci a te is an e n t i ty over w h i ch t he G r o up
has s i g n i f i c a nt i n f l ue n c e. S i g n i f i c a nt i n
f l u e nce is t he p o w er to p a r t i ci p a te in t he f i na
n c i al a nd o p e r a t i ng p o l icy d e c i s i ons of t he i
n ve s t e e b ut is n ot co n t r ol or j o i nt co n t r ol o ve
r t h o se p o l i c i e s.
A j o i nt ve n t u re is a ty pe of j o i nt a r r a n g e m e
nt w he r e by t he p a r t i es t h at have j o i nt c o n t r ol
of t he a r r a n g e m e nt h a v e ri g h ts to t he n et a s s e
ts of t he j o i nt ve n t u r e. J o int c o n t r ol is t he c o
n t r act ua lly a g r e ed s ha r i ng of c o n t r ol o f an a r
r a n g e m e n t, w h ich e x i s ts o n ly w hen d e c i s i o ns
a b out t he r e l e v a nt act i v i t i es r e q u i re t he u n
an i m o us co n s e nt of t he p a r t i es s h a r ing c o n t r
o l.
T h e c o n s i d e r a t i ons m a de in d e t e r m i n ing s
i g n i f i c a nt i n f l u e n ce or j o int c o n t r ol a re s
i mil ar to t h o se n e c e s s a ry t o d e t e r mi ne c o n t r
ol o ver s u b s i di a r i e s. T he G r ou p's i n ve s t m e nt
in i ts a s s oci a te a nd j o i nt ve n t u re a re a c cou n t
ed f or u s i ng t he e q u i ty m e t h o d.
Un d er t he e q u i ty m e t h o d, t he i n v e s t m e nt in
an a s s oci a te or a j o i nt ve n t u re is i n i t i a lly r e
c o g n i s ed at co s t. T h e c a r r y i ng a m o u nt of t he i
nve s t m e nt is a d j u s t ed to r e c o g n i se c h a n g es
in t he Gro u p's s ha re of n et a s s e ts
o f t he a s s oci a te or j o int ve n t u re s i n ce t he acq
u i s i t i on d a t e. Go o d w i ll r e l a t i ng to t he a s s
o c i a te or j o i nt ve n t u re i s i n c l u d ed in t he c a r
r y i ng a m o u nt of t he i nv e s t m e nt a nd is n ot t e s t
ed f or i m p a i r m e nt s e p a r a t e ly.
T h e s t a t e m e nt of pr o fit or l o ss r e f l ects t he G
r o u p's s h a re of t he r e s u l ts of o p e r a t i o ns of t
he a ss o c i a te or j o i n t ve n t u r e. A ny cha n ge in
other comprehensive income of t h o se i n v e s t e es is p r e s
e n t ed as p a rt of t he G r o u p's comprehensive income. In a
dd i t i o n, w he n t h e re h as b een a cha n ge r e c o g n i s
ed d ir ect ly in t he e q u i ty of t he a s s o c i a te or j o i
nt v e n t u r e, t he G r o up r e c o g n i s e s i ts s h a re
of a ny c h a n g e s, w h en a p p l i c a bl e, in t he s t a t e
m e nt of c h a n g es in e q u i ty. U n r e a li s ed g a i n s a
nd l o ss es r e s u l t i ng fr om t r a n s act i ons b e t w e
en t he G r o up a nd t he a s s o c i a te or j o int v e n t u re
a re e l i m i n a t e d to t he e x t e nt of t he i n t e r e st
in t he a ss o c i a te or j o int v e n t u r e.
T h e a ggr e g a te of the Gro u p's s h a re of p r o f it or
l o ss of an a s s oci a te a nd a j o i nt ve n t u re is s h o wn
on t he f ace o f t he s t a t e m e nt of p r o f it or l o ss ou
t si de o p e r a t i ng p r o f it and r e p r e s e n ts p r o f
it or l o ss a f t er t ax a nd no n- co n t r o l l i ng i n t e r
e s ts in t he s u b s id i a r i es of t he a s s o c i a te or j
o int v e n t u r e.
T h e fi n anci al s t a t e m e n ts of t he a s s oci a te or
j o i nt ve n t u re a re p r e p a r ed f or t he s a me r e p o r
t ing p e r i od as t h e G r ou p. W h en n e c e ss a r y, a d j
u s t m e n ts a re m a de to b r i ng t he acc ou n t i ng p o l
ici es in l i ne wi th t ho se 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 or joint venture. At each reporting
date, the Group determines whether there is objective evidence that
the investment in the associate or joint venture is impaired. If
there is such evidence, the Group calculates the amount of
impairment as the difference between the recoverable amount of the
associate or joint venture and its carrying value, and then
recognises the loss within 'Share of profit of an associate and a
joint venture' in the statement of profit or loss.
Up on l o ss of s i g n i f ica nt i n fl u ence ov er t he a s
s o c i a te or j o int co n t r ol over t he j o i nt ve n t u r
e, t he G r o up m e a s u r e s a nd r e c o g n i s es a ny r e t
a i n ed i n v e s t m e nt at i ts f a ir va l u e. Any di f f e r
e n ce b e t w e en t he c a r r y i ng a m o u n t of t he a ss o
c i a te or j o i nt ve n t u re u p on l o ss of si g n i fica nt
i n f l ue n ce or j o i nt c o n t r ol a nd t he f a ir va l ue
of t he r e t a i n ed i n ve s t m e nt a nd p r o c e e ds fr om
d is p o s al is r e c o g n i s ed in p r o f it or l o s s.
Going concern
The directors have prepared the condensed Group interim
financial statements on a going concern basis after reviewing the
Group's forecast cash position for the period to 30 September 2023
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.
The Group had cash balances of $21.2 million and no bank debt at
30 June 2022. The directors have prepared a base case cash flow
forecast that assumes production is consistent with the business
plan and a gold price of $1,750. The gold prices are lower than
that used for the impairment testing to add further conservatism to
the forecast. The base case cash flow forecast shows the Group is
able to fund its working capital requirements from cash generated
from its operations at Gedabek provided production is maintained
and finished products sold. The Group has access to local sources
of both short and long term finance should this be required and has
an $15 million standby credit facility with Pasha Bank as a
contingency measure which is available until April 2023 with no
conditions on drawdown.
By 1 January 2022, the Government of Azerbaijan had lifted
virtually all of the restrictions imposed to restrict the spread of
the coronavirus. The very few restrictions that remained were not
having any effect on the ability of the business to operate. The
directors believe that the ability of the Company to operate
throughout the COVID-19 pandemic demonstrates the resilience of the
business should further restrictions be imposed due to any future
intensification of the COVID-19 pandemic.
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 chief executive
officer'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.
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 condensed Group interim financial statements
for the 6 months to 30 June 2022.
2 Operating segments
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 income statement and Group
statement of financial position in their entireties. Accordingly,
the Group has only one operating segment, mining operations. The
mining operations comprise the Group's major producing asset, the
open cast and underground mines located at the Gedabek and Gosha
licence areas, which account for all the Group's revenues and the
majority of its cost of sales, depreciation and amortisation. The
Group's mining operations are all located within Azerbaijan and
therefore all within one geographic segment.
Sales of gold within doré and gold and silver bullion were made
to two customers, the Group's gold refiners, MKS Finance SA and
Argor-Heraeus SA, both based in Switzerland.
The gold and copper concentrate was sold in 2021 and 2022 to
Industrial Minerals SA, Trafigura PTE Ltd and Metal-Kim Metalurji
Ve Kimya Tarim Sanayi Tic Ltd Sti.
3 Investment in an associate
Libero Copper & Gold Corporation ("Libero") is minerals
exploration company listed on the TSX Venture Exchange (ticker:
LBC) in Canada and owns, or has the right to acquire, several
copper exploration properties in North and South America.
On 26 January 2022, the Group acquired a further 10 per cent.
interest in Libero taking its total interest to 19.8 per cent. From
this date, Libero is accounted for using the equity method of
accounting in the Group's consolidated financial statements. Prior
to 26 January 2022, the Group had a 9.8 per cent. interest in
Libero and accounted for the investment as a financial asset. The
Group's interest was subsequently reduced in the period to 19.6 per
cent. following an issue of shares by Libero in which the Group did
not participate. The reduction in shareholding has been treated as
a deemed disposal of an interest of 0.2 per cent. of Libero.
The Group's interest in Libero at 30 June 2022 was 19.6 per
cent. The following tables illustrates the summarised financial
information of the Group's investment in Libero:
Balance sheet of Libero at 30 June 2022
30 June
2022
(Unaudited)
$000
----------------------------------- --------------
Current assets 1,684
Non-current assets 2,908
Current liabilities (961)
Non-current liabilities (209)
----------------------------------- --------------
Equity 3,422
----------------------------------- --------------
Reconciliation to carrying value in
Group balance sheet
Equity of Libero 3,422
Share based payment expense (582)
----------------------------------- --------------
Equity recognised by Group 2,840
----------------------------------- --------------
Group's share in equity - 19.6%
(2021: nil) 556
Goodwill 3,493
----------------------------------- --------------
Group carrying value of associate 4,049
----------------------------------- --------------
Profit and loss account of Libero for
the 6 months to 30 June 2022
6 months
to
30 June
2022
(Unaudited)
$000
---------------------- --------------
Expenses 5,169
Other expenses 314
---------------------- --------------
Loss before taxation 5,483
Taxation -
---------------------- --------------
Loss for the period 5,483
---------------------- --------------
Reconciliation to loss of associate in Group P&L account
Loss for the period 5,483
Pre-acquisition loss to 25
January 2022 (659)
--------------------------------- ------
Post acquisition loss 4,824
--------------------------------- ------
Group's share of the loss at
19.8 and 19.6 per cent. 949
Profit on deemed disposal of
0.2 per cent. of Libero (83)
--------------------------------- ------
Loss recognised as an associate 866
--------------------------------- ------
Reconciliation of the movement in associate company in the 6
months
to 30 June 2022
6 months
to
30 June
2022
(Unaudited)
$000
-------------------------------- --------------
1 January 2022 -
Transfer from other financial
assets 2,173
Additions 2,776
Share of loss of the associate (866)
Foreign exchange loss (34)
-------------------------------- --------------
30 June 2022 4,049
-------------------------------- --------------
Libero had no contingent liabilities or capital commitments on
30 June 2022 and 2021.
4 Income tax
The income taxation charge for the 6 months ended 30 June 2022
represents a current income tax charge of $nil (2021: $1.8m) and a
deferred taxation charge of $2.2m (2021: $0.6m). These current and
deferred taxation charges are in respect of the representative
office registered in Azerbaijan of RV Investment Group Services LLC
("RVIG") (a wholly owned subsidiary of the Company).
Deferred taxation assets or liabilities are calculated at the
taxation rates that are expected to apply in the period when the
liability is settled or the asset is realised. Deferred taxation is
charged or credited in the income statement, except when it relates
to items charged or credited directly to equity, in which case the
deferred taxation is also dealt with in equity.
Deferred taxation assets and liabilities are offset when there
is a legally enforceable right to offset current taxation assets
against current taxation liabilities and when they relate to income
taxes levied by the same taxation authority and the Group intends
to settle its current taxation assets and liabilities on a net
basis.
At 30 June 2022, RVIG had unused taxation losses available for
offset against future profits of $9.4m and a deferred taxation
asset has been established of $3.0m. This has been offset against
deferred taxation liabilities in the Group balance sheet. The Group
also has unused taxation losses within the Company and a subsidiary
(Anglo Asian Operations Limited) available for offset against
future profits. No deferred taxation asset has been recognised in
respect of such losses due to the unpredictability of future profit
streams. Unused taxation losses may be carried forward
indefinitely.
5 Profit per ordinary share
6 months 6 months
to to
30 June 30 June
2022 2021
(unaudited) (unaudited)
Profit per ordinary share $000 $000
----------------------------- ------------- ------------
Profit after tax for the
period 3,475 3,555
Basic profit per share (US
cents) 3.04 3.11
Diluted profit per share
(US cents) 3.04 3.11
------------- ------------
Weighted average number Number Number
of shares
----------------------------- ------------- ------------
For basic earnings per share 114,392,024 114,392,024
For diluted earnings per
share 114,392,024 114,392,024
------------- ------------
6 Intangible assets
Exploration Exploration Exploration
Exploration & & & Other
& evaluation evaluation evaluation evaluation Mining intangible
Gedabek Gosha Ordubad Vejnaly rights assets Total
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
$000 $000 $000 $000 $000 $000 $000
---------------- ------------ ----------- ----------- ----------- ------------- ------------ -------------
Cost
1 January 2021 10,514 1,642 5,751 - 41,925 562 60,394
Additions 6,842 556 190 - - - 7,588
---------------- ------------ ----------- ----------- ----------- ------------- ------------ -------------
31 December 2021 17,356 2,198 5,941 - 41,925 562 67,982
Additions 2,011 34 81 150 - 127 2,403
---------------- ------------ ----------- ----------- ----------- ------------- ------------ -------------
30 June 2022 19,367 2,232 6,022 150 41,925 689 70,385
---------------- ------------ ----------- ----------- ----------- ------------- ------------ -------------
Amortisation and impairment
1 January 2021 - - - - 35,966 463 36,429
Charge for year - - - - 1,176 30 1,206
------------- ------------ -------------
31 December 2021 - - - - 37,142 493 37,635
Charge for
period - - - - 537 13 550
---------------- ------------ ----------- ----------- ----------- ------------- ------------ -------------
30 June 2022 - - - - 37,679 506 38,185
---------------- ------------ ----------- ----------- ----------- ------------- ------------ -------------
Net book value
31 December 2021 17,356 2,198 5,941 - 4,783 69 30,347
---------------- ------------ ----------- ----------- ----------- ------------- ------------ -------------
30 June 2022 19,367 2,232 6,022 150 4,246 183 32,200
---------------- ------------ ----------- ----------- ----------- ------------- ------------ -------------
7 Property, plant and equipment
Plant
and
equipment
and motor Producing Assets
vehicles mines under construction Total
(unaudited) (unaudited) (unaudited) (unaudited)
$000 $000 $000 $000
------------------------- ------------ ------------ ------------------- ---------------
Cost
1 January 2021 25,207 220,421 1,590 247,218
Additions 1,974 4,782 637 7,393
Decrease in provision
for
rehabilitation - (288) - (288)
------------ ------------ ------------------- ---------------
31 December 2021 27,181 224,915 2,227 254,323
Additions 482 2,801 889 4,172
Decrease in provision
for rehabilitation - (84) - (84)
------------------------- ------------ ------------ ------------------- ---------------
30 June 2022 27,663 227,632 3,116 258,411
------------------------- ------------ ------------ ------------------- ---------------
Depreciation and impairment
1 January 2021 21,766 158,772 - 180,538
Charge for year 1,427 13,648 - 15,075
31 December 2021 23,193 172,420 - 195,613
Charge for period 420 5,525 - 5,945
------------------------- ------------ ------------ ------------------- ---------------
30 June 2022 23,613 177,945 - 201,558
------------------------- ------------ ------------ ------------------- ---------------
Net book value
31 December 2021 3,988 52,495 2,227 58,710
------------------------- ------------ ------------ ------------------- ---------------
30 June 2022 4,050 49,687 3,116 56,853
------------------------- ------------ ------------ ------------------- ---------------
8 Leases
Right of use assets
Plant and
equipment
and motor Producing
vehicles mines Total
(unaudited) (unaudited) (unaudited)
$000 $000 $000
------------------------ ------------ -------------- --------------
Cost
1 January 2021 2,357 553 2,910
Additions 166 541 707
Lease modifications 957 116 1,073
------------------------ ------------ -------------- --------------
31 December 2021 3,480 1,210 4,690
Additions 54 - 54
------------------------ ------------ -------------- --------------
30 June 2022 3,534 1,210 4,744
------------------------ ------------ -------------- --------------
Depreciation and impairment
1 January 2021 813 288 1,101
Charge for year 410 113 523
31 December 2021 1,223 401 1,624
Charge for period 220 86 306
------------------------ ------------ -------------- --------------
30 June 2022 1,443 487 1,930
------------------------ ------------ -------------- --------------
Net book value
31 December 2021 2,257 809 3,066
------------------------ ------------ -------------- --------------
30 June 2022 2,091 723 2,814
------------------------ ------------ -------------- --------------
Lease liabilities
Total
$000
--------------------- ------
1 January 2021 1,947
Additions 707
Lease modifications 1,073
Interest expense 266
Repayment (700)
--------------------- ------
31 December 2021 3,293
Addition 54
Interest expense 165
Repayment (368)
--------------------- ------
30 June 2022 3,144
--------------------- ------
30 June 31 December
2022 2021
(unaudited) 30 June 2021
(unaudited) (audited)
$000 $000 $000
------------------------ ------------- ------------ -----------
Current liabilities 429 520 403
Non-current liabilities 2,715 1,541 2,890
Total lease liabilities 3,144 2,061 3,293
------------------------ ------------- ------------ -----------
Amount recognised in the profit and loss account
6 months 6 months
to to
30 June 30 June
2022 2021
(unaudited) (unaudited)
$000 $000
------------------------------- -------------- -------------
Depreciation expense of right
to use assets 306 245
Interest expense 165 80
Expense relating to short
leases 131 98
------------------------------- -------------- -------------
602 423
------------------------------- -------------- -------------
9 Other financial assets
30 June 30 June 2021 31 December
2022 (unaudited) 2021
Non - current $000 (unaudited) (audited)
$000 $000
------------------------------- ------------------ ------------- ------------
Derivatives not designated as
hedging instruments
Share warrants 80 - 384
Financial assets at fair value
through profit and loss
Listed equity investments - - 2,393
80 - 2,777
------------------------------- ------------------ ------------- ------------
30 June 30 June 2021 31 December
2022 (unaudited) 2021
Current $000 (unaudited) (audited)
$000 $000
---------------------------------- ------------------- ------------- ------------
Derivatives not designated as
hedging instruments
Forward contract for the purchase
of shares - - 214
---------------------------------- ------------------- ------------- ------------
Forward contract for the purchase of shares
In December 2021, the Group subscribed for 12,600,000 shares in
Libero Copper & Gold Corporation ("Libero"). 5,600,000 shares
were purchased in December 2021, with the remaining 7,000,000
shares purchased in January 2022. Accordingly, the 7,000,000 shares
purchased in January 2022 is a forward contract for the purchase of
shares. The forward contract is measured at fair value. The
carrying value of the forward contract of $214,000 was expensed to
other expense in the 6 months ended 30 June 2022.
Share warrants
Each of the 12,600,000 shares purchased in Libero has half a
warrant attached totalling 6,300,000 warrants. The carrying value
is the value of the 6,300,000 warrants valued using a risk-neutral
binomial tree. Quantitative information about the fair value
measurement of the warrants using significant directly or
indirectly observable inputs together with the major assumptions
used to value the share warrants in Libero is as follows:
Assumption 30 June 2022 31 December
2021
-------------------------- ------------------ ------------------
Share price of Libero CAD$0.24 CAD$0.54
Option exercise price CAD$0.75 CAD$0.75
Acceleration condition CAD$1.00 CAD$1.00
Lapse date 22 December 2023 22 December 2023
Risk free rate 3.09 per cent. 0.51 per cent.
Expected volatility 5.64 per cent. 7.64 per cent.
- daily
Expected volatility 89.58 per cent. 121.25 per cent.
- annualised
Probability of regulatory Not applicable 95 per cent.
approval
Discount for lack 11.61 per cent. 15.36 per cent.
of marketability
Exchange rate US$1 = CAD$1.2872 US$1 = CAD$1.2634
------------------ ------------------
10 Trade and other receivables
30 June 30 June 2021 31 December
2022 (unaudited) 2021
Non- current $000 (unaudited) (audited)
$000 $000
----------------------- ------------------- ------------- --------------
Advances for purchases - - 185
----------------------- ------------------- ------------- ------------
30 June 30 June 2021 31 December
2022 (unaudited) 2021
Current $000 (unaudited) (audited)
$000 $000
-------------------------- ------------------ ------------- --------------
Gold held due to the
Government of Azerbaijan 22,488 9,683 16,094
VAT refund due 25 1,086 390
Loan to employee 500 - -
Other tax receivable 1,432 238 182
Trade receivables
- fair value* 1,441 1,866 718
Prepayments and advances 3,898 2,449 2,368
-------------------------- ------------------ ------------- ------------
29,784 15,322 19,752
-------------------------- ------------------ ------------- ------------
*Trade receivables subject to provisional pricing.
Trade receivables (subject to provisional pricing) are for sales
of gold and copper concentrate and are non interest-bearing, but
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.
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 at 30 June 2021 and 2022 and 31 December 2021.
The VAT refund due at 30 June 2021 and 2022 and 31 December 2021
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 shown in note 12.
11 Inventory
30 June 30 June 2021 31 December
2022 (unaudited) 2021
Current assets $000 (unaudited) (audited)
$000 $000
-------------------------------------- ------------------ ------------- ------------
Cost
Finished goods - bullion 10,500 2,686 2,001
Finished goods - metal in concentrate 3,843 2,984 1,079
Metal in circuit 12,391 13,278 12,026
Ore stockpiles 7,138 9,127 7,107
Spare parts and consumables 15,147 12,416 14,699
-------------------------------------- ------------------ ------------- ------------
Total current inventories 49,019 40,491 36,912
-------------------------------------- ------------------ ------------- ------------
Total inventories at the lower
of cost and net realisable value 49,019 40,491 36,912
-------------------------------------- ------------------ ------------- ------------
Current ore stockpiles consist of high-grade and low-grade oxide
ores that are expected to be processed during the 12 months
subsequent to the balance sheet date.
Inventory is recognised at lower of cost or net realisable
value.
12 Trade and other payables
30 June 2022 31 December
2021
(unaudited) 30 June 2021
(unaudited) (audited)
$000 $000 $000
---- ----------------------------- -------------- ------------ -------------
Accruals and other payables 4,868 4,914 5,999
Trade creditors 3,075 3,630 3,629
Gold held due to the Government
of Azerbaijan 22,488 9,683 16,094
Payable to the Government
of Azerbaijan from copper
concentrate joint sale 1,700 1,308 2,302
----------------------------------- -------------- ------------ -----------
32,131 19,535 28,024
----------------------------------- -------------- ------------ -----------
Trade creditors primarily comprise amounts outstanding for trade
purchases and ongoing costs. Trade creditors are non-interest
bearing. Accruals and other payables mainly consist of accruals
made for accrued but not paid salaries, bonuses, related payroll
taxes and social contributions, accrued interest on borrowings, 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.
13 Share capital
Ordinary
shares of
1 pence each $000
--------------------------------------- ------------- -----
Ordinary shares issued and fully paid:
1 January and 31 December 2021 and 30
June 2022 114,392,024 2,016
--------------------------------------- ------------- -----
14 Share premium account
$000
---------------------------------------------- ------
1 January and 31 December 2021 and 30 June
2022 . 33
------------------------------------------- ------
15 Distributions made and proposed
Six months Six months Year ended
ended 30 ended 30 31 December
June June
2022 2021 2021
(unaudited) (unaudited) (audited)
$000 $000 $000
------------------------------- ------------- ------------ ------------
Cash dividends on ordinary shares declared
and paid
Special dividend for 2020: 1.5
US cents* per share - 1,711 1,711
Final dividend for 2020: 3.5
US cents** per share - - 4,010
Interim dividend for 2021: 4.5
US cents*** per share - - 5,197
- 1,711 10,918
------------------------------- ------------- ------------ ------------
Cash dividends proposed on
ordinary shares
Final dividend for 2021: 3.5
US cents**** per share - - 4,010
Interim dividend for 2021: 4.5
US cents*** per share - 5,197 -
Interim dividend for 2022: 4.0
US cents***** per share 4,572 - -
------------------------------- ------------- ------------ ------------
* the special dividend for 2020 was declared in United States
dollars but paid in Sterling in the amount of 1.0767 pence per
ordinary share on 11 March 2021.
** the final dividend for 2020 was declared in United States
dollars but paid in Sterling in the amount of 2.5354 pence per
ordinary share on 29 July 2021.
*** the interim dividend for 2021 was declared in United States
dollars but paid in Sterling in the amount of 3.2937 pence per
ordinary share on 4 November 2021.
**** the final dividend for 2021 was declared in United States
dollars but paid in Sterling in the amount of 2.9181 pence per
ordinary share on 28 July 2022.
***** the interim dividend for 2022 is to be paid in Sterling on
3 November 2022 at a rate to be announced.
The proposed but not paid interim and final dividends for the
year ending 31 December 2021 and the 6 months ended 30 June 2021
and 2022 are not recognised as liabilities in the Group statements
of financial position.
16 Contingencies and commitments
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
contains various provisions relating to the obligations of the 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 now extends 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 substantially in compliance with the environmental clauses
contained in the PSA.
Subsequent to 30 June 2022, various revisions to the Group's PSA
were passed into the law of the Republic of
Azerbaijan as set out in note 18 - post balance sheet
events.
17 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.
Trading transactions
During the period, there were no trading transactions between
group companies and related parties who are not members of the
Group.
Other related party transactions
a) Total payments in the 6 months to 30 June 2022 of $1,809,000
(6 months to 30 June 2021: $452,000) were made for equipment and
spare parts purchased from Proses Muhendislik Danismanlik Inshaat
ve Tasarim Anonim Shirket ("PMDI"), an entity in which the vice
president of technical services of Azerbaijan International Mining
Company has a direct ownership interest. There is an outstanding
payable to PMDI of $nil at 30 June 2022 (30 June 2021: $21,000 and
31 December 2021: $157,000).
b) Total payments in the 6 months to 30 June 2022 of $1,033,000
(6 months to 30 June 2021: $503,000) were made for equipment and
spare parts purchased from F&H Group LLC ("F&H"), an entity
in which the vice president of technical services of Azerbaijan
International Mining Company has a direct ownership interest. There
is an outstanding payable to F&H of $576,000 at 30 June 2022
(30 June 2021: $488,000 and 31 December 2021: $862,000).
c) On 30 June 2022, a loan of $500,000 was made to the vice
president of technical services of Azerbaijan International Mining
Company. The loan carries an interest rate of 4 per cent. and is
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.
18 Post balance sheet events
Ratification of revised Production Sharing Agreement for the
Group
Various amendments to the Group's Production Sharing Agreement
("PSA") were ratified in July 2022 by the Parliament of the
Republic of Azerbaijan which granted the Group three new Contract
Areas with a combined area of 882 square kilometres. The Soutely
contract area was relinquished. The parliamentary ratification was
signed into law on 5 July 2022 by the President of the Republic of
Azerbaijan. Following revision to the PSA, the Group has eight
contract areas covering 2,544 square kilometres in Azerbaijan.
Purchase of Company's own Shares
In the period 1 July 2022 to 14 September 2022, the Company
purchased a total of 100,000 of its own shares at an average price
of 85.625 pence. The shares were not cancelled but held in
treasury.
Additional investment in Libero Copper & Gold Corporation
("Libero")
On 7 August 2022, the Company acquired 2,900,000 new shares in
Libero by way of a private placement at CAN 33 cents per share. The
total acquisition price was CAN$957,000 million ($748,000). The
shares were admitted to the TSXV Stock Exchange following issue.
Following the placement, the Company owned 19.9 per cent. of the
enlarged share capital of Libero.
19 Approval of condensed group interim financial statements
The condensed group interim financial statements of Anglo Asian
Mining plc and its subsidiaries for the six-month period ended 30
June 2022 were authorised for issue in accordance with a resolution
of the directors on 14 September 2022.
**ENDS**
Notes:
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 December 2021, the Company undertook a private placement
which acquired 19.8 per cent. of Libero Copper & Gold
Corporation ("Libero"). The transaction was completed in January
2022. 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.
On 5 July 2022, the Government of Azerbaijan ratified amendments
to its Production Sharing Agreement, granting Anglo Asian three
additional concessions totalling a combined area of 882 square
kilometres. This includes the Garadagh porphyry copper deposit,
with a Soviet classified resource of over 300,000 tonnes of copper.
The acquisition of these concessions is transformational to Anglo
Asian's asset portfolio and underpins the strategic target of
transitioning into a mid-tier copper focused miner.
https://www.angloasianmining.com/
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END
IR SFDFALEESELU
(END) Dow Jones Newswires
September 15, 2022 02:00 ET (06:00 GMT)
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