Anglo Asian is an AIM quoted, cash generative and profitable gold and copper mining and exploration company in Azerbaijan. The Company moved into gold production in May 2009 at its flagship Gedabek gold/copper mine located in western Azerbaijan. The mine, which is an open pit, heap leach operation, produced 67,267 ounces of gold for its first full year of operation to 31 December 2010. Additionally Gedabek produces copper through its Sulphidisation, Acidification, Recycling and Thickening ('SART') plant, which recovers copper in the form of a precipitated copper sulphide concentrate containing silver with commercial value.
It says that gold recoveries will increase to 85 per cent for oxide ore and up to 69 per cent for the sulphide ore.
The new plant will be designed to treat 100 tonnes of ore per hour. And it is expected to cost US$52 million (capex). The first plant equipment is expected to arrive in the third quarter.
Anglo Asian says an increased confidence in Gedabek’s future gold production has justified the decision to move forward with the new leaching plant.
"We have enormous confidence in Gedabek as a long-term producing project and the exciting potential to improve its production profile and in turn life of mine,” said chief executive Reza Vazari.
He adds: “We truly believe that the construction of a new agitation leaching plant, which would vastly improve recovery rates at the mine, is a natural development step for the future success of Gedabek as the first gold mine in Azerbaijan in modern times and will provide the best return for shareholders."
The company’s confidence in the mine comes after a 50 per cent increase to Gedabek's resource base, in a recent assessment. The project now has over 1 million ounces in the Measured and Indicated resource categories. Meanwhile drilling work continues this year and this is expected to provide a further resource update.
Anglo Asian also told investors today that it is in talks with both local and international banks regarding funding facilities to cover the capex outlay for the new plant.
And it is currently in the process of submitting final paperwork to the Azerbaijan government seeking permission for the project. Anglo Asian says it is confident that the project will be approved.
The new plant uses agitation leaching. And it will be able to process high grade gold ore as well as additional ore which is not suitable for the current heap leaching operation - it will also be able to process ‘spent’ ore processed by the current heap leaching operation.
Last month Anglo Asian told investors that the current Gedabek operation is on track to produce 54,000 ounces of gold this year.
It reported production, for the March quarter, of 9,925 ounces from its heap leach processing and gold sales of 8,252 ounces at an average price per ounce of US$1,679. It also produced 7,670 ounces of silver and it sold 7,381 ounces at an average price of US$33.
However it explained that extreme winter weather conditions resulted in 'sluggish' leaching, and as a result, first quarter gold production was lower than the preceding quarter - which totalled 15,292 ounces.