Anglo Asian Mining PLC (ISE:AAZ)

Anglo Asian Mining PLC (ISE:AAZ)


Share Price
130.75 p
Change
15.7495 (13.70 %)
Market Cap
£149.57 m
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Anglo Asian Mining PLC

Anglo Asian Mining PLC is quoted on AIM (ticker - AAZ) and has a portfolio of gold, copper and silver exploration and production assets in Azerbaijan. The Company’s key operations span three contract areas in Azerbaijan covering 1,062 square kilometres. Three additional contract areas covering 900 square kilometres are held in territories occupied by Armenia. The Company started to produce...

EPIC: AAZ
Market: ISE:AAZ
FRA:A4A
52-week High/Low: 131.400p / 38.200p
Sector: General Mining - Gold
Market Cap: £149.57 m
Website: www.angloasianmining.com
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Big Picture – A Deep Dive Examination of Anglo Asian Mining PLC


Anglo Asian Mining PLC Snapshot

 

 

 

Group strategy

Anglo Asian Mining PLC's strategy is to build a leading gold, copper and silver producer in Azerbaijan and Caucasia by using its first mover advantage and to leverage the experience of its Board and management team. Key pillars of the strategy are as follows:

  • Formalise mineral resources and ore reserves for all existing mines
  • Optimisation of gold and copper production at its Gedabek site from existing mines
  • Increase its production profile by identifying further resources and reserves in proximity to its existing mines
  • Pursue a comprehensive geological exploration programme to extensively explore all of the land of its contract areas for new deposits to open new mines
  • Ramp up exploration at Ordubad which is an untapped value opportunity
  • Aggressively pursue any suitable opportunities outside of Azerbaijan

Operations

Anglo Asian Mining’s wholly owned subsidiary, Azerbaijan International Mining Company, operates three mines; its main Gedabek gold-copper open pit and nearby high grade underground Gadir gold-copper mine and the Gosha underground gold mine. The Gedabek contract area has significant exploration potential along a mineralised belt within its 300 square kilometre area. The belt comprises known gold, gold-copper (often in outcrop), plus copper-molybdenum mineralisation. The Company is currently carrying out exploration activity at Bittibulag, where copper-gold mineralisation is exposed on surface and at several occurrences along strike of the Gedabek mine.

In addition, the Ordubad contract area hosts significant gold, gold-copper targets that have been assessed by Soviet surface and underground exploration and comprises surface exposure of gold hosting quartz veins and copper mineralised faults that will be subject to evaluation.

Given the Company’s demonstrated ability to convert resources to reserves and construct mining operations, these exploration targets give significant opportunity to extend mine life. Anglo Asian Mining's main operations are located within three contract (licence) areas in Azerbaijan with a total area of 1,062 square kilometres.

 

Overview

Anglo Asian Mining PLC's main operations span three contract areas in Azerbaijan covering 1,062 square kilometres.

Gedabek – the site of the Company's main open pit mine and also Gadir, a co-located underground mine.
Gosha – where the Company is operating a small, high grade mine.
Ordubad – an early stage gold and copper exploration property located in the Nakhchivan region of Azerbaijan.
The Company processes all its ore at the Gedabek site using predominantly heap and agitation cyanide leaching. It has also built a flotation plant to exploit the high copper content of the ore.

Tethyan Tectonic Belt

Anglo Asian Mining PLC's assets are located within one of the world's significant gold and copper bearing trends, the Tethyan Tectonic Belt, which extends from Pakistan to the Balkans running through Iran, Azerbaijan, Georgia and Turkey.

The major operating mines within the Tethyan Tectonic Belt contain porphyry copper deposits that are some of the largest sources of copper in the world and also yield significant quantities of gold and molybdenum.

Major copper, gold and molybdenum deposits in the belt include:

  • Sar Chesmeh & Sungun (500 mt at 0.75% Cu, 0.01% Mo) in Iran.
  • Kadjaran (400 mt at 0.27% Cu, 0.055% Mo, 0.03 g/t Au) & Agarak (45 mt at 0.46% Cu, 0.027% Mo, 0.025 g/t Au) in Armenia.
  • Tekhout & Zod (4.3 mt at 7.3 g/t Au) in Armenia.
  • Cayeli (20 mt at 4.2% Cu, 0.8 g/t Au) and Cerateppe (3 mt at 5.1% Cu) in Turkey.
  • Madneuli (23.5 mt at 1.03 g/t Au) in Georgia.

 


Gedabek contract area

Introduction

The Company holds mining and exploration rights for a minimum period of 15 years from 26 February 2007 over the 300 square kilometres Gedabek Contract Area, which is 55 kilometres from Azerbaijan's second biggest city, Ganja. The area includes Azerbaijan's first operating gold mine as well as a number of exploration targets.

Mining activity at Gedabek is reported to have started as long as 2,000 years ago. More recent activity began around 1849 when the Mekhor Brothers, followed by the German Siemens Bros Company, developed and operated a copper mine at Gedabek. At least five large (>100,000 tonne) and numerous smaller sulphide lenses were mined during the period between 1849 and 1917. Mining activity ceased in 1917 with the onset of the Russian Revolution.

Mining activity commenced once more when Anglo Asian began construction of an open pit mine and a conventional heap leach and processing facility for the recovery of gold, copper and silver in 2008. The Company poured its first gold in May 2009, making it the first gold/copper producer in Azerbaijan in modern times. Since that time it has seen steady gold production as efficiencies of the mine continue to improve. In addition, in 2015 the Group commenced production from Gadir, an underground mine co-located at Gedabek.

Click here for more info

 

Flotation plant

Introduction

The Company's new flotation plant started production in November 2015.

The plant is producing a copper and precious metal concentrate. Feed for the flotation plant can be either tailings from the agitation leaching plant or fresh ore initially fed through a crushing and grinding circuit.

The flotation plant currently comprises two grinding mills, two conditioning tanks and six flotation cells, a thickener, eight cleaner cells, a concentrate collection tank and two filter presses. There are also an additional eight tanks for reagent handling and 12 smaller flotation cells which were constructed as part of the initial project to build a pilot plant.

The flotation plant's first full year of operation was 2016. During 2016, concentrate was produced containing
1,121 tonnes of copper, 4,430 ounces of gold and 122,965 ounces of silver.

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Gosha Contract Area

Introduction

The 300 square kilometre Gosha Contract Area is situated 50 kilometres north-west of Gedabek and contains at least nine mineralised zones. Gosha has more than 6 kilometres of exploration adits from the Soviet-era, of which the richest mineralised zone has a prospect of narrow vein type gold deposit.

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Ordubad Contract Area

Exploration

The 462 square kilometre Ordubad Contract Area is in the Nakhichevan region of Azerbaijan and contains numerous targets including Shakardara, Piyazbashi, Misdag, Agyurt, Shalala and Diakchay, which are all located within a 5 kilometre radius. Exploration activities are ongoing at the Contract Area including a preliminary remote sensing study, adit cleaning and re-sampling of adits in two regions, Pyazbashi and Agyurt, and trenching and sampling in the Daste Bashi region.

Development at Ordubad forms part of the Group's longer-term development portfolio as a mid-tier gold, copper and silver mining company.

 

Reserves, exploration and development

Mineral reserves
Mineral resources and ore reserves


Key to the future development of the Gedabek site is our knowledge of the mineral resources and ore reserves within our contract areas. The Group’s most recent mineral resources and ore reserves estimates for the Gedabek open pit were published as of 18 September 2018. Full JORC (2012) reporting with unchanged mineral resources and ore reserves estimates was subsequently released on 14 March 2019. The mineral resource showed a total mineral resource (at a cut-off grade of 0.3 grammes per tonne of gold) of approximately 986 thousand ounces of gold, 63.4 thousand tonnes of copper and 8,172 thousand ounces of silver. The economically mineable ore reserves are over 343,000 ounces of gold and more than 36,000 tonnes of copper, which has extended the current life of the Gedabek open pit until 2024. Table 1 shows the Gedabek open pit mineral resources estimate at 14 March 2019 and Table 2 shows the Gedabek open pit ore reserves estimate at 14 March 2019.

 

The Occupied Territories and Nagorno-Karabakh

 

Mr Khosrow Zamani *
Non-executive chairman, age 75


Khosrow Zamani was director of the southern Europe and central Asia department of the International Finance Corporation (“IFC”), the private sector lending arm of the World Bank, from March 2000 to July 2005. He was responsible for the IFC investment programme and strategy in 15 countries across the region. Whilst a director at IFC, Khosrow was instrumental in building the IFC investment portfolio in the region with several new initiatives, particularly in central Asia and Caucasia. He oversaw the IFC portfolio of more than $2 billion, diversified across the financial, oil and gas, mining and manufacturing sectors. Khosrow has over 30 years of experience in investment and project finance and banking in emerging markets. He holds an MSc in Engineering from the United States of America and a master of business operations and management from the United Kingdom. He is currently a non-executive board member and chairman of the corporate governance committee of Sekerbank A.S., a publicly listed commercial bank in Turkey, a non-executive board member and a member of the compensation committee of Komercijalna Bank, Serbia.

* Independent non-executive director.

Mr Reza Vaziri
President and chief executive, age 65


Reza Vaziri has been actively involved in business in the Republic of Azerbaijan since just after its independence. Since R.V. Investment Group Services LLC, now Anglo Asian’s subsidiary, signed a Production Sharing Agreement with the Government of the Republic of Azerbaijan, Reza has been focused on developing Anglo Asian Mining PLC into a significant gold producer in the Caucasia and central Asia region. Prior to his business career, Reza held a number of high-ranking positions in the pre-revolutionary Iranian government. He was the head of the Foreign Relations Office at the Ministry of the Imperial Court of Iran. At the time of the revolution, he was chief of the office of political and international affairs. Reza holds a law degree from the national university of Iran. As founder and co-chairman for life of the board of directors of the US–Azerbaijan Chamber of Commerce with James A Baker IV, Reza dedicates much of his time furthering business relations between the two countries. Reza serves alongside such directors as James Baker III, Zbigniew Brzezinski, Governor John Sununu and Henry Kissinger. Reza resides in Baku, London and Washington, DC.

Mr Richard Round *
Non-executive director, age 60


Richard Round has held senior finance and leadership roles in a range of quoted and private companies. Richard now maintains a portfolio of non-executive director and board advisory positions in the energy, mining and technology development sectors. Most recently, Richard led the strategy and ultimate sale of hydro developer Green Highland Renewables prior to which he successfully secured around £70 million of funding for the development of the Oyster wave power technology for Aquamarine Power. Prior to joining Aquamarine Power, Richard was acting chief executive at the quoted group, Novera Energy plc where he led the sale of the landfill gas, wind and hydro group. Richard has also held a number of finance director roles in the renewable, oil and gas service, coal and mining sectors with companies including Mining Scotland, Consolidated Supply Management and Cambrian Mining plc. Richard was also finance director of Anglo Asian Mining PLC where he stepped down in July 2008 and was appointed a non‑executive director.

Governor John H Sununu
Non-executive director, age 78


Governor John Sununu received a PhD from Massachusetts Institute of Technology and taught engineering at Tufts University for 16 years. He served three terms as the Governor of New Hampshire before President George H W Bush appointed him chief of staff in 1989, a position that he held until March 1992. After his tenure as chief of staff, he co-hosted CNN’s Crossfire, ran an engineering firm and then, in 2004, served as the visiting Roy M and Barbara Goodman family professor of practice in public service at the Kennedy School of Government at Harvard University. John is a former partner in Trinity International Partners, a private financial firm, and currently serves as president of JHS Associates Ltd.

* Independent non-executive director.

Professor John Monhemius *
Non-executive director, age 75


Emeritus professor John Monhemius held the Roy Wright Chair in mineral and environmental engineering at the Royal School of Mines, Imperial College, London until 2004, when he retired from full-time academic work. From 2000 to 2004, he was dean of the Royal School of Mines. He has more than 40 years of experience of academic and industrial research and development in hydrometallurgy and environmental control in mining and metallurgical processes, particularly in the management of toxic wastes and effluents, and he has acted as a consultant to many large mining and chemical companies. John has published over 130 papers of scientific literature and he has supervised more than 30 PhD students. From 1986 to 1996, he was a co-founder and director of Consort Research Ltd, a consultancy specialising in gold and base metal ore processing, and he is a former director of Obtala Resources plc.

* Independent non-executive director.

Shareholder information

Anglo Asian Mining snapshot

 

Index FTSE AIM All-Share
Status AIM
Stock code AAZ
Sector General mining
Financial year end 31 December

Shares in issue

 

The total issued share capital 114,392,024 ordinary shares.

The total voting capital 114,392,024 ordinary shares.

No shares are currently held in treasury.

Percentage issued share capital not in public hands 40.172 per cent.

There are no restrictions on the transfer of AIM securities.

Key shareholders

 

Shareholders as of 8 October 2018

Key shareholders Number of
ordinary shares
Holding
percentage
Reza Vaziri 32,796,830 28.671
Governor John Sununu 10,734,540 9.384
Limelight industrial developments 4,038,600 3.530
Khosrow Zamani 1,418,352 1.240
Richard Round 361,680 0.316
Prof John Monhemius 341,890 0.299

The Company is subject to the UK City Code on Takeovers and Mergers.

Azerbaijan office

Anglo Asian Mining plc

3rd Floor
Tower 2
Hyatt Regency Business Centre
1033 Izmir St
Baku 1065
The Republic of Azerbaijan

Tel: +994 (12) 596 3350
Fax: +994 (12) 596 3354

Registered office

7 Devonshire Square
Cutlers Garden
London EC2M 4YH
United Kingdom

Tel: +994 (12) 596 3350
Fax: +994 (12) 596 3354

PR/IR contact

St Brides Partners Ltd
Salisbury House
London Wall
London EC2M 5QQ
United Kingdom

Tel: 0207 236 1177
[email protected]

Nominated Adviser and broker

SP Angel Corporate Finance LLP
Prince Frederick House
35-39 Maddox Street
London
W1S 2PP

Tel: 020 3463 2260

Nominated Adviser and Broker
S.P. Angel Corporate Finance LLP
Prince Frederick House
35-39 Maddox Street
London W1S 2PP
United Kingdom

Bankers – UK
Barclays
1 Churchill Place
London E14 5HP
United Kingdom

Bankers – Azerbaijan
International Bank of Azerbaijan
67 Nizami Str.
Baku
Azerbaijan

Bankers – Azerbaijan
Yupi Kredi Bank Azerbaijan JSC
32 J. Jabbarly Str.
Baku
Azerbaijan

Registrar
Link Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
United Kingdom

Auditors
Ernst & Young LLP
1 More London Place
London SE1 2AF
United Kingdom

Financial PR Advisers
St Brides Partners Ltd
Salisbury House
London Wall
London EC2M 5QQ
United Kingdom

Solicitors – United Kingdom
Squire Patton Boggs (UK) LLP
7 Devonshire Square
Cutlers Gardens
London EC2M 4YH
United Kingdom

Solicitors – Azerbaijan
Nazal Consulting LLC
36 Islam Safarly Str.
Baku
Azerbaijan

Contact

Azerbaijan office
Anglo Asian Mining plc

3rd Floor
Tower 2
Hyatt Regency Business Centre
1033 Izmir St
Baku 1065
The Republic of Azerbaijan

Tel: +994 (12) 596 3350
Fax: +994 (12) 596 3354

Registered office
7 Devonshire Square
Cutlers Garden
London EC2M 4YH
United Kingdom

Tel: +994 (12) 596 3350
Fax: +994 (12) 596 3354

PR/IR contact
St Brides Partners Ltd
Salisbury House
London Wall
London EC2M 5QQ
United Kingdom

Tel: 0207 236 1177
[email protected]

Nominated Adviser and broker
SP Angel Corporate Finance LLP
Prince Frederick House
35-39 Maddox Street
London
W1S 2PP

Tel: 020 3463 2260

 

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