Anglo Asian Mining confirms significant improvement in Q3 gold production

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Anglo Asian Mining PLC (LON:AAZ) has confirmed a significant improvement in production during the third quarter, with gold equivalent ounces (GEO) up 25% on the tally for the preceding three months.

The Azerbaijan based miner said it produced 18,451 GEO in the three months ended September 30, 2020, versus 14,819 GEO in the second quarter of the year.

It saw production for the first nine months of the year reach 50,702 GEO, against 60,122 GEO in the comparative period of 2019.

READ: AAZ says its monitoring Azerbaijan-Armenia dispute

Anglo Asian also noted the sale of 6,335 ounces in early October at an average price of US$1.910 per ounce, to generate US$12.1mln in proceeds. The average sale price has increased significantly during the quarter, the company highlighted, to US$1,947 per ounce from the US1,649 average marked for the first half.

The company had US$21.4mln of cash as at the end of September 2020 and noted that it paid a US$5.1mln dividend and US$3mln of corporation tax during the third quarter. It held 6,335 ounces of unsold gold inventory as of September 30.

“I am very pleased with the better performance so far in the second half of this year,” Anglo Asian Reza Vaziri, chief executive said in a statement.

He added: “The actions we took to improve production in the first half of the year are now taking effect. We will soon start underground mining below the Gedabek open pit which is expected to lead to a further improvement in performance.”

Production guidance for 2020 is presently being reviewed, the group added, due to minor delays in the underground development arising from the effects of the Azeri and Armenian conflict, as some engineering staff have been conscripted. The company flagged that a 5% to 10% reduction in full-year guidance may be required, from the current level of 75,000 to 80,000 GEO.

“We are very saddened by the resumption of the conflict between Azerbaijan and Armenia, especially as the country was recovering well from the COVID-19 pandemic which now seems under control,” Vaziri said.

“The length and final resolution of the conflict are currently unknown. The company is operating normally but we are experiencing some operational inefficiencies due to the conflict which has required us to review our full-year production guidance.”

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