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Anglo Asian continuing with gold production in Azerbaijan, supported by US$25mln cash buffer

Guidance has been maintained at between 75,000 and 85,000 ounces of gold equivalent

Anglo Asian Mining PLC -

Anglo Asian Mining PLC (LON:AAZ has said it is monitoring the coronavirus situation as it evolves and is implementing precautionary measures to maintain the safety of its employees and ensure the sustainability of its business.

In a statement, Anglo Asian noted that it is continuing to produce gold from its operations in Azerbaijan for the time being.

It said the government of Azerbaijan has implemented a series of restrictions to combat the spread of the coronavirus. Air travel to and from Azerbaijan is significantly curtailed and people entering the country are subject to 14 days compulsory quarantine.

Most of the land borders, including those with Georgia and Iran, are closed to people, although freight movements are currently continuing.

Domestic travel for people between towns and cities in Azerbaijan is prohibited with public transport suspended and many shops and restaurants etc. are operating very limited opening hours or permanently closed.

But Anglo Asian’s operations of Gedabek and Gosha are not included in the government restrictions and continue to operate normally. Mining and production, as well as essential maintenance, are continuing. The planned raise of the tailings dam wall is also continuing. The company is still able to procure necessary supplies from outside of Azerbaijan such as cyanide and is continuing with its exploration programme.

During this time, the company is experiencing an impact on the rotation of staff including management, due to the travel restrictions. However, actions have been put in place to enable senior staff to work remotely from home.

Meanwhile, although production of gold doré is continuing, the company is currently unable to ship gold doré to its refiners in Switzerland due to the cessation of air flights.

The refiners have also temporarily suspended operations on the instruction of the Swiss government. However, gold doré production through to early March has been shipped and the sale proceeds received. The company is actively looking at other logistical, refining and sale options for gold doré should the suspension be prolonged.

The company continues to ship copper concentrate by road.

Anglo Asian’s financial position is strong, with approximately US$25mln in cash and no debt. The company is also in discussions with its banks in Azerbaijan to put in place a stand-by credit facility of up to US$20mln.

The purpose of the stand-by credit facility is to provide additional financial flexibility and ensure the continuation of operations.

The company is maintaining its production guidance for the year ending 31 December 2020 of between 75,000 to 80,000 gold equivalent ounces.

 

Quick facts: Anglo Asian Mining PLC

Price: 98 GBX

AIM:AAZ
Market: AIM
Market Cap: £112.1 m
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