Azerbaijan, Baku, Aug.4 / Trend N. Ismayilova /
Anglo Asian Mining plc, the only gold producer in Azerbaijan, announced its first sale of gold ('Au'), as well as resumption of the operations and production on Gedabek gold/copper mine in Azerbaijan.
Additionally, the company agreed with International Bank of Azerbaijan (IBA) on further financing in the amount of $6.5 million to provide working capital in the early period of Gedabek's operations.
The open pit, heap leach operation at Gedabek, which poured its first gold and silver in May 2009, is in operation and tuning its processes. Anglo Asian has refined 795oz of Au, of which 630oz has been sold to the account of the Company and circa 64oz will be sold shortly on completion of the assay results.
Production for the first 12 months of operation is now targeted to be circa 50,000 oz Au, which is below the management's initial forecast of 70,000 oz Au.
The Company signed a loan agreement ('the Agreement') with IBA for $6.5 million to help address the working capital constraints caused by the delay in ramp-up. The proceeds of this facility have been received by Anglo Asian and used to settle certain outstanding interest payments, trade creditors and other working capital commitments. Under the terms of the Agreement, an all inclusive annual interest rate of 15% will apply on funds drawn. Repayment is scheduled in 13 installments of $500,000 with the first installment due in June 2010 and then every three months until June 2013. There is no penalty for early repayment. The Agreement is in addition to two other loan agreements with the IBA totaling $34.4 million, which will be repaid from cash generated from production at Gedabek.
According to the company President, Reza Veziri, the subsequent months will require a major effort to control this situation with working capital and the company intends to identify additional resources within the contract Gedabek.
"This progress could not have been achieved without the support of IBA, as the company strengthened its position as the only gold producer in Azerbaijan," Veziri said.
The Azerbaijani International Operating Company will hold exploitation work on six sites, including one in the Nakhchivan Autonomous Republic, two in Tovuz and Gedabek regions, three in the occupied territory (the Zod in Kalbajar, "Gyzylbulag" in Agdara and Vejnali in Zangilan). Under the agreement, it is planned to produce about 400 tons of gold, 2,500 tons of silver and 1.5 million tons of copper on the fields.
Generally, it is before planned to produce over 300,000 ounces of gold by late 2015 in Gedabek.
Azerbaijan (State Concern "Azergizil", whose powers were later transferred to the Ecology and Natural Resources Ministry) signed its first gold contract in 1997. The country received the first gold bullion only in 2009. The Azerbaijani International Operating Company is involved in the agreement on sharing of mining, signed for a period of 30 years. Equity participation of Azerbaijan in the agreement is 51 percent, the British company Anglo Asian Mining Plc. - 49 percent.
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