Gold producer in Azerbaijan to save $13M

Business Materials 27 May 2016 14:43 (UTC +04:00)

Baku, Azerbaijan, May 27

By Azad Hasanli - Trend:

Two devaluations of Azerbaijan's national currency (in February and December of 2015) will reduce operating costs of Anglo Asian Mining PLC (AAM), producer of gold in Azerbaijan, by $13 million in 2016, said the company's CEO Reza Vaziri, according to the AAM message.

"We sell our products in US dollars; however, a significant portion of our costs are denominated in Azerbaijani manats," said Vaziri. "We believe that the recent devaluation of the Azerbaijani manat against the US dollar of 43 percent [in December 2015] in addition to the previous devaluation of 34 percent [in February 2015] will have a considerable beneficial effect for Anglo Asian Mining in 2016."

In 2015, the company produced 72,032 ounces of gold by increasing output in the Gadabay field and commissioning a flotation plant in the fourth quarter of 2015.

Vaziri said that the company is now able to deliver long-term, sustainable value to shareholders even during periods of low metal prices such as seen during 2015.

"The increase in metal prices seen since the beginning of 2016, together with the cost reduction and efficiency initiatives and the devaluation of the Azerbaijani manat, will further enhance Anglo Asian's performance in the future," he added.

"The outlook for metal prices remains uncertain," said the CEO. "However, the increase in prices during the first four months of 2016 is obviously beneficial to us and we hope marks the start of a sustained recovery in prices."

Anglo Asian Mining PLC is a gold, copper and silver producer in Central Asia with a broad portfolio of production and exploration assets in Azerbaijan.

Based on the production sharing agreement signed with Azerbaijani government in August 1997, Anglo Asian Mining PLC has the right to develop six fields in south-west of Azerbaijan: "Gadabay", "Ordubad", "Gosha Bulag", "Gizil Bulag", "Vejnali" and "Soyutlu".

The gold produced at the fields is sent to Switzerland for purification. The ingots are delivered to Azerbaijan and stored in the government's account.

Edited by SI