Gold, silver producer in Azerbaijan plans to make profit in Azerbaijan in 2017
Baku, Azerbaijan, Sept. 22
By Anvar Mammadov – Trend:
Revenue of Anglo Asian Mining PLC (AAM, a gold, copper and silver producer in Azerbaijan) totaled $29.8 million in 1H17, says the company’s financial report.
According to the report, sales of gold and silver bullion totaled $19.5 million. During the period, the company sold 15,689 ounces of gold and 5,020 ounces of silver at an average price of $1,238 and $17 per ounce, respectively. Meanwhile, sales of copper and precious metal concentrate totaled $10.3 million. No hedging of gold bullion sales was undertaken in the six months to June 30, 2017, says the report.
Total cost of sales of the company decreased by $4 million to $25.9 million in 1H17 as compared to $29.9 million in the same period of 2016, according to the report. Cash cost of sales decreased by $2.1 million to $20.5 million in the period.
During the period, reagents costs decreased by $1.2 million and mining costs went down by $0.9 million as compared to 1H16.
Administrative expenses decreased to $2.3 million in 1H17 as compared to $2.5 million in the same period of 2016. Administrative expenses comprise the cost of the AAM’s office in Baku, directors and other administrative staff salaries, professional fees and others.
“The finance costs of $1.9 million comprise interest on loans and letters of credit of $1.7 million and accretion expense on the rehabilitation provision of $0.2 million,” says the report.
Income tax amounted to $1.4 million and in total, the company completed the first half of 2017 with loss of $2.74 million. Meanwhile, the AAM operations are expected to produce taxable profits until late 2017.
Based on a production sharing agreement signed with Azerbaijani government in August 1997, Anglo Asian Mining PLC has the right to develop six fields in southwest 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 then delivered to Azerbaijan and stored in the government's account.