Azerbaijan, Baku, Jan 13 /Trend/
Leyla Abdullayeva, Trend Analytical Center Expert
The cost of gold on the world markets increases again. Gold futures prices on the basis of trading on the Comex New York Stock Exchange increased by 0.5 percent, up to $1.647.7 per troy ounce. According to the traders, large volumes of technical purchase and concern about the financial situation in the eurozone are the main causes of price increase.
Although Azerbaijan is not such major regional gold producer, as China, Russia and Uzbekistan, the increasing world prices on this precious metal and increased international instability turned gold into a very attractive asset. At average gold prices, many small and medium fields in Azerbaijan may be interesting for foreign investors who are able to ensure the necessary technologies and capital. And those investors who are involved in the Azerbaijani gold fields at the moment, confidently increase gold production and strengthen its position in the export market.
According to the Azerbaijani State Statistics Committee, the country produced 2,759 kg of precious metals in January-November 2011 (1,637 kg of gold and 1,122 kg of silver). Gold in Azerbaijan is extracted only in Gadabay field, the west of Azerbaijan. The foreign company Anglo Asian Mining PLC began gold production in Gadabay in late May 2009.
Gold reserves at the Azerbaijani Gadabay field exceeded the expected results. It was planned to receive 1.8 grams of gold from every ton of ore at "Gadabay". It became known that this figure is more than 2 grams. That is, it becomes clear during the drilling operations that the gold-bearing resources in the field and the saturation of ore exceed the forecasts.
Moreover, sometimes the ore saturation exceeds 3 grams. This turns the industrial development of the field into cost-effective. Moreover, one can get about 16 grams of silver and 0.29 percent copper from each ton.
The exploitation of the "Gosha" deposit consisting of 13 zones is expected to be launched. The preliminary gold reserves at "Gosha" field are projected at 300,000 ounces. But there are plans to build a plant, to produce and to supply 20,000 ounces of gold to the market per year. Anglo Asian Mining Plc company, gold producer in Azerbaijan, submitted the development and production program at the Gosha field to the government in late 2011. The first batch of gold is expected to be obtained in the first half of 2013.
The exploration work is also underway on the Ordubad field. The new equipment is bought from Canada. A drilling rig is capable of conducting underground drilling.
Amid the depletion of natural gold resources in the leading gold-producing countries, the development of the Azerbaijani gold mining industry promotes the emergence of one of the most strategically important sectors of the country. Today, when the distinct upward tendencies in gold prices and the popularity of this precious metal strengthened on the world market, the revival of gold mining involves the need for its development in the market terms.
Considering the dynamics of the gold price for the last 11 years, we will see that the price on gold increased from $281 to $1,700 from 2000 to 2011, that is, the growth of the asset cost was more than 600 percent. No asset gave such price appreciation.
Consequently, the Azerbaijani gold mining industry, as a young sector of the economy, has a promising future.