Anglo Asian declares first dividend, reports strong H1 results
Aim-listed Anglo Asian has declared a maiden interim dividend, following the company’s move into a net cash position subsequent to June 30.
The gold and copper miner, which operates in Azerbaijan, would pay a 3c a share dividend, it said on Wednesday, releasing a strong set of half-year results.
The first six months of 2018 saw a continued improvement, with the miner posting an interim profit of $5.07-million, compared with a prior-year period loss, on the back of higher revenue as production increased by 22% to 37 349 gold-equivalent ounces (GEOs).
The production was aided by mining from the new Ugur openpit mine and the successful implementation of operational initiatives at the existing Gedabek openpit and Gadir underground mines.
Gold production in the six-month period totalled 33 255 oz; 31 282 oz of which was contained within gold doré, 12 oz from sulfidisation, acidification, recycling and thickening (SART) processing and 1 961 oz from flotation.
Copper production totalled 587 t; 251 t from SART processing and 336 t from flotation.
Silver production totalled 84 785; 13 124 oz contained within gold doré, 43 687 oz from SART processing and 27 974 oz from flotation.
Targeted production for the 12 months to December 31 remains at between 78 000 GEOs and 84 000 GEOs, compared with the 2017 actual total production of 71 461 GEOs.
During the period, increased sales of gold bullion was offset by reduced sales of copper concentrate. Gold bullion sales of 25 778 oz at an average of $1 319/oz were achieved, while copper concentrate shipments to the customer totalled 2 344 dry metic tonnes with a sales value of $5.9-million.
Anglo Asian, which is currently in a net cash position, increased its revenue to $40-million owing to higher production and stronger average metal selling prices.
The company's all-in sustaining cost (AISC) reduced marginally to $543/oz in the first half 2018, compared with $564/oz in the first half of 2017.
The increased gold production in the first half benefited the AISC, but this was offset by higher sustaining capital costs and lower by-product credits.
Profit before taxation of $8.1-million was achieved, owing to higher revenues, a lower AISC and reduced interest expense.
Meanwhile, cash generated from operations was $24.6-million while capital expenditure of $8.2-million was mainly spent on deferred stripping, the new crusher plant and underground mining equipment.
The company also refinanced $13.5-million of its debt in early 2018 with a two-year syndicated loan from banks primarily in Azerbaijan.
This, chairperson Khosrow Zamani said, was a sign of the confidence that banks in Azerbaijan have in the business, adding that the new loan substantially reduced Anglo Asian’s borrowing costs.
It also increased cash availability by $8.4-million in 2018 by extending the repayment of debt principal into 2019.
The company also repaid certain other borrowings in early July 2018.
Anglo Asian’s net debt decreased to $2.9-million at June 30.
In terms of operations, the updated joint-ore reserves committee (Jorc) mineral resource for the Gedabek openpit was published, with over one-million ounces of gold to provide further mine life of between five and six years.
The company anticipates that it will publish a Jorc resource for the Gadir underground mine by the end of 2018.
A three-year geological exploration programme, which began this year, further identified mineralisation at Gedabek with an airborne geophysical survey to be carried out over the entire Gedabek contract area.
“With this in mind, we continue to develop and enlarge our production facilities and the second crusher line, which is now in operation, has increased the company's production capacity,” Zamani commented on Wednesday.
The Ugur openpit mine operated throughout the first half of the year and produced 461 382 t of ore.
Zamani remains optimistic for the rest of the year, and beyond, noting that the declaration of the company’s maiden dividend demonstrates the board’s confidence in the future.
The progress in 2018 has enabled Anglo Asian to target significantly higher production for 2018 compared with production in the previous two years, which Zamani said the company “is on track to achieve”.
Following the release of the results, Anglo Asian’s share price increased by 7.41%.
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