Anglo Asian Mining to build small flotation plant in Azerbaijan

(Interfax) - Anglo Asian Mining plc, which produces gold in Azerbaijan, plans to build a small-scale flotation plat at its Gedabek field to process sulphide ores containing precious metals.

"The total estimated capital cost of the small-scale flotation plant is $3.5 million including capital works and ancillary equipment. Yilmaz Proses Teknolojileri Detay Muhendislik Madencilik Danismanlik Insaat Limited STI (YPT) of Ankara, Turkey, has been contracted by the company to manufacture and construct the plant under an engineering, procurement, construction and installation (EPCI) contract for up to $2.7 million. The plant will have a capacity to process 20 tonnes of ore per hour and it will serve as a pilot plant for a future full-scale flotation production plant," the company said in a statement.

"The YPT contract will be settled by stage payments upon contractual milestones. These will be made by way of an irrevocable and confirmed letter of credit of $2.75 million opened in favour of YPT. Negotiations are being concluded with Pasha Bank, Azerbaijan to provide financing for this letter of credit for $2.75 million over a period of one to two years."

"The company currently has a stockpile of sulphide ore with a high copper content totalling 379,000 tonnes. The ore has an estimated average metal content of 2.12 grammes per tonne of gold, 20.2 grammes per tonne of silver and 0.61 per cent. copper. This ore is suitable for concentration by flotation and it will be processed in the new flotation plant after crushing in the existing crusher plant. The company estimates that the incremental cash flow generated from the processing of this ore in the first year will be sufficient to repay the financing from Pasha Bank."

Anglo Asian Mining plc developed Azerbaijan's first operating gold/copper/silver mine, Gedabek, which commenced gold production in May 2009. Gold production for the year ended December 31, 2013 from Gedabek totalled 52,068 ounces. The company is also developing a second resource area, Gosha, which is 50 kilometres from Gedabek.

Targeted gold production at Gedabek for FY 2014 ahs been revised from around 62,000 ounces to 60,000 ounces due to the continuing high copper content of the ore mined.