🕐23.06.09 - 16:59 Uhr
Numis: Anglo Asian Mining (Buy, TP: 21) 2008 results in line
Numis: Anglo Asian Mining (Buy, TP: 21) 2008 results in line
Anglo Asians 2008 final results are in line with our expectations.
The
company poured first gold at its Gedabek mine in Azerbaijan at the end
of May and expects first gold sales by the end of June.
With the US$9.4m
debt funding announced last month we believe the company has sufficient
working capital to ensure the open pit, heap-leach operation reaches
steady state, and to fund further exploration at Gedabek and on its
other exploration licences.
The company has reiterated its 70,000oz gold
production target for the first full year of operations and we believe
the current resource at Gedabek is sufficient to produce at least
300,000oz gold over the next six years.
The company expects to
capitalise on its first mover advantage in Azerbaijan and leverage its
exploration position.
We maintain out 21p target price and, with recent
weakness in the share price, we updrage our our recommendation to a Buy.
* Mining operations: As a heap leach operation it will be a while
before the recoveries and operating costs can be confirmed - and much
will depend on the successful operation of the SART process for the
recovery of by-product copper.
The company expects the production of
first copper in Q3 2009.
We await further information on the expected
production rates and cash costs - but with the by-product copper and
silver production overall C1 costs should be relatively low.
* Cash position: We expect the delay in first production to put
short-term constraints on the companys cash position.
However, Anglo
Asian has agreed a further US$1.5m working capital facility, if
required, with the International Bank of Azerbaijan.
In addition, Reza
Vazari (director and a significant shareholder) has confirmed that he
would be willing to provide additional funding if required.
The company
expects to be able to fully repay its current debt by Q2 2013.
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