Gold, copper and silver producer Anglo Asian Mining (LON:AAZ) posted Thursday pre-tax profits of $10.5 million for the six months to the end of June – down from $14.2 million a year ago.
An unusually severe winter at its flagship gold mine Gedabek, in western Azerbaijan, hurt half-year results, but the miner anticipates stronger production levels for the second half.
Anglo Asian’s revenue for the period also fell to $30.1 million from $38.5 million before.
The disruption at the Gedabek prompted the miner to reduce its production target to between 49,000 – 51,000 ounces of gold, down from 54,000 ounces. Its target for silver however is unchanged at 26,000 ounces.
Gold sales fell to 18,135 ounces compared to 24,586 a year earlier at an average price of $1,644 versus $1,450 before. However production issues sent costs up to $767 from $448.
The company said it is considering its options on its copper stockpile and has sent $1.4 million worth of copper concentrate samples to Glencore (LON:GLEN), which is currently conducting test smelting of the product and may take more from AngloAsian in the future if the tests prove successful.
According to UK-based broker Fairfax, Anglo Asian is the first gold miner in Azerbaijan in modern times giving a target price of 69p, a 60% upside to this morning’s opening price of 43p.
Fairfax believes the company has secured financing for the construction of the agitated leach plant with the state controlled lender ‘IBA’.
“Operations are expected to ramp up in H2 with total production moving towards management’s guidance of 49,000-51,000oz. This should cut cash costs and provide operating cash flow to cut outstanding debt,” the said in Thursday’s note to investors.
The broker concludes the results released today by Anglo Asian show the company is on track to hit its target gold production with H2e output estimated at 29,400oz, up 36% from H1 and 3% from last year.
Image: Photo from the movie The Great Waldo Pepper (1975). Maude (played by Margot Kidder) and Waldo Pepper (played by Robert Redford) pose after he is hurt in a plane crash. Courtesy of: San Diego Air & Space Museum Archives