Anglo Asian Mining plugs cash gap but production levels still below expectations
27 November 2009
Anglo Asian Mining, the emerging gold producer behind the Gedabek gold-copper mine in Azerbaijan, has secured a further US$3 million loan agreement with the International Bank of Azerbaijan to provide working capital for the company.
The cash is being used to cover interest payments on other loans totalling US$40.9 million owed to the bank. The latest deal is priced at 15% and repayment is scheduled in six monthly instalments of US$500,000 beginning from April 2010.
In a bleak warning to investors, the company said that if operating costs increased significantly, ramp-up be delayed further or revenues otherwise fall short of expectations, it may run out of cash without the help of further financing.
The warning comes as Anglo announced lower than expected production levels in September and October because of mechanical problems, although these are believed to have been resolved now.
Anglo produced and refined 1,562 ounces of gold and sold 1,332 ounces during September and produced 2,875 ounces and sold 2,508 ounces during October. The company said it was anticipating producing 2,030 ounces and selling 1,770 ounces in November, which is broadly inline with management expectations.
As a result, it is now forecasting Gedabek to produce 25,000 ounces in its first full year of production to June 2010, down from the original forecast of 50,000 ounces.
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