TBY talks to Reza Vaziri, President and CEO of Anglo Asian Mining, on prospects for mineral resources producers in Azerbaijan.
TBY How has 2011 been for the company?
REZA VAZIRI We had a very productive and successful year in 2010. We produced over 67,000 ounces of gold. In 2011 our production output was around 60,000 ounces because we were affected by very severe weather conditions in Gedabek, which is a surface mine. Basically, Gedabek is a copper mine with lots of gold in it. The separation of these two elements is a real challenge. Gedabek is the only mining property in the world that has two plants: SART and ADR. The former plant is being showcased as the best way to separate both elements. Our company has started the process of building a new agitation leaching plant, with an investment of around $60 million, and we very much hope to see the plant operational by the end of 2012. It will allow us to extend the life of the mine and improve the recovery rate for gold and other materials. We are planning to have two production lines for sulfate ore and high-grade ore. The average recovery rate from an agitation plant should be 90%.
With production expected from the Gosha mine by the end of 2012, what level of impact are you expecting from these operations?
In 2011 we discovered and submitted the notes of discovery to the government for another of our properties, the Gosha mine. It is located at the top of a mountain, and this makes our job difficult. We estimate that there are 300,000 ounces in just one zone of the 13 the site has. These other areas are currently being explored, as we are talking about an underground mine. We are planning to put into operation a small processing plant to produce somewhere between 15,000 and 20,000 ounces of concentrated gold annually. Later on we will decide whether to sell the gold concentrate itself or bring it back together and put it in the agitation plant. Adding Gosha’s production to our overall operations, we will reach over 100,000 ounces a year, which will enable us to upgrade the status of the company from a junior mining company to a mid-size mining company.
What is the status of the Ordubad project?
This is another property in our current portfolio, and the initial exploration works were not successful. We will be emphasizing our exploration activities in the Agyurt area, one of our more promising sites, as we need to come up with a discovery by April 2012, otherwise we may lose the right to this mine. If we submit positive exploration results, we will be given the right to mine for the next 20 years.
How would you assess Anglo Asian Mining’s contribution to the realization of Azerbaijan’s full mining potential?
Azerbaijan never had a mining industry, and as a result we did not have mining experts. We have created them. We have created a skilled team that can operate in any type of mine anywhere in the world. We have trained our team from different perspectives, such as in processing, geology, mining, engineering, and the environment. Anglo Asian Mining has created jobs, directly and indirectly, for over 1,000 people in rural Azerbaijan, where we have changed the economic environment. We have also developed community projects repairing roads and even building a whole new school for 400 students. We are partners with the government, which owns 51% of production after the deduction of capital and operational expenses, and so far we have given to the government of Azerbaijan close to $30 million in gold, which in my opinion would represent around 17,000 ounces.
How do you see the processing prospects of Azerbaijan in the extractive industries sector, and what business opportunities are there for local and foreign investors?
Azerbaijan has an extremely high potential for mining. We have been pioneers in gold mining, but there are many other sites in Azerbaijan offering opportunities that have not been touched but contain deposits of metals, polymetals, copper, and probably zinc. We are in talks with the government in order to expand our segments of activity in the country, and I am sure there are plenty of other companies in Azerbaijan that have either obtained concessions or are looking into it. Overall, I am convinced that the industry offers plenty of opportunities for both local and foreign investors.
© The Business Year