AZERBAIJAN - Industry
General Manager, AIMROC
The hard-rock mining industry in Azerbaijan is still in the early stages of development. At this time, there are two commercial-scale gold mines. The output from these two gold mines does not have a great impact on the global gold market, with production from these two relatively small mines being measured in tens of thousands of ounces of gold annually, as compared to all primary mine production of gold measured in several millions of gold ounces. However, in Azerbaijan, there was only one gold mine in early 2012, and now there are two. It is this business in Azerbaijan that is rapidly expanding as both of these mines have room for expansion and will increase production over time, and there is great potential for the additional discovery of nearby deposits. Many of the largest deposits elsewhere in the world have very similar geological settings as seen here in Azerbaijan; we just haven’t found comparable quantities yet. However, that doesn’t mean that the exploration potential is limited. On the contrary, we just have more work to do and it is only beginning. AIMROC is systematically reviewing the area immediately around Chovdar. The Chovdar license area is large, at 575 square kilometers. There are other gold showings in the area, and there is an iron deposit nearby, all of which contain clues needed to lead our exploration geologists to the next discovery, whether it be gold or other metals.
AIMROC has worked to raise basic awareness and encourage the government to support the mining industry, businesses that are required for our endeavors, and our company and its activities. While Chovdar is a relatively small mine, the capital requirements for building larger-scale mines could range much higher. Therefore, individual companies, such as AIMROC, need to have secure sources of capital, a clear and consistent regulatory framework, and well-defined risks to justify the size of investment needed in this business.
The investment climate in Azerbaijan is good for AIMROC as a company, and I believe that the future will see more investment. The people here at AIMROC are looking forward with great anticipation to future projects. We are establishing ourselves as an aggressive, results-oriented group, driven by the knowledge that we can succeed in Azerbaijan. It is unique for me as a professional to be employed in a situation where an idea or mining opportunity is presented that may have done very little mine development work before. In AIMROC’s development pipeline, we are working in many new areas without any significant development works or previous operations. We as a company get strong encouragement from all levels of the government and the local communities where we operate to advance our projects quickly. AIMROC is secure in the knowledge that we can realize our opportunities with hard work and a diligent, professional approach to building mines.
In the immediate to medium term, the company is striving to improve the performance at Chovdar. We built it, and part of the evolution of a mine is that once it is built it needs to be optimized to better respond to the conditions encountered and fine-tune all of the systems in place. The objective will also be to add value by potentially cutting costs, enhancing operating efficiencies, and making operations more effective. Chovdar, like any mine, will eventually run out of ore, and as time goes on we need to replace those reserves. We have greater possibilities now because the mine itself is operating. In the medium term, our focus will continue to be to enhance our portfolio of projects, while at the Chovdar mine we will grow our current operations, look for additional deposits, and expand into the deeper underground parts of the Chovdar ore body.
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