THE GOLD RUSH

Anglo-Asian Mining PLC has commissioned a new plant for the tank leaching of gold-bearing ore at the Gadabay field in Azerbaijan. The state-of-the-art technology at the enterprise promises an appreciable increase in the production of gold concentrate.

The Anglo-Asian Mining PLC operating company, which was founded by the American R.V. Investment Group Services Ltd, has since May 2009 been extracting precious metals and copper at the Gadabay field. The gold ore that is concentrated at the local combine is sent to Switzerland for refining. Some of the ingots to be sold on the world market under the Ayrim brand are sent to the Azerbaijani Central Bank for depositing as part of the Public Storage Agreement (PSA).

The Gabaday field possesses the lion's share of the total volume of precious metals extracted in the country and it is the work of this mine that determines the core indicators of the industry. From the middle of 2009 up to the first quarter of this year over 6,000 tonnes of pure gold have been extracted from all the country's gold-bearing fields. According to the State Statistics Committee, as of the end of last year the total volume of extraction of precious metals at Azerbaijani fields amounted to over 1,562 tonnes of gold and 625kg of silver which is respectively 12% and 48.6% less than the previous year. Production was also down in January-April 2013 and only 342.8kg of gold were extracted in this period.

In the opinion of experts of the country's leading gold extractor - Anglo-Asian Mining PLC - the reduction in gold extraction was caused by the severe weather of last winter, as well as the incurrence of a number of complexities of a geological nature during the development of the field. But all these problems were of a temporary nature and have already been resolved, and so this year the growth indicators should increase.

Specifically, the state-of-the-art plant for the tank leaching of ore, which was commissioned on 5 June, will ensure a marked increase in production. The funding of the project, which amounted to over $50m, was provided basically by a loan from the International Bank of Azerbaijan which allocated $43.5m for three years.

"In the next few days the enterprise will provide the first consignment of gold concentrate. Not just ore rich in precious metals but also rock that is unsuitable for heap leaching will be concentrated at this plant, which is designed to process 100 tonnes of ore an hour. The tank leaching technology enables over 90% of the gold contained in the ore to be extracted, whereas with heap leaching this figure has not been more than 70%," says an Anglo-Asian Mining plc report. According to preliminary assessments, gold extraction at the new plant is expected to be at a level of not less than 85% from oxide ores and about 69% from sulphide ores. At the same time, company experts are continuing their surveys and tests to raise these indices to the peak level of 90%.

"Thanks to the launch of the new enterprise, the company is planning to increase gold production volumes to 60,000 troy ounces in 2013, which will mean an increase of 20% on last year's figure. Moreover, thanks to the introduction of state-of-the-art technology we plan to reduce production costs to $500 for each ounce of gold, which will benefit our output from other gold-extraction sources," the manager of Anglo-Asian Mining PLC, Reza Vaziri, emphasized.

Having put industrial extraction at Gadabay on the right track, Anglo-Asian Mining plc is extending its exploratory work at other fields. Specifically, the company is planning by 2015 to double gold production volumes in the country once the "Gosa" field in Tovuz District is opened. The development of this mine is due to begin by the end of this year. The "Gosa" field contains pure gold-bearing rock whereas the rock from Gadabay is rich in copper with a relatively small gold content.

Last year Anglo-Asian Mining experts also began surveys at a new gas field on the Piyazbasi and Agyurt contract area of 462 sq km in Ordubad District in the Naxcivan Autonomous Republic. The company's resource base at all three fields is over 36 tonnes of gold, 292 tonnes of silver and 94,000 tonnes of copper.

The second biggest gold producer in Azerbaijan - the Azerbaijan International Mineral Resources Operating Company (AIMROC) consortium, set up in December 2006 out of five foreign companies and the Azerbaijani government with a 30% stake - is also busy expanding its operations. The consortium plans to start the commercial exploitation of the Covdar ore-bearing field in Daskasan District before the end of this year. The first sample ingot from Covdar was obtained at the end of last year, and when the processing plant is commissioned AIMROC will be in full production. According to experts' assessments, up to 4 grammes of gold can be obtained from one tonne of ore at Covdar - in this respect it is one of the more promising mines. The consortium will also develop the "Karabakh", "Goydag" and "Dagkasaman" fields and the "Kohnamadan" and "Kurekcay" sectors.

Azerbaijani geologists are continuing their surveys deep underground and are obtaining successful results. The work undertaken by the geologists has enabled new gold fields to be discovered in Goygol District: the reserves of the "Tullalar" gold-bearing field which has been surveyed here are estimated at 80 tonnes of gold and 290 tonnes of silver. And in Daskasan District the "Gosgardaq-Canagci" field has been discovered with potential reserves of 20 tonnes of gold. An even bigger discovery has been made in Samkir District: here a field of platinum with extractable supplies of 50 tonnes of precious metals of the platinum group has been surveyed, making this mine one of the largest in the South Caucasus region.

According to calculations of the Ministry of Ecology and Natural Resources, with the development of other fields in Azerbaijan, about 10-15 tonnes of gold could be produced every year. The extraction of precious metals has every prospect of becoming another rapidly developing branch of the non-oil sector and providing alternative sources of revenue for Azerbaijan.