Buoyant gold prices, a sharp reduction in net debt, and copper revenues coming on-stream form the backdrop for Anglo Asian Mining's half-year results. The Azerbaijan-focused miner also announced an exploration programme to increase the resource base and consequent life-span of its flagship Gedabek mine.
Strong first-half revenue growth was underpinned by the rise in the average realised gold price, which, at $1,450 (£927) an ounce, was 26 per cent higher than at this stage last year. Gold sales were marginally higher at 24,586 ounces, while unit costs rose by a quarter to $445 an ounce. It's worth noting that revenues were bolstered by $2.1m from the miner's first sales of copper concentrate.
Anglo Asian's gold production - at 28,500 ounces - was slightly lower than management's target due to problems associated with the leach rate of the ore. To remedy this, the company has initiated a feasibility study from mining consultant Arcadis Chile to assess the potential benefits of building a new agitation leaching plant.
Net cash inflows increased by 24 per cent to $16.2m, which Anglo Asian utilised to repay $12.6m of debt to the International Bank of Azerbaijan.
Numis Securities forecasts full-year EPS of 21¢ (14¢ in 2010), subject to revision post results.
| ANGLO ASIAN MINING (AAZ) | ||||
|---|---|---|---|---|
| ORD PRICE: | 42p | MARKET VALUE: | £46.4m | |
| TOUCH: | 41-42.5p | 12-MONTH HIGH: | 85p | Low: 31.25p |
| DIVIDEND YIELD: | nil | PE RATIO: | 4 | |
| NET ASSET VALUE: | 60¢* | NET DEBT: | 25% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 28.4 | 6.23 | 5.69 | nil |
| 2011 | 38.5 | 14.20 | 7.51 | nil |
| % change | +36 | +127 | +32 | - |
*Includes intangible assets of $33.9m, or 31¢ a share £1=$1.57 | ||||
