Anglo Asian increases gold output in Azerbaijan

TBILISI, July 18 (Reuters) - Anglo Asian Mining Plc, Azerbaijan's main gold producer, said it had increased output by 54.6 percent in the first half of 2014 and planned to reach its target of 62,000-67,000 ounces for the year, up as much as 28.7 percent from 2013.

London-listed Anglo-Asian said on Friday it raised output at Azerbaijan's main mine, Gedabek, to 27,054 ounces in January-June 2014 from 17,497 ounces in the same 2013 period.

Gold production at Gedabek was 15,736 ounces in the second quarter of this year, up 39 percent from the previous quarter, when it rose 32 percent year on year to 11,318 ounces.

"In line with our improving production profile from Gedabek and Gosha, we remain confident that we will achieve our full year 2014 gold production target of 62,000 - 67,000 ounces," Anglo Asian Chief Executive Reza Vaziri said in a statement.

"We believe that with our cost saving initiatives such as reductions in cyanide costs and increased processing capacity at Gedabek our second half of 2014 performance will be much stronger."

Its 2013 output rose to 52,068 ounces from 50,025 ounces in 2012, but the company said it missed its target last year due to unexpected weather conditions and processing issues.

Gold is produced at Gedabek and other Azeri mines under a production venture with Anglo Asian, in which the government owns 49 percent.

Anglo Asian began production at Gedabek, 350 km west of the capital Baku, in July 2009 and plans to extract a total of 22 tonnes of gold from the mine.

The company said gold sales in the first half of this year totalled 23,545 ounces at an average price of $1,297 per ounce.

The company commissioned an agitation leaching plant at Gedabek in June 2013 and installed a Knelson concentrator in March this year, hoping to isolate copper sulphides that were found to have restricted gold recoveries in the leach tanks in 2013.

Silver production in the first half of 2014 was 21,924 ounces, while copper production totalled 369 tonnes.

Overall, Anglo Asian, which is controlled by R.V. Investment Group Services, plans to develop seven mines in western Azerbaijan with estimated gold reserves of 430 tonnes.

The company said in May it had signed a three-year contract with Industrial Minerals SA, an integrated trading, mining and logistics group, to become its exclusive partner for sales of copper concentrate produced at Gedabek. Industrial Minerals replaced Swiss trading major Glencore (Xetra: A1JAGV - news) . (Reporting by Margarita Antidze; Editing by David Evans)