Anglo Asian set for 29 pct annual increase in Azerbaijan gold output

TBILISI, Oct 16 (Reuters) - Anglo Asian Mining Plc (Other OTC: AGXKF - news) , Azerbaijan's main gold producer, plans to reach its target of between 62,000 and 67,000 ounces for the year, up as much as 28.7 percent from 2013, after strong increases in the past three quarters.

London-listed Anglo Asian said on Thursday it had raised output at its main mine, Gedabek, as well as smaller mine Gosha, to 43,232 ounces in January-September from 32,424 in the same period of 2013.

For the third quarter, production at Gedabek and Gosha reached 16,178 ounces, up from 15,736 in the previous quarter. Total output in the first three quarters of the year was up 33.3 percent on the year before.

"In light of the ore currently being mined at Gedabek, which has a high copper content, we are actively pursuing options from which to increase gold recovery to achieve our target of circa 62,000 ounces for the year," Chief Executive Reza Vaziri said in a statement.

Vaziri said the considerable amount of ore mined with a high copper content was unexpected, but added stockpiles of ore totalling 379,000 tonnes "presented an attractive opportunity."

"In light of this, we are evaluating the construction of a small-scale flotation plant suited to process this type of ore to produce a copper and precious metals concentrate," Vaziri said.

The company said silver production in the first three quarters was 27,419 ounces, while copper production totalled 580 tonnes.

Gold sales in January-September totalled 37,342 ounces at an average price of $1,291 per ounce.

In 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 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.

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 and mining group Glencore (Xetra: A1JAGV - news) . (Reporting by Margarita Antidze; Editing by David Holmes)