Anglo Asian gets state approval for Gosha gold deposit development program in Azerbaijan
BAKU. May 16. (Interfax) - Azerbaijan's Ecology and Natural Resources Ministry has approved a development and production program for the Gosha gold deposit submitted by the company Anglo Asian Mining Plc, which operates a project to develop six gold deposits in Azerbaijan, the company said in a statement.
"Accordingly, the Company aims to commence the development of Gosha into a small, profitable, high grade underground gold mine producing gold at an average rate of 10,000 to 15,000 ounces per annum for a period of up to five years," it said.
"Under the terms of the Production Sharing Agreement ('PSA'), the Company is required to commence development and production of Gosha within one year, as from April 25, 2012, unless otherwise agreed in writing between the parties to the PSA," the statement said.
"Given the Company's intention to construct an agitation leaching plant at the Company's flagship mining operation Gedabek, also in Azerbaijan, the Company intends to request that the Government of Azerbaijan agree that the commencement of the Development and Production Program is delayed until H1 2013 so that the efforts of the Company can be focused on the agitation leaching plant construction," it said.
"At the same time, the Company aims to implement further drilling campaigns at Gosha in order to increase the economics of the proposed mine," the statement said.
The Gosha structure is located 50 kilometers from the Gedabek deposit.
The PSA with Anglo Asian Mining was signed on August 21, 1997, and envisages the development of six prospective structures: one in Nakhichivan, two in Gedabek (450 km west of Baku) and three in Kalbajar and Zangilan, currently occupied by the Armenian armed forces. Azerbaijan holds a 51% stake in the contract, and Anglo Asian Mining owns 49%.
However, because of low gold prices on global markets, work under the PSA was frozen, hardly having even begun, until 2005. In 2009, Anglo Asian Mining commissioned a gold ore processing plant in Azerbaijan for material from the Gedabek deposit.
According to the contract, there are plans to extract 400 tonnes of gold, 2,500 tonnes of silver and 1,500 tonnes of copper from the six deposits.