22nd May 2014 11:18
LONDON (Alliance News) - Anglo Asian Mining PLC Thursday said it has agreed to a USD1.5 million six-month loan from the International Bank of Azerbaijan (IBA) in order to help develop its Gedabek and Gosha mines.
The gold producer said the loan, which has an all-inclusive annual interest rate of 12% and no penalty for early repayment, will be used for general working capital in order the help increase production at its flagship Gedabek gold, copper, silver mining operation, and at its second mining operation, Gosha, also in Azerbaijan.
The company said its gold production target for the full year remains at 62,000 ounces to 67,000 ounces.
Anglo Asian said the loan is in addition to existing borrowings, which include loans with IBA, the Amsterdam Trade Bank NV and Atlas Copco, which stood at USD11.6 million, USD37.0 million and USD1.7 million, respectively, at March 31.
The news comes a week after the company issued its second profit warning over upcoming full year results, saying that it now expects profits for the year to be significantly below market expectations due to increased cost of sales and the accounting treatment of certain items.
The company announced in January that it missed its production target for 2013 and expected to report lower overall profit in the full-year results.
It increased its production to 52,068 ounces from 50,025 ounces in 2012, but failed to achieve its original production target of 60,000 ounces. It said the lower production, coupled with a lower gold prices during 2013, means that it expects to see the cash cost per ounce increase and profitability for 2013 significantly reduced from 2012.
Anglo Asian shares were down 8.3% to 11.00 pence on Thursday.
By Tom McIvor; [email protected]; @TomMcIvor1
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